FIRST TENNESSEE NATIONAL CORP
1997 EMPLOYEE STOCK OPTION PLAN
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<TYPE>EX-10.(C)
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<FILENAME>g72558ex10-c.txt
<DESCRIPTION>1997 EMPLOYEE STOCK OPTION PLAN
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                                                                   EXHIBIT 10(c)

                      FIRST TENNESSEE NATIONAL CORPORATION
                         1997 EMPLOYEE STOCK OPTION PLAN
                (Adopted 10-22-96, Amended and Restated 10-16-01)

1.       PURPOSE. The 1997 Employee Stock Option Plan (the "Plan") of First
Tennessee National Corporation and any successor thereto, (the "Company") is
designed to enable employees of the Company and its subsidiaries to obtain a
proprietary interest in the Company, and thus to share in the future success of
the Company's business. Accordingly, the Plan is intended as a further means not
only of attracting and retaining outstanding personnel, but also of promoting a
closer identity of interest between employees and shareholders.

2.       DEFINITIONS. As used in the Plan, the following terms shall have the
respective meanings set forth below:

         (a)      "Change in Control" means the occurrence of any one of the
                  following events:

                           (i)      individuals who, on January 21, 1997,
                  constitute the Board (the "Incumbent Directors") cease for any
                  reason to constitute at least a majority of the Board,
                  provided that any person becoming a director subsequent to
                  January 21, 1997, whose election or nomination for election
                  was approved by a vote of at least three-fourths (3/4) of the
                  Incumbent Directors then on the Board (either by a specific
                  vote or by approval of the proxy statement of the Company in
                  which such person is named as a nominee for director, without
                  written objection to such nomination) shall be an Incumbent
                  Director; provided, however, that no individual elected or
                  nominated as a director of the Company initially as a result
                  of an actual or threatened election contest with respect to
                  directors or as a result of any other actual or threatened
                  solicitation of proxies or consents by or on behalf of any
                  person other than the Board shall be deemed to be an Incumbent
                  Director;

                           (ii)     any "Person" (as defined under Section
                  3(a)(9) of the Securities Exchange Act of 1934, as amended
                  (the "Exchange Act") and as used in Section 13(d) or Section
                  14(d) of the Exchange Act) is or becomes a "beneficial owner"
                  (as defined in Rule 13d-3 under the Exchange Act), directly or
                  indirectly, of securities of the Company representing 20% or
                  more of the combined voting power of the Company's then
                  outstanding securities eligible to vote for the election of
                  the Board (the "Company Voting Securities"); provided,
                  however, that the event described in this paragraph (ii) shall
                  not be deemed to be a change in control by virtue of any of
                  the following acquisitions: (A) by the Company or any entity
                  in which the Company directly or indirectly beneficially owns
                  more than 50% of the voting securities or interests (a
                  "Subsidiary"), (B) by an employee stock ownership or employee
                  benefit plan or trust sponsored or maintained by the Company
                  or any Subsidiary, (C) by any underwriter temporarily holding
                  securities pursuant to an offering of such securities, or (D)
                  pursuant to a Non-Qualifying Transaction (as defined in
                  paragraph (iii));

                           (iii)    the shareholders of the Company approve a
                  merger, consolidation, share exchange or similar form of
                  corporate transaction involving the Company or any of its
                  Subsidiaries that requires the approval of the Company's
                  shareholders, whether for such transaction or the issuance of
                  securities in the transaction (a "Business Combination"),
                  unless immediately following such Business Combination: (A)
                  more than 50% of the total voting power of (x) the corporation
                  resulting from such Business Combination (the "Surviving
                  Corporation"), or (y) if applicable, the ultimate parent
                  corporation that directly or indirectly has beneficial
                  ownership of 100% of the voting securities eligible to elect
                  directors of the Surviving Corporation (the "Parent
                  Corporation"), is represented by Company Voting Securities
                  that were outstanding immediately prior to the consummation of
                  such Business Combination (or, if applicable, is represented
                  by shares into which such Company Voting Securities were
                  converted pursuant to such Business Combination), and such
                  voting power among the holders thereof is in substantially the
                  same proportion as the voting power of such Company


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                  Voting Securities among the holders thereof immediately prior
                  to the Business Combination, (B) no person (other than any
                  employee benefit plan sponsored or maintained by the Surviving
                  Corporation or the Parent Corporation), is or becomes the
                  beneficial owner, directly or indirectly, of 20% or more of
                  the total voting power of the outstanding voting securities
                  eligible to elect directors of the Parent Corporation (or, if
                  there is no Parent Corporation, the Surviving Corporation) and
                  (C) at least a majority of the members of the board of
                  directors of the Parent Corporation (or, if there is no Parent
                  Corporation, the Surviving Corporation) were Incumbent
                  Directors at the time of the Board's approval of the execution
                  of the initial agreement providing for such Business
                  Combination (any Business Combination which satisfies all of
                  the criteria specified in (A), (B) and (C) above shall be
                  deemed to be a "Non-Qualifying Transaction"); or

                           (iv)     the shareholders of the Company approve a
                  plan of complete liquidation or dissolution of the Company or
                  a sale of all or substantially all of the Company's assets.

         Computations required by paragraph (iii) shall be made on and as of the
date of shareholder approval and shall be based on reasonable assumptions that
will result in the lowest percentage obtainable.

         Notwithstanding the foregoing, a change in control of the Company shall
not be deemed to occur solely because any person acquires beneficial ownership
of more than 20% of the Company Voting Securities as a result of the acquisition
of Company Voting Securities by the Company which reduces the number of Company
Voting Securities outstanding; provided, that if after such acquisition by the
Company such person becomes the beneficial owner of additional Company Voting
Securities that increases the percentage of outstanding Company Voting
Securities beneficially owned by such person, a change in control of the Company
shall then occur.


         (b)      "Committee" means the Stock Option Committee or any successor
                  committee designated by the Board of Directors to administer
                  the Stock Option Plan, as provided in Section 5(a) hereof.

         (c)      "Early Retirement" means termination of employment after an
                  employee has fulfilled all service requirements for an early
                  pension, and before his or her Normal Retirement Date, under
                  the terms of the First Tennessee National Corporation Pension
                  Plan, as amended from time to time.

         (d)      "Quota" means the portion of the total number of shares
                  subject to an option which the grantee of the option may
                  purchase during the several periods of the term of the option
                  (if the option is subject to quotas), as provided in Section
                  8(b) hereof.

         (e)      "Retirement" means termination of employment after an employee
                  has fulfilled all service requirements for a pension under the
                  terms of the First Tennessee National Corporation Pension
                  Plan, as amended from time to time.

         (f)      "Subsidiary" means a subsidiary corporation as defined in
                  Section 425 of the Internal Revenue Code.

         (g)      "Successor" means the legal representative of the estate of a
                  deceased grantee or the person or persons who shall acquire
                  the right to exercise an option or related SAR by bequest or
                  inheritance or by reason of the death of the grantee, as
                  provided in Section 10 hereof.

         (h)      "Term of the Option" means the period during which a
                  particular option may be exercised, as provided in Section
                  8(a) hereof.

         (i)      "Three months after cessation of employment" means a period of
                  time beginning at 12:01 A.M. on the day following the date
                  notice of termination of employment was given and ending at
                  11:59 P.M. on the date in the third following month
                  corresponding numerically with the date notice of


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                  termination of employment was given ( or in the event that the
                  third following month does not have a date so corresponding,
                  then the last day of the third following month).

         (j)      "Five years after (an event occurring on day x)" and "five
                  years from (an event occurring on day x)" means a period of
                  time beginning at 12:01 A.M. on the day following day x and
                  ending at 11:59 P.M. on the date in the fifth following year
                  corresponding numerically with day x (or in the event that the
                  fifth following year does not have a date so corresponding,
                  then the last day of the sixtieth following month).

         (k)      "Voluntary Resignation" means any termination of employment
                  that is not involuntary and that is not the result of the
                  employee's death, disability, early retirement or retirement.

         (l)      "Workforce reduction" means any termination of employment of
                  one or more employees of the Company or one or more of its
                  subsidiaries as a result of the discontinuation by the Company
                  of a business or line of business or a realignment of the
                  Company, or a part thereof, or any other similar type of
                  event; provided, however, in the case of any such event
                  (whether the termination of employment was a result of a
                  discontinuation, a realignment, or another event), that the
                  Committee or the Board of Directors has designated the event
                  as a "workforce reduction" for purposes of this Plan."

3.       EFFECTIVE DATE OF PLAN. The Plan shall become effective upon approval
by the Board of Director of the Company. No options may be granted under the
Plan after the month and day in the year 2006 corresponding to the day before
the month and day on which the Plan becomes effective. The term of options
granted on or before such date may, however, extend beyond that date.

4.       SHARES SUBJECT TO THE PLAN.

         (a)      The Company may grant options under the Plan authorizing the
                  issuance of no more than 26,200,000 shares of its $0.625 par
                  value (adjusted for any stock splits) common stock, which will
                  be provided from shares purchased in the open market or
                  privately (that became authorized but unissued shares under
                  state corporation law) or by the issuance of previously
                  authorized but unissued shares.

         (b)      Shares as to which options previously granted under this Plan
                  shall for any reason lapse shall be restored to the total
                  number available for grant of options.

5.       PLAN ADMINISTRATION.

         (a)      The Plan shall be administered by a Stock Option Committee
                  (the "Committee") whose members shall be appointed from time
                  to time by, and shall serve at the pleasure of, the Board of
                  Directors of the Company. In addition, all members shall be
                  directors and shall meet the definitional requirements for
                  "non-employee director" (with any exceptions therein
                  permitted) contained in the then current SEC Rule 16b-3 or any
                  successor provision.

         (b)      The Committee shall adopt such rules of procedure as it may
                  deem proper.

         (c)      The powers of the Committee shall include plenary authority to
                  interpret the Plan, and subject to the provisions hereof, to
                  determine the persons to whom options shall be granted, the
                  number of shares subject to each option, the term of the
                  option, and the date on which options shall be granted.


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6.       ELIGIBILITY.

         (a)      Options may be granted under the Plan to employees of the
                  Company or any subsidiary selected by the Committee.
                  Determination by the Committee of the employees to whom
                  options shall be granted shall be conclusive.

         (b)      An individual may receive more than one option.

7.       OPTION PRICE. The option price per share to be paid by the grantee to
the Company upon exercise of the option shall be determined by the Committee,
but shall not be less than 100% of the fair market value of the share at the
time the option is granted, nor shall the price per share be less than the par
value of the share. Notwithstanding the prior sentence, the option price per
share may be less than 100% of the fair market value of the share at the time
the option is granted if:

         (a)      The grantee of the option has entered into an agreement with
                  the Company pursuant to which the grant of the option is in
                  lieu of the payment of compensation; and

         (b)      The amount of such compensation when added to the cash
                  exercise price of the option equals at least 100% of the fair
                  market value (at the time the option is granted) of the shares
                  subject to option.

"Fair market value" for purposes of the Plan shall be the mean between the high
and low sales prices at which shares of the Company were sold on the valuation
day as quoted by the Nasdaq Stock Market or, if there were no sales on that day,
then on the last day prior to the valuation day during which there were sales.
In the event that this method of valuation is not practicable, then the
Committee, in its discretion, shall establish the method by which fair market
value shall be determined.

8.       TERMS OR QUOTAS OF OPTIONS:

         (a)      TERM. Each option granted under the Plan shall be exercisable
                  only during a term (the "Term of the Option") commencing one
                  year, or such other period of time (which may be less than or
                  more than one year) as is determined to be appropriate by the
                  Committee, after the date when the option was granted and
                  ending (unless the option shall have terminated earlier under
                  other provisions of the Plan) on a date to be fixed by the
                  Committee. Notwithstanding the foregoing, each option granted
                  under the Plan shall become exercisable in full immediately
                  upon a Change in Control.

         (b)      QUOTAS. The Committee shall have authority to grant options
                  exercisable in full at any time during their term, or
                  exercisable in quotas. Quotas or portions thereof not
                  purchased in earlier periods shall be cumulated and be
                  available for purchase in later periods. In exercising his or
                  her option, the grantee may purchase less than the full quota
                  available to him or her.

         (c)      EXERCISE OF STOCK OPTIONS. Stock options shall be exercised by
                  delivering, mailing, or transmitting to the Committee or its
                  designee (for all purposes under the Plan, in the absence of
                  an express designation by the Committee, the Company's
                  Personnel Division Manager is deemed to be the Committee's
                  designee) the following items:

                  (i)      A notice, in the form, by the method, and at times
                  prescribed by the Committee, specifying the number of shares
                  to be purchased; and

                  (ii)     A check or money order payable to the Company for the
                  full option price.

                  In addition, the Committee in its sole discretion may
                  determine that it is an appropriate method of payment for
                  grantees to pay, or make partial payment of, the option price
                  with shares of Company


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                  common stock in lieu of cash. In addition, in its sole
                  discretion the Committee may determine that it is an
                  appropriate method of payment for grantees to pay for any
                  shares subject to an option by delivering a properly executed
                  exercise notice together with a copy of irrevocable
                  instructions to a broker to deliver promptly to the Company
                  the amount of sale or loan proceeds to pay the purchase price
                  (a "cashless exercise"). To facilitate the foregoing, the
                  Company may enter into agreements for coordinated procedures
                  with one or more brokerage firms. The value of Company common
                  stock surrendered in payment of the exercise price shall be
                  its fair market value, determined pursuant to Section 7, on
                  the date of exercise. Upon receipt of such notice of exercise
                  of a stock option and upon payment of the option price by a
                  method other than a cashless exercise, the Company shall
                  promptly deliver to the grantee (or, in the event the grantee
                  has executed a deferral agreement, the Company shall deliver
                  to the grantee at the time specified in such deferral
                  agreement) a certificate or certificates for the shares
                  purchased, without charge to him or her for issue or transfer
                  tax.

         (d)      POSTPONEMENTS. The Committee may postpone any exercise of an
                  option for such period of time as the Committee in its
                  discretion reasonably believes necessary to prevent any acts
                  or omissions that the Committee reasonably believes will be or
                  will result in the violation of any state or federal law; and
                  the Company shall not be obligated by virtue of any provision
                  of the Plan or the terms of any prior grant of an option to
                  recognize the exercise of an option or to sell or issue shares
                  during the period of such postponement. Any such postponement
                  shall automatically extend the time within which the option
                  may be exercised, as follows: The exercise period shall be
                  extended for a period of time equal to the number of days of
                  the postponement, but in no event shall the exercise period be
                  extended beyond the last day of the postponement for more days
                  than there were remaining in the option exercise period on the
                  first day of the postponement. Neither the Company nor any
                  subsidiary of the Company, nor any of their respective
                  directors or officers shall have any obligation or liability
                  to the grantee of an option or to a successor with respect to
                  any shares as to which the option shall lapse because of such
                  postponement.

         (e)      NON-TRANSFERABILITY. All options granted under the Plan shall
                  be non-transferable other than by will or by the laws of
                  descent and distribution, subject to Section 10 hereof, and an
                  option may be exercised during the lifetime of the grantee
                  only by him or her or by his/her guardian or legal
                  representative.

         (f)      CERTIFICATES. The stock certificate or certificates to be
                  delivered under this Plan may, at the request of the grantee,
                  be issued in his or her name or, with the consent of the
                  Company, the name of another person as specified by the
                  grantee.

         (g)      RESTRICTIONS. This subsection (g) shall be void and of no
                  legal effect in the event of a Change of Control.
                  Notwithstanding anything in any other section or subsection
                  herein to the contrary, the following provisions shall apply
                  to all options (except options designated by the Committee as
                  FirstShare options), exercises and grantees. An amount equal
                  to the spread realized in connection with the exercise of an
                  option within six months prior to a grantee's voluntary
                  resignation shall be paid to the Company by the grantee in the
                  event that the grantee, within six months following voluntary
                  resignation, engages, directly or indirectly, in any activity
                  determined by the Committee to be competitive with any
                  activity of the Company or any of its subsidiaries.

         (h)      TAXES. The Company shall be entitled to withhold the amount of
                  any tax attributable to amounts payable or shares deliverable
                  under the Plan, and the Company may defer making payment or
                  delivery of any benefits under the Plan if any tax is payable
                  until indemnified to its satisfaction. The Committee may, in
                  its discretion and subject to such rules which it may adopt,
                  permit a grantee to satisfy, in whole or in part, any federal,
                  state and local withholding tax obligation which may arise in
                  connection with the exercise of a stock option, by electing
                  either:


<PAGE>

                  (i)      to have the Company withhold shares of Company common
                  stock from the shares to be issued upon the exercise of the
                  option;

                  (ii)     to permit a grantee to tender back shares of Company
                  common stock issued upon the exercise of an option; or

                  (iii)    to deliver to the Company previously owned shares of
                  Company common stock, having, in the case of (i), (ii), or
                  (iii), a fair market value equal to the amount of the federal,
                  state, and local withholding tax associated with the exercise
                  of the option.

         (i)      ADDITIONAL PROVISIONS APPLICABLE TO OPTION AGREEMENTS IN LIEU
                  OF COMPENSATION. If the Committee, in its discretion permits
                  participants to enter into agreements as contemplated by
                  Section 7 herein, then such agreements must be irrevocable and
                  cannot be changed by the participant once made, and such
                  agreements must be made at least prior to the performance of
                  any services with respect to which an option may be granted.
                  If any participant who enters into such an agreement
                  terminates employment prior to the grant of the option, then
                  the option will not be granted and all compensation which
                  would have been covered by the option will be paid to the
                  participant in cash.

9.       EXERCISE OF OPTION BY GRANTEE ON CESSATION OF EMPLOYMENT. If a person
to whom an option has been granted shall cease, for a reason other than his or
her death, disability, early retirement, retirement, workforce reduction, or
voluntary resignation, to be employed by the Company or a subsidiary, the option
shall terminate three months after the cessation of employment, unless it
terminates earlier under other provisions of the Plan. Until the option
terminates, it may be exercised by the grantee for all or a portion of the
shares as to which the right to purchase had accrued under the Plan at the time
of cessation of employment, subject to all applicable conditions and
restrictions provided in Section 8 hereof. If a person to whom an option has
been granted shall retire or become disabled, the option shall terminate five
years after the date of early retirement, retirement or disability, unless it
terminates earlier under other provisions of the Plan. Although such exercise by
a retiree or disabled grantee is not limited to the exercise rights which had
accrued at the date of early retirement, retirement or disability, such exercise
shall be subject to all applicable conditions and restrictions prescribed in
Section 8 hereof. If a person shall voluntarily resign, his option to the extent
not previously exercised shall terminate at once. In the event that the sale of
certain assets and assumption of certain liabilities (referred to herein as "the
sale of the Division") of the HomeBanc Mortgage Corporation division (the
"Division") of First Horizon Home Loan Corporation occurs, then notwithstanding
anything herein to the contrary, if the grantee of one or more stock options
described in the second sentence of Section 7 of the Plan is employed by the
Division immediately prior to the closing of the sale of the Division and is not
an employee of the Equibanc department of the Division and if the employment of
the grantee of such option or options terminates at the time of the closing of
the sale of the Division, then each of such stock options shall terminate at
5:00 p.m. Memphis time on the fifth anniversary of the closing of the sale of
the Division (or if such date is not a business day, then on the immediately
preceding business day), unless it terminates earlier under the Plan. The
exercise of each of such options is subject to all applicable conditions and
restrictions provided in Section 8 hereof. If the grantee of one or more stock
options described in the second sentence of Section 7 of the Plan or as to which
the number of shares awarded was based on a formula which included a percentage
of the grantee's annual bonus or target bonus or participation in a bonus plan
shall cease to be employed as a result of a workforce reduction, then each of
such stock options shall terminate on the date specified by the Committee, not
to exceed five years after the date of termination, unless it terminates earlier
under other provisions of the Plan. Although such exercise is not limited to the
exercise rights which had accrued at the date of termination, such exercise
shall be subject to all applicable conditions and restrictions prescribed in
Section 8 hereof. If the grantee of one or more stock options not described in
the prior two sentences of this paragraph shall cease to be employed as a result
of a workforce reduction, then each of such stock options shall terminate on the
date specified by the Committee, not to exceed three years after the date of
termination, unless it terminates earlier under other provisions of the Plan.
Although such exercise is not limited to exercise rights which had accrued at
the date of termination, such exercise shall be subject to all applicable
conditions and restrictions prescribed in Section 8 hereof.


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10.      EXERCISE OF OPTION AFTER DEATH OF GRANTEE. If the grantee of an option
shall die while in the employ of the Company or within three months after
ceasing to be an employee, and if the option was in effect at the time of his or
her death (whether or not its term had then commenced), the option may, until
the expiration of five years from the date of death of the grantee or until the
earlier expiration of the term of the option, be exercised by the successor of
the deceased grantee. Although such exercise is not limited to the exercise
rights which had accrued at the date of death of the grantee, such exercise
shall be subject to all applicable conditions and restrictions prescribed in
Section 8 hereof.

11.      PYRAMIDING OF OPTIONS. The Committee in its sole discretion may from
time to time permit the method of exercising options known as pyramiding (the
automatic application of shares received upon the exercise of a portion of a
stock option to satisfy the exercise price for additional portions of the
option).

12.      SHAREHOLDER RIGHTS. No person shall have any rights of a shareholder by
virtue of a stock option except with respect to shares actually issued to him or
her, and issuance of shares shall confer no retroactive right to dividends.

13.      ADJUSTMENT FOR CHANGES IN CAPITALIZATION. Any increase in the number of
outstanding shares of common stock of the Company occurring through stock splits
or stock dividends after the adoption of the Plan shall be reflected
proportionately:

         (a)      in an increase in the aggregate number of shares then
                  available for the grant of options under the Plan, or becoming
                  available through the termination or forfeiture of options
                  previously granted but unexercised;

         (b)      in the number subject to options then outstanding; and

         (c)      in the quotas remaining available for exercise under
                  outstanding options,

and a proportionate reduction shall be made in the per-share option price as to
any outstanding options or portions thereof not yet exercised. Any fractional
shares resulting from such adjustments shall be eliminated. If changes in
capitalization other than those considered above shall occur, the Board of
Directors shall make such adjustments in the number and class of shares for
which options may thereafter be granted, and in the number and class of shares
remaining subject to options previously granted and in the per-share option
price as the Board in its discretion may consider appropriate, and all such
adjustments shall be conclusive.

14.      TERMINATION, SUSPENSION, OR MODIFICATION OF PLAN. The Board of
Directors may at any time terminate, suspend, or modify the Plan, except that
the Board of Directors shall not amend the Plan in violation of law. No
termination, suspension, or modification of the Plan shall adversely affect any
right acquired by any grantee, or by any successor of a grantee (as provided in
Section 10 hereof), under the terms of an option granted before the date of such
termination, suspension, or modification, unless such grantee or successor shall
consent, but it shall be conclusively presumed that any adjustment for changes
in capitalization as provided in Section 13 does not adversely affect any such
right.

15.      APPLICATION OF PROCEEDS. The proceeds received by the Company from the
sale of its shares under the Plan will be used for general corporate purposes.

16.      NO RIGHT TO EMPLOYMENT. Neither the adoption of the Plan nor the
granting of any stock option shall confer upon the grantee any right to continue
in the employ of the Company or any of its subsidiaries or interfere in any way
with the right of the Company or the subsidiary to terminate such employment at
any time.

17       GOVERNING LAW. The Plan and all determinations thereunder shall be
governed by and construed in accordance with the laws of the State of Tennessee.


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18.      SUCCESSORS. This Plan shall bind any successor of the Company, its
assets or its businesses (whether direct or indirect, by purchase, merger,
consolidation or otherwise), in the same manner and to the same extent that the
Company would be obligated under this Plan if no succession had taken place. In
the case of any transaction in which a successor would not by the foregoing
provision or by operation of law be bound by this Plan, the Company shall
require such successor expressly and unconditionally to assume and agree to
perform the Company's obligations under this Plan, in the same manner and to the
same extent that the Company would be required to perform if no such succession
had taken place. The term "Company," as used in the Plan, shall mean the Company
as hereinbefore defined and any successor or assignee to the business or assets
which by reason hereof becomes bound by this Plan.

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