10-Q

FORM 10-Q

 SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

(Mark one)

(X)       QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2007

OR

  (  )         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from______ to______

Commission file number  001-15185

CIK number 0000036966

    FIRST HORIZON NATIONAL CORPORATION

    (Exact name of registrant as specified in its charter)

Tennessee                                                                                                                            62-0803242

(State or other jurisdiction of                                                                                                        (I.R.S. Employer

incorporation or organization)                                                                                                      Identification No.)

165 Madison Avenue, Memphis, Tennessee                                                                                       38103          

         (Address of principal executive offices)                                                                                        (Zip Code)           

(901) 523-4444

(Registrant's telephone number, including area code)

 (Former name, former address and former fiscal year,

if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x    No____ 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):

  x     Large accelerated filer    ____ Accelerated filer    ____ Non-accelerated filer

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

Yes         No  x    

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common Stock, $.625 par value 126,387,854

 Class                                                                                            Outstanding on September 30, 2007

FIRST HORIZON NATIONAL CORPORATION

INDEX

Part I. Financial Information

Part II. Other Information

Signatures

Exhibit Index

2

PART I.

FINANCIAL INFORMATION

Item 1.         Financial Statements

The Consolidated Condensed Statements of Condition

The Consolidated Condensed Statements of Income

The Consolidated Condensed Statements of Shareholders’ Equity

The Consolidated Condensed Statements of Cash Flows

The Notes to Consolidated Condensed Financial Statements

This financial information reflects all adjustments that are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations for the interim periods presented.

3

CONSOLIDATED CONDENSED STATEMENTS OF CONDITION		First Horizon National Corporation
	September 30			December 31
(Dollars in thousands)(Unaudited)	2007		2006	2006
Assets:
Cash and due from banks	$      936,707		$      872,528	$      943,555
Federal funds sold and securities
purchased under agreements to resell	1,096,624		1,992,426	1,202,537
Total cash and cash equivalents	2,033,331		2,864,954	2,146,092
Investment in bank time deposits	30,993		17,798	18,037
Trading securities	1,734,653		2,512,744	2,230,745
Loans held for sale	2,900,464		2,798,281	2,873,577
Loans held for sale-divestiture	565,492		-	-
Securities available for sale	3,076,120		4,013,634	3,923,215
Securities held to maturity (fair value of $241 on September 30, 2007; $373 on
September 30, 2006; and $272 on December 31, 2006)	240		369	269
Loans, net of unearned income	21,973,004		21,955,030	22,104,905
Less:  Allowance for loan losses	236,611		206,829	216,285
Total net loans	21,736,393		21,748,201	21,888,620
Mortgage servicing rights, net	1,470,589		1,498,341	1,533,942
Goodwill	267,228		274,534	275,582
Other intangible assets, net	58,738		70,546	64,530
Capital markets receivables	1,219,720		1,027,927	732,282
Premises and equipment, net	411,515		441,659	451,708
Real estate acquired by foreclosure	75,656		65,224	63,519
Discontinued assets	-		939,728	416
Other assets	1,874,497		1,802,243	1,715,725
Other assets-divestiture	22,623		-	-
Total assets	$ 37,478,252		$ 40,076,183	$ 37,918,259
Liabilities and shareholders' equity:
Deposits:
Savings	$   3,592,732		$   3,256,680	$   3,354,180
Time deposits	2,822,792		2,906,424	2,924,050
Other interest-bearing deposits	1,674,624		1,742,276	1,969,700
Interest-bearing deposits-divestiture	361,368		-	-
Certificates of deposit $100,000 and more	5,142,169		11,920,226	6,517,629
Certificates of deposit $100,000 and more-divestiture	41,037		-	-
Interest-bearing	13,634,722		19,825,606	14,765,559
Noninterest-bearing	4,928,233		5,458,935	5,447,673
Noninterest-bearing-divestiture	72,404		-	-
Total deposits	18,635,359		25,284,541	20,213,232
Federal funds purchased and securities
sold under agreements to repurchase	4,039,827		2,416,974	4,961,799
Trading liabilities	543,060		847,453	789,957
Commercial paper and other short-term borrowings	2,396,316		926,292	1,258,513
Term borrowings	6,015,954		5,226,772	5,243,961
Other collateralized borrowings	784,599		260,416	592,399
Total long-term debt	6,800,553		5,487,188	5,836,360
Capital markets payables	1,053,349		989,332	799,489
Discontinued liabilities	-		6,977	6,966
Other liabilities	1,253,295		1,311,628	1,294,283
Other liabilities-divestiture	39,389		-	-
Total liabilities	34,761,148		37,270,385	35,160,599
Preferred stock of subsidiary	295,277		295,274	295,270
Shareholders' equity
Preferred stock - no par value (5,000,000 shares authorized, but unissued)	-		-	-
Common stock - $.625 par value (shares authorized - 400,000,000;
shares issued and outstanding - 126,387,854 on September 30, 2007;
124,467,143 on September 30, 2006; and 124,865,982 on December 31, 2006)	78,992		77,792	78,041
Capital surplus	360,016		301,857	312,521
Undivided profits	2,048,689		2,124,312	2,144,276
Accumulated other comprehensive (loss)/ income, net	(65,870	)	6,563	(72,448	)
Total shareholders' equity	2,421,827		2,510,524	2,462,390
Total liabilities and shareholders' equity	$ 37,478,252		$ 40,076,183	$ 37,918,259
See accompanying notes to consolidated condensed financial statements. Certain previously reported amounts have been reclassified to agree with current presentation.

4

CONSOLIDATED CONDENSED STATEMENTS OF INCOME	First Horizon National Corporation
	Three Months Ended						Nine Months Ended
	September 30						September 30
(Dollars in thousands except per share data)(Unaudited)	2007			2006			2007		2006
Interest income:
Interest and fees on loans	$	413,275		$	416,898		$	1,236,956	$	1,173,832
Interest on investment securities		44,990			54,138			146,365		132,024
Interest on loans held for sale		66,570			72,135			191,338		224,309
Interest on trading securities		41,898			44,850			132,530		126,963
Interest on other earning assets		16,002			24,577			53,634		67,421
Total interest income		582,735			612,598			1,760,823		1,724,549
Interest expense:
Interest on deposits:
Savings		29,140			25,083			85,090		62,256
Time deposits		34,745			32,090			101,337		86,544
Other interest-bearing deposits		6,179			6,562			19,876		18,474
Certificates of deposit $100,000 and more		92,557			130,875			309,463		360,239
Interest on trading liabilities		10,295			19,233			40,928		57,503
Interest on short-term borrowings		75,114			66,871			211,210		190,495
Interest on long-term debt		96,901			80,263			278,264		198,098
Total interest expense		344,931			360,977			1,046,168		973,609
Net interest income		237,804			251,621			714,655		750,940
Provision for loan losses		43,352			23,694			116,246		60,146
Net interest income after provision for loan losses		194,452			227,927			598,409		690,794
Noninterest income:
Capital markets		63,722			95,215			235,889		290,238
Mortgage banking		39,022			85,935			183,419		283,089
Deposit transactions and cash management		44,863			44,503			127,300		125,282
Revenue from loan sales and securitizations		4,774			11,830			24,052		35,399
Insurance commissions		6,747			10,534			24,210		37,681
Trust services and investment management		9,922			9,609			30,238		31,090
Equity securities gains, net		-			8,757			2,967		10,271
Debt securities gains/(losses), net		-			-			6,292		(78,902	)
All other income and commissions		34,425			51,544			132,595		116,401
Total noninterest income		203,475			317,927			766,962		850,549
Adjusted gross income after provision for loan losses		397,927			545,854			1,365,371		1,541,343
Noninterest expense:
Employee compensation, incentives and benefits		236,683			260,351			741,217		766,288
Occupancy		34,778			29,745			96,964		87,372
Equipment rentals, depreciation and maintenance		17,270			17,893			56,674		56,015
Operations services		18,774			17,976			54,052		52,491
Communications and courier		10,959			12,950			33,245		41,271
Amortization of intangible assets		2,647			3,233			8,095		9,002
Goodwill impairment		13,010			-			13,010		-
All other expense		87,501			110,751			278,617		298,552
Total noninterest expense		421,622			452,899			1,281,874		1,310,991
(Loss)/ income before income taxes		(23,695	)		92,955			83,497		230,352
(Benefit)/provision for income taxes		(9,330	)		25,776			5,611		55,830
(Loss)/ income from continuing operations		(14,365	)		67,179			77,886		174,522
Income/ (loss) from discontinued operations, net of tax		209			(69	)		628		210,580
(Loss)/ income before cumulative effect of changes in accounting principle		(14,156	)		67,110			78,514		385,102
Cumulative effect of changes in accounting principle, net of tax		-			-			-		1,345
Net (loss)/ income	$	(14,156	)	$	67,110		$	78,514	$	386,447
(Loss)/ earnings per common share from continuing operations	$	(.11	)	$	.54		$	.62	$	1.40
Earnings per common share from discontinued operations, net of tax		-			-			-		1.69
Earnings per common share from cumulative effect of changes in accounting principle		-			-			-		.02
(Loss)/ earnings per common share  (Note 7)	$	(.11	)	$	.54		$	.62	$	3.11
(Loss)/ diluted earnings per common share from continuing operations	$	(.11	)	$	.53		$	.61	$	1.36
Diluted earnings per common share from discontinued operations, net of tax		-			-			-		1.65
Diluted earnings per common share from cumulative effect of changes in accounting principle		-			-			-		.01
(Loss)/ diluted earnings per common share  (Note 7)	$	(.11	)	$	.53		$	.61	$	3.02
Weighted average common shares (Note 7)		126,058			124,150			125,760		124,431
Diluted average common shares (Note 7)		126,058			127,523			127,823		127,962
See accompanying notes to consolidated condensed financial statements. Certain previously reported amounts have been reclassified to agree with current presentation.

5

CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY	First Horizon National Corporation
(Dollars in thousands)(Unaudited)	2007			2006
Balance, January 1		$2,462,390			$2,347,539
Adjustment to reflect change in accounting for tax benefits (FIN 48)		(862	)		-
Adjustment to reflect adoption of measurement date provisions for SFAS No. 158		6,233			-
Adjustment to reflect change in accounting for purchases of life insurance
(EITF Issue No. 06-5)		(548	)		-
Net income		78,514			386,447
Other comprehensive income:
Unrealized fair value adjustments, net of tax:
Cash flow hedges		(268	)		434
Securities available for sale		(5,591	)		48,373
Recognized pension and other employee benefit plans net periodic benefit costs		4,127			-
Comprehensive income		76,782			435,254
Cash dividends declared		(170,620	)		(168,065	)
Common stock repurchased		(1,099	)		(165,569	)
Common stock issued for:
Stock options and restricted stock		34,243			49,432
Acquisitions		-			486
Excess tax benefit from stock-based compensation arrangements		6,261			3,592
Adjustment to reflect change in accounting for employee stock option forfeitures		-			(1,780	)
Stock-based compensation expense		9,016			9,635
Other		31			-
Balance, September 30		$2,421,827			$2,510,524
See accompanying notes to consolidated condensed financial statements.

6

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS		First Horizon National Corporation
		Nine Months Ended September 30
(Dollars in thousands)(Unaudited)		2007			2006
Operating	Net income		$     78,514			$   386,447
Activities	Adjustments to reconcile net income to net cash provided/(used) by operating activities:
	Provision for loan losses		116,246			60,146
	Provision for deferred income tax		5,611			55,830
	Depreciation and amortization of premises and equipment		44,286			39,787
	Amortization of intangible assets		8,095			9,227
	Net other amortization and accretion		48,978			61,137
	Decrease in derivatives, net		(103,163	)		(164,317	)
	Market value adjustment on mortgage servicing rights		258			(35,830	)
	Provision for foreclosure reserve		4,144			9,266
	Cumulative effect of changes in accounting principle, net of tax		-			(1,345	)
	Gain on divestiture		-			(208,581	)
	Stock-based compensation expense		9,016			9,635
	Excess tax benefit from stock-based compensation arrangements		(6,261	)		(3,592	)
	Equity securities gains, net		(2,967	)		(10,271	)
	Debt securities (gains)/losses, net		(6,292	)		78,902
	Net losses on disposal of fixed assets		1,093			3,193
	Net (increase)/decrease in:
	Trading securities		496,092			(379,316	)
	Loans held for sale		(26,887	)		1,619,378
	Capital markets receivables		(487,438	)		(516,419	)
	Interest receivable		3,466			(22,284	)
	Other assets		24,965			(1,132,665	)
	Net increase/(decrease) in:
	Capital markets payables		253,860			398,005
	Interest payable		4,984			49,066
	Other liabilities		(74,502	)		40,448
	Trading liabilities		(246,897	)		53,815
	Total adjustments		66,687			13,215
	Net cash provided by operating activities		145,201			399,662
Investing	Held to maturity securities:
Activities	Maturities		29			15
	Available for sale securities:
	Sales		636,188			2,286,850
	Maturities		765,601			514,301
	Purchases		(543,545	)		(3,854,017	)
	Premises and equipment:
	Sales		-			44
	Purchases		(24,194	)		(75,967	)
	Net increase in loans		(581,368	)		(1,499,550	)
	Net increase in investment in bank time deposits		(12,952	)		(7,111	)
	Proceeds from divestitures, net of cash and cash equivalents		-			280,041
	Acquisitions, net of cash and cash equivalents acquired		-			(487	)
	Net cash provided/(used) by investing activities		239,759			(2,355,881	)
Financing	Common stock:
Activities	Exercise of stock options		34,450			49,448
	Cash dividends paid		(168,506	)		(167,551	)
	Repurchase of shares		(1,099	)		(165,569	)
	Excess tax benefit from stock-based compensation arrangements		6,261			3,592
	Long-term debt:
	Issuance		1,222,431			2,234,160
	Payments		(265,056	)		(189,667	)
	Issuance of preferred stock of subsidiary		8			-
	Repurchase of preferred stock of subsidiary		(1	)		-
	Net increase/(decrease) in:
	Deposits		(1,577,872	)		1,848,370
	Short-term borrowings		251,663			(1,194,493	)
	Net cash (used)/provided by financing activities		(497,721	)		2,418,290
	Net (decrease)/increase in cash and cash equivalents		(112,761	)		462,071
	Cash and cash equivalents at beginning of period		2,146,092			2,402,883
	Cash and cash equivalents at end of period		$2,033,331			$2,864,954
	Cash and cash equivalents from discontinued operations at beginning of period, included above		$               -			$         874
	Total interest paid		1,039,828			923,139
	Total income taxes paid		14,016			105,779
See accompanying notes to consolidated condensed financial statements. Certain previously reported amounts have been reclassified to agree with current presentation.

7

Note 1 - Financial Information

The unaudited interim consolidated financial statements of First Horizon National Corporation (FHN), including its subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States of America and follow general practices within the industries in which it operates.  This preparation requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  These estimates and assumptions are based on information available as of the date of the financial statements and could differ from actual results. In the opinion of management, all necessary adjustments have been made for a fair presentation of financial position and results of operations for the periods presented.  The operating results for the interim 2007 periods are not necessarily indicative of the results that may be expected going forward.  For further information, refer to the audited consolidated financial statements in the 2006 Annual Report to shareholders.

Income Taxes.   FHN or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various states jurisdictions. With few exceptions, FHN is no longer subject to U.S. federal or state and local income tax examinations by tax authorities for years before 2002. The Internal Revenue Service (IRS) has completed its examination of all U.S. federal returns through 2004; although 2003 and 2004 remain open under the statute. All proposed adjustments with respect to examinations of federal returns filed for 2004 and prior years have been settled.

FHN adopted the provisions of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (FIN 48), on January 1, 2007. As a result of the implementation of FIN 48, FHN recognized a $.9 million increase in the liability for unrecognized tax benefits, which was accounted for as a reduction to the January 1, 2007, balance of undivided profits. The total balance of unrecognized tax benefits at January 1, 2007, was $41.0 million. First Horizon does not expect that unrecognized tax benefits will significantly increase or decrease within the next 12 months.  Included in the balance at January 1, 2007, were $15.6 million of tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. Because of the impact of deferred tax accounting, other than interest, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.  FHN recognizes interest accrued related to unrecognized tax benefits in tax expense and penalties in tax expense. FHN had approximately $4.8 million accrued for the payment of interest at January 1, 2007.  As of September 30, 2007, no significant changes to these amounts have occurred since the adoption of FIN 48.

Accounting Changes. Effective January 1, 2007, FHN adopted Statement of Financial Accounting Standards No. 155, “Accounting for Certain Hybrid Financial Instruments” (SFAS No. 155), which permits fair value remeasurement for hybrid financial instruments that contain an embedded derivative that otherwise would require bifurcation. Additionally, SFAS No. 155 clarifies the accounting guidance for beneficial interests in securitizations. Under SFAS No. 155, all beneficial interests in a securitization require an assessment in accordance with SFAS No. 133 to determine if an embedded derivative exists within the instrument. In addition, effective January 1, 2007, FHN adopted Derivatives

Implementation Group Issue B40, “Application of Paragraph 13(b) to Securitized Interests in Prepayable Financial Assets” (DIG B40). DIG B40 provides an exemption from the embedded derivative test of paragraph 13(b) of SFAS No. 133 for instruments that would otherwise require bifurcation if the test is met solely because of a prepayment feature included within the securitized interest and prepayment is not controlled by the security holder. Since FHN presents all retained interests in its proprietary securitizations as trading securities and due to the clarifying guidance of DIG B40, the impact of adopting SFAS No. 155 was immaterial to the results of operations.

Effective January 1, 2007, FHN adopted FIN 48 which provides guidance for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  FIN 48 also provides guidance on the classification and disclosure of uncertain tax positions in the financial statements.  As previously mentioned, upon adoption of FIN 48, FHN recognized a cumulative effect adjustment to the beginning balance of undivided profits in the amount of $.9 million for differences between the tax benefits recognized in the statements of condition prior to the adoption of FIN 48 and the amounts reported after adoption.

Effective January 1, 2007, FHN adopted EITF Issue No. 06-5, “Accounting for Purchases of Life Insurance—Determining the Amount That Could Be Realized in Accordance with FASB Technical Bulletin No. 85-4, Accounting for Purchases of Life Insurance” (EITF 06-5).  EITF 06-5 provides that in addition to cash surrender value, the asset recognized for a life insurance contract should consider certain other provisions included in a policy’s contractual terms with additional amounts being discounted if receivable beyond one year.  Additionally, EITF 06-5 requires that the determination of the amount that could be realized under an insurance contract be performed at the individual policy level.  FHN recognized a reduction of undivided profits in the amount of $.5 million as a result of adopting EITF 06-5.

8

Note 1 - Financial Information (continued)

Effective January 1, 2007, FHN elected early adoption of the final provisions of Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106, and 132(R)” (SFAS No. 158), which required that the annual measurement date of a plan’s assets and liabilities be as of the date of the financial statements. As a result of adopting the measurement date provisions of SFAS No. 158, total equity was increased by $6.2 million on January 1, 2007, consisting of a reduction to undivided profits of $2.1 million and a credit to accumulated other comprehensive income of $8.3 million. Effective December 31, 2006, FHN adopted the provisions of SFAS No. 158 related to the requirements to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in the statements of condition. SFAS No. 158 did not change measurement or recognition requirements for periodic pension and postretirement costs.  SFAS No. 158 also provides that changes in the funded status of a defined benefit postretirement plan should be recognized in the year such changes occur through comprehensive income. As a result of adopting the recognition provisions of SFAS No. 158, unrecognized transition assets and obligations, unrecognized actuarial gains and losses, and unrecognized prior service costs and credits were recognized as a component of accumulated other comprehensive income resulting in a reduction in equity of $76.7 million, net of tax, on December 31, 2006.

In fiscal 2006, FHN adopted SEC Staff Accounting Bulletin No. 108 (SAB No. 108).  SAB No. 108 requires that registrants assess the impact on both the statement of condition and the statement of income when quantifying and evaluating the materiality of a misstatement.  Under SAB No. 108, adjustment of financial statements is required when either approach results in quantifying a misstatement that is material to a reporting period presented within the financial statements, after considering all relevant quantitative and qualitative factors.  The adoption of SAB No. 108 had no effect on FHN’s statement of condition or results of operations.

Effective January 1, 2006, FHN elected early adoption of SFAS No. 156.  This amendment to SFAS No. 140 requires servicing rights be initially measured at fair value.  Subsequently, companies are permitted to elect, on a class-by-class basis, either fair value or amortized cost accounting for their servicing rights.  FHN elected fair value accounting for its MSR.  Accordingly, FHN recognized the cumulative effect of a change in accounting principle totaling $.2 million, net of tax, representing the excess of the fair value of the servicing asset over the recorded value on January 1, 2006.

FHN also adopted Statement of Financial Accounting Standards No. 154, “Accounting Changes and Error Corrections” (SFAS No. 154), as of January 1, 2006.  SFAS No. 154 requires retrospective application of voluntary changes in accounting principle.  A change in accounting principle mandated by new accounting pronouncements should follow the transition method specified by the new guidance.  However, if transition guidance is not otherwise specified, retrospective application will be required.  SFAS No. 154 does not alter the accounting requirement for changes in estimates (prospective) and error corrections (restatement).  The adoption of SFAS No. 154 did not affect FHN’s reported results of operations.

FHN adopted SFAS No. 123-R as of January 1, 2006.  SFAS No. 123-R requires recognition of expense over the requisite service period for awards of share-based compensation to employees.  The grant date fair value of an award is used to measure the compensation expense to

be recognized over the life of the award.  For unvested awards granted prior to the adoption of SFAS No. 123-R, the fair values utilized equal the values developed in preparation of the disclosures required under the original SFAS No. 123.  Compensation expense recognized after adoption of SFAS No. 123-R incorporates an estimate of awards expected to ultimately vest, which requires estimation of forfeitures as well as projections related to the satisfaction of performance conditions that determine vesting.   As permitted by SFAS No. 123-R, FHN retroactively applied the provisions of SFAS No. 123-R to its prior period financial statements.  The Consolidated Condensed Statements of Income were revised to incorporate expenses previously presented in the footnote disclosures.  The Consolidated Condensed Statements of Condition were revised to reflect the effects of including equity compensation expense in those prior periods.  Additionally, all deferred compensation balances were reclassified within equity to capital surplus.  Since FHN’s prior disclosures included forfeitures as they occurred, a cumulative effect adjustment, as required by SFAS No. 123-R, of $1.1 million net of tax, was made for unvested awards that are not expected to vest due to anticipated forfeiture.

Accounting Changes Issued but Not Currently Effective. In November 2007, the SEC issued Staff Accounting Bulletin No. 109, "Written Loan Commitments Recorded at Fair Value Through Earnings" (SAB No. 109). SAB No. 109 rescinds SAB No. 105's prohibition on inclusion of expected net future cash flows related to loan servicing activities in the fair value measurement of a written loan commitment. SAB No. 109 also applies to any loan commitments for which fair value accounting is elected under SFAS No. 159. SAB No. 109 is effective prospectively for derivative loan commitments issued or modified in fiscal quarters beginning after December 15, 2007. FHN is currently assessing the financial impact of adopting SAB No. 109.

In June 2007, the American Institute of Certified Public Accountants (AICPA) issued Statement of Position 07-1, “Clarification of the Scope of the Audit and Accounting Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies” (SOP 07-1), which provides guidance for determining whether an entity is within the scope of the AICPA’s Investment Companies Guide.  Additionally, SOP 07-1 provides certain criteria that must be met in order for investment company accounting applied by a subsidiary or equity method investee to be retained in the financial statements of the parent company or an equity method investor.  SOP 07-1 also provides expanded disclosure requirements regarding the retention of such investment company accounting in the consolidated financial statements.  In May 2007, FASB Staff Position No. FIN 46(R)- 7, “Application of FASB Interpretation No. 46(R) to Investment Companies” (FSP FIN 46(R)-7) was issued.  FSP FIN 46(R)-7 amends FIN 46(R) to provide a permanent exception to its scope for companies within the scope

9

Note 1 - Financial Information (continued)

of the revised Investment Companies Guide under SOP 07-1.  The FASB has indefinitely deferred the effective date of SOP 07-1 and FSP FIN 46(R)-7.

In April 2007, FASB Staff Position No. FIN 39-1, “Amendment of FASB Interpretation No. 39” (FSP FIN 39-1) was issued.  FSP FIN 39-1 permits the offsetting of fair value amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral against fair value amounts recognized for derivative instruments executed with the same counterparty under the same master netting arrangement.  Upon adoption of FSP FIN 39-1, entities are permitted to change their previous accounting policy election to offset or not offset fair value amounts recognized for derivative instruments under master netting arrangements.  Additionally, FSP FIN 39-1 requires additional disclosures for derivatives and collateral associated with master netting arrangements.  FSP FIN 39-1 is effective for fiscal years beginning after November 15, 2007, through retrospective application, with early application permitted.  FHN is currently assessing the financial impact of adopting FSP FIN 39-1.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (SFAS No. 159), which allows an irrevocable election to measure certain financial assets and financial liabilities at fair value on an instrument-by-instrument basis, with unrealized gains and losses recognized currently in earnings.  Under SFAS No. 159, the fair value option may only be elected at the time of initial recognition of a financial asset or financial liability or upon the occurrence of certain specified events.  Additionally, SFAS No. 159 provides that application of the fair value option must be based on the fair value of an entire financial asset or financial liability and not selected risks inherent in those assets or liabilities.  SFAS No. 159 requires that assets and liabilities which are measured at fair value pursuant to the fair value option be reported in the financial statements in a manner that separates those fair values from the carrying amounts of similar assets and liabilities which are measured using another measurement attribute.  SFAS No. 159 also provides expanded disclosure requirements regarding the effects of electing the fair value option on the financial statements.  SFAS No. 159 is effective prospectively for fiscal years beginning after November 15, 2007.  FHN is currently assessing the financial impact of adopting SFAS No. 159.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (SFAS No. 157), which establishes a hierarchy to be used in performing measurements of fair value.  SFAS No. 157 emphasizes that fair value should be determined from the perspective of a market participant while also indicating that valuation methodologies should first reference available market data before using internally developed assumptions.  Additionally, SFAS No. 157 provides expanded disclosure requirements regarding the effects of fair value measurements on the financial statements.  SFAS No. 157 is effective prospectively for fiscal years beginning after November 15, 2007.  FHN is currently assessing the financial impact of adopting SFAS No. 157.

In September 2006, the consensus reached in EITF Issue No. 06-4, “Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements” (EITF 06-4) was ratified by the FASB.  EITF 06-4 requires that a liability be recognized for contracts written to employees which provide future postretirement benefits that are covered by endorsement split-dollar life insurance arrangements because such obligations are not considered to be effectively settled upon entering into the related insurance arrangements.  EITF 06-4 is effective for fiscal years beginning after December 15, 2007, with the guidance applied using either a retrospective approach or through a cumulative-effect adjustment to beginning undivided profits.  FHN anticipates recognizing a liability, with a corresponding decrease to undivided profits, of approximately $8 million, net of tax, upon adoption of EITF 06-4.

10

Note 2 - Acquisitions/Divestitures

Due to FHN’s ongoing efforts to improve profitability, in July 2007 management decided to pursue the sale, closure, or consolidation of 34 full-service First Horizon Bank branches in Atlanta, Baltimore, Dallas and Northern Virginia.  In September 2007, it was announced that agreements for the sale of all 34 of the branches had been reached.  The branch sales are expected to close by the first quarter of 2008 and are expected to result in a gain up to $40 million for FHN in the aggregate after recognition of $13.9 million in impairment losses in the third quarter of 2007.  Each of the agreements is to purchase certain loans and fixed assets, including branch locations, and to assume all of the deposit relationships of the First Horizon Bank branches being purchased.  The assets and liabilities related to the branches to be sold, which are included in the Retail/Commercial Banking segment, are reflected as held-for-sale on the Consolidated Condensed Statements of Condition.  The aggregate carrying amounts of transferred loans, deposits, other assets and other liabilities were $565.5 million, $474.8 million, $22.6 million, and $39.4 million, respectively, as of September 30, 2007.  As a result of impairment assessments completed in relation to two Georgia branches, a goodwill writedown of $13.0 million and a writedown of core deposit intangibles of $.9 million were recognized in the third quarter of 2007.  The goodwill impairment loss was estimated based on the implied fair value as of September 30, 2007 of the goodwill originally recognized upon FHN’s purchase of such branches, and was calculated using the bid price for the associated branches.  The fair value of the core deposit intangible asset, which is included in the Retail/Commerical Banking segment, was determined based on the discounted present value of cash flows remaining related to the associated deposit accounts.  These impairment losses are included in all other expense on the Consolidated Condensed Statements of Income and are recognized in the Corporate segment as described in Note 12 – Restructuring, Repositioning, and Efficiency Charges.

On June 28, 2006, First Horizon Merchant Services, Inc. (FHMS) sold all of the outstanding capital stock of Global Card Services, Inc. (GCS), a wholly-owned subsidiary.  As a result, tax benefits of $4.2 million were recognized associated with the difference between FHMS’ tax basis in the stock and net proceeds from the sale.

On March 1, 2006, FHN sold substantially all the assets of its national merchant processing business conducted primarily through FHMS and GCS.  The sale was to NOVA Information Systems (NOVA), a wholly-owned subsidiary of U.S. Bancorp.  This transaction resulted in a pre-tax gain of $351.5 million.  In addition, a supplement to the purchase price may be paid to FHN if certain performance goals are achieved during a period following closing.  This divestiture was accounted for as a discontinued operation, and prior periods were adjusted to exclude the impact of merchant operations from the results of continuing operations.  In conjunction with the sale, FHN entered into a transitional service agreement with NOVA to provide or continue on-going services such as telecommunications, back-end processing and disaster recovery until NOVA converts the operations to their systems. 

In addition to the divestitures mentioned above, FHN acquires or divests assets from time to time in transactions that are considered business combinations or divestitures but are not material to FHN individually or in the aggregate.

11

Note 3 - Loans
The composition of the loan portfolio is detailed below:
			September 30						December 31
(Dollars in thousands)			2007			2006			2006
Commercial:
Commercial, financial and industrial			$	6,978,643		$	6,945,207		$	7,201,009
Real estate commercial				1,326,261			1,199,084			1,136,590
Real estate construction				2,828,545			2,660,415			2,753,458
Retail:
Real estate residential				7,544,048			8,428,652			7,973,313
Real estate construction				2,160,593			2,096,440			2,085,133
Other retail				144,526			163,134			161,178
Credit card receivables				196,967			202,866			203,307
Real estate loans pledged against other collateralized
borrowings				793,421			259,232			590,917
Loans, net of unearned income				21,973,004			21,955,030			22,104,905
Allowance for loan losses				236,611			206,829			216,285
Total net loans			$	21,736,393		$	21,748,201		$	21,888,620
Certain previously reported amounts have been reclassified to agree with current presentation.
Nonperforming loans consist of loans which management has identified as impaired, other nonaccrual loans and loans which have been
restructured. On September 30, 2007 and 2006, there were no outstanding commitments to advance additional funds to customers whose
loans had been restructured. The following table presents nonperforming loans on:
			September 30						December 31
(Dollars in thousands)			2007			2006			2006
Impaired loans			$	181,010		$	60,372		$	76,340
Other nonaccrual loans*				27,296			14,072			17,290
Total nonperforming loans			$	208,306		$	74,444		$	93,630
* On September 30, 2007 and 2006, and on December 31, 2006, other nonaccrual loans included $18.5 million, $10.5 million,
and $10.8 million, respectively, of loans held for sale.
Generally, interest payments received on impaired loans are applied to principal. Once all principal has been received, additional payments
are recognized as interest income on a cash basis. The following table presents information concerning impaired loans:
	Three Months Ended						Nine Months Ended
	September 30						September 30
(Dollars in thousands)	2007		2006			2007			2006
Total interest on impaired loans	$	152	$	538		$	646		$	882
Average balance of impaired loans		158,373		54,227			112,857			48,945
Activity in the allowance for loan losses related to non-impaired loans, impaired loans, and for the total allowance for the nine months ended
September 30, 2007 and 2006, is summarized as follows:
(Dollars in thousands)			Non-impaired			Impaired			Total
Balance on December 31, 2005			$	179,635		$	10,070		$	189,705
Provision for loan losses				35,255			24,891			60,146
Divestitures/acquisitions/transfers				(1,470	)		-			(1,470	)
Charge-offs				(29,414	)		(22,677	)		(52,091	)
Recoveries				7,687			2,852			10,539
Net charge-offs				(21,727	)		(19,825	)		(41,552	)
Balance on September 30, 2006			$	191,693		$	15,136		$	206,829
Balance on December 31, 2006			$	200,827		$	15,458		$	216,285
Provision for loan losses				50,773			65,473			116,246
Divestitures/acquisitions/transfers				(16,237	)		1,290			(14,947	)
Charge-offs				(35,476	)		(56,540	)		(92,016	)
Recoveries				6,893			4,150			11,043
Net charge-offs				(28,583	)		(52,390	)		(80,973	)
Balance on September 30, 2007			$	206,780		$	29,831		$	236,611

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Note 4 - Mortgage Servicing Rights

On January 1, 2006, FHN elected early adoption of SFAS No. 156, which requires servicing rights be initially measured at fair value. Subsequently, companies are permitted to elect, on a class-by-class basis, either fair value or amortized cost accounting for their servicing rights.  Accordingly, FHN began initially recognizing all its classes of mortgage servicing rights (MSR) at fair value and elected to irrevocably continue application of fair value accounting to all its classes of MSR.  Classes of MSR are determined in accordance with FHN’s risk management practices and market inputs used in determining the fair value of the servicing asset.  FHN recognized the cumulative effect of a change in accounting principle totaling $.2 million, net of tax, representing the excess of the fair value of the servicing asset over the recorded value on January 1, 2006.  The balance of MSR included on the Consolidated Condensed Statements of Condition represents the rights to service approximately $110.0 billion of mortgage loans on September 30, 2007, for which a servicing right has been capitalized.

Since sales of MSR tend to occur in private transactions and the precise terms and conditions of the sales are typically not readily available, there is a limited market to refer to in determining the fair value of MSR.  As such, like other participants in the mortgage banking business, FHN relies primarily on a discounted cash flow model to estimate the fair value of its MSR.  This model calculates estimated fair value of the MSR using predominant risk characteristics of MSR, such as interest rates, type of product (fixed vs. variable), age (new, seasoned, or moderate), agency type and other factors.  FHN uses assumptions in the model that it believes are comparable to those used by brokers and other service providers.  FHN also periodically compares its estimates of fair value and assumptions with brokers, service providers, and recent market activity and against its own experience.

Following is a summary of changes in capitalized MSR as of September 30, 2007 and 2006:

	First			Second
(Dollars in thousands)	Liens			Liens			HELOC
Fair value on January 1, 2006	$	1,318,219		$	5,470		$	14,384
Addition of mortgage servicing rights		303,791			15,532			5,421
Reductions due to loan payments		(191,239	)		(2,924	)		(6,143	)
Changes in fair value due to:
Changes in current market interest rates		33,536			34			1,090
Changes in assumptions		-			722			8
Other changes in fair value		53			17			370
Fair value on September 30, 2006	$	1,464,360		$	18,851		$	15,130
Fair value on January 1, 2007	$	1,495,215		$	24,091		$	14,636
Addition of mortgage servicing rights		282,341			11,582			1,919
Reductions due to loan payments		(173,323	)		(7,106	)		(3,961	)
Changes in fair value due to:
Changes in current market interest rates		(387	)		98			(39	)
Reclassification to trading assets		(174,547	)		-			-
Other changes in fair value		(54	)		82			42
Fair value on September 30, 2007	$	1,429,245		$	28,747		$	12,597

In conjunction with capital management initiatives, FHN modified Pooling and Servicing Agreements (PSA) on its private securitizations during the second quarter of 2007 to segregate the retained yield component from the master servicing fee.  The retained yield of $174.5 million was reclassified from mortgage servicing rights to trading securities on the Consolidated Condensed Statements of Condition.

13

Note 5 - Intangible Assets

The following is a summary of intangible assets, net of accumulated amortization, included in the Consolidated Condensed Statements of Condition:

				Other
				Intangible
(Dollars in thousands)	Goodwill			Assets*
December 31, 2005	$	281,440		$	76,647
Amortization expense		-			(9,002	)
Additions		4,871			6,124
Divestitures		(11,777	)		(3,223	)
September 30, 2006	$	274,534		$	70,546
December 31, 2006	$	275,582		$	64,530
Amortization expense		-			(8,095	)
Impairment**		(13,010	)		(910	)
Divestitures		-			(93	)
Additions***		4,656			3,306
September 30, 2007	$	267,228		$	58,738
* Represents customer lists, acquired contracts, premium on purchased deposits, covenants not to compete and assets related to the minimum pension liability.
** See Note 2 - Acquisition/Divestitures for further details.
*** Preliminary purchase price allocations on acquisitions are based upon estimates of fair value and are subject to change.

The gross carrying amount of other intangible assets subject to amortization is $135.7 million on September 30, 2007, net of $77.0 million of accumulated amortization.  Estimated aggregate amortization expense for the remainder of 2007 is expected to be $2.5 million and is expected to be $8.6 million, $6.7 million, $5.8 million and $5.5 million for the twelve-month periods of 2008, 2009, 2010 and 2011, respectively.

The following is a summary of goodwill detailed by reportable segments for the nine months ended September 30:

	Retail/
	Commercial			Mortgage		Capital
(Dollars in thousands)	Banking			Banking		Markets		Total
December 31, 2005	$	104,781		$	61,593	$	115,066	$	281,440
Divestitures		(11,777	)		-		-		(11,777	)
Additions		1,272			3,599		-		4,871
September 30, 2006	$	94,276		$	65,192	$	115,066	$	274,534
December 31, 2006	$	94,276		$	66,240	$	115,066	$	275,582
Impairment		(13,010	)		-		-		(13,010	)
Additions*		-			4,656		-		4,656
September 30, 2007	$	81,266		$	70,896	$	115,066	$	267,228
* Preliminary purchase price allocations on acquisitions are based upon estimates of fair value and are subject to change.

14

Note 6 - Regulatory Capital

FHN is subject to various regulatory capital requirements administered by the federal banking agencies.  Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on FHN's financial statements.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, specific capital guidelines that involve quantitative measures of assets, liabilities and certain derivatives as calculated under regulatory accounting practices must be met.  Capital amounts and classification are also subject to qualitative judgment by the regulators about components, risk weightings and other factors.  Quantitative measures established by regulation to ensure capital adequacy require FHN to maintain minimum amounts and ratios of total and Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets (leverage).  Management believes, as of September 30, 2007, that FHN met all capital adequacy requirements to which it was subject.

The actual capital amounts and ratios of FHN and FTBNA are presented in the table below.  In addition, FTBNA must also calculate its capital ratios after excluding financial subsidiaries as defined by the Gramm-Leach-Bliley Act of 1999.  Based on this calculation FTBNA’s Total Capital, Tier 1 Capital and Leverage ratios were 11.78 percent, 8.12 percent and 6.81 percent, respectively, on September 30, 2007, and were 11.58 percent, 7.95 percent and 6.61 percent, respectively, on September 30, 2006.

	First Horizon National						First Tennessee Bank
	Corporation						National Association
(Dollars in thousands)	Amount			Ratio			Amount			Ratio
On September 30, 2007:
Actual:
Total Capital	$	3,988,233			12.85	%	$	3,796,610			12.38	%
Tier 1 Capital		2,666,834			8.59			2,575,210			8.39
Leverage		2,666,834			7.12			2,575,210			6.93
For Capital Adequacy Purposes:
Total Capital		2,483,350	>		8.00			2,454,189	>		8.00
Tier 1 Capital		1,241,675	>		4.00			1,227,094	>		4.00
Leverage		1,498,359	>		4.00			1,486,043	>		4.00
To Be Well Capitalized Under Prompt
Corrective Action Provisions:
Total Capital								3,067,736	>		10.00
Tier 1 Capital								1,840,642	>		6.00
Leverage								1,857,554	>		5.00
On September 30, 2006:
Actual:
Total Capital	$	3,998,431			12.66	%	$	3,806,220			12.14	%
Tier 1 Capital		2,660,264			8.42			2,568,052			8.19
Leverage		2,660,264			6.80			2,568,052			6.62
For Capital Adequacy Purposes:
Total Capital		2,526,690	>		8.00			2,507,515	>		8.00
Tier 1 Capital		1,263,345	>		4.00			1,253,757	>		4.00
Leverage		1,564,438	>		4.00			1,552,664	>		4.00
To Be Well Capitalized Under Prompt
Corrective Action Provisions:
Total Capital								3,134,393	>		10.00
Tier 1 Capital								1,880,636	>		6.00
Leverage								1,940,830	>		5.00
Certain previously reported amounts have been reclassified to agree with current presentation.

15

Note 7 - Earnings Per Share

The following table shows a reconciliation of earnings per common share to diluted earnings per common share:

	Three Months Ended						Nine Months Ended
	September 30						September 30
(In thousands, except per share data)	2007			2006			2007		2006
Net (loss)/income from continuing operations		$  (14,365	)		$ 67,179			$ 77,886		$ 174,522
Income/(loss) from discontinued operations, net of tax		209			(69	)		628		210,580
Cumulative effect of changes in accounting
principle, net of tax		-			-			-		1,345
Net (loss)/income		$  (14,156	)		$ 67,110			$ 78,514		$ 386,447
Weighted average common shares		126,058			124,150			125,760		124,431
Effect of dilutive securities		-			3,373			2,063		3,531
Diluted average common shares		126,058			127,523			127,823		127,962
Earnings per common share:
Net (loss)/income from continuing operations		$       (.11	)		$      .54			$      .62		$      1.40
Income from discontinued operations, net of tax		-			-			-		1.69
Cumulative effect of changes in accounting
principle, net of tax		-			-			-		.02
Net (loss)/income		$       (.11	)		$      .54			$      .62		$      3.11
Diluted earnings per common share:
Net (loss)/income from continuing operations		$       (.11	)		$      .53			$      .61		$      1.36
Income from discontinued operations, net of tax		-			-			-		1.65
Cumulative effect of changes in accounting
principle, net of tax		-			-			-		.01
Net (loss)/income		$       (.11	)		$      .53			$      .61		$      3.02

Equity awards of 17,811 and 6,730 with a weighted average exercise price of $34.76 and $42.34 per share for the three months ended September 30, 2007 and 2006 and of 9,876 and 6,174 with weighted average exercise prices of $37.81 and $42.56 per share for the nine months ended September 30, 2007 and 2006,  respectively, were not included in the computation of diluted earnings per common share because such shares would have had an antidilutive effect on earnings per common share.

In first quarter 2006, FHN purchased four million shares of its common stock. This share repurchase program was concluded for an adjusted purchase price of $165.1 million in second quarter 2006.

16

Note 8 - Contingencies and Other Disclosures

Contingencies. Contingent liabilities arise in the ordinary course of business, including those related to litigation. Various claims and lawsuits are pending against FHN and its subsidiaries. Although FHN cannot predict the outcome of these lawsuits, after consulting with counsel, management is of the opinion that when resolved, these lawsuits will not have a material adverse effect on the consolidated financial statements of FHN.

In November 2000, a complaint was filed in state court in Jackson County, Missouri against FHN’s subsidiary, First Horizon Home Loans. The case generally concerned the charging of certain loan origination fees, including fees permitted by Kansas and federal law but allegedly restricted or not permitted by Missouri law, when First Horizon Home Loans or its predecessor, McGuire Mortgage Company, made certain second-lien mortgage loans. Among other relief, plaintiffs sought a refund of fees, a repayment and forgiveness of loan interest, prejudgment interest, punitive damages, loan rescission, and attorneys’ fees. In response to pre-trial motions, the court certified a statewide class action involving approximately 4,000 loans and made a number of rulings that could have significantly affected the ultimate outcome of the case in the absence of an appeal.  Trial had been scheduled for the fourth quarter of 2006.

As a result of mediation, FHN entered into a final settlement agreement related to the McGuire lawsuit. In connection with this settlement, FHN agreed to pay, under agreed circumstances using an agreed methodology, an aggregate of up to approximately $36 million.  At the present time, the period during which claims under the settlement can be made has ended. Claims have been evaluated and objections made pursuant to the agreed upon challenge process. The total amount reserved for this matter, based on the claims received and FHN’s evaluation of them to date, was approximately $30 million. The settlement has received final approval by the court, the court has entered its order making the settlement final, there have been no appeals, and the time for any appeals has expired.

The loss reserve for this matter reflects an estimate of the amount that ultimately would be paid under the settlement.  The amount reserved reflects the amount and value of claims actually received by the claims deadline plus fees and expenses that the settlement requires FHN to pay, all of which together are less than the maximum amount possible under the settlement.  The ultimate amount paid under the settlement is not expected to be higher than the amount reserved at present, and may be lower in the event some of the claims are reduced or rejected for reasons set forth in the settlement, and in any event cannot exceed the settlement amount.

Other disclosures – Indemnification agreements and guarantees.  In the ordinary course of business, FHN enters into indemnification agreements for legal proceedings against its directors and officers and standard representations and warranties for underwriting agreements, merger and acquisition agreements, loan sales, contractual commitments, and various other business transactions or arrangements.  The extent of FHN’s obligations under these agreements depends upon the occurrence of future events; therefore, it is not possible to estimate a maximum potential amount of payouts that could be required with such agreements.

First Horizon Home Loans services a mortgage loan portfolio of approximately $108.7 billion on September 30, 2007, a significant portion of which is held by GNMA, FNMA, FHLMC or private security holders.  In connection with its servicing activities, First Horizon Home Loans guarantees the receipt of the scheduled principal and interest payments on the underlying loans.  In the event of customer non-performance on the loan, First Horizon Home Loans is obligated to make the payment to the security holder.  Under the terms of the servicing agreements, First Horizon Home Loans can utilize payments received from other prepaid loans in order to make the security holder whole.  In the event payments are ultimately made by First Horizon Home Loans to satisfy this obligation, for loans sold with no recourse, all funds are recoverable from the government agency at foreclosure sale.

First Horizon Home Loans is also subject to losses in its loan servicing portfolio due to loan foreclosures and other recourse obligations. Certain agencies have the authority to limit their repayment guarantees on foreclosed loans resulting in certain foreclosure costs being borne by servicers. In addition, First Horizon Home Loans has exposure on all loans sold with recourse. First Horizon Home Loans has various claims for reimbursement, repurchase obligations, and/or indemnification requests outstanding with government agencies or private investors. First Horizon Home Loans has evaluated all of its exposure under recourse obligations based on factors, which include loan delinquency status, foreclosure expectancy rates and claims outstanding.  Accordingly, First Horizon Home Loans had an allowance for losses on the mortgage servicing portfolio of approximately $12.9 million and $14.8 million on September 30, 2007 and 2006, respectively.  First Horizon Home Loans has sold certain mortgage loans with an agreement to repurchase the loans upon default.  For the single-family residential loans, in the event of borrower nonperformance, First Horizon Home Loans would assume losses to the extent they exceed the value of the collateral and private mortgage insurance, FHA insurance or VA guarantees.  On September 30, 2007 and 2006, First Horizon Home Loans had single-family residential loans with outstanding balances of $104.6 million and $130.4 million, respectively, that were serviced on a full recourse basis. On September 30, 2007 and 2006, the outstanding principal balance of loans sold with limited recourse arrangements where some portion of the principal is at risk and serviced

17

Note 8 - Contingencies and Other Disclosures (continued)

by First Horizon Home Loans was $3.3 billion and $3.0 billion, respectively.  Additionally, on September 30, 2007 and 2006, $4.9 billion and $5.1 billion, respectively, of mortgage loans were outstanding which were sold under limited recourse arrangements where the risk is limited to interest and servicing advances.

FHN has securitized and sold HELOC and second-lien mortgages which are held by private security holders, and on September 30, 2007, the outstanding principal balance of these loans was $285.4 million and $76.7 million, respectively.  On September 30, 2006, the outstanding principal balance of securitized and sold HELOC and second-lien mortgages was $415.5 million and $105.2 million, respectively.  In connection with its servicing activities, FTBNA does not guarantee the receipt of the scheduled principal and interest payments on the underlying loans but does have residual interests of $22.2 million and $53.3 million on September 30, 2007 and 2006, respectively, which are available to make the security holder whole in the event of credit losses. FHN has projected expected credit losses in the valuation of the residual interest.

18

Note 9 – Pension and Other Employee Benefits

Pension plan.  FHN provides pension benefits to employees retiring under the provisions of a noncontributory, defined benefit pension plan.  Employees of FHN’s mortgage subsidiary and certain insurance subsidiaries are not covered by the pension plan.  Pension benefits are based on years of service, average compensation near retirement and estimated social security benefits at age 65.  The annual funding is based on an actuarially determined amount using the entry age cost method. The Pension Plan was closed to new participants as of October 1, 2007.

FHN also maintains a nonqualified supplemental executive retirement plan that covers certain employees whose benefits under the pension plan have been limited under Tax Code Section 415 and Tax Code Section 401(a)(17), which limit compensation to $225,000 for purposes of benefit calculations. Compensation is defined in the same manner as it is under the pension plan.  Participants receive the difference between the monthly pension payable, if tax code limits did not apply, and the actual pension payable.  All benefits provided under this plan are unfunded and payments to plan participants are made by FHN.

Other employee benefits.  FHN provides postretirement medical insurance to full-time employees retiring under the provisions of the FHN Pension Plan.  The postretirement medical plan is contributory with retiree contributions adjusted annually.  The plan is based on criteria that are a combination of the employee’s age and years of service and utilizes a two-step approach.  For any employee retiring on or after January 1, 1995, FHN contributes a fixed amount based on years of service and age at time of retirement.

Effective December 31,2006, FHN adopted SFAS No. 158, which required the recognition of the overfunded or underfunded status of a defined benefit plan and postretirement plan as an asset or liability in the statements of condition. SFAS No. 158 did not change measurement or recognition requirements for periodic pension and postretirement costs. Effective January 1, 2007, FHN adopted the final provisions of SFAS No. 158, which required that the annual measurement date of a plan’s assets and liabilities be as of the date of the financial statements. As a result of adopting the measurement provisions of SFAS No. 158, undivided profits were reduced by $2.1 million, net of tax, and accumulated other comprehensive income was credited by $8.3 million, net of tax.

The components of net periodic benefit cost for the three months ended September 30 are as follows:

	Pension Benefits						Postretirement Benefits
(Dollars in thousands)	2007			2006			2007			2006
Components of net periodic benefit cost/(benefit)
Service cost		$    4,324			$   4,521			$      74			$     83
Interest cost		6,153			5,485			278			279
Expected return on plan assets		(10,638	)		(8,945	)		(440	)		(421	)
Amortization of prior service cost/(benefit)		220			211			(44	)		(44	)
Recognized losses/(gains)		2,226			1,769			(177	)		(141	)
Amortization of transition obligation		-			-			247			248
Net periodic cost/(benefit)		$    2,285			$   3,041			$     (62	)		$       4

The components of net periodic benefit cost for the nine months ended September 30 are as follows:

	Pension Benefits						Postretirement Benefits
(Dollars in thousands)	2007			2006			2007			2006
Components of net periodic benefit cost/(benefit)
Service cost		$  12,978			$ 13,561			$    224			$    249
Interest cost		18,461			16,456			834			837
Expected return on plan assets		(31,912	)		(26,834	)		(1,322	)		(1,262	)
Amortization of prior service cost/(benefit)		660			633			(132	)		(132	)
Recognized losses/(gains)		5,846			5,306			(533	)		(422	)
Amortization of transition obligation		-			-			741			742
Net periodic cost/(benefit)		$    6,033			$   9,122			$   (188	)		$     12

19

Note 9 – Pension and Other Employee Benefits (continued)

FHN made a contribution of $37 million to the pension plan in fourth quarter 2006 and made an additional contribution of $37 million in first quarter 2007. Both of these contributions were attributable to the 2006 plan year. FHN expects to make no additional contributions to the pension plan or to the other employee benefit plan in 2007.

20

Note 10 – Business Segment Information

FHN has four business segments, Retail/Commercial Banking, Mortgage Banking, Capital Markets and Corporate. The Retail/Commercial Banking segment offers financial products and services, including traditional lending and deposit taking, to retail and commercial customers. Additionally, Retail/Commercial Banking provides investments, insurance, financial planning, trust services and asset management, credit card, cash management, check clearing, and correspondent services. On March 1, 2006, FHN sold its national merchant processing business. The divestiture, which was accounted for as a discontinued operation, is included in the Retail/Commercial Banking segment. The Mortgage Banking segment consists of core mortgage banking elements including originations and servicing and the associated ancillary revenues related to these businesses. The Capital Markets segment consists of traditional capital markets securities activities, structured finance, equity research, investment banking, loan sales, portfolio advisory, and the sale of bank-owned life insurance. The Corporate segment consists of unallocated corporate expenses, expense on subordinated debt issuances and preferred stock, bank-owned life insurance, unallocated interest income associated with excess equity, net impact of raising incremental capital, revenue and expense associated with deferred compensation plans, funds management, and venture capital. Periodically, FHN adapts its segments to reflect changes in expense allocations between segments. Previously reported amounts have been reclassified to agree with current presentation.

Total revenue, expense and asset levels reflect those which are specifically identifiable or which are allocated based on an internal allocation method. Because the allocations are based on internally developed assignments and allocations, they are to an extent subjective. This assignment and allocation has been consistently applied for all periods presented. The following table reflects the amounts of consolidated revenue, expense, tax, and assets for each segment for the three and nine months ended September 30:

	Three Months Ended						Nine Months Ended
	September 30						September 30
(Dollars in thousands)	2007			2006			2007		2006
Total Consolidated
Net interest income		$      237,804			$      251,621			$      714,655		$      750,940
Provision for loan losses		43,352			23,694			116,246		60,146
Noninterest income		203,475			317,927			766,962		850,549
Noninterest expense		421,622			452,899			1,281,874		1,310,991
Pre-tax (loss)/income		(23,695	)		92,955			83,497		230,352
(Benefit)/provision for income taxes		(9,330	)		25,776			5,611		55,830
(Loss)/income from continuing operations		(14,365	)		67,179			77,886		174,522
Income/(loss) from discontinued operations, net of tax		209			(69	)		628		210,580
(Loss)/income before cumulative effect of changes
in accounting principle		(14,156	)		67,110			78,514		385,102
Cumulative effect of changes in
accounting principle, net of tax		-			-			-		1,345
Net (loss)/income		$       (14,156	)		$       67,110			$        78,514		$      386,447
Average assets		$  37,754,038			$ 39,519,765			$  38,487,137		$  38,574,766

Certain previously reported amounts have been reclassified to agree with current presentation.

21

Note 10 – Business Segment Information (continued)

	Three Months Ended						Nine Months Ended
	September 30						September 30
(Dollars in thousands)	2007			2006			2007			2006
Retail/Commercial Banking
Net interest income	$	219,579		$	232,830		$	661,591		$	691,066
Provision for loan losses		43,349			23,549			108,689			59,936
Noninterest income		95,397			111,594			305,005			333,317
Noninterest expense		193,269			205,416			597,681			638,526
Pre-tax income		78,358			115,459			260,226			325,921
Provision for income taxes		27,792			35,470			80,824			92,680
Income from continuing operations		50,566			79,989			179,402			233,241
Income/(loss) from discontinued operations, net of tax		209			(69	)		628			210,580
Income before cumulative effect		50,775			79,920			180,030			443,821
Cumulative effect of changes in
accounting principle, net of tax		-			-			-			522
Net income	$	50,775		$	79,920		$	180,030		$	444,343
Average assets	$	23,782,612		$	23,419,421		$	23,723,556		$	23,136,168
Mortgage Banking
Net interest income	$	20,590		$	21,266		$	62,286		$	72,598
Provision for loan losses		3			145			(115	)		210
Noninterest income		42,158			90,376			193,859			293,711
Noninterest expense		108,580			136,804			329,476			366,715
Pre-tax loss		(45,835	)		(25,307	)		(73,216	)		(616	)
Benefit from income taxes		(16,612	)		(10,283	)		(36,887	)		(1,685	)
(Loss)/income before cumulative effect		(29,223	)		(15,024	)		(36,329	)		1,069
Cumulative effect of changes in
accounting principle, net of tax		-			-			-			414
Net (loss)/income	$	(29,223	)	$	(15,024	)	$	(36,329	)	$	1,483
Average assets	$	6,663,005		$	6,333,165		$	6,578,956		$	6,387,233
Capital Markets
Net interest expense	$	(2,169	)	$	(1,531	)	$	(11,871	)	$	(11,867	)
Noninterest income		61,847			98,498			241,193			299,229
Noninterest expense		67,339			81,778			220,911			248,008
Pre-tax (loss)/income		(7,661	)		15,189			8,411			39,354
(Benefit)/provision for income taxes		(2,957	)		5,682			3,001			14,681
(Loss)/income before cumulative effect		(4,704	)		9,507			5,410			24,673
Cumulative effect of changes in
accounting principle, net of tax		-			-			-			179
Net (loss)/ income	$	(4,704	)	$	9,507		$	5,410		$	24,852
Average assets	$	3,441,451		$	5,183,369		$	4,081,671		$	5,014,073

Certain previously reported amounts have been reclassified to agree with current presentation.

22

Note 10 – Business Segment Information (continued)

	Three Months Ended						Nine Months Ended
	September 30						September 30
(Dollars in thousands)	2007			2006			2007			2006
Corporate
Net interest (expense)/income		$          (196	)		$         (944	)		$        2,649			$           (857	)
Provision for loan losses		-			-			7,672			-
Noninterest income/(expense)		4,073			17,459			26,905			(75,708	)
Noninterest expense		52,434			28,901			133,806			57,742
Pre-tax loss		(48,557	)		(12,386	)		(111,924	)		(134,307	)
Benefit from income taxes		(17,553	)		(5,093	)		(41,327	)		(49,846	)
Loss before cumulative effect		(31,004	)		(7,293	)		(70,597	)		(84,461	)
Cumulative effect of changes in
accounting principle, net of tax		-			-			-			230
Net loss		$     (31,004	)		$       (7,293	)		$     (70,597	)		$      (84,231	)
Average assets		$ 3,866,970			$ 4,583,810			$ 4,102,954			$  4,037,292

Certain previously reported amounts have been reclassified to agree with current presentation.

23

Note 11 – Derivatives

In the normal course of business, FHN utilizes various financial instruments, through its mortgage banking, capital markets and risk management operations, which include derivative contracts and credit-related arrangements, as part of its risk management strategy and as a means to meet customers’ needs.  These instruments are subject to credit and market risks in excess of the amount recorded on the balance sheet in accordance with generally accepted accounting principles.  The contractual or notional amounts of these financial instruments do not necessarily represent credit or market risk.  However, they can be used to measure the extent of involvement in various types of financial instruments. Controls and monitoring procedures for these instruments have been established and are routinely reevaluated.  The Asset/Liability Committee (ALCO) monitors the usage and effectiveness of these financial instruments.

Credit risk represents the potential loss that may occur because a party to a transaction fails to perform according to the terms of the contract. The measure of credit exposure is the replacement cost of contracts with a positive fair value.  FHN manages credit risk by entering into financial instrument transactions through national exchanges, primary dealers or approved counterparties, and using mutual margining agreements whenever possible to limit potential exposure.  With exchange-traded contracts, the credit risk is limited to the clearinghouse used.  For non-exchange traded instruments, credit risk may occur when there is a gain in the fair value of the financial instrument and the counterparty fails to perform according to the terms of the contract and/or when the collateral proves to be of insufficient value.  Market risk represents the potential loss due to the decrease in the value of a financial instrument caused primarily by changes in interest rates, mortgage loan prepayment speeds or the prices of debt instruments.  FHN manages market risk by establishing and monitoring limits on the types and degree of risk that may be undertaken. FHN continually measures this risk through the use of models that measure value-at-risk and earnings-at-risk.

Derivative Instruments. FHN enters into various derivative contracts both in a dealer capacity, to facilitate customer transactions, and also as a risk management tool. Where contracts have been created for customers, FHN enters into transactions with dealers to offset its risk exposure. Derivatives are also used as a risk management tool to hedge FHN’s exposure to changes in interest rates or other defined market risks.

Derivative instruments are recorded on the Consolidated Condensed Statements of Condition as other assets or other liabilities measured at fair value.  Fair value is defined as the amount FHN would receive or pay in the market to replace the derivatives as of the valuation date.  Fair value is determined using available market information and appropriate valuation methodologies. For a fair value hedge, changes in the fair value of the derivative instrument and changes in the fair value of the hedged asset or liability are recognized currently in earnings.  For a cash flow hedge, changes in the fair value of the derivative instrument, to the extent that it is effective, are recorded in accumulated other comprehensive income and subsequently reclassified to earnings as the hedged transaction impacts net income.  Any ineffective portion of a cash flow hedge is recognized currently in earnings.  For freestanding derivative instruments, changes in fair value are recognized currently in earnings.  Cash flows from derivative contracts are reported as operating activities on the Consolidated Condensed Statements of Cash Flows.

Interest rate forward contracts are over-the-counter contracts where two parties agree to purchase and sell a specific quantity of a financial instrument at a specified price, with delivery or settlement at a specified date.  Futures contracts are exchange-traded contracts where two parties agree to purchase and sell a specific quantity of a financial instrument at a specific price, with delivery or settlement at a specified date.  Interest rate option contracts give the purchaser the right, but not the obligation, to buy or sell a specified quantity of a financial instrument, at a specified price, during a specified period of time.  Caps and floors are options that are linked to a notional principal amount and an underlying indexed interest rate.  Interest rate swaps involve the exchange of interest payments at specified intervals between two parties without the exchange of any underlying principal.  Swaptions are options on interest rate swaps that give the purchaser the right, but not the obligation, to enter into an interest rate swap agreement during a specified period of time.

Mortgage Banking

Mortgage banking interest rate lock commitments are short-term commitments to fund mortgage loan applications in process (the pipeline) for a fixed term at a fixed price. During the term of an interest rate lock commitment, First Horizon Home Loans has the risk that interest rates will change from the rate quoted to the borrower. First Horizon Home Loans enters into forward sales contracts with respect to fixed rate loan commitments and futures contracts with respect to adjustable rate loan commitments as economic hedges designed to protect the value of the interest rate lock commitments from changes in value due to changes in interest rates. Under SFAS No. 133, interest rate lock commitments qualify as derivative financial instruments and as such do not qualify for hedge accounting treatment. As a result, the interest rate lock commitments are recorded at fair value, exclusive of the value of associated servicing rights, with changes in fair value recorded in current earnings as gain or loss on the sale of loans in mortgage banking noninterest income. Changes in the fair value of the derivatives that

24

Note 11 – Derivatives (continued)

serve as economic hedges of interest rate lockcommitments are also included in current earnings as a component of gain or loss on the sale of loans in mortgage banking noninterest income.

First Horizon Home Loans’ warehouse (mortgage loans held for sale) is subject to changes in fair value, due to fluctuations in interest rates from the loan closing date through the date of sale of the loan into the secondary market. Typically, the fair value of the warehouse declines in value when interest rates increase and rises in value when interest rates decrease. To mitigate this risk, First Horizon Home Loans enters into forward sales contracts and futures contracts to provide an economic hedge against those changes in fair value on a significant portion of the warehouse. These derivatives are recorded at fair value with changes in fair value recorded in current earnings as a component of the gain or loss on the sale of loans in mortgage banking noninterest income.

To the extent that these interest rate derivatives are designated to hedge specific similar assets in the warehouse and prospective analyses indicate that high correlation is expected, the hedged loans are considered for hedge accounting under SFAS No. 133.  Anticipated correlation is determined by projecting a dollar offset relationship for each tranche based on anticipated changes in the fair value of the hedged mortgage loans and the related derivatives, in response to various interest rate shock scenarios.  Hedges are reset daily and the statistical correlation is calculated using these daily data points. Retrospective hedge effectiveness is measured using the regression correlation results. First Horizon Home Loans generally maintains a coverage ratio (the ratio of expected change in the fair value of derivatives to expected change in the fair value of hedged assets) of approximately 100 percent on warehouse loans hedged under SFAS No. 133. Effective SFAS No. 133 hedging results in adjustments to the recorded value of the hedged loans. These basis adjustments, as well as the change in fair value of derivatives attributable to effective hedging, are included as a component of the gain or loss on the sale of loans in mortgage banking noninterest income.

Warehouse loans qualifying for SFAS No. 133 hedge accounting treatment totaled $1.6 billion and $1.0 billion on September 30, 2007 and 2006, respectively. The balance sheet impacts of the related derivatives were net liabilities of $9.5 million and $5.7 million on September 30, 2007 and 2006, respectively. Net losses of $14.5 million and $11.4 million representing the ineffective portion of these fair value hedges were recognized as a component of gain or loss on sale of loans for the nine months ended September 30, 2007 and 2006, respectively.

In 2006, due to adoption of SFAS No. 156, First Horizon began revaluing MSR to current fair value each month.  Changes in fair value are included in servicing income in mortgage banking noninterest income. First Horizon Home Loans also enters into economic hedges of the MSR to minimize the effects of loss in value of MSR associated with increased prepayment activity that generally results from declining interest rates. In a rising interest rate environment, the value of the MSR generally will increase while the value of the hedge instruments will decline.  First Horizon Home Loans enters into interest rate contracts (including swaps, swaptions, and mortgage forward sales contracts) to hedge against the effects of changes in fair value of its MSR.  Substantially all capitalized MSR are hedged for economic purposes.

First Horizon Home Loans utilizes derivatives (including swaps, swaptions, and mortgage forward sales contracts) that change in value inversely to the movement of interest rates to protect the value of its interest-only securities as an economic hedge.  Changes in the fair value of these derivatives are recognized currently in earnings in mortgage banking noninterest income as a component of servicing income. Interest-only securitiesare included in trading securities with changes in fair value recognized currently in earnings in mortgage banking noninterest income as a component of servicing income.

Capital Markets

Capital Markets trades U.S. Treasury, U.S. Agency, mortgage-backed, corporate and municipal fixed income securities, and other securities for distribution to customers.  When these securities settle on a delayed basis, they are considered forward contracts.  Capital Markets also enters into interest rate contracts, including options, caps, swaps, futures and floors for its customers.  In addition, Capital Markets enters into futures contracts to economically hedge interest rate risk associated with its securities inventory.  These transactions are measured at fair value, with changes in fair value recognized currently in capital markets noninterest income. Related assets and liabilities are recorded on the balance sheet as other assets and other liabilities.  Credit risk related to these transactions is controlled through credit approvals, risk control limits and ongoing monitoring procedures through the Senior Credit Policy Committee.

25

Note 11 – Derivatives (continued)

In 2005, Capital Markets utilized a forward contract as a cash flow hedge of the risk of change in the fair value of a forecasted sale of certain loans. In first quarter 2006, $.1 million of net losses which were recorded in other comprehensive income on December 31, 2005, were recognized in earnings.  The amount of SFAS No. 133 hedge ineffectiveness related to this cash flow hedge was immaterial.

In third quarter 2007, Capital Markets hedged $47.5 million of held-to-maturity trust preferred securities, which have an initial fixed rate term of five years before conversion to a floating rate.  Capital Markets has entered into pay fixed, receive floating interest rate swaps to hedge the interest rate risk associated with this initial five year term.  The balance sheet impact of those swaps was $.2 million in other liabilities on September 30, 2007.  Interest paid or received for these swaps was recognized as an adjustment of the interest income of the assets whose risk in being hedged.

Interest Rate Risk Management

FHN’s ALCO focuses on managing market risk by controlling and limiting earnings volatility attributable to changes in interest rates.  Interest rate risk exists to the extent that interest-earning assets and liabilities have different maturity or repricing characteristics.  FHN uses derivatives, including swaps, caps, options, and collars, that are designed to moderate the impact on earnings as interest rates change. FHN’s interest rate risk management policy is to use derivatives not to speculate but to hedge interest rate risk or market value of assets or liabilities.  In addition, FHN has entered into certain interest rate swaps and caps as a part of a product offering to commercial customers with customer derivatives paired with offsetting market instruments that, when completed, are designed to eliminate market risk.  These contracts do not qualify for hedge accounting and are measured at fair value with gains or losses included in current earnings in noninterest income.

FHN has entered into pay floating, receive fixed interest rate swaps to hedge the interest rate risk of certain large institutional certificates of deposit, totaling $62.2 million and $61.4 million on September 30, 2007 and 2006, respectively. These swaps have been accounted for as fair value hedges under the shortcut method.  The balance sheet impact of these swaps was $.3 million and $1.1 million in other liabilities on September 30, 2007 and 2006, respectively. Interest paid or received for these swaps was recognized as an adjustment of the interest expense of the liabilities whose risk is being managed.

FHN has entered into pay floating, receive fixed interest rate swaps to hedge the interest rate risk of certain long-term debt obligations, totaling $1.1 billion on September 30, 2007 and 2006. These swaps have been accounted for as fair value hedges under the shortcut method. The balance sheet impact of these swaps was $3.1 million in other assets and $10.7 million in other liabilities on September 30, 2007, and $2.0 million in other assets and $19.0 million in other liabilities on September 30, 2006. Interest paid or received for these swaps was recognized as an adjustment of the interest expense of the liabilities whose risk is being managed.

In first quarter 2006, FHN determined that derivative transactions used in hedging strategies to manage interest rate risk on subordinated debt related to its trust preferred securities did not qualify for hedge accounting under the shortcut method.  As a result, any fluctuations in the market value of the derivatives should have been recorded through the income statement with no corresponding offset to the hedged item. While management believes these hedges would have qualified for hedge accounting under the long haul method, that accounting cannot be applied retroactively.  FHN evaluated the impact to all quarterly and annual periods since the inception of the hedges and concluded that the impact was immaterial in each period.  In first quarter 2006, FHN recorded an adjustment to recognize the cumulative impact of these transactions that resulted in a negative $15.6 million impact to noninterest income, which was included in current earnings.  FHN has subsequently redesignated these hedge relationships under SFAS No. 133 using the long haul method.  For the period of time during first quarter 2006 that these hedge relationships were not redesignated under SFAS No. 133, the swaps were measured at fair value with gains or losses included in current earnings.  FHN has entered into pay floating, receive fixed interest rate swaps to hedge the interest rate risk of certain subordinated debt totaling $.3 billion on September 30, 2007 and 2006. The balance sheet impact of these swaps was $21.4 million and $20.4 million in other liabilities on September 30, 2007 and 2006, respectively.  There was no ineffectiveness related to these hedges. Interest paid or received for these swaps was recognized as an adjustment of the interest expense of the liabilities whose risk is being managed.

FHN has utilized an interest rate swap as a cash flow hedge of the interest payment on floating-rate bank notes with fair values of $100.1 million and $100.6 million on September 30, 2007 and 2006, respectively, and a maturity in first quarter 2009. The balance sheet impact of this swap was $.1 million in other assets and $82 thousand, net of tax, in other comprehensive income on September 30, 2007, and was $.6 million in other assets and $.4 million, net of tax, in other comprehensive income on September 30, 2006. There was no ineffectiveness related to this hedge.

26

Note 12 - Restructuring, Repositioning, and Efficiency Charges

Throughout 2007, FHN has conducted an ongoing, company-wide review of business practices with the goal of improving its overall profitability and productivity.  As a result of actions taken in second quarter 2007, FHN recorded pre-tax expenses of $39.3 million related to restructuring, repositioning, and efficiency initiatives, including $16.9 million of losses related to asset impairments.  Additionally, in third quarter 2007 management announced its intention to sell 34 full-service First Horizon Bank branches in its national banking markets, as well as plans to right size First Horizon Home Loans’ mortgage banking operations and balance sheet utilization and to downsize FHN’s national lending operations, in order to redeploy capital to higher-return businesses.  Costs recognized in the nine months ended September 30, 2007 related to those restructuring, repositioning, and efficiency activities were $72.1 million, with approximately $32.8 million in pre-tax expenses recorded in third quarter.  Of these amounts, $29.8 million and $15.0 million, respectively, represents exit costs that have been accounted for in accordance with Statement of Financial Accounting Standards No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” (SFAS No. 146).

Significant expenses year-to-date for 2007 resulted from the following actions:

·   Expense of $18.8 million associated with organizational and compensation changes for right sizing operating segments and consolidating functional areas.

·   Non-core business repositioning costs of $17.4 million, including costs associated with the exit of the collectible coin merchandising business and the transition of the non-prime mortgage origination business to a broker model.

·   Expense of $14.3 million related to other restructuring, repositioning, and efficiency initiatives, including facilities consolidation, procurement centralization, multi-sourcing and the divestiture of certain loan portfolios.

·   Costs of $18.0 million related to the divestiture of 34 full-service First Horizon Bank locations in Virginia, Maryland, Georgia, and Texas, including $13.9 million for the writedown of intangibles.

·   Expense of $3.6 million related to the restructuring of mortgage operations through office closures, associated sales force decreases, and the reduction of management and support staff and downsizing of national lending operations through the reduction of consumer and construction sales forces and decreasing management, support staff and back-office costs.

Provision for loan losses of $7.7 million were incurred in second quarter 2007 in relation to the divestiture of a non-strategic loan portfolio.  All other costs associated with the restructuring, repositioning, and efficiency initiatives implemented by management are included in the noninterest expense section of the Consolidated Condensed Statements of Income, including severance and other employee-related costs recognized in relation to such initiatives which are recorded in employee compensation, incentives, and benefits, facilities consolidation costs and related asset impairment costs which are included in occupancy, costs associated with the impairment of premises and equipment which are included in equipment rentals, depreciation, and maintenance, and other costs associated with such initiatives, including professional fees, intangible asset impairment costs,  and asset impairment and repositioning costs associated with the exit from the collectible coin merchandising business, which are included in all other expense and goodwill impairment.  In total, up to $40 million in gains are expected in fourth quarter 2007 and first quarter 2008 in relation to the First Horizon Bank branch divestitures.  Additionally, pre-tax expenses of approximately $20 to $30 million are anticipated to be recognized in relation to the continuing implementation of the existing restructuring, repositioning, and efficiency initiatives through the targeted completion date for such initiatives at the end of first quarter 2008.  At this time, the exact amounts and timing of these additional charges are still being determined.

Activity in the restructuring and repositioning liability for the three and nine months ended September 30, 2007 is presented in the following table, along with other restructuring and repositioning expenses recognized.  All costs associated with the restructuring, repositioning, and efficiency initiatives implemented in second and third quarters 2007 are recorded as unallocated corporate charges within the Corporate segment.

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Note 12 - Restructuring, Repositioning, and Efficiency Charges (continued)

	Three Months Ended		Nine Months Ended
(Dollars in thousands)	September 30, 2007		September 30, 2007
	Charged to		Charged to
	Expense	Liability	Expense	Liability
Beginning Balance	$         -	$   10,849	$          -	$          -
Severance and other employee related costs*	9,258	9,258	17,255	17,255
Facility consolidation costs	2,836	2,836	6,624	6,624
Other exit costs, professional fees and other	2,933	2,933	5,902	5,902
Total Accrued	15,027	25,876	29,781	29,781
Payments**	-	8,690	-	12,595
Accrual Reversals	-	294	-	294
Restructuring & Repositioning Reserve Balance	$ 15,027	$   16,892	$  29,781	$  16,892
Other Restructuring & Repositioning Expenses:
Loan Portfolio Divestiture	-		7,672
Impairment of Premises and Equipment	3,876		9,035
Impairment of Intangible Assets	13,919		13,919
Impairment of Other Assets	-		11,733
Total Other Restructuring & Repositioning Expenses	17,795		42,359
Total Charged to Expense	$ 32,822		$  72,140

* Includes $1.2 million of deferred severance-related payments that will be paid after 2008.
** Includes payments related to:	Three Months Ended	Nine Months Ended
	September 30, 2007	September 30, 2007
Severance and other employee related costs	$  5,001	$  7,338
Facility consolidation costs	1,157	1,207
Other exit costs, professional fees and other	2,532	4,050
	$  8,690	$12,595

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL INFORMATION

FHN is a national financial services institution.  From a small community bank chartered in 1864, FHN has grown to be one of the 30 largest bank holding companies in the United States in terms of asset size.

FHN’s 11,000 employees provide a broad array of financial services to individual and business customers through hundreds of offices located across the United States.

AARP, Working Mother and Fortune magazines have recognized FHN as one of the nation’s best employers.  FHN also was named one of the nation’s 100 best corporate citizens by CRO magazine.

FHN provides a broad array of financial services to its customers through three national businesses.  The combined strengths of these businesses create an extensive range of financial products and services.  In addition, the corporate segment provides essential support within the corporation.

§   Retail/Commercial Banking offers financial products and services, including traditional lending and deposit-taking, to retail and commercial customers.  Additionally, the retail/commercial bank provides investments, insurance, financial planning, trust services and asset management, credit card, cash management, check clearing, and correspondent services. On March 1, 2006, FHN sold its national merchant processing business.  The divestiture which was included in the Retail/Commercial Banking segment was accounted for as a discontinued operation.

§   Mortgage Banking helps provide home ownership through First Horizon Home Loans, a division of First Tennessee Bank National Association (FTBNA), which operates offices in 44 states and is one of the top 20 mortgage servicers and top 20 originators of mortgage loans to consumers.  This segment consists of core mortgage banking elements including originations and servicing and the associated ancillary revenues related to these businesses.

§   Capital Markets provides a broad spectrum of financial services for the investment and banking communities through the integration of traditional capital markets securities activities, structured finance, equity research, investment banking, loan sales, portfolio advisory, and the sale of bank-owned life insurance.

§   Corporate consists of unallocated corporate expenses including restructuring, repositioning and efficiency charges, expense on subordinated debt issuances and preferred stock, bank-owned life insurance, unallocated interest income associated with excess equity, net impact of raising incremental capital, revenue and expense associated with deferred compensation plans, funds management and venture capital.

For the purpose of this management discussion and analysis (MD&A), earning assets have been expressed as averages, and loans have been disclosed net of unearned income.  The following is a discussion and analysis of the financial condition and results of operations of FHN for the three-month and nine-month periods ended September 30, 2007, compared to the three-month and nine-month periods ended September 30, 2006.  To assist the reader in obtaining a better understanding of FHN and its performance, this discussion should be read in conjunction with FHN’s unaudited consolidated condensed financial statements and accompanying notes appearing in this report.  Additional information including the 2006 financial statements, notes, and MD&A is provided in the 2006 Annual Report.

FORWARD-LOOKING STATEMENTS

This MD&A contains forward-looking statements with respect to FHN’s 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 a company’s control, and many of which, with respect to future business decisions and actions (including acquisitions and divestitures), are subject to change.  Examples of uncertainties and contingencies include, among other important factors, general and local economic and business conditions; 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; inflation or deflation; customer and investor responses to these conditions; the financial condition of borrowers and other counterparties; competition within and outside the financial services industry; geopolitical developments including possible terrorist activity; natural disasters; effectiveness of FHN’s hedging

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practices; technology; demand for FHN’s product offerings; new products and services in the industries in which FHN operates; 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 Securities and Exchange Commission (SEC), the Financial Accounting Standards Board (FASB), the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, Financial Industry Regulatory Authority, and other regulators; regulatory and judicial proceedings and changes in laws and regulations applicable to FHN; and FHN’s success in executing its business plans and strategies and managing the risks involved in the foregoing, could cause actual results to differ. FHN assumes no obligation to update any forward-looking statements that are made from time to time. Actual results could differ because of several factors, including those presented in this Forward-Looking Statements section.

FINANCIAL SUMMARY (Comparison of Third Quarter 2007 to Third Quarter 2006)

FINANCIAL HIGHLIGHTS

For third quarter 2007, FHN recorded a net loss of $14.2 million or $.11 per diluted share compared to net income of $67.1 million or $.53 per diluted share in third quarter 2006.  Third quarter 2007 was impacted by several items including credit market disruptions, restructuring, repositioning and efficiency initiatives and additional provisioning. Throughout 2007, FHN has conducted an ongoing, company-wide review of business practices with the goal of improving its overall profitability and productivity.  As a result of actions taken in the second quarter of 2007, FHN recorded pre-tax expenses of $39.3 million related to restructuring, repositioning, and efficiency initiatives.  Additionally, in third quarter 2007 management announced its intention to sell 34 full-service First Horizon Bank branches in its national banking markets, as well as plans to right size First Horizon Home Loans’ mortgage banking operations and to downsize FHN’s national lending operations, in order to redeploy capital to higher-return businesses.  Costs recognized in the nine months ended September 30, 2007 related to those restructuring, repositioning, and efficiency activities were $72.1 million, with $32.8 million in pre-tax expenses recorded in third quarter.  Significant expenses resulted from the following actions:

·   Expense associated with organizational and compensation changes for right sizing operating segments and consolidating functional areas.

·   Non-core business repositioning costs including costs associated with the exit of the collectible coin merchandising business and the transition of the non-prime mortgage origination business to a broker model.

·   Expense related to other restructuring, repositioning, and efficiency initiatives, including facilities consolidation, procurement centralization, multi-sourcing and the divestiture of certain loan portfolios.

·   Costs related to the divestiture of 34 full-service First Horizon Bank locations in Virginia, Maryland, Georgia, and Texas, including $13.9 million for the writedown of intangibles.

·   Expense related to the restructuring of mortgage operations through office closures, associated sales force decreases, and the reduction of management and support staff and downsizing of national lending operations through the reduction of consumer and construction sales forces and decreasing management, support staff and back-office costs.

The Tennessee banking franchise experienced growth in profitability which was offset by additional provisioning and fewer loan sales in national businesses.  In the third quarter 2007, Mortgage Banking and Capital Markets were also negatively impacted by credit market disruptions.

Assessment of the results of operations for periods which include third quarter 2007 requires an understanding of the causes and effects of dislocations within credit markets which existed during the quarter.  As higher levels of borrower defaults on adjustable rate loans were experienced throughout the industry in 2007 (primarily occurring upon repricing of the loans to higher interest rates), investor appetite for all types of credit structures was severely curtailed if not completely eliminated in certain circumstances (e.g., home equity lines of credit).  As a result of increasing credit risk aversion by investors, coupon rates for all credit structures increased and FHN was adversely impacted by spread widening.  FHN was adversely affected as a result of this process.

Within Mortgage Banking operations, the widening of credit spreads resulted in losses on sales within the prime nonconforming mortgage market.  This negative effect was partially offset by improvements in hedging results and a decrease in servicing runoff.  For assets that remained on the Consolidated Condensed Statements of Condition which are accounted for at fair value or the lower of cost or market, the wider credit spreads were utilized in valuation methodologies and produced lower asset values in comparison to prior periods, including lower of cost or market adjustments to the loan warehouse.  Further, estimated market values for less than liquid retained interests in securitizations declined due to the higher discount rates in valuations.

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Similarly, the Retail/Commercial Banking segment experienced limited demand for consumer loan sales. This segment also recognized adjustments to reflect the market value of consumer loans held for sale and lower values of residual interests related to prior securitizations.  Additionally, given the market’s reduced appetite for credit products, structured finance fees, including fees from pooled trust preferred transactions, within the Capital Markets segment were adversely affected by lower transaction volumes and wider credit spreads.

Return on average shareholders’ equity and return on average assets were (2.3) percent and (.15) percent, respectively, for third quarter 2007.  Return on average shareholders’ equity and return on average assets were 10.9 percent and .67 percent, respectively, for third quarter 2006.  Total assets were $37.5 billion and shareholders’ equity was $2.4 billion on September 30, 2007, compared to $40.1 billion and $2.5 billion, respectively, on September 30, 2006.

BUSINESS LINE REVIEW

Retail/Commercial Banking

Pre-tax income for Retail/Commercial Banking was $78.3 million for third quarter 2007 compared to $115.4 million for third quarter 2006.  Total revenues for Retail/Commercial Banking were $314.9 million for third quarter 2007 compared to $344.4 million for third quarter 2006.

Net interest income was $219.5 million in third quarter 2007 compared to $232.9 million in third quarter 2006.  The Retail/Commercial Banking net interest margin was 3.88 percent in third quarter 2007 compared to 4.23 percent in the third quarter of last year.  This compression resulted from the contracting housing market which created competitive pricing pressure and additional nonaccrual loans. Also unfavorably impacting the margin were higher deposit rates paid in Tennessee markets.

Noninterest income was $95.4 million in third quarter 2007 compared to $111.5 million in third quarter 2006.  This decrease primarily resulted from negative incremental lower of cost or market (LOCOM) adjustment of $7.3 million on consumer loans (HELOC and second liens) recognized in third quarter 2007 to reflect recent market illiquidity.  Revenue from loan sales and securitizations decreased $6.0 million, or 60 percent, primarily due to a decline in the volume of loans delivered into the secondary markets.

Provision for loan losses increased to $43.3 million in third quarter 2007 from $23.6 million last year.  The $19.7 million increase primarily reflects deterioration in national homebuilder and one-time close construction loans.

Noninterest expense decreased 6 percent to $193.3 million in third quarter 2007 from $205.4 million last year.  Noninterest expense decreased as personnel costs declined from a combination of reduced variable compensation costs on loan originations as well as the effect of efficiency initiatives.

Mortgage Banking

Mortgage Banking had a pre-tax loss of $45.8 million in third quarter 2007, compared to pre-tax loss of $25.3 million in third quarter 2006.  Total revenues for Mortgage Banking were $62.8 million for third quarter 2007 compared to $111.6 million for third quarter 2006.

Net interest income was relatively flat at $20.6 million in third quarter 2007 compared to $21.2 million in third quarter 2006.  Positively impacting net interest income, the spread on the warehouse increased 16 basis points to 1.34 percent in third quarter 2007 compared to the same period in 2006, the average warehouse increased 5 percent compared to last year and there was an increase of $5.3 million due to the reclassification of $175 million from excess mortgage servicing rights to trading securities in second quarter 2007.  This reclassification was the outcome of capital management initiatives which resulted in modification of the Pooling and Servicing Agreements (PSA) for private (non-GSE) securitizations which were active as of March 31, 2007. The modifications separated master servicing from retained yield.  Offsetting the increase in net interest income was a decline in servicing fees and a decline in the change of mortgage servicing rights (MSR) value due to runoff.  Also negatively impacting net interest income was the cost to fund a larger balance sheet and a decrease in custodial balances.

Noninterest income was $42.2 million in third quarter 2007 compared to $90.4 million in third quarter 2006.  Noninterest income consists primarily of mortgage banking-related revenue, net of costs, from the origination and sale of mortgage loans, fees from mortgage servicing and changes in fair value of MSR net of hedge gains or losses.

Net origination income declined to a loss of $17.5 million in third quarter 2007 compared to income of $64.2 million last year as credit market deterioration produced negative gain on sale margins as well as LOCOM adjustments on warehouse loans.  Loans delivered into the secondary market increased $.9 billion, but the margin on deliveries decreased from 77 basis points in third quarter 2006 to negative 33 basis points in 2007.  Total mortgage servicing fees decreased 11 percent to $76.7 million from $86.2 million as the change in PSA reduced income by $12.8 million offset by an 8 percent increase in the servicing portfolio.

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Servicing hedging activities and changes other than runoff in the value of capitalized servicing assets positively impacted net revenues by $32.2 million this quarter as spreads between mortgage and swap rates widened, option volatility increased, and seasonality moved in our favor. Additionally, the change in MSR value due to runoff increased net revenues by $11.4 million in third quarter 2007 compared to last year primarily due to increases in coupon rates on non-conforming loans and disruptions in the mortgage market.

Noninterest expense was $108.6 million in third quarter 2007 compared to $136.8 million in third quarter 2006.  Third quarter 2006 included $21.3 million for the estimated costs of settling a class action lawsuit.   Additionally, noninterest expense was impacted by lower personnel costs and other efficiency initiatives.

Capital Markets

Capital Markets had a pre-tax loss of $7.7 million in third quarter 2007 compared to pre-tax income of $15.2 million in third quarter 2006.  Total revenues for Capital Markets were $59.6 million in third quarter 2007 compared to $97.0 million in third quarter 2006.  Net interest expense was $2.2 million in third quarter 2007 compared to net interest expense of $1.5 million in third quarter 2006.

Revenues from fixed income sales increased to $46.0 million in third quarter 2007 from $41.5 million in third quarter 2006.  Other product revenues were $15.8 million in third quarter 2007 compared to $57.0 million in third quarter 2006.  Revenues from other products include fee income from activities such as structured finance, equity research, investment banking, loan sales, portfolio advisory and the sale of bank-owned life insurance.  This decline was primarily due to decreases in structured finance activities which were significantly impacted by credit market disruptions in third quarter 2007.

Noninterest expense was $67.3 million in third quarter 2007 compared to $81.8 million in third quarter 2006.  This decrease was primarily due to decreased variable compensation related to the decline in product revenues and the effect of efficiency initiatives.

Corporate

The Corporate segment’s results yielded a pre-tax loss of $48.5 million in third quarter 2007 compared to a pre-tax loss of $12.4 million in third quarter 2006.  Results for the third quarter 2007 include $32.8 million of expense associated with implementation of restructuring, repositioning and efficiency initiatives.  See discussion of the restructuring, repositioning and efficiency initiatives below for further details.  The third quarter 2006 results include $8.8 million of net securities gains from the sale of MasterCard Inc. securities and net securities gains from venture capital investments.  This gain was partially offset by the write-off of a holding company investment, venture capital commissions and project costs in 2006.

RESTRUCTURING, REPOSITIONING, AND EFFICIENCY INITIATIVES

Throughout 2007, FHN has conducted an ongoing, company-wide review of business practices with the goal of improving its overall profitability and productivity.  As a result of actions taken in third quarter 2007 related to such activities, FHN recorded pre-tax expenses of $32.8 million.  In second quarter 2007, FHN recorded pre-tax expenses of $39.3 million related to restructuring, repositioning, and efficiency initiatives, including $16.9 million of losses related to asset impairments.  Additionally, in third quarter 2007 management announced its intention to sell 34 full-service First Horizon Bank branches in its national banking markets, as well as plans to right size First Horizon Home Loans’ mortgage banking operations and balance sheet utilization and to downsize FHN’s national lending operations, in order to redeploy capital to higher-return businesses.  Provision for loan losses of $7.7 million were incurred in second quarter 2007 in relation to the divestiture of a non-strategic loan portfolio, while all other costs incurred in relation to the restructuring, repositioning, and efficiency initiatives implemented by management are included in noninterest expense.  All costs associated with the initiatives implemented in second and third quarters 2007 are recorded as unallocated corporate charges within the Corporate segment.  Significant expenses year-to-date for 2007 resulted from the following actions:

·   Expense of $18.8 million associated with organizational and compensation changes for right sizing operating segments and consolidating functional areas.

·   Non-core business repositioning costs of $17.4 million, including costs associated with the exit of the collectible coin merchandising business and the transition of the non-prime mortgage origination business to a broker model.

·   Expense of $14.3 million related to other restructuring, repositioning, and efficiency initiatives, including facilities consolidation, procurement centralization, multi-sourcing and the divestiture of certain loan portfolios.

·   Costs of $18.0 million related to the divestiture of 34 full-service First Horizon Bank locations in Virginia, Maryland, Georgia, and Texas, including $13.9 million for the writedowns of intangibles.

·   Expense of $3.6 million related to the restructuring of mortgage operations through office closures, associated sales force decreases, and the reduction of management and support staff and downsizing of national lending operations through the reduction of consumer and construction sales forces and decreasing management, support staff and back-office costs.

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In total, up to $40 million in gains are expected in fourth quarter 2007 and first quarter 2008 in relation to the First Horizon Bank branch divestitures.  Additionally, pre-tax expenses of approximately $20 to $30 million are anticipated to be recognized in relation to the continuing implementation of the existing restructuring, repositioning, and efficiency initiatives through the targeted completion date for such initiatives at the end of first quarter 2008. Settlement of the obligations arising from current initiatives will primarily occur in fourth quarter 2007 and first quarter 2008 and will be funded from operating cash flows.  As a result of the planned sale of 34 First Horizon Bank branches, the assets and liabilities related to such branches are reflected as held-for-sale on the Consolidated Condensed Statements of Condition.  The aggregate carrying amounts of transferred loans, deposits, other assets, and other liabilities were approximately $565.5 million, $474.8 million, $22.6 million, and $39.4 million, respectively, as of September 30, 2007.  Further, as a result of impairment assessments completed in relation to two First Horizon Bank branches to be sold, a goodwill writedown of $13.0 million and a writedown of core deposit intangibles of $.9 million were recognized in third quarter 2007. The goodwill impairment loss was estimated based on the implied fair value as of September 30, 2007 of the goodwill originally recognized upon FHN’s purchase of such branches, and was calculated using the bid price for the associated branches. The fair value of the core deposit intangible asset was determined based on the discounted present value of cash flows remaining related to the associated deposit accounts.  The recognition of these impairment losses will have no effect on FHN’s debt covenants.  Additional asset impairment losses of approximately $4 million were recognized in third quarter 2007 for property, plant, and equipment associated with facilities undergoing consolidation.  The fair value of such property was determined based on appraised value or discounted cash flows as of the assessment date. The impairment losses related to such intangible assets and property, plant, and equipment, which are recorded as unallocated corporate charges within the Corporate segment, are included in all other expense on the Consolidated Condensed Statements of Income.  As a result of the restructuring, repositioning, and efficiency initiatives implemented by management, it is anticipated that up to $175 million in aggregate annual pre-tax improvements should be experienced by first quarter 2008, with an additional $60 to $80 million in annual profitability improvements experienced through 2008 in relation to the First Horizon Bank branch divestitures and the restructuring of mortgage operations and national lending operations.  Due to the broad nature of the actions being taken, all components of income and expense will be affected. In addition, management continues to explore additional initiatives for profitability improvement, including opportunities for balance sheet repositioning and the redeployment of capital which may include targeted reductions of MSR.

Charges related to restructuring, repositioning, and efficiency initiatives for the three and nine months ended September 30, 2007, are presented in the following table based on the income statement line item affected.  See Note 12 – Restructuring, Repositioning, and Efficiency Charges and Note 2 – Acquisitions/Divestitures for additional information.

Table 1 - Charges for Restructuring, Repositioning, and Efficiency Initiatives

	Three Months Ended	Nine Months Ended
	September 30	September 30
(Dollars in thousands)	2007	2007
Provision for loan losses	$         -	$   7,672
Noninterest expense:
Employee compensation, incentives and benefits	9,269	17,266
Occupancy	5,074	8,800
Equipment rentals, depreciation and maintenance	846	6,067
Operations services	25	25
Communications and courier	27	27
Goodwill impairment	13,010	13,010
All other expense	4,571	19,273
Total noninterest expense	32,822	64,468
Loss before income taxes	$ 32,822	$ 72,140

INCOME STATEMENT REVIEW

Total revenues (net interest income and noninterest income) were $441.2 million in third quarter 2007 compared to $569.5 million in 2006.  Net interest income was $237.8 million in third quarter 2007 compared to $251.6 million in 2006 and noninterest income was $203.4 million in 2007 compared to $317.9 million in 2006.  A discussion of the major line items follows.

NET INTEREST INCOME

Net interest income decreased 5 percent to $237.8 million in third quarter 2007.  Earning assets decreased 5 percent to $33.0 billion and interest-bearing liabilities decreased 5 percent to $28.5 billion in third quarter 2007.

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The activity levels and related funding for FHN’s mortgage production and servicing and capital markets activities affect the net interest margin.  These activities typically produce different margins than traditional banking activities.  Mortgage production and servicing activities can affect the overall margin based on a number of factors, including the shape of the yield curve, the size of the mortgage warehouse, the time it takes to deliver loans into the secondary market, the amount of custodial balances, and the level of MSR.  Capital markets activities tend to compress the margin because of its strategy to reduce market risk by economically hedging a portion of its inventory on the balance sheet.  As a result of these impacts, FHN’s consolidated margin cannot be readily compared to that of other bank holding companies.

The consolidated net interest margin was 2.87 percent for third quarter 2007 compared to 2.89 percent for third quarter 2006.  This compression in the margin occurred as the net interest spread decreased to 2.21 percent from 2.24 percent in 2006 while the impact of free funding increased from 65 basis points to 66 basis points.  The margin was negatively impacted by competitive pricing pressure in a contracting housing market, additional nonaccrual loans and higher deposit rates in Tennessee markets.  The decline related to these factors was largely offset by changes in earning asset mix and the change in PSA described above.

Table 2 - Net Interest Margin

	Three Months Ended
	September 30
	2007			2006
Consolidated yields and rates:
Loans, net of unearned income		7.39	%		7.59	%
Loans held for sale		6.72			6.88
Investment securities		5.57			5.66
Capital markets securities inventory		5.59			5.41
Mortgage banking trading securities		12.21			11.31
Other earning assets		5.02			5.09
Yields on earning assets		7.02			7.03
Interest-bearing core deposits		3.40			3.17
Certificates of deposits $100,000 and more		5.40			5.36
Federal funds purchased and securities sold under agreements to repurchase		4.82			4.83
Capital markets trading liabilities		5.28			5.61
Commercial paper and other short-term borrowings		5.05			5.25
Long-term debt		5.84			5.80
Rates paid on interest-bearing liabilities		4.81			4.79
Net interest spread		2.21			2.24
Effect of interest-free sources		.66			.65
FHN - NIM		2.87	%		2.89	%

Certain previously reported amounts have been reclassified to agree with current presentation.

Going forward, the NIM is expected to experience modest improvement driven by a steeper yield curve and the reduction of lower margin businesses including the sale of the First Horizon Bank branches and the reduction of the national consumer lending portfolio.

NONINTEREST INCOME

Mortgage Banking Noninterest Income

First Horizon Home Loans offers residential mortgage banking products and services to customers, which consist primarily of the origination or purchase of single-family residential mortgage loans.  First Horizon Home Loans originates mortgage loans through its retail and wholesale operations and also purchases mortgage loans from third-party mortgage bankers for sale to secondary market investors and subsequently provides servicing for the majority of those loans.

Origination income includes origination fees, net of costs, gains/(losses) recognized on loans sold including the capitalized fair value of MSR, and the value recognized on loans in process including results from hedging.  Origination fees, net of costs (including incentives and other direct costs), are deferred and included in the basis of the loans in calculating gains and losses upon sale.  Gain or loss is recognized due to changes in fair value of an interest rate lock commitment made to the customer.  Gains or losses from the sale of loans are recognized at the time a mortgage loan is sold into the secondary market.  Origination income declined to a loss of $17.5 million in third quarter 2007 compared to $64.2 million due

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to credit market deterioration. Loans delivered into the secondary market were increased $.9 billion, but the margin on deliveries decreased from 77 basis points in third quarter 2006 to negative 33 basis points in 2007.

Servicing income includes servicing fees, changes in the fair value of the MSR asset and net gains or losses from hedging MSR.  First Horizon Home Loans employs hedging strategies intended to counter changes in the value of MSR and other retained interests due to changing interest rate environments (refer to discussion of MSR under Critical Accounting Policies).  Total mortgage servicing fees decreased 11 percent to $76.7 million from $86.2 million as the change in PSA reduced income by $12.8 million offset by an 8 percent increase in the servicing portfolio.

Servicing hedging activities and changes other than runoff in the value of capitalized servicing assets positively impacted net revenues by $32.2 million this quarter as compared to a year ago due to higher interest rate swap spreads.  Additionally, the change in MSR value due to runoff increased net revenues by $11.4 million compared to third quarter 2006 due to market disruptions described in the Business Line Review.

Other income includes FHN’s share of earnings from nonconsolidated subsidiaries accounted for under the equity method, which provide ancillary activities to mortgage banking, and fees from retail construction lending.

Table 3 - Mortgage Banking Noninterest Income

	Three Months Ended		Percent	Nine Months Ended		Percent
	September 30		Change	September 30		Change
	2007	2006	(%)	2007	2006	(%)
Noninterest income (thousands):
Origination (loss)/ income	$   (17,494)	$     64,248	NM	$   113,428	$   238,869	52.5   -
Servicing income	49,738	15,701	216.8  +	49,250	25,691	91.7  +
Other	6,778	5,986	13.2  +	20,741	18,529	11.9  +
Total mortgage banking noninterest income	$     39,022	$     85,935	54.6  -	$   183,419	$   283,089	35.2   -
Mortgage banking statistics (millions):
Refinance originations	$    2,067.1	$    2,091.8	1.2  -	$    7,909.8	$    7,389.2	7.0  +
Home-purchase originations	4,605.2	4,258.7	8.1  +	13,157.3	13,308.1	1.1   -
Mortgage loan originations	$    6,672.3	$    6,350.5	5.1  +	$  21,067.1	$  20,697.3	1.8  +
Servicing portfolio	$108,400.8	$100,245.7	8.1  +	$108,400.8	$100,245.7	8.1  +

Certain previously reported amounts have been reclassified to agree with current presentation.

Capital Markets Noninterest Income

Capital markets noninterest income, the major component of revenue in the Capital Markets segment, is generated from the purchase and sale of securities as both principal and agent, and from other fee sources including structured finance, equity research, investment banking, loans sales, and portfolio advisory activities.  Inventory positions are limited to the procurement of securities solely for distribution to customers by the sales staff.  A portion of the inventory is hedged to protect against movements in fair value due to changes in interest rates.

Revenues from fixed income sales increased $4.5 million compared to third quarter 2006.  Other product revenues decreased $36.0 million primarily due to lower fees from structured finance activities.

Table 4 - Capital Markets Noninterest Income

	Three Months Ended			Nine Months Ended
	September 30		Growth	September 30		Growth
(Dollars in thousands)	2007	2006	Rate (%)	2007	2006	Rate (%)
Noninterest income:
Fixed income	$46,003	$41,503	10.8  +	$140,574	$133,948	4.9  +
Other product revenue	17,719	53,712	67.0  -	95,315	156,290	39.0  -
Total capital markets noninterest income	$63,722	$95,215	33.1  -	$235,889	$290,238	18.7  -

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Other Noninterest Income

Other noninterest income includes deposit transactions and cash management fees, revenue from loan sales and securitizations, insurance commissions, trust services and investment management fees, net securities gains and losses and other noninterest income.  Revenue from loan sales and securitizations decreased $7.0 million, or 60 percent, primarily due to a decline in the volume of loans delivered into the secondary markets.  Third quarter 2006 results include $8.8 million of net securities gains, primarily due to the sale of MasterCard Inc. securities and net securities gains from venture capital investments.  Other noninterest income decreased $17.1 million reflecting a decrease of $6.4 million in other revenues in 2007 related to deferred compensation plans, which is offset by a related decrease in noninterest expense associated with these plans and a negative incremental LOCOM adjustment of $7.3 million on consumer loans (HELOC and second liens) recognized in third quarter 2007 to reflect market illiquidity.

NONINTEREST EXPENSE

Total noninterest expense for third quarter 2007 decreased 7 percent to $421.6 million from $452.9 million in 2006.  Employee compensation, incentives and benefits (personnel expense), the largest component of noninterest expense, decreased to $236.6 million from $260.3 million in 2006.  Impacting compensation, incentives and benefits in third quarter 2007 were $9.3 million of restructuring, repositioning and efficiency charges.  This increase was offset by a continued corporate focus on efficiency and reductions in personnel expense in mortgage banking and capital markets directly related to the contraction in revenue.  Included in these results was a decrease of $7.7 million in 2007 related to deferred compensation plans.  The $5.0 million increase in occupancy is primarily related to restructuring, repositioning and efficiency charges.  Goodwill impairment of $13.0 million related to the sale of First Horizon Bank branches was recognized in third quarter 2007.  All other noninterest expense decreased 21 percent, or $23.2 million as compared to third quarter 2006 reflecting the continued corporate focus on efficiency.  All other noninterest expense included $4.6 million of restructuring, repositioning and efficiency charges.  In 2006, all other expense included $21.3 million related to the estimated settlement costs of a class action lawsuit.

INCOME TAXES

The tax benefit of $9.3 million in third quarter 2007 primarily reflects FHN’s normal statutory federal and states rates, and permanent tax benefits of $7.1 million offset by $6.6 million of increased taxes for the writedown of non-deductible goodwill associated with the pending sale of First Horizon Bank branches.

PROVISION FOR LOAN LOSSES / ASSET QUALITY

The provision for loan losses is the charge to earnings that management determines to be necessary to maintain the allowance for loan losses at an adequate level reflecting management’s estimate of probable incurred losses in the loan portfolio.  An analytical model based on historical loss experience adjusted for current events, trends and economic conditions is used by management to determine the amount of provision to be recognized and to assess the adequacy of the loan loss allowance.  The provision for loan losses was $43.3 million in third quarter 2007 compared to $23.7 million in third quarter 2006, reflecting deterioration in national homebuilder and one-time close construction portfolios related to the general downturn in the housing industry.  The net charge-off ratio increased to 57 basis points in third quarter 2007 from 30 basis points in third quarter 2006 as net charge-offs grew to $31.4 million from $16.4 million, driven mainly by the deterioration in the national homebuilder and one-time close residential real estate portfolio.

Table 5 - Net Charge-off Ratios *

	Three Months Ended
	September 30
	2007			2006
Total commercial		.55	%		.28	%
Retail real estate		.50			.25
Other retail		3.59			2.71
Credit card receivables		3.01			1.99
Total net charge-offs		.57			.30

  *  Net charge-off ratios are calculated based in average loans, net of unearned income.

Table 7 provides information on the relative size of each loan portfolio.

Nonperforming loans in the loan portfolio were $189.8 million on September 30, 2007, compared to $64.0 million on September 30, 2006.  The ratio of nonperforming loans in the loan portfolio to total loans was 86 basis points on September 30, 2007, and 29 basis points on September 30, 2006.  The increase in nonperforming loans is attributable to deterioration in the one-time close and homebuilder/condominiums portfolios,

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due primarily to the slowdown in the housing market. Nonperforming one-time close loans (the Retail Real Estate Construction line on Table 7) increased to $69.3 million on September 30, 2007 from $12.2 million on September 30, 2006. Nonperforming homebuilder/condominiums loans increased to $86.5 million on September 30, 2007 from $11.6 million on September 30, 2006. The homebuilder/condominium portfolios were $2.2 billion in both third quarter 2007 and 2006. These portfolios are included in the Commercial Real Estate Construction line of Table 7. Nonperforming assets were $268.4 million on September 30, 2007, compared to $118.0 million on September 30, 2006. The nonperforming assets ratio was 113 basis points on September 30, 2007 and 49 basis points last year. In addition to the increase in nonperforming loans, foreclosed assets increased $16.5 million, which can be attributed to the maturing of the home equity portfolio and the deterioration in the residential real estate loan portfolio. Foreclosed assets are written down to net realizable value at foreclosure. The nonperforming asset ratio is expected to remain under pressure throughout the balance of the negative housing cycle.

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Table 6 - Asset Quality Information

	Third Quarter
(Dollars in thousands)	2007			2006
Allowance for loan losses:
Beginning balance on June 30		$    229,919			$    199,835
Provision for loan losses		43,352			23,694
Divestitures/acquisitions/transfers		(5,276	)		(275	)
Charge-offs		(35,858	)		(19,782	)
Recoveries		4,474			3,357
Ending balance on September 30		$    236,611			$    206,829
Reserve for off-balance sheet commitments		9,002			9,230
Total allowance for loan losses and reserve for off-balance sheet commitments		$    245,613			$    216,059
	September 30
	2007			2006
Retail/Commercial Banking:
Nonperforming loans		$    189,798			$      63,956
Foreclosed real estate		37,796			29,947
Total Retail/Commercial Banking		227,594			93,903
Mortgage Banking:
Nonperforming loans - held for sale		18,508			10,488
Foreclosed real estate		22,250			13,598
Total Mortgage Banking		40,758			24,086
Total nonperforming assets		$    268,352			$    117,989
Total loans, net of unearned income		$21,973,004			$21,955,030
Insured loans		(928,238	)		(730,453	)
Loans excluding insured loans		$21,044,766			$21,224,577
Foreclosed real estate from GNMA loans		$      15,610			$      21,679
Potential problem assets*		171,426			148,356
Loans 30 to 89 days past due		179,014			104,957
Loans 30 to 89 days past due - guaranteed portion**		157			179
Loans 90 days past due		42,515			28,246
Loans 90 days past due - guaranteed portion**		179			185
Loans held for sale 30 to 89 days past due		38,233			30,288
Loans held for sale 30 to 89 days past due - guaranteed portion**		31,804			24,226
Loans held for sale 90 days past due		164,145			132,416
Loans held for sale 90 days past due - guaranteed portion**		158,601			130,188
Off-balance sheet commitments***		7,106,326			7,415,880
Allowance to total loans		1.08	%		.94	%
Allowance to loans excluding insured loans		1.12			.97
Allowance to nonperforming loans in the loan portfolio		125			323
Nonperforming assets to loans, foreclosed real estate and other assets
(Retail/Commercial Banking)		1.05			.44
Nonperforming assets to unpaid principal balance of servicing portfolio (Mortgage Banking)		.04			.02
Allowance to annualized net charge-offs		1.88	x		3.15	x

    *  Includes 90 days past due loans.

   ** Guaranteed loans include FHA, VA, student and GNMA loans repurchased through the GNMA repurchase program.

  *** Amount of off-balance sheet commitments for which a reserve has been provided.

Certain previously reported amounts have been reclassified to agree with current presentation.

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Potential problem assets in the loan portfolio, which are not included in nonperforming assets, represent those assets where information about possible credit problems of borrowers has caused management to have serious doubts about the borrower’s ability to comply with present repayment terms.  This definition is believed to be substantially consistent with the standards established by the Office of the Comptroller of the Currency for loans classified substandard.  In total, potential problem assets were $171.4 million on September 30, 2007, up from $148.4 million on September 30, 2006.  Also, loans 30 to 89 days past due increased to $179.0 million on September 30, 2007, up from $105.0 million on September 30, 2006.  This significant increase was primarily driven by the slowdown in the housing market and its impact on national homebuilder and one-time close portfolios.  The current expectation of losses from both potential problem assets and loans 30 to 89 days past has been included in management’s analysis for assessing the adequacy of the allowance for loan losses.

Going forward, the level of provision for loan losses will primarily be driven by the length and breadth of the housing market cycle, the strength or weakness of the economies of the markets where FHN does business and recognition and resolution of asset quality issues. In addition, asset quality ratios could be affected by balance sheet strategies and shifts in loan mix to and from products with different risk/return profiles.  Asset quality indicators are expected to remain stressed during the remainder of the current housing industry cycle.

STATEMENT OF CONDITION REVIEW

EARNING ASSETS

Earning assets consist of loans, loans held for sale, investment securities, trading securities and other earning assets.  During third quarter 2007, earning assets decreased 5 percent and averaged $33.0 billion compared to $34.7 billion in 2006, as a small growth in loans and mortgage trading securities was offset by a decrease in investment securities, capital markets securities inventory, and repurchase agreements.

LOANS

Average total loans increased 2 percent for third quarter 2007 to $22.2 billion from $21.8 billion in 2006.  Average loans represented 67 percent of average earning assets in third quarter 2007 and 63 percent in 2006.

Commercial, financial and industrial loans increased 4 percent, or $257.6 million, since third quarter 2006 reflecting increased market share in Tennessee and growth in regional middle market commercial lending.  Commercial real estate lending grew 12 percent since third quarter 2006 or $441.7 million primarily due to growth in income property lending.  Loans to homebuilders were flat as compared to last year and homebuilder commitments were down 9 percent compared to last year.  On September 30, 2007, FHN did not have any concentrations of 10 percent or more of commercial, financial and industrial loans in any single industry.

Total retail loans decreased 3 percent or $309.7 million reflecting a decline in home equity loans that was primarily due to the strategy of selling a significant portion of production to third party investors.  Recent market disruptions have reduced investor demand for home equity related loan sales and securitizations.  Additional loan information is provided in Table 7 – Average Loans.

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Table 7 - Average Loans

	Three Months Ended
	September 30
			Percent			Growth					Percent
(Dollars in millions)	2007		of Total			Rate			2006		of Total
Commercial:
Commercial, financial and industrial		$ 7,061.1		32	%		3.8	%		$ 6,803.5		31	%
Real estate commercial (a)		1,363.4		6			11.6			1,221.4		6
Real estate construction (b)		2,875.3		13			11.6			2,575.6		12
Total commercial		11,299.8		51			6.6			10,600.5		49
Retail:
Real estate residential (c)		7,601.4		34			(10.7	)		8,512.6		39
Real estate construction (d)		2,144.9		10			3.8			2,065.9		9
Other retail		149.7		1			(6.7	)		160.4		1
Credit card receivables		194.4		1			(3.4	)		201.3		1
Real estate loans pledged
against other collateralized borrowings (e)		808.2		3			NM			268.1		1
Total retail		10,898.6		49			(2.8	)		11,208.3		51
Total loans, net of unearned		$ 22,198.4		100	%		1.8	%		$ 21,808.8		100	%

Certain previously reported amounts have been reclassified to agree with current presentation.

(a) Includes nonconstruction income property loans

(b) Includes homebuilder, condominium, and income property construction loans

(c) Includes primarily home equity loans and lines of credit (average for third quarter 2007 and 2006 - $3.7 billion and $4.8 billion, respectively)

(d) Includes one-time close product

(e) Includes on-balance sheet securitizations of home equity loans

Going forward into 2008, total loans is expected to decline as held-to-maturity originations of the national home equity, one-time close and homebuilder lending products are significantly curtailed.

LOANS HELD FOR SALE

Loans held for sale consist of first-lien mortgage loans (warehouse), HELOC, second-lien mortgages, student loans, and small issuer trust preferred securities.  The mortgage warehouse accounts for the majority of loans held for sale. Loans held for sale decreased 5 percent to $4.0 billion in 2007 from $4.2 billion in 2006.  This decrease is primarily related to a decline in small issuer trust preferred securities.

DEPOSITS / OTHER SOURCES OF FUNDS

During third quarter 2007, FHN shifted approximately $2 billion in wholesale borrowings from short-term certificates of deposit (CD) to lower cost Federal Home Loan Bank advances as a result of reduced liquidity and higher borrowing costs in the wholesale CD market.  Core deposits were flat at $13.3 billion in third quarter 2007.  Short-term purchased funds averaged $13.7 billion for third quarter 2007, down 17 percent or $2.8 billion from third quarter 2006.  In third quarter 2007, short-term purchased funds accounted for 41 percent of FHN’s total funding down from 47 percent in third quarter 2006, which is comprised of core deposits, purchased funds (including federal funds purchased, securities sold under agreements to repurchase, trading liabilities, CD greater than $100,000, and short-term borrowings) and long-term debt.  Long-term debt includes senior and subordinated borrowings, advances with original maturities greater than one year and other collateralized borrowings.  Long-term debt averaged $6.6 billion in third quarter 2007 compared to $5.5 billion in third quarter 2006.

FINANCIAL SUMMARY (Comparison of first nine months of 2007 to first nine months of 2006)

Earnings were $78.5 million or $.61 per diluted share for the nine months ended September 30, 2007.  Earnings were $386.4 million or $3.02 per diluted share for the nine months ended September 30, 2006, including the impact of the divestiture of FHN’s national merchant processing business.  For the nine months ended September 30, 2007, return on average shareholders’ equity and return on average assets were 4.27 percent and .27 percent, respectively.  Return on average shareholders’ equity and return on average assets were 21.59 percent and 1.34 percent, respectively, for the nine months ended September 30, 2006.

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Comparisons between reported earnings are directly and significantly affected by a number of factors in both 2007 and 2006.  See the Restructuring, Repositioning, and Efficiency Initiatives discussion under the Corporate segment of the Business Line Review for the quarter for further details of the impact on 2007.  FHN’s year-to-date performance in 2006 was impacted by estimated settlement costs of $21.3 million for a class action lawsuit.  Additionally, performance in 2006 was impacted by the gain on the merchant divestiture, transactions through which the incremental capital provided by the divestiture was utilized, various other transactions, and accounting matters.  The following discussion highlights these items:

On March 1, 2006, FHN sold its national merchant processing business for an after-tax gain of $209 million.  This divestiture was accounted for as a discontinued operation, and accordingly, all periods presented were adjusted to exclude the impact of merchant operations from the results of continuing operations.  In tandem with the merchant sale, FHN purchased 4 million shares of its common stock to minimize the potentially dilutive effect of the merchant divestiture on future earnings per share.  Also included in results from continuing operations are securities losses of $68.6 million, predominantly related to repositioning approximately $2.3 billion of investment securities.  Partially offsetting these securities losses were net securities gains of $10.4 million in 2006 from the sale of MasterCard Inc. securities and from venture capital investments.

FHN determined that certain derivative transactions used in hedging strategies to manage interest rate risk did not qualify for hedge accounting under the "short cut" method, as have a number of other banks.  As a result, any fluctuations in the market value of the derivatives should have been recorded through the income statement with no corresponding offset to the hedged item. While management believes these hedges would have qualified for hedge accounting under the "long haul" method, that accounting method could not be applied retroactively.  FHN evaluated the impact to all quarterly and annual periods since the inception of the hedges and concluded that the impact was immaterial in each period.  In first quarter 2006, FHN recorded an adjustment to recognize the cumulative impact of these transactions that resulted in a negative $15.6 million impact to noninterest income, which was included in continuing operations.  FHN has subsequently redesignated these hedge relationships under Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities” (SFAS No. 133), using the “long haul” method.

Various other items impacted results from continuing operations. A pre-tax loss of $12.7 million was recognized from the sale of HELOC upon which the borrower had not drawn funds.  The loss represents deferred loan origination costs, generally recognized over the life of the loan, which were recognized when the line of credit was sold.  Mortgage banking experienced foreclosure losses and other expenses related to nonprime mortgage loans.  In addition, expenses associated with devaluing inventories, consolidating operations and closing offices, incremental expenditures on technology, and compensation expense related to early retirement, severance and retention were recognized in 2006.

2006 earnings also included a favorable impact of $1.3 million or $.01 per diluted share from the cumulative effect of changes in accounting principles.  FHN adopted SFAS No. 123 (revised 2004), “Share-Based Payment” (SFAS No. 123-R) in first quarter 2006 and retroactively applied the provisions of the standard.  Accordingly, results for periods prior to 2006 have been adjusted to reflect expensing of share-based compensation.  A cumulative effect adjustment of $1.1 million was recognized, reflecting the change in accounting for share-based compensation expense based on estimated forfeitures rather than actual forfeitures.  FHN also adopted SFAS No. 156, “Accounting for Servicing of Financial Assets,” which allows servicing assets to be measured at fair value with changes in fair value reported in current earnings. The adoption of this standard was applied on a prospective basis and resulted in a cumulative effect adjustment of $.2 million, representing the excess of the fair value of the servicing asset over the recorded value on January 1, 2006.

INCOME STATEMENT REVIEW

For the first nine months of 2007, total revenues were $1,481.6 million, a decrease of 7 percent from $1,601.4 million in 2006.  Noninterest income for the first nine months of 2007 was $766.9 million and contributed 52 percent to total revenues as compared to $850.5 million, or 53 percent of total revenues in 2006.

Mortgage banking fee income decreased 35 percent to $183.4 million from $283.1 million.  During this period, fees from the origination process decreased to $113.4 million from $238.9 million for 2007 as loans sold into the secondary market were flat, but credit market disruptions reduced the margin on deliveries from 97 basis points for 2006 to 42 basis points for 2007.

Total mortgage servicing fees were $235.3 million in 2007 compared to $244.3 million in 2006.  The average servicing portfolio increased 7 percent compared to prior year.  This increase was more than offset by the impact of the modification to the PSA mentioned in the quarterly Business Line Review.  The impact of net hedging activities and changes in MSR value due to runoff on net servicing revenues was an improvement of $32.6

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million in 2007 as compared to 2006.  In 2007, spreads between mortgage and swap rates widened and option volatility increased.  Consequently, the cost of hedging MSR decreased in 2007 compared to 2006.  The MSR value due to runoff negatively impacted servicing revenue by $173.3 million in 2007 compared to $191.2 million last year of which $15.2 million of the favorable impact related to the modification of the PSA.  See Table 3 – Mortgage Banking Noninterest Income for a breakout of noninterest income as well as mortgage banking origination volume and servicing portfolio levels.

Fee income from capital markets decreased 19 percent to $235.9 million from $290.2 million for 2006 primarily due to decreased fees from structured finance and equity research activities, partially offset by an increase in fixed income revenues.  In 2007 net securities gains of $9.2 million were primarily related to changes in the investment portfolio that were made to compensate for loan growth in first quarter.  Net securities losses of $68.6 million in 2006 were primarily related to the restructuring of the investment portfolio in the first quarter 2006.  Noninterest income from insurance commissions declined 36 percent or $13.5 million due to the divestiture of two subsidiaries in third quarter 2006.  Revenue from loan sales and securitizations decreased 32 percent or $11.3 million to $24.1 million in 2007 primarily due to a decline in the volume of loans delivered into the secondary markets.  Other noninterest income increased 14 percent, or $16.3 million, to $132.6 million.  Other noninterest income in 2006 included the unfavorable adjustment of $15.6 million previously mentioned.  Other items impacting this growth were increased levels of bank owned life insurance and revenue from deferred compensation plans compared to 2006.

Net interest income decreased 5 percent to $714.7 million from $750.9 million for the first nine months of 2007.  The year-to-date consolidated margin decreased to 2.83 percent in 2007 from 2.96 percent in 2006.  The reasons for the year-to-date trends were similar to the quarterly trend information already discussed.

Total noninterest expense for the first nine months of 2007 decreased to $1,281.9 million from $1,311.0 million in 2006.  Employee compensation, incentives and benefits (personnel expense), occupancy and equipment rentals, depreciation and maintenance were impacted by restructuring, repositioning and efficiency initiatives previously discussed. These results also reflect reductions in personnel and communication and courier expense in mortgage banking and capital markets directly related to the contraction in revenue.  Goodwill impairment of $13.0 million related to the sale of First Horizon Bank branches was recognized in 2007. All other expense categories decreased 7 percent or $19.9 million, in 2007.  Expenses in 2007 included $14.7 million related to the exit of the collectible coin merchandising business. In 2006, this category included expenses related to the estimated settlement costs for a class action lawsuit, occupancy expense, incremental expense growth in the collectible coin business, losses due to certain misrepresentations within a previously identified pool of construction loans, nonprime mortgage loans, consolidating operations, closing offices, and technology.

Excluding the impact of $7.7 million of losses to reflect sale price of non-strategic loan portfolio in second quarter 2007, the provision for loan losses increased 81 percent to $108.5 million from $60.1 million in the first nine months of 2007 primarily reflecting deterioration related to both homebuilder and one-time-close construction loans.  See further discussion in the Asset Quality section of the MD&A.

BUSINESS LINE REVIEW

Retail/Commercial Banking

Total revenues for the nine-month period were $966.6 million, a decrease of 6 percent from $1,024.4 million in 2006.  Net interest income decreased 4 percent, or $29.5 million.  Noninterest income decreased 8 percent or $28.3 million from $333.3 million in 2006.  Revenue from insurance commissions declined $13.7 million primarily due to the sale of two insurance subsidiaries in third quarter 2006. Revenue from loans sales and securitizations declined $8.6 million primarily due to a decline in the volume of loans delivered into the secondary markets.  Additionally impacting noninterest income were negative incremental LOCOM adjustments of $8.8 million on consumer loans (HELOC and second lien).  Provision for loan losses increased 81 percent in 2007 to $108.6 million from $59.9 million.  The $48.7 million increase primarily reflects an increase in nonperforming assets related to both homebuilder and one-time-close construction loans.  Total noninterest expense for the nine-month period decreased 6 percent to $597.8 million from $638.6 million in 2006.  In 2007, noninterest expense declined from a combination of reduced variable compensation costs on loan originations as well as the effects of efficiency initiatives and the impact of several items in 2006 which included costs associated with the coin inventory valuation and closing of retail sites, incremental costs associated with national businesses, losses due to certain misrepresentations within a previously identified pool of construction loans, consolidation of remittance processing operations and office closing, and early retirement and severance costs.  For the first nine months of 2007, pre-tax income decreased to $260.2 million from $325.9 million in 2006.

Mortgage Banking

Total revenues for the nine-month period were $256.2 million, a decrease of 30 percent from $366.3 million in 2006.  During this period, fees from the origination process decreased $125.5 million while net servicing income increased $23.6 million.  See Table 3 – Mortgage Banking Noninterest Income for a breakout of noninterest income as well as mortgage banking origination volume and servicing portfolio levels.  Total noninterest expense for the nine-month period decreased 10 percent to $329.5 million from $366.7 million in 2006.  This decrease primarily reflects lower

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personnel expense related to the contraction in origination revenue and reductions in support headcount offset by the recognition of expense related to a previously disclosed legal settlement.  For the first nine months of 2007 pre-tax income decreased to a loss of $73.2 million from a loss of $.6 million in 2006.

Capital Markets

Total revenues for the nine-month period were $229.3 million, a decrease of 20 percent from $287.3 million in 2006.  This decline was primarily due to decreased fees from structured finance and equity research activities, partially offset by an increase in fixed income revenues.  Noninterest expense decreased 11 percent or $27.1 million primarily due to variable compensation related to the decrease in other product revenues.  For the first nine months of 2007 pre-tax income decreased 79 percent to $8.4 million from $39.3 million in 2006.

Corporate

For the first nine months of 2007, Corporate had a pre-tax loss of $111.9 million compared to a pre-tax loss of $134.3 million in 2006.  See restructuring, repositioning and efficiency initiatives previously discussed for further detail on the noninterest expense impact in 2007.Included in 2006 were net securities losses of $68.6 million primarily related to the restructuring of the investment portfolio in first quarter 2006.  Also impacting noninterest income in 2006 was the negative $15.6 million cumulative impact of derivative transactions used in hedging strategies to manage interest rate risk that management determined did not qualify for hedge accounting under the “short cut” method.

CAPITAL

Management’s objectives are to provide capital sufficient to cover the risks inherent in FHN’s businesses, to maintain excess capital to well-capitalized standards and to assure ready access to the capital markets.

Average shareholders’ equity was flat in third quarter 2007 at $2.4 billion.  Period-end shareholders’ equity was $2.4 billion on September 30, 2007, down 4 percent from the prior year, primarily due to the impact from the adoption of FASB 158.  Pursuant to board authority, FHN may repurchase shares from time to time and will evaluate the level of capital and take action designed to generate or use capital as appropriate, for the interests of the shareholders.

In first quarter 2006, FHN entered into an agreement with Goldman Sachs & Co. to purchase four million shares of FHN common stock in connection with an accelerated share repurchase program under an existing share repurchase authorization.  This share repurchase program was concluded for an adjusted purchase price of $165.1 million in second quarter 2006.  The share repurchase was funded with a portion of the proceeds from the merchant processing sale.

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Table 8 - Issuer Purchases of Equity Securities

					Total Number of		Maximum Number
	Total Number				Shares Purchased		of Shares that May
	of Shares		Average Price		as Part of Publicly		Yet Be Purchased
(Volume in thousands)	Purchased		Paid per Share		Announced Programs		Under the Programs
2007
July 1 to July 31		-		-		-		30,402
August 1 to August 31		*		39.20		*		30,402
September 1 to September 30		*		30.37		*		30,402
Total		*		$ 35.90		*

* Amount is less than 1,000 shares
Compensation Plan Programs:
-	A consolidated compensation plan share purchase program was announced on August 6, 2004.  This plan consolidated into a single share
	purchase program all of the previously authorized compensation plan share programs as well as the renewal of the authorization to purchase
	shares for use in connection with two compensation plans for which the share purchase authority had expired. The total amount originally
	authorized under this consolidated compensation plan share purchase program is 25.1 million shares.  On April 24, 2006, an increase to the
	authority under this purchase program of 4.5 million shares was announced for a new total authorization of 29.6 million shares.  The shares
	may be purchased over the option exercise period of the various compensation plans on or before December 31, 2023.  Stock options granted
	after January 2, 2004, must be exercised no later than the tenth anniversary of the grant date.  On September 30, 2007, the maximum number
	of shares that may be purchased under the program was 28.8 million shares.
Other Programs:
-	A non-stock option plan-related authority was announced on October 18, 2000, authorizing the purchase of up to 9.5 million shares.  On October 16,
	2001, it was announced that FHN's board of directors extended the expiration date of this program from June 30, 2002, until December 31, 2004.
	On October 19, 2004, the board of directors extended the authorization until December 31, 2007.  On September 30, 2007, the maximum number
	of shares that may be purchased under the program was 1.6 million shares.
See also Subsequent Events section of the MD&A.

Banking regulators define minimum capital ratios for bank holding companies and their bank subsidiaries.  Based on the capital rules and definitions prescribed by the banking regulators, should any depository institution’s capital ratios decline below predetermined levels, it would become subject to a series of increasingly restrictive regulatory actions.  The system categorizes a depository institution’s capital position into one of five categories ranging from well-capitalized to critically under-capitalized.  For an institution to qualify as well-capitalized, Tier 1 Capital, Total Capital and Leverage capital ratios must be at least 6 percent, 10 percent and 5 percent, respectively.  As of September 30, 2007, FHN and FTBNA had sufficient capital to qualify as well-capitalized institutions as shown in Note 6 – Regulatory Capital.

RISK MANAGEMENT

FHN has an enterprise-wide approach to risk governance, measurement, management, and reporting including an economic capital allocation process that is tied to risk profiles used to measure risk-adjusted returns.  The Enterprise-wide Risk/Return Management Committee oversees risk management governance.  Committee membership includes the CEO and other executive officers of FHN.  The Executive Vice President (EVP) of Risk Management oversees reporting for the committee.  Risk management objectives include evaluating risks inherent in business strategies, monitoring proper balance of risks and returns, and managing risks to minimize the probability of future negative outcomes.  The Enterprise-wide Risk/Return Management Committee oversees and receives regular reports from the Credit Risk Management Committee, Asset/Liability Committee (ALCO), Capital Management Committee, Regulatory Compliance Committee, Operational Risk Committee, and the Executive Program Governance Forum.  The Chief Credit Officer, EVP of Funds Management, Corporate Treasurer, EVP of Regulatory Risk Management, EVP of Risk Management, and EVP of Corporate Services chair these committees respectively.  Reports regarding Credit, Asset/Liability Management, Market Risk, Capital Management, Regulatory Compliance, and Operational Risks are provided to the Credit Policy and Executive and/or Audit Committee of the Board and to the full Board.

Risk management practices include key elements such as independent checks and balances, formal authority limits, policies and procedures, and portfolio management all executed through experienced personnel.  The internal audit department also evaluates risk management activities. These evaluations are reviewed with management and the Audit Committee, as appropriate.

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MARKET UNCERTAINTIES AND PROSPECTIVE TRENDS

Given the significant current uncertainties in the mortgage and credit markets, it is anticipated that the rest of 2007 and 2008 will continue to be challenging for the housing markets and for FHN.  Competitive pricing pressure is likely to continue related to mortgage (first- and second-lien) gain on sale margins.  In addition, current volatility and reduced liquidity in the capital markets may adversely impact market execution putting continued pressure on margins as well as revenues.  Some improvement from third quarter 2007 is anticipated.  However, as difficulties in the mortgage and credit markets persist, FHN will continue to adapt its liquidity management strategies.  Further deterioration of the housing market could result in increased credit costs depending on the length and depth of this market cycle.

INTEREST RATE RISK MANAGEMENT

Interest rate risk is the risk that changes in prevailing interest rates will adversely affect assets, liabilities, capital, income and/or expense at different times or in different amounts. ALCO, a committee consisting of senior management that meets regularly, is responsible for coordinating the financial management of interest rate risk.  FHN primarily manages interest rate risk by structuring the balance sheet to attempt to maintain the desired level of associated earnings while operating within prudent risk limits and thereby preserving the value of FHN’s capital.

Net interest income and the financial condition of FHN are affected by changes in the level of market interest rates as the repricing characteristics of loans and other assets do not necessarily match those of deposits, other borrowings and capital.  To the extent that earning assets reprice more quickly than liabilities, this position should benefit net interest income in a rising interest rate environment and could negatively impact net interest income in a declining interest rate environment.  In the case of floating rate assets and liabilities with similar repricing frequencies, FHN may also be exposed to basis risk, which results from changing spreads between earning and borrowing rates.  Generally, when interest rates decline, Mortgage Banking faces increased prepayment risk associated with MSR.

In certain cases, derivative financial instruments are used to aid in managing the exposure of the balance sheet and related net interest income and noninterest income to changes in interest rates.  As discussed in Critical Accounting Policies, derivative financial instruments are used by mortgage banking for two purposes.  First, forward sales contracts and futures contracts are used to protect against changes in fair value of the pipeline and mortgage warehouse (refer to discussion of Pipeline and Warehouse under Critical Accounting Policies) from the time an interest rate is committed to the customer until the mortgage is sold into the secondary market due to increases in interest rates.  Second, interest rate contracts are utilized to protect against MSR prepayment risk that generally accompanies declining interest rates.  As interest rates fall, the value of MSR should decrease and the value of the servicing hedge should increase.  The converse is also true.

Derivative instruments are also used to protect against the risk of loss arising from adverse changes in the fair value of capital markets’ securities inventory due to changes in interest rates.  FHN does not use derivative instruments to protect against changes in fair value of loans or loans held for sale other than the mortgage pipeline, warehouse and certain small issuer trust preferred securities.

In addition to the balance sheet impacts, fee income and noninterest expense may be affected by actual changes in interest rates or expectations of changes.  Mortgage banking revenue, which is generated from originating, selling and servicing residential mortgage loans, is highly sensitive to changes in interest rates due to the direct effect changes in interest rates have on loan demand.  In general, low or declining interest rates typically lead to increased origination fees and profit from the sale of loans but potentially lower servicing-related income due to the impact of higher loan prepayments on the value of mortgage servicing assets.  Conversely, high or rising interest rates typically reduce mortgage loan demand and hence income from originations and sales of loans while servicing-related income may rise due to lower prepayments.  The earnings impact from originations and sales of loans on total earnings is more significant than servicing-related income.  Net interest income earned on warehouse loans held for sale and on swaps and similar derivative instruments used to protect the value of MSR increases when the yield curve steepens and decreases when the yield curve flattens or inverts.  In addition, a flattening or inverted yield curve negatively impacts the demand for fixed income securities and, therefore, Capital Markets’ revenue.

LIQUIDITY MANAGEMENT

ALCO focuses on being able to fund assets with liabilities of the appropriate duration, as well as the risk of not being able to meet unexpected cash needs.  The objective of liquidity management is to ensure the continuous availability of funds to meet the demands of depositors, other creditors and borrowers, and the requirements of ongoing operations.  This objective is met by maintaining liquid assets in the form of trading securities and securities available for sale, maintaining sufficient unused borrowing capacity in the national money markets, growing core deposits, and the repayment of loans and the capability to sell or securitize loans.  ALCO is responsible for managing these needs by taking into account the marketability of assets; the sources, stability and availability of funding; and the level of unfunded commitments.  Funds are available from a number of sources, including core deposits, the securities available for sale portfolio, the Federal Home Loan Bank (FHLB), the Federal Banks,

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access to capital markets through issuance of senior or subordinated bank notes and institutional certificates of deposit, availability to the overnight and term Federal Funds markets, access to retail brokered certificates of deposit, dealer and commercial customer repurchase agreements, and through the sale or securitization of loans.

Core deposits are a significant source of funding and have been a stable source of liquidity for banks.  The Federal Deposit Insurance Corporation insures these deposits to the extent authorized by law.  For third quarter 2007 and 2006, the total loans, excluding loans held for sale and real estate loans pledged against other collateralized borrowings, to core deposits ratio was 161 percent and 163 percent, respectively.  One means of maintaining a stable liquidity position is to sell loans either through whole-loan sales or loan securitizations.  During 2007 and 2006, FHN sold loans through on-balance sheet securitizations structured as financings for accounting purposes.  FHN periodically evaluates its liquidity position in conjunction with determining its ability and intent to hold loans for the foreseeable future.

FTBNA has a bank note program providing additional liquidity of $5.0 billion.  This bank note program provides FTBNA with a facility under which it may continuously issue and offer short- and medium-term unsecured notes.  On September 30, 2007, $1.6 billion was available under current conditions through the bank note program as a funding source.

FHN and FTBNA have the ability to generate liquidity by issuing preferred equity or incurring other debt.  Liquidity has been obtained through FTBNA’s issuance of approximately $250 million of subordinated notes in 2006.  FHN also evaluates alternative sources of funding, including loan sales, securitizations, syndications, and FHLB borrowings in its management of liquidity.

The Consolidated Condensed Statements of Cash Flows provide information on cash flows from operating, investing and financing activities for the nine-month periods ended September 30, 2007 and 2006.  For the nine-months ended September 30, 2007, negative cash flows from financing activities exceeded net cash provided by operating and investing activities primarily due to a decrease in brokered deposits.  Positive investing cash flows resulted as $1.4 billion of available for sale securities were sold or matured offsetting an increase in loans and available for sale securities purchased.  Net cash provided by financing activities was the primary contributor to an increase in cash and cash equivalents for the nine-month period ended September 30, 2006.  Growth in deposits and the issuance of long-term borrowings provided positive cash flow from financing activities in 2006 and were utilized to fund the balance sheet growth reflected in the net cash used by investing activities.  For the nine months ended September 30, 2006, significant cash flows from investing activities included the sale of $2.3 billion of investment securities and the subsequent purchase of $3.8 billion of investment securities as the portfolio was repositioned.  Earnings represented a significant source of liquidity, providing positive cash flows from operating activities in the nine-month period ended September 30, 2006.

Parent company liquidity is maintained by cash flows stemming from dividends and interest payments collected from subsidiaries along with net proceeds from stock sales through employee plans, which represent the primary sources of funds to pay dividends to shareholders and interest to debt holders. The amount paid to the parent company through FTBNA common dividends is managed as part of FHN’s overall cash management process, subject to applicable regulatory restrictions described in the next paragraph.  The parent company also has the ability to enhance its liquidity position by raising equity or incurring debt.

Certain regulatory restrictions exist regarding the ability of FTBNA to transfer funds to FHN in the form of cash, common dividends, loans or advances. At any given time, the pertinent portions of those regulatory restrictions allow FTBNA to declare preferred or common dividends without prior regulatory approval in an amount equal to FTBNA’s retained net income for the two most recent completed years plus the current year to date.  For any period, FTBNA’s ‘retained net income’ is equal to FTBNA’s regulatory net income reduced by the preferred and common dividends declared by FTBNA.  One effect of this regulatory calculation method is that the amount available for preferred or common dividends by FTBNA without prior regulatory approval often changes substantially at the beginning of each new fiscal year compared with the last day of the year just completed. FTBNA’s total amount available for dividends was $642.7 million at December 31, 2006, and was reduced substantially at January 1, 2007 because in 2007 the regulatory calculation method no longer included the $344.4 million of retained net income associated with the year 2004. Earnings (or losses) and dividends in 2007 have changed and will continue to change the amount available during the year until December 31. Another reduction will occur at January 1, 2008 with respect to $225.0 million of retained net income for the year 2005, and again at January 1, 2009 with respect to $73.3 million of retained net income for the year 2006.  However, if dividends were to exceed regulatory net income for the year 2007, the amount of that excess may be applied against retained net income for the year 2005, which would have the practical effect of making smaller the reduction at January 1, 2008.

OFF-BALANCE SHEET ARRANGEMENTS AND OTHER CONTRACTUAL OBLIGATIONS

First Horizon Home Loans originates conventional conforming and federally insured single-family residential mortgage loans.  Likewise, FTN Financial Capital Assets Corporation purchases the same types of loans from customers.  Substantially all of these mortgage loans are exchanged for securities, which are issued through investors, including government-sponsored enterprises (GSE), such as Government National Mortgage

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Association (GNMA) for federally insured loans and Federal National Mortgage Association (FNMA) and Federal Home Loan Mortgage Corporation (FHLMC) for conventional loans, and then sold in the secondary markets.  Each of the GSE has specific guidelines and criteria for sellers and servicers of loans backing their respective securities.  Many private investors are also active in the secondary market as issuers and investors.  The risk of credit loss with regard to the principal amount of the loans sold is generally transferred to investors upon sale to the secondary market.  To the extent that transferred loans are subsequently determined not to meet the agreed upon qualifications or criteria, the purchaser has the right to return those loans to FHN.  In addition, certain mortgage loans are sold to investors with limited or full recourse in the event of mortgage foreclosure (refer to discussion of foreclosure reserves under Critical Accounting Policies).  After sale, these loans are not reflected on the Consolidated Condensed Statements of Condition.

FHN’s use of government agencies as an efficient outlet for mortgage loan production is an essential source of liquidity for FHN and other participants in the housing industry.  During third quarter 2007, approximately $5.4 billion of conventional and federally insured mortgage loans were securitized and sold by First Horizon Home Loans through these investors.

Certain of FHN's originated loans, including non-conforming first-lien mortgages, second-lien mortgages and HELOC originated primarily through FTBNA, do not conform to the requirements for sale or securitization through government agencies.  FHN pools and securitizes these non-conforming loans in proprietary transactions.  After securitization and sale, these loans are not reflected on the Consolidated Condensed Statements of Condition.  These transactions, which are conducted through single-purpose business trusts, are an efficient way for FHN and other participants in the housing industry to monetize these assets.  On September 30, 2007 and 2006, the outstanding principal amount of loans in these off-balance sheet business trusts was $26.1 billion and $23.7 billion, respectively.  Given the significance of FHN's origination of non-conforming loans, the use of single-purpose business trusts to securitize these loans is an important source of liquidity to FHN.

FHN has various other financial obligations, which may require future cash payments.  Purchase obligations represent obligations under agreements to purchase goods or services that are enforceable and legally binding on FHN and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions, and the approximate timing of the transaction.  In addition, FHN enters into commitments to extend credit to borrowers, including loan commitments, standby letters of credit, and commercial letters of credit.  These commitments do not necessarily represent future cash requirements, in that these commitments often expire without being drawn upon.

MARKET RISK MANAGEMENT

Capital markets buys and sells various types of securities for its customers.  When these securities settle on a delayed basis, they are considered forward contracts.  Inventory positions are limited to the procurement of securities for distribution to customers by the sales staff, and ALCO policies and guidelines have been established with the objective of limiting the risk in managing this inventory.

CAPITAL MANAGEMENT

The capital management objectives of FHN are to provide capital sufficient to cover the risks inherent in FHN’s businesses, to maintain excess capital to well-capitalized standards and to assure ready access to the capital markets.  Management has a Capital Management committee that is responsible for capital management oversight and provides a forum for addressing management issues related to capital adequacy.  The committee reviews sources and uses of capital, key capital ratios, segment economic capital allocation methodologies, and other factors in monitoring and managing current capital levels, as well as potential future sources and uses of capital.  The committee also recommends capital management policies, which are submitted for approval to the Enterprise-wide Risk/Return Management Committee and the Board.

OPERATIONAL RISK MANAGEMENT

Operational risk is the risk of loss from inadequate or failed internal processes, people, and systems or from external events.  This risk is inherent in all businesses.  Management, measurement and reporting of operational risk are overseen by the Operational Risk Committee, which is chaired by the EVP of Risk Management.  Key representatives from the business segments, legal, shared services, risk management, and insurance are represented on the committee.  Subcommittees manage and report on business continuity planning, information technology, data security, insurance, compliance, records management, product and system development, customer complaint, and reputation risks.  Summary reports of the committee’s activities and decisions are provided to the Enterprise-wide Risk/Return Management Committee.  Emphasis is dedicated to refinement of processes and tools to aid in measuring and managing material operational risks and providing for a culture of awareness and accountability.

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COMPLIANCE RISK MANAGEMENT

Compliance risk is the risk of legal or regulatory sanctions, material financial loss, or loss to reputation as a result of failure to comply with laws, regulations, rules, related self-regulatory organization standards, and codes of conduct applicable to banking and other activities. Management, measurement, and reporting of compliance risk are overseen by the Regulatory Compliance Committee, which is chaired by the EVP of Regulatory Risk Management. Key executives from the business segments, legal, risk management, and shared services are represented on the committee. Summary reports of the committee’s activities and decisions are provided to the Enterprise-wide Risk/Return Management Committee, and to the Audit Committee of the Board, as applicable. Reports include the status of regulatory activities, internal compliance program initiatives, and evaluation of emerging compliance risk areas.

CREDIT RISK MANAGEMENT

Credit risk is the risk of loss due to adverse changes in a borrower’s ability to meet its financial obligations under agreed upon terms.  FHN is subject to credit risk in lending, trading, investing, liquidity/funding and asset management activities.  The nature and amount of credit risk depends on the types of transactions, the structure of those transactions and the parties involved.  In general, credit risk is incidental to trading, liquidity/funding and asset management activities, while it is central to the profit strategy in lending.  As a result, the majority of credit risk is associated with lending activities.

FHN has processes and management committees in place that are designed to assess and monitor credit risks.  These are subject to independent review by FHN’s Credit Risk Assurance Group, which encompasses both Credit Review and Credit Quality Control functions.  The EVP of Credit Risk Assurance is appointed by and reports to the Credit Risk & Executive Committee of the Board.  This group is charged with providing the Board and executive management with independent, objective, and timely assessments of FHN’s portfolio quality and credit risk management processes. Management’s Asset Quality Committee has the responsibility to evaluate its assessment of current asset quality for each lending product.  In addition, the Asset Quality Committee evaluates the projected changes in classified loans, non-performing assets and charge-offs.  A primary objective of this committee is to provide information about changing trends in asset quality by region or loan product, and to provide to senior management a current assessment of credit quality as part of the estimation process for determining the allowance for loan losses.  The Senior Credit Watch Committee has primary responsibility to identify credit problems and to monitor actions to rehabilitate certain credits. Management also has a Credit Risk Management Committee that is responsible for enterprise-wide credit risk oversight and provides a forum for addressing management issues.  The committee also recommends credit policies, which are submitted for approval to the Credit Policy and Executive Committee of the Board, and underwriting guidelines to manage the level and composition of credit risk in its loan portfolio and review performance relative to these policies.  In addition, the Financial Counterparty Credit Committee, composed of senior managers, assesses the credit risk of financial counterparties and sets limits for exposure based upon the credit quality of the counterparty.  FHN’s goal is to manage risk and price loan products based on risk management decisions and strategies.  Management strives to identify potential problem loans and nonperforming loans early enough to correct the deficiencies.  It is management’s objective that both charge-offs and asset write-downs are recorded promptly, based on management’s assessments of current collateral values and the borrower’s ability to repay.

CRITICAL ACCOUNTING POLICIES

APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

FHN’s accounting policies are fundamental to understanding management’s discussion and analysis of results of operations and financial condition.  The consolidated condensed financial statements of FHN are prepared in conformity with accounting principles generally accepted in the United States of America and follow general practices within the industries in which it operates.  The preparation of the financial statements requires management to make certain judgments and assumptions in determining accounting estimates.  Accounting estimates are considered critical if (a) the estimate requires management to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (b) different estimates reasonably could have been used in the current period, or changes in the accounting estimate are reasonably likely to occur from period to period, that would have a material impact on the presentation of FHN’s financial condition, changes in financial condition or results of operations.

It is management's practice to discuss critical accounting policies with the Board of Directors’ Audit Committee including the development, selection and disclosure of the critical accounting estimates. Management believes the following critical accounting policies are both important to the portrayal of the company’s financial condition and results of operations and require subjective or complex judgments.  These judgments about critical accounting estimates are based on information available as of the date of the financial statements.  

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Effective January 1, 2006, FHN elected early adoption of SFAS No. 156.  This amendment to Statement of Financial Accounting Standards No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities” (SFAS No. 140) required servicing rights be initially measured at fair value.  Subsequently, companies are permitted to elect, on a class-by-class basis, either fair value or amortized cost accounting for servicing rights.  FHN elected fair value accounting for all classes of mortgage servicing rights.  Accordingly, FHN recognized the cumulative effect of a change in accounting principle totaling $.2 million, net of tax, representing the excess of the fair value of the servicing asset over the recorded value on January 1, 2006.

MORTGAGE SERVICING RIGHTS AND OTHER RELATED RETAINED INTERESTS

When FHN sells mortgage loans in the secondary market to investors, it generally retains the right to service the loans sold in exchange for a servicing fee that is collected over the life of the loan as the payments are received from the borrower.  An amount is capitalized as MSR on the Consolidated Condensed Statements of Condition at current fair value.  The changes in fair value of MSR are included as a component of Mortgage Banking – Noninterest Income on the Consolidated Condensed Statements of Income.

MSR Estimated Fair Value

The fair value of MSR typically rises as market interest rates increase and declines as market interest rates decrease; however, the extent to which this occurs depends in part on (1) the magnitude of changes in market interest rates, and (2) the differential between the then current market interest rates for mortgage loans and the mortgage interest rates included in the mortgage-servicing portfolio.

Since sales of MSR tend to occur in private transactions and the precise terms and conditions of the sales are typically not readily available, there is a limited market to refer to in determining the fair value of MSR.  As such, like other participants in the mortgage banking business, FHN relies primarily on a discounted cash flow model to estimate the fair value of its MSR.  This model calculates estimated fair value of the MSR using predominant risk characteristics of MSR, such as interest rates, type of product (fixed vs. variable), age (new, seasoned, moderate), agency type and other factors.  FHN uses assumptions in the model that it believes are comparable to those used by other participants in the mortgage banking business and reviews estimated fair values and assumptions with third-party brokers and other service providers on a quarterly basis.  FHN also compares its estimates of fair value and assumptions to recent market activity and against its own experience.

Estimating the cash flow components of net servicing income from the loan and the resultant fair value of the MSR requires FHN to make several critical assumptions based upon current market and loan production data.

Prepayment Speeds: Generally, when market interest rates decline and other factors favorable to prepayments occur there is a corresponding increase in prepayments as customers refinance existing mortgages under more favorable interest rate terms.  When a mortgage loan is prepaid the anticipated cash flows associated with servicing that loan are terminated, resulting in a reduction of the fair value of the capitalized MSR.  To the extent that actual borrower prepayments do not react as anticipated by the prepayment model (i.e., the historical data observed in the model does not correspond to actual market activity), it is possible that the prepayment model could fail to accurately predict mortgage prepayments and could result in significant earnings volatility. To estimate prepayment speeds, First Horizon Home Loans utilizes a third-party prepayment model, which is based upon statistically derived data linked to certain key principal indicators involving historical borrower prepayment activity associated with mortgage loans in the secondary market, current market interest rates and other factors, including First Horizon Home Loans’ own historical prepayment experience.  For purposes of model valuation, estimates are made for each product type within the MSR portfolio on a monthly basis.

Table 9 - Mortgage Banking Prepayment Assumptions

	Three Months Ended
	September 30
	2007			2006
Prepayment speeds
Actual		13.3	%		16.8	%
Estimated*		14.7			15.0

* Estimated prepayment speeds represent monthly average prepayment speed estimates for each of the periods presented.

Discount Rate: Represents the rate at which expected cash flows are discounted to arrive at the net present value of servicing income.  Discount rates will change with market conditions (i.e., supply vs. demand) and be reflective of the yields expected to be earned by market participants investing in MSR.

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Cost to Service: Expected costs to service are estimated based upon the incremental costs that a market participant would use in evaluating the potential acquisition of MSR.

Float Income: Estimated float income is driven by expected float balances (principal, interest and escrow payments that are held pending remittance to the investor or other third party) and current market interest rates, including the thirty-day London Inter-Bank Offered Rate (LIBOR) and five-year swap interest rates, which are updated on a monthly basis for purposes of estimating the fair value of MSR.

First Horizon Home Loans engages in a process referred to as “price discovery” on a quarterly basis to assess the reasonableness of the estimated fair value of MSR.  Price discovery is conducted through a process of obtaining the following information: (a) quarterly informal (and an annual formal) valuation of the servicing portfolio by a prominent independent mortgage-servicing broker, and (b) a collection of surveys and benchmarking data made available by independent third parties that include peer participants in the mortgage banking business.  Although there is no single source of market information that can be relied upon to assess the fair value of MSR, First Horizon Home Loans reviews all information obtained during price discovery to determine whether the estimated fair value of MSR is reasonable when compared to market information.  On September 30, 2007 and 2006, First Horizon Home Loans determined that its MSR valuations and assumptions were reasonable based on the price discovery process.

The First Horizon Risk Management Committee (FHRMC) reviews the overall assessment of the estimated fair value of MSR monthly.  The FHRMC is responsible for approving the critical assumptions used by management to determine the estimated fair value of First Horizon Home Loans’ MSR.  In addition, FHN’s MSR Committee reviews the initial capitalization rates for newly originated MSR, the assessment of the fair value of MSR and the source of significant changes to the MSR carrying value each quarter.

Hedging the Fair Value of MSR

First Horizon Home Loans enters into financial agreements to hedge MSR in order to minimize the effects of loss in value of MSR associated with increased prepayment activity that generally results from declining interest rates.  In a rising interest rate environment, the value of the MSR generally will increase while the value of the hedge instruments will decline.  Specifically, First Horizon Home Loans enters into interest rate contracts (including swaps, swaptions and mortgage forward sales contracts) to hedge against the effects of changes in fair value of its MSR.  Substantially all capitalized MSR are hedged.  The hedges are economic hedges only, and are terminated and reestablished as needed to respond to changes in market conditions.  Changes in the value of the hedges are recognized as a component of net servicing income in mortgage banking noninterest income.  Successful economic hedging will help minimize earnings volatility that may result from carrying MSR at fair value.

First Horizon Home Loans generally experiences increased loan origination and production in periods of low interest rates which, at the time of sale, result in the capitalization of new MSR associated with new production.  This provides for a “natural hedge” in the mortgage-banking business cycle.  New production and origination does not prevent First Horizon Home Loans from recognizing losses due to reduction in carrying value of existing servicing rights as a result of prepayments; rather, the new production volume results in loan origination fees and the capitalization of MSR as a component of realized gains related to the sale of such loans in the secondary market, thus the natural hedge, which tends to offset a portion of the reduction in MSR carrying value during a period of low interest rates.  In a period of increased borrower prepayments, these losses can be significantly offset by a strong replenishment rate and strong net margins on new loan originations.  To the extent that First Horizon Home Loans is unable to maintain a strong replenishment rate, or in the event that the net margin on new loan originations declines from historical experience, the value of the natural hedge may diminish, thereby significantly impacting the results of operations in a period of increased borrower prepayments.

First Horizon Home Loans does not specifically hedge the change in fair value of MSR attributed to other risks, including unanticipated prepayments (representing the difference between actual prepayment experience and estimated prepayments derived from the model, as described above), basis risk (meaning, the risk that changes in the benchmark interest rate may not correlate to changes in the mortgage market interest rate), discount rates, cost to service and other factors.  To the extent that these other factors result in changes to the fair value of MSR, First Horizon Home Loans experiences volatility in current earnings due to the fact that these risks are not currently hedged.

Excess Interest (Interest-Only Strips) Fair Value – Residential Mortgage Loans

In certain cases, when First Horizon Home Loans sells mortgage loans in the secondary market, it retains an interest in the mortgage loans sold primarily through excess interest.  These financial assets represent rights to receive earnings from serviced assets that exceed contractually specified servicing fees and are legally separable from the base servicing rights.  Consistent with MSR, the fair value of excess interest typically rises as market interest rates increase and declines as market interest rates decrease.  Additionally, similar to MSR, the market for excess interest is limited, and the precise terms of transactions involving excess interest are not typically readily available.  Accordingly, First Horizon Home Loans relies primarily on a discounted cash flow model to estimate the fair value of its excess interest.

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Estimating the cash flow components and the resultant fair value of the excess interest requires First Horizon Home Loans to make certain critical assumptions based upon current market and loan production data.  The primary critical assumptions used by First Horizon Home Loans to estimate the fair value of excess interest include prepayment speeds and discount rates, as discussed above.  First Horizon Home Loans' excess interest is included as a component of trading securities on the Consolidated Condensed Statements of Condition, with realized and unrealized gains and losses included in current earnings as a component of mortgage banking income on the Consolidated Condensed Statements of Income.

Hedging the Fair Value of Excess Interest

First Horizon Home Loans utilizes derivatives (including swaps, swaptions and mortgage forward sales contracts) that change in value inversely to the movement of interest rates to protect the value of its excess interest as an economic hedge.  Realized and unrealized gains and losses associated with the change in fair value of derivatives used in the economic hedge of excess interest are included in current earnings in mortgage banking noninterest income as a component of servicing income.  Excess interest is included in trading securities with changes in fair value recognized currently in earnings in mortgage banking noninterest income as a component of servicing income.

The extent to which the change in fair value of excess interest is offset by the change in fair value of the derivatives used to hedge this asset depends primarily on the hedge coverage ratio maintained by First Horizon Home Loans.  Also, as noted above, to the extent that actual borrower prepayments do not react as anticipated by the prepayment model (i.e., the historical data observed in the model does not correspond to actual market activity), it is possible that the prepayment model could fail to accurately predict mortgage prepayments, which could significantly impact First Horizon Home Loans’ ability to effectively hedge certain components of the change in fair value of excess interest and could result in significant earnings volatility.

Residual-Interest Certificates Fair Value – HELOC and Second-lien Mortgages

In certain cases, when FHN sells HELOC or second-lien mortgages in the secondary market, it retains an interest in the loans sold primarily through a residual-interest certificate.  Residual-interest certificates are financial assets which represent rights to receive earnings to the extent of excess income generated by the underlying loan collateral of certain mortgage-backed securities, which is not needed to meet contractual obligations of senior security holders.  Similar to MSR and interest-only certificates, the market for residual-interest certificates is limited, and the precise terms of transactions involving residual-interest certificates are not typically readily available.  Accordingly, FHN relies primarily on a discounted cash flow model, which is prepared monthly, to estimate the fair value of its residual-interest certificates.

Estimating the cash flow components and the resultant fair value of the residual-interest certificates requires FHN to make certain critical assumptions based upon current market and loan production data.  The primary critical assumptions used by FHN to estimate the fair value of residual-interest certificates include prepayment speeds, credit losses and discount rates, as discussed above.  FHN’s residual-interest certificates are included as a component of trading securities on the Consolidated Condensed Statements of Condition, with realized and unrealized gains and losses included in current earnings as a component of other income on the Consolidated Condensed Statements of Income.  FHN does not utilize derivatives to hedge against changes in the fair value of residual-interest certificates.

PIPELINE AND WAREHOUSE

During the period of loan origination and prior to the sale of mortgage loans in the secondary market, First Horizon Home Loans has exposure to mortgage loans that are in the “mortgage pipeline” and the “mortgage warehouse”.  The mortgage pipeline consists of loan applications that have been received, but have not yet closed as loans.  Pipeline loans are either "floating" or "locked".  A floating pipeline loan is one on which an interest rate has not been locked by the borrower.  A locked pipeline loan is one on which the potential borrower has set the interest rate for the loan by entering into an interest rate lock commitment.  Once a mortgage loan is closed and funded, it is included within the mortgage warehouse, or the “inventory” of mortgage loans that are awaiting sale and delivery (at quarter end an average of approximately 30 days) into the secondary market.

Interest rate lock commitments are derivatives pursuant to SFAS 133 and are therefore recorded at estimates of fair value.  Warehouse loans are carried at the lower of cost or market, where carrying value is adjusted for successful hedging under SFAS 133 and the comparison of carrying value to market is performed for aggregate loan pools.  The fair value of interest rate lock commitments, and the market value of warehouse loans is impacted principally by changes in interest rates, but also by changes in borrower’s credit, and changes in profit margins required by investors for perceived risks (i.e., liquidity).  First Horizon Home Loans does not hedge against credit and liquidity risk in the pipeline or warehouse.  Third party models are used to manage the interest rate risk.

The market value of First Horizon Home Loans’ warehouse (first-lien mortgage loans held for sale) changes with fluctuations in interest rates from the loan closing date through the date of sale of the loan into the secondary market. Typically, the fair value of the warehouse declines in value when interest rates increase and rises in value when interest rates decrease. To mitigate this risk, First Horizon Home Loans enters into forward

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sales contracts and futures contracts to provide an economic hedge against those changes in fair value on a significant portion of the warehouse. These derivatives are recorded at fair value with changes in fair value recorded in current earnings as a component of the gain or loss on the sale of loans in mortgage banking noninterest income.

To the extent that these interest rate derivatives are designated to hedge specific similar assets in the warehouse and prospective analyses indicate that high correlation is expected, the hedged loans are considered for hedge accounting under SFAS No. 133.  Anticipated correlation is determined by projecting a dollar offset relationship for each tranche based on anticipated changes in the fair value of the hedged mortgage loans and the related derivatives, in response to various interest rate shock scenarios.  Hedges are reset daily and the statistical correlation is calculated using these daily data points.  Retrospective hedge effectiveness is measured using the regression results. First Horizon Home Loans generally maintains a coverage ratio (the ratio of expected change in the fair value of derivatives to expected change in the fair value of hedged assets) of approximately 100 percent on warehouse loans accounted for under SFAS No. 133.

Warehouse loans qualifying for SFAS No. 133 hedge accounting treatment totaled $1.6 billion and $1.0 billion on September 30, 2007 and 2006, respectively.  The balance sheet impacts of the related derivatives were net liabilities of $9.5 million and $5.7 million on September 30, 2007 and 2006, respectively.  Net losses of $14.5 million and $11.4 million representing the ineffective portion of these fair value hedges were recognized as a component of gain or loss on sale of loans for the nine months ended September 30, 2007 and 2006, respectively.

Interest rate lock commitments generally have a term of up to 60 days before the closing of the loan.  During this period the value of the lock changes with changes in interest rates.  The interest rate lock commitment does not bind the potential borrower to entering into the loan, nor does it guarantee that First Horizon Home Loans will approve the potential borrower for the loan.  Therefore, when determining fair value, First Horizon Home Loans makes estimates of expected "fallout” (locked pipeline loans not expected to close) using models which consider cumulative historical fallout rates and other factors.  Fallout can occur for a variety of reasons including falling rate environments when a borrower will abandon an interest rate lock commitment at one lender and enter into a new lower interest rate lock commitment at another, when a borrower is not approved as an acceptable credit by the lender, or for a variety of other non-economic reasons.  Changes in the fair value of interest rate lock commitments are recorded in current earnings as gain or loss on the sale of loans in mortgage banking noninterest income.

Because interest rate lock commitments are derivatives they do not quality for hedge accounting treatment under SFAS 133.  However, First Horizon Home Loans economically hedges the risk of changing interest rates by entering into forward sales contracts with respect to fixed rate loan commitments and futures contracts with respect to adjustable rate loan commitments.  The extent to which First Horizon Home Loans is able to economically hedge changes in the mortgage pipeline depends largely on the hedge coverage ratio that is maintained relative to mortgage loans in the pipeline.  The hedge coverage ratio can change significantly due to changes in market interest rates and the associated forward commitment prices for sales of mortgage loans in the secondary market.  Increases or decreases in the hedge coverage ratio can result in significant earnings volatility to FHN.

For the periods ended September 30, 2007 and 2006, the valuation model utilized to estimate the fair value of interest rate lock commitments assumes a zero fair value on the date of the lock with the borrower.  Subsequent to the lock date, the fair value of the interest rate lock commitment is calculated using a model to estimate the change in fair value since inception of the commitment. The estimated fair value was an asset of $19.0 million and a liability of $13.2 million on September 30, 2007, compared to an asset with an estimated fair value of $20.5 million and a liability with an estimated fair value of $2.1 million on September 30, 2006.

FORECLOSURE RESERVES

As discussed above, First Horizon Home Loans typically originates mortgage loans with the intent to sell those loans to GSE and other private investors in the secondary market.  Certain of the mortgage loans are sold with limited or full recourse in the event of foreclosure.  On September 30, 2007 and 2006, $3.3 billion and $3.0 billion, respectively, of mortgage loans were outstanding which were sold under limited recourse arrangements where some portion of the principal is at risk.  Additionally, on September 30, 2007 and 2006, $4.9 billion and $5.1 billion, respectively, of mortgage loans were outstanding which were sold under limited recourse arrangements where the risk is limited to interest and servicing advances.  On September 30, 2007 and 2006, $104.6 million and $130.4 million, respectively, of mortgage loans were outstanding which were serviced under full recourse arrangements.

Loans sold with limited recourse include loans sold under government guaranteed mortgage loan programs including the Federal Housing Administration (FHA) and Veterans Administration (VA).  First Horizon Home Loans continues to absorb losses due to uncollected interest and foreclosure costs and/or limited risk of credit losses in the event of foreclosure of the mortgage loan sold.  Generally, the amount of recourse liability in the event of foreclosure is determined based upon the respective government program and/or the sale or disposal of the foreclosed property collateralizing the mortgage loan.  Another instance of limited recourse is the VA/No bid.  In this case, the VA guarantee is limited

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and First Horizon Home Loans may be required to fund any deficiency in excess of the VA guarantee if the loan goes to foreclosure.

Loans sold with full recourse generally include mortgage loans sold to investors in the secondary market which are uninsurable under government guaranteed mortgage loan programs, due to issues associated with underwriting activities, documentation or other concerns.

Management closely monitors historical experience, borrower payment activity, current economic trends and other risk factors, and establishes a reserve for foreclosure losses for loans sold with limited recourse, loans serviced with full recourse, and loans sold with general representations and warranties, including early payment defaults.  Management believes the foreclosure reserve is sufficient to cover incurred foreclosure losses relating to loans being serviced as well as loans sold where the servicing was not retained.  The reserve for foreclosure losses is based upon a historical progression model using a rolling 12-month average, which predicts the probability or frequency of a mortgage loan entering foreclosure. In addition, other factors are considered, including qualitative and quantitative factors (e.g., current economic conditions, past collection experience, risk characteristics of the current portfolio and other factors), which are not defined by historical loss trends or severity of losses.  On September 30, 2007 and 2006, the foreclosure reserve was $12.9 million and $14.8 million, respectively. While the servicing portfolio has grown from $100.2 billion on September 30, 2006, to $108.4 billion on September 30, 2007, the foreclosure reserve has decreased primarily due to the decline in the full recourse portfolios.

ALLOWANCE FOR LOAN LOSSES

Management’s policy is to maintain the allowance for loan losses at a level sufficient to absorb estimated probable incurred losses in the loan portfolio.  Management performs periodic and systematic detailed reviews of its loan portfolio to identify trends and to assess the overall collectibility of the loan portfolio.  Accounting standards require that loan losses be recorded when management determines it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated.  Management believes the accounting estimate related to the allowance for loan losses is a "critical accounting estimate" because:  changes in it can materially affect the provision for loan losses and net income, it requires management to predict borrowers’ likelihood or capacity to repay, and it requires management to distinguish between losses incurred as of a balance sheet date and losses expected to be incurred in the future.  Accordingly, this is a highly subjective process and requires significant judgment since it is often difficult to determine when specific loss events may actually occur.  The allowance for loan losses is increased by the provision for loan losses and recoveries and is decreased by charged-off loans.  This critical accounting estimate applies primarily to the Retail/Commercial Banking segment.  The Credit Policy and Executive Committee of FHN’s board of directors reviews quarterly the level of the allowance for loan losses.

FHN’s methodology for estimating the allowance for loan losses is not only critical to the accounting estimate, but to the credit risk management function as well.  Key components of the estimation process are as follows:  (1) commercial loans determined by management to be individually impaired loans are evaluated individually and specific reserves are determined based on the difference between the outstanding loan amount and the estimated net realizable value of the collateral (if collateral dependent) or the present value of expected future cash flows; (2) individual commercial loans not considered to be individually impaired are segmented based on similar credit risk characteristics and evaluated on a pool basis; (3) retail loans are segmented based on loan types and credit score bands and loan to value; (4) reserve rates for each portfolio segment are calculated based on historical charge-offs and are adjusted by management to reflect current events, trends and conditions (including economic factors and trends); and (5) management’s estimate of probable incurred losses reflects the reserve rate applied against the balance of loans in each segment of the loan portfolio.

Principal loan amounts are charged off against the allowance for loan losses in the period in which the loan or any portion of the loan is deemed to be uncollectible.

FHN believes that the critical assumptions underlying the accounting estimate made by management include: (1) the commercial loan portfolio has been properly risk graded based on information about borrowers in specific industries and specific issues with respect to single borrowers; (2) borrower specific information made available to FHN is current and accurate; (3) the loan portfolio has been segmented properly and individual loans have similar credit risk characteristics and will behave similarly;  (4) known significant loss events that have occurred were considered by management at the time of assessing the adequacy of the allowance for loan losses; (5) the economic factors utilized in the allowance for loan losses estimate are used as a measure of actual incurred losses; (6) the period of history used for historical loss factors is indicative of the current environment; and (7) the reserve rates, as well as other adjustments estimated by management for current events, trends, and conditions, utilized in the process reflect an estimate of losses that have been incurred as of the date of the financial statements.

While management uses the best information available to establish the allowance for loan losses, future adjustments to the allowance for loan losses and methodology may be necessary if economic or other conditions differ substantially from the assumptions used in making the estimates or, if required by regulators, based upon information at the time of their examinations.  Such adjustments to original estimates, as necessary, are

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made in the period in which these factors and other relevant considerations indicate that loss levels vary from previous estimates.  There have been no significant changes to the methodology for the quarters ended September 30, 2007 and 2006.

GOODWILL AND ASSESSMENT OF IMPAIRMENT

FHN’s policy is to assess goodwill for impairment at the reporting unit level on an annual basis or between annual assessments if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.  Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value.  Accounting standards require management to estimate the fair value of each reporting unit in making the assessment of impairment at least annually.  As of October 1, 2006, FHN engaged an independent valuation firm to compute the fair value estimates of each reporting unit as part of its annual impairment assessment.  The independent valuation utilized three separate valuation methodologies and applied a weighted average to each methodology in order to determine fair value for each reporting unit.  The valuation as of October 1, 2006, indicated no goodwill impairment for any of the reporting units.

Management believes the accounting estimates associated with determining fair value as part of the goodwill impairment test is a "critical accounting estimate" because estimates and assumptions are made about FHN’s future performance and cash flows, as well as other prevailing market factors (interest rates, economic trends, etc.).  FHN’s policy allows management to make the determination of fair value using internal cash flow models or by engaging independent third parties.  If a charge to operations for impairment results, this amount would be reported separately as a component of noninterest expense.  This critical accounting estimate applies to the Retail/Commercial Banking, Mortgage Banking, and Capital Markets business segments.  Reporting units have been defined as the same level as the operating business segments.

The impairment testing process conducted by FHN begins by assigning net assets and goodwill to each reporting unit.  FHN then completes “step one” of the impairment test by comparing the fair value of each reporting unit (as determined based on the discussion below) with the recorded book value (or “carrying amount”) of its net assets, with goodwill included in the computation of the carrying amount.  If the fair value of a reporting unit exceeds its carrying amount, goodwill of that reporting unit is not considered impaired, and “step two” of the impairment test is not necessary.  If the carrying amount of a reporting unit exceeds its fair value, step two of the impairment test is performed to determine the amount of impairment.  Step two of the impairment test compares the carrying amount of the reporting unit’s goodwill to the “implied fair value” of that goodwill.  The implied fair value of goodwill is computed by assuming all assets and liabilities of the reporting unit would be adjusted to the current fair value, with the offset as an adjustment to goodwill.  This adjusted goodwill balance is the implied fair value used in step two.  An impairment charge is recognized for the amount by which the carrying amount of goodwill exceeds its implied fair value.

In connection with obtaining the independent valuation, management provided certain data and information that was utilized by the third party in its determination of fair value.  This information included budgeted and forecasted earnings of FHN at the reporting unit level.  Management believes that this information is a critical assumption underlying the estimate of fair value.  The independent third party made other assumptions critical to the process, including discount rates, asset and liability growth rates, and other income and expense estimates, through discussions with management.

While management uses the best information available to estimate future performance for each reporting unit, future adjustments to management’s projections may be necessary if economic conditions differ substantially from the assumptions used in making the estimates.

CONTINGENT LIABILITIES

A liability is contingent if the amount or outcome is not presently known, but may become known in the future as a result of the occurrence of some uncertain future event.  FHN estimates its contingent liabilities based on management’s estimates about the probability of outcomes and their ability to estimate the range of exposure.  Accounting standards require that a liability be recorded if management determines that it is probable that a loss has occurred and the loss can be reasonably estimated.  In addition, it must be probable that the loss will be confirmed by some future event. As part of the estimation process, management is required to make assumptions about matters that are by their nature highly uncertain.

The assessment of contingent liabilities, including legal contingencies and income tax liabilities, involves the use of critical estimates, assumptions and judgments.  Management’s estimates are based on their belief that future events will validate the current assumptions regarding the ultimate outcome of these exposures.  However, there can be no assurance that future events, such as court decisions or I.R.S. positions, will not differ from management’s assessments.  Whenever practicable, management consults with third party experts (attorneys, accountants, claims administrators, etc.) to assist with the gathering and evaluation of information related to contingent liabilities.  Based on internally and/or externally prepared evaluations, management makes a determination whether the potential exposure requires accrual in the financial statements.

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OTHER

SUBSEQUENT EVENTS

On October 16, 2007, the board of directors approved a 7.5 million share purchase authority that will expire on December 31, 2010.  Purchases will be made in the open market or through privately negotiated transactions and will be subject to market conditions, accumulation of excess equity and prudent capital management.  The new authority is not tied to any compensation plan, and replaces an older non-plan share purchase authority.  The board immediately terminated the older authority, which originally was announced on October 19, 2000, had approximately 1.6 million shares remaining in available share purchase authority and was scheduled to expire on December 31, 2007.

ACCOUNTING CHANGES

In November 2007, the SEC issued Staff Accounting Bulletin No. 109, "Written Loan Commitments Recorded at Fair Value Through Earnings" (SAB No. 109). SAB No. 109 rescinds SAB No. 105's prohibition on inclusion of expected net future cash flows related to loan servicing activities in the fair value measurement of a written loan commitment. SAB No. 109 also applies to any loan commitments for which fair value accounting is elected under SFAS No. 159. SAB No. 109 is effective prospectively for derivative loan commitments issued or modified in fiscal quarters beginning after December 15, 2007. FHN is currently assessing the financial impact of adopting SAB No. 109.

In June 2007, the American Institute of Certified Public Accountants (AICPA) issued Statement of Position 07-1, “Clarification of the Scope of the Audit and Accounting Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies” (SOP 07-1), which provides guidance for determining whether an entity is within the scope of the AICPA’s Investment Companies Guide.  Additionally, SOP 07-1 provides certain criteria that must be met in order for investment company accounting applied by a subsidiary or equity method investee to be retained in the financial statements of the parent company or an equity method investor.  SOP 07-1 also provides expanded disclosure requirements regarding the retention of such investment company accounting in the consolidated financial statements.  In May 2007, FASB Staff Position No. FIN 46(R)- 7, “Application of FASB Interpretation No. 46(R) to Investment Companies” (FIN 46(R)-7) was issued.  FIN 46(R)-7 amends FIN 46(R) to provide a permanent exception to its scope for companies within the scope of the revised Investment Companies Guide under SOP 07-1.  The FASB has indefinitely deferred the effective date of SOP 07-1 and FIN 46(R)-7.

In April 2007, FASB Staff Position No. FIN 39-1, “Amendment of FASB Interpretation No. 39” (FIN 39-1) was issued. FIN 39-1 permits the offsetting of fair value amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral against fair value amounts recognized for derivative instruments executed with the same counterparty under the same master netting arrangement.  Upon adoption of FIN 39-1, entities are permitted to change their previous accounting policy election to offset or not offset fair value amounts recognized for derivative instruments under master netting arrangements.  Additionally, FIN 39-1 requires additional disclosures for derivatives and collateral associated with master netting arrangements.  FIN 39-1 is effective for fiscal years beginning after November 15, 2007, through retrospective application, with early application permitted.  FHN is currently assessing the financial impact of adopting FIN 39-1.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (SFAS No. 159), which allows an irrevocable election to measure certain financial assets and financial liabilities at fair value on an instrument-by-instrument basis, with unrealized gains and losses recognized currently in earnings.  Under SFAS No. 159, the fair value option may only be elected at the time of initial recognition of a financial asset or financial liability or upon the occurrence of certain specified events.  Additionally, SFAS No. 159 provides that application of the fair value option must be based on the fair value of an entire financial asset or financial liability and not selected risks inherent in those assets or liabilities.  SFAS No. 159 requires that assets and liabilities which are measured at fair value pursuant to the fair value option be reported in the financial statements in a manner that separates those fair values from the carrying amounts of similar assets and liabilities which are measured using another measurement attribute.  SFAS No. 159 also provides expanded disclosure requirements regarding the effects of electing the fair value option on the financial statements.  SFAS No. 159 is effective prospectively for fiscal years beginning after November 15, 2007.  FHN is currently assessing the financial impact of adopting SFAS No. 159.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (SFAS No. 157), which establishes a hierarchy to be used in performing measurements of fair value.  SFAS No. 157 emphasizes that fair value should be determined from the perspective of a market participant while also indicating that valuation methodologies should first reference available market data before using internally developed assumptions.  Additionally, SFAS No. 157 provides expanded disclosure requirements regarding the effects of fair value measurements on the financial statements.  SFAS No. 157 is effective prospectively for fiscal years beginning after November 15, 2007.  FHN is currently assessing the financial impact of adopting SFAS No. 157.

In September 2006, the consensus reached in EITF Issue No. 06-4, “Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements” (EITF 06-4) was ratified by the FASB.  EITF 06-4 requires that a liability be recognized for contracts written to employees which provide future postretirement benefits that are covered by endorsement split-dollar life insurance

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arrangements because such obligations are not considered to be effectively settled upon entering into the related insurance arrangements.  EITF 06-4 is effective for fiscal years beginning after December 15, 2007, with the guidance applied using either a retrospective approach or through a cumulative-effect adjustment to beginning undivided profits.  FHN anticipates recognizing a liability, with a corresponding decrease to undivided profits, of approximately $8 million, net of tax, upon adoption of EITF 06-4.

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 Item 3.        Quantitative and Qualitative Disclosures about Market Risk

The information called for by this item is contained in (a) Management’s Discussion and Analysis of Financial Condition and Results of Operations included as Item 2 of Part I of this report at pages 29-56, (b) the section entitled “Risk Management – Interest Rate Risk Management” of the Management’s Discussion and Analysis of Results of Operations and Financial Condition section of FHN’s 2006 Annual Report to shareholders, and (c) the “Interest Rate Risk Management” subsection of Note 25 to the Consolidated Financial Statements included in FHN’s 2006 Annual Report to shareholders.

Item 4.          Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures.  FHN’s management, with the participation of FHN’s chief executive officer and chief financial officer, has evaluated the effectiveness of the design and operation of FHN’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this quarterly report. Based on that evaluation, the chief executive officer and chief financial officer have concluded that FHN’s disclosure controls and procedures are effective to ensure that material information relating to FHN and FHN’s consolidated subsidiaries is made known to such officers by others within these entities, particularly during the period this quarterly report was prepared, in order to allow timely decisions regarding required disclosure.

(b) Changes in Internal Control over Financial Reporting.  There have not been any changes in FHN’s internal control over financial reporting during FHN’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, FHN’s internal control over financial reporting.

Item 4(T).      Controls and Procedures

       Not applicable

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Part II.

OTHER INFORMATION

Items 1, 3, 4, and 5

As of the end of the third quarter 2007, the answers to Items 1,  3, 4, and 5 were either inapplicable or negative, and therefore, these items are omitted.

Item 1A        Risk Factors

The discussions concerning “Financing, Funding, and Liquidity Risks” and “Interest Rate and Yield Curve Risks” in Item 1A of the Corporation’s annual report on Form 10-K for the year 2006 are amended and restated as follows: 

Financing, Funding, and Liquidity Risks

            Management of liquidity and related risks is a key function for our business. Additional information concerning liquidity risk management is set forth under the caption “Liquidity Management” beginning on page 25 of the Management’s Discussion and Analysis of Results of Operations and Financial Condition section of our 2006 Annual Report to Shareholders, which is part of the material from that Report that has been incorporated by reference into Item 7 of Part II of the Corporation’s annual report on Form 10-K for the year 2006 (the “10-K report”).

            Our funding requirements currently are met principally by deposits, financing from other financial institutions, and financing from institutional investors by means of the capital markets. In general, the costs of our funding directly impact our costs of doing business and, therefore, can positively or negatively affect our financial results. 

            A number of factors could make such funding more difficult, more expensive, or unavailable on affordable terms, including, but not limited to, our financial results, organizational changes, adverse impacts on our reputation, changes in the activities of our business partners, disruptions in the capital markets, specific events that adversely impact the financial services industry, counterparty availability, changes affecting our loan portfolio or other assets, changes affecting our corporate and regulatory structure, interest rate fluctuations, ratings agency actions, general economic conditions, and the legal, regulatory, accounting, and tax environments governing our funding transactions. In addition, our ability to raise funds is strongly affected by the general state of the U.S. and world economies and financial markets, and may become increasingly difficult due to economic and other factors beyond our control.

            To a certain degree we depend on our ability to sell or securitize first and second mortgage loans and home equity line of credit loans (which we refer to as HELOC). Those actions involve the sale of whole loans or of beneficial interests in loans. Although the market for loans is substantial, if it experiences disruptions we may be unable to sell or securitize our mortgage or HELOC loans at favorable or profitable pricing levels, or at all. If we were unable to continue to sell or securitize our loans, we would seek alternative funding sources to fund loan originations and meet our other liquidity needs. If we were unable to find cost-effective and stable alternatives, that failure could negatively impact our liquidity and could potentially increase our cost of funds and lower our loan growth. Moreover, such disruptions:  (i) could force us to significantly and disadvantageously change our loan products and product mix; (ii) could temporarily or indefinitely reduce our loan origination flow and the resulting revenues; and, (iii) as to loans originated prior to such disruptions, could result in our selling such loans at an immediate loss or our keeping them on our balance sheet or both. Keeping pre-disruption loans on our balance sheet could adversely impact our liquidity and capital ratios, and could expose us to losses both immediately and later due to the effects of accounting rules that require us to adjust certain loan values to the lower of cost or market (sometimes referred to as a LOCOM adjustment).

            Events affecting interest rates, markets, and other factors which adversely impact our ability or desire to access the capital markets for funding likewise may adversely affect the demand for our services in our capital markets business.  As result, disruptions in those areas may adversely impact our earnings in that business unit as well as in our retail/commercial banking and mortgage banking units.

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            When we sell or securitize mortgage and HELOC loans, we sometimes do so with limited or full recourse, which means, in effect, that we will take some or significant financial responsibility for the loan if it defaults. Additional information concerning these risks is set forth under the caption “Foreclosure Reserves” beginning on page 43 of the Management’s Discussion and Analysis of Results of Operations and Financial Condition section of our 2006 Annual Report to Shareholders, which is part of the material from that Report that has been incorporated by reference into Item 7 of Part II of the 10-K report. In many instances, we sell or securitize loans with no recourse. However, if a loan sold with no recourse defaults, we could still bear responsibility to the buyer in many cases if the loan defaults shortly after the sale, typically in the first 90 days, or if the loan did not conform to representations we made to the buyer at the time of sale. We manage the early default risk through our credit review processes, and we manage the risk of non-conformity through origination and documentation controls and procedures, and through post-closing quality control processes.

            Rating agencies assign credit ratings to issuers and their debt. In that role, agencies directly affect the availability and cost of our funding. The Corporation and the Bank currently receive ratings from several rating entities for unsecured borrowings. A rating below investment grade typically reduces availability and increases the cost of market-based funding. A debt rating of Baa3 or higher by Moody’s Investors Service, or BBB- or higher by Standard & Poor’s and Fitch Ratings, is considered investment grade for many purposes. Currently, all three rating agencies rate the unsecured senior debt of the Corporation and the Bank as investment grade. Because we depend on institutional borrowing and the capital markets for funding and capital, we could experience reduced liquidity and increased cost of funding if our debt ratings were lowered, particularly if lowered below investment grade. In addition, other actions by ratings agencies can create uncertainty about our ratings in the future and thus can adversely affect the cost and availability of funding, including placing us on negative outlook or on watchlist.  Please note that a credit rating is not a recommendation to buy, sell, or hold securities, is subject to revision or withdrawal at any time, and should be evaluated independently of any other rating.

            Regulatory laws or rules that establish minimum capital levels, regulate deposit insurance, and govern related funding matters for banks could be changed in a manner that could increase our overall cost of capital and thus reduce our earnings.

Interest Rate and Yield Curve Risks

            A significant portion of our business involves borrowing and lending money. Accordingly, changes in interest rates directly impact our revenues and expenses, and potentially could expand or compress our net interest margin. We actively manage our balance sheet to control the risks of a reduction in net interest margin brought about by ordinary fluctuations in rates. Additional information concerning those risks and our management of them appears under the caption “Interest Rate Risk Management” beginning on page 23 of the Management’s Discussion and Analysis of Results of Operations and Financial Condition section of our 2006 Annual Report to Shareholders, which is part of the material from that Report that has been incorporated by reference into Item 7 of Part II of the 10-K report.

            Our mortgage lending and servicing businesses also are affected by changes in interest rates. Generally, when rates increase, demand for mortgage loans and HELOC decrease (and our revenues from new originations fall), and when rates decrease, demand increases (and our origination revenues increase). In a contrary fashion, when interest rates increase, the value of mortgage servicing rights (MSR) that we retain generally increases, and when rates decline the value of MSR declines. Additional information concerning those risks and our management of them appears under the caption “Mortgage Servicing Rights and Other Related Retained Interests” beginning on page 39 of the Management’s Discussion and Analysis of Results of Operations and Financial Condition section of our 2006 Annual Report to Shareholders, which is part of the material from that Report that has been incorporated by reference into Item 7 of Part II of the 10-K report.

            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 loan’s 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 customer’s mortgage rate and for all warehouse loans that bear a fixed rate. We manage that rate-change risk through hedging activities and other methods; however, it is not possible to eliminate all such risks. Additional information concerning those risks and our management of them appears under the caption “Pipeline and Warehouse” beginning on page 42 of the Management’s Discussion and Analysis of Results of Operations and Financial Condition section of our 2006 Annual Report to Shareholders, which is part of the material from that Report that has been incorporated by reference into Item 7 of Part II of the 10-K report.

            Like all financial services companies, we face the risks associated with movements in the yield curve. The yield curve simply shows the interest rates applicable to short and long term debt. The curve is steep when short-term rates are much lower than long-term rates; it is flat when short-term rates are equal, or nearly equal, to long-term rates; and it is inverted when short-term rates exceed long-term rates. Historically, the

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yield curve normally is positively sloped.  However, during much of 2006 the yield curve was inverted and the degree of inversion generally worsened as the year progressed. The yield curve inversion continued into the first half of 2007. A flat or inverted yield curve tends to decrease net interest margin, as yields on the warehouse narrow relative to their short-term funding sources, and it tends to reduce demand for long-term debt securities, adversely impacting the revenues of our capital markets business.   A prolonged inversion of the yield curve historically is so uncommon that it is difficult to predict all the effects that such a market condition is reasonably likely to create.  One such effect upon us was an overall increase in the cost of hedging mortgage servicing rights (MSR) in our mortgage business. This cost is tied to factors including volatility in the market place, the shape of the yield curve, product duration, risk tolerance and other effects which may favorably or unfavorably impact hedging cost.

            Lastly, expectations by the market regarding the direction of future interest rate movements, particularly long-term rates, can impact the demand for long-term debt which in turn can impact the revenues of our capital markets business. That risk is most apparent during times when strong expectations have not yet been reflected in market rates, or when expectations are especially weak or uncertain.

Item 2          Unregistered Sales of Equity Securities and Use of Proceeds

(a)    None

(b)    Not applicable

(c)    The Issuer Purchase of Equity Securities Table is incorporated herein by reference to the table included in Item 2 of

   Part I – First Horizon National Corporation – Management’s Discussion and Analysis of Financial Condition and Results of

   Operations at page 44.

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Item 6          Exhibits

(a)  Exhibits.

Exhibit No. Description

3.2 Bylaws of the Corporation, as amended and restated as of October 16, 2007, incorporated herein by reference to Exhibit 3.2 to the Corporation’s Current Report on Form 8-K dated October 16, 2007.

4 Instruments defining the rights of security holders, including indentures.*

10.1(a3)** Form of Amendment to Directors and Executives Deferred Compensation Plan.

10.1(c)** Form of First Horizon National Corporation Deferred Compensation Plan as Amended and Restated.

10.1(i)** Form of First Horizon Deferred Compensation Plan as Amended and Restated. 

10.1(j)** Form of FTN Financial Deferred Compensation Plan Amended and Restated Effective January 1, 2008.

10.2(b2)** Amendment to 1992 Restricted Stock Incentive Plan.

10.2(e2)** Amendment to 2000 Employee Stock Option Plan.

10.2(f2)** Amendment to 2003 Equity Compensation Plan.

10.6(a2)** Amendment to 2002 Management Incentive Plan.

10.6(c2)** Amendment to Capital Markets Incentive Compensation Plan.

10.7(a3)** Form of Amendment to pre-2007 form of change-in-control severance agreement between the registrant and its executive officers. This is an amendment to exhibit 10.7(a1) to the registrant’s annual report on Form 10-K for the year ended December 31, 2006.

10.7(a4)** Form of Amendment to 2007 form of change-in-control severance agreement between the registrant and its executive officers. This is an amendment to exhibit 10.7(a2) to the registrant’s annual report on Form 10-K for the year ended December 31, 2006.

10.7(a5)** October 16, 2007 form of change-in-control severance agreement offered to executive officers.

10.7(e)** Form of Pension Restoration Plan (amended and restated as of January 1, 2008).

10.7(i)** Description of Certain Benefits Available to Executive Officers

10.7(k2)** Form of Amendment to Limited Confidentiality and Non-Compete Agreement with Mr. Jim L. Hughes .

13 The “Risk Management-Interest Rate Risk Management” subsection of the Management’s Discussion and Analysis section and the “Interest Rate Risk Management” subsection of Note 25 to the Corporation’s consolidated financial statements, contained, respectively, at pages 23-25 and page 108 in the Corporation’s 2006 Annual Report to shareholders furnished to shareholders in connection with the Annual Meeting of Shareholders on April 17, 2007, and incorporated herein by reference. Portions of the Annual Report not incorporated herein by reference are deemed not to be “filed” with the Commission with this report.

61

31(a) Rule 13a-14(a) Certifications of CEO (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)

31(b) Rule 13a-14(a) Certifications of CFO (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)

32(a) 18 USC 1350 Certifications of CEO (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

32(b) 18 USC 1350 Certifications of CFO (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

* The Corporation agrees to furnish copies of the instruments, including indentures, defining the rights of the holders of the long-term debt of the Corporation and its consolidated subsidiaries to the Securities and Exchange Commission upon request.

** This is a management contract or compensatory plan required to be filed as an exhibit.

In many agreements filed as exhibits, each party makes representations and warranties to other parties. Those representations and warranties are made only to and for the benefit of those other parties in the context of a business contract. They are subject to contractual materiality standards. Exceptions to such representations and warranties may be partially or fully waived by such parties in their discretion. No such representation or warranty may be relied upon by any other person for any purpose.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	FIRST HORIZON NATIONAL CORPORATION (Registrant)
DATE:    November 7, 2007	By: /s/ D. Bryan Jordan       D. Bryan Jordan       Executive Vice President and Chief       Financial Officer (Duly Authorized       Officer and Principal Financial Officer)

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EXHIBIT INDEX

Exhibit No. Description

3.2 Bylaws of the Corporation, as amended and restated as of October 16, 2007, incorporated herein by reference to Exhibit 3.2 to the Corporation’s Current Report on Form 8-K dated October 16, 2007.

4 Instruments defining the rights of security holders, including indentures.*

10.1(a3)** Form of Amendment to Directors and Executives Deferred Compensation Plan.

10.1(c)** Form of First Horizon National Corporation Deferred Compensation Plan as Amended and Restated.

10.1(i)** Form of First Horizon Deferred Compensation Plan as Amended and Restated. 

10.1(j)** Form of FTN Financial Deferred Compensation Plan Amended and Restated Effective January 1, 2008.

10.2(b2)** Amendment to 1992 Restricted Stock Incentive Plan.

10.2(e2)** Amendment to 2000 Employee Stock Option Plan.

10.2(f2)** Amendment to 2003 Equity Compensation Plan.

10.6(a2)** Amendment to 2002 Management Incentive Plan.

10.6(c2)** Amendment to Capital Markets Incentive Compensation Plan.

10.7(a3)** Form of Amendment to pre-2007 form of change-in-control severance agreement between the registrant and its executive officers. This is an amendment to exhibit 10.7(a1) to the registrant’s annual report on Form 10-K for the year ended December 31, 2006.

10.7(a4)** Form of Amendment to 2007 form of change-in-control severance agreement between the registrant and its executive officers. This is an amendment to exhibit 10.7(a2) to the registrant’s annual report on Form 10-K for the year ended December 31, 2006.

10.7(a5)** October 16, 2007 form of change-in-control severance agreement offered to executive officers.

10.7(e)** Form of Pension Restoration Plan (amended and restated as of January 1, 2008).

10.7(i)** Description of Certain Benefits Available to Executive Officers

10.7(k2)** Form of Amendment to Limited Confidentiality and Non-Compete Agreement with Mr. Jim L. Hughes .

13 The “Risk Management-Interest Rate Risk Management” subsection of the Management’s Discussion and Analysis section and the “Interest Rate Risk Management” subsection of Note 25 to the Corporation’s consolidated financial statements, contained, respectively, at pages 23-25 and page 108 in the Corporation’s 2006 Annual Report to shareholders furnished to shareholders in connection with the Annual Meeting of Shareholders on April 17, 2007, and incorporated herein by reference. Portions of the Annual Report not incorporated herein by reference are deemed not to be “filed” with the Commission with this report.

31(a) Rule 13a-14(a) Certifications of CEO (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)

31(b) Rule 13a-14(a) Certifications of CFO (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)

32(a) 18 USC 1350 Certifications of CEO (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

32(b) 18 USC 1350 Certifications of CFO (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

64

* The Corporation agrees to furnish copies of the instruments, including indentures, defining the rights of the holders of the long-term debt of the Corporation and its consolidated subsidiaries to the Securities and Exchange Commission upon request.

** This is a management contract or compensatory plan required to be filed as an exhibit.

In many agreements filed as exhibits, each party makes representations and warranties to other parties. Those representations and warranties are made only to and for the benefit of those other parties in the context of a business contract. They are subject to contractual materiality standards. Exceptions to such representations and warranties may be partially or fully waived by such parties in their discretion. No such representation or warranty may be relied upon by any other person for any purpose.

65

EX-31

Exhibit 31(a)

FIRST HORIZON NATIONAL CORPORATION

RULE 13a – 14(a) CERTIFICATIONS OF CEO

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 (QUARTERLY REPORT)

CERTIFICATIONS

I, Gerald L. Baker, President and Chief Executive Officer of First Horizon National Corporation, certify that:

1. I have reviewed this quarterly report on Form 10-Q of First Horizon National Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.  The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date November 7, 2007

/s/ Gerald L. Baker

Gerald L. Baker

President and Chief Executive Officer

1

EX-31

Exhibit 31(b)

FIRST HORIZON NATIONAL CORPORATION

RULE 13a – 14(a) CERTIFICATIONS OF CFO

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 (QUARTERLY REPORT)

CERTIFICATIONS

I, D. Bryan Jordan, Executive Vice President and Chief Financial Officer of First Horizon National Corporation, certify that:

1. I have reviewed this quarterly report on Form 10-Q of First Horizon National Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.  The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date November 7, 2007

/s/ D. Bryan Jordan

D. Bryan Jordan

Executive Vice President and Chief Financial Officer

1

EX-32

 Exhibit 32(a)

CERTIFICATION OF PERIODIC REPORT

18 USC 1350 CERTIFICATIONS OF CEO

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,

As Codified at 18 U.S.C. Section 1350

I, the undersigned Gerald L. Baker, President and Chief Executive Officer of First Horizon National Corporation (“Corporation”), hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, as follows:

1. The Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934.

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

Dated:  November 7, 2007

/s/ Gerald L. Baker

Gerald L. Baker

President and Chief Executive Officer

1

EX-32

                                           Exhibit 32(b)

CERTIFICATION OF PERIODIC REPORT

18 USC 1350 CERTIFICATIONS OF CFO

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,

As Codified at 18 U.S.C. Section 1350

I, the undersigned D. Bryan Jordan, Executive Vice President and Chief Financial Officer of First Horizon National Corporation (“Corporation”), hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, as follows:

1. The Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934.

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of   the Corporation.

Dated:  November 7, 2007

 /s/D. Bryan Jordan

D. Bryan Jordan

Executive Vice President and Chief Financial Officer

1

EX-10

Exhibit 10.1(a3)

AMENDMENT TO

FIRST HORIZON NATIONAL CORPORATION

DIRECTORS AND EXECUTIVES DEFERRED COMPENSATION PLAN

(AS AMENDED AND RESTATED AS OF JANUARY 21, 1997)

The Directors and Executives Deferred Compensation Plan of First Horizon National Corporation (as amended and restated January 21, 1997 and as further amended effective July 17, 2001) (the “Plan”) is hereby amended as hereinafter provided.  It is intended by the Compensation Committee of the Board of Directors to make only those changes to the Plan that are necessary in order for the Plan to be in compliance with Section 409A of the Internal Revenue Code (the “Code”), and in the case of any ambiguity, this Amendment shall be construed in accordance with the intent of the Committee to make the least possible change in order to achieve such compliance.  The specific amendments are as follows:

1.           Each Participant who executes an addendum to his or her Deferral and Acknowledgement Agreement in the form of Exhibit “A” to this Amendment shall become subject to all of the terms and conditions of this Amendment notwithstanding any provision of his or her Deferral and Acknowledgement Agreement to the contrary.

2.           All references in the Plan and in any Deferral and Acknowledgement Agreement subject to this Amendment to a “termination of employment” or any similar terms are hereby amended to refer instead to a “separation from service.”  Whether a separation from service has occurred shall be determined in accordance with Section 409A of the Code, and the following rules shall apply:

(a)           Except in the case of a Participant on a bona fide leave of absence as provided below, a Participant is deemed to have incurred a separation from service if the Company and the Participant reasonably anticipate that the level of services to be performed by the Participant after a date certain would be reduced to twenty percent (20%) or less of the average services rendered by the Participant during the immediately preceding thirty-six (36) month period disregarding periods during which the Participant was on a bona fide leave of absence.

(b)           A Participant who is absent from work due to military leave, sick leave or other bona fide leave of absence shall incur a separation from service on the first day immediately following the later of (i) the six-month anniversary of the commencement of the leave or (ii) the expiration of the Participant’s right, if any, to reemployment or to return to work under statute or contract.

(c)           For purposes of determine whether a separation from service has occurred, the Company and its affiliates shall be treated as a single employer.  For this purpose, an affiliate means a corporation, trade or business that, together with the Company, is treated as a single employer under Section 414(b) or (c) of the Code, except that for the foregoing purposes, common ownership of at least fifty percent (50%) shall be determinative.

(d)           The Committee specifically reserves the right to determine whether a sale or other disposition of substantial assets to an unrelated party constitutes a separation from service with respect to a Participant providing services to the seller immediately prior to the transaction and providing services to the buyer after the transaction.  Such determination shall be made in accordance with the requirements of Section 409A of the Code.

3.           Section III.G of the Plan is hereby amended to delete such section in its entirety and to substitute in lieu thereof the following:

“Change in Control” means the occurrence with respect to the Company of any of the following events:  (i) a change in the ownership of the Company; (ii) a change in the effective control of the Company; (iii) a change in the ownership of a substantial portion of the assets of the Company.

For purposes of this Section, a change in the ownership of the Company occurs on the date on which any one person, or more than one person acting as a group, acquires ownership of stock of the Company that, together with stock held by such person or group constitutes more than 50% of the total fair market value or total voting power of the stock of the Company. A change in the effective control of the Company occurs on the date on which either (i) a person, or more than one person acting as a group, acquires ownership of stock of the Company possessing 30% or more of the total voting power of the stock of the Company, taking into account all such stock acquired during the 12-month period ending on the date of the most recent acquisition, or (ii) a majority of the members of the Company’s Board of Directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of such Board of Directors prior to the date of the appointment or election. A change in the ownership of a substantial portion of assets occurs on the date on which any one person, or more than one person acting as a group, other than a person or group of persons that is related to the Company, acquires assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions, taking into account all such assets acquired during the 12-month period ending on the date of the most recent acquisition.

An event constitutes a Change in Control with respect to a Participant only if the Participant performs services for the Company, or the Participant’s relationship to the Company otherwise satisfies the requirements of Treasury Regulation Section 1.409A-3(i)(5)(ii).

2

The determination as to the occurrence of a Change in Control shall be based on objective facts and in accordance with the requirements of Code Section 409A.

4.           Notwithstanding any provision of the Plan to the contrary, specifically including but not limited to Sections IV and V:

(a)           No new Deferral and Acknowledgement Agreements shall be accepted by the Company.

(b)           Existing Deferral and Acknowledgement Agreements may not be amended or modified without the consent of the Committee, which consent shall be withheld if such amendment or modification would cause such Deferral and Acknowledgement Agreement not to comply with Section 409A of the Code.

(c)           Neither the Company nor the Committee may accelerate the time or form of payment of any benefit due to the Participant hereunder unless such acceleration is permitted under Treas. Reg. §1.409A-3(j)(4).  Neither the Company nor the Committee may delay the time for payment of any benefit due to the Participant hereunder except to the extent permitted under Treas. Reg. §1.409A-2(b)(7).

5.           Section VI.A of the Plan is hereby amended to delete such section in its entirety and to substitute in lieu thereof the following:

A.           Retirement Benefit.  If a Participant separates from service with the Company and such separation constitutes a Normal Retirement, the Company shall pay to the Participant the benefits from the Participant’s Accrual Account as provided in this paragraph.  The first benefit to be paid on the thirty-first (31^st) day of January following the calendar year in which the Participant attains Normal Retirement.  The Accrual Account shall be payable in a total of one hundred eighty (180) monthly payments, calculated initially as one hundred eighty (180) equal payments of the Accrual Account including interest at the Applicable Rate in effect on the later of (i) January 1, 2008 or (ii) January 1 of the year in which the Participant attains Normal Retirement.  The monthly payments shall not thereafter be adjusted in the event of a subsequent change in the Applicable Rate.

6.           Notwithstanding any provision of Section VI.B of the Plan to the contrary, in the event that (a) a recalculation is required under Section VI.B and (b) any remaining balance shall remain payable to the Participant thereafter, any remaining Accrual Account balance recalculated as of the date of the next installment shall be paid in the same number of installments remaining to be made to the Participant under Section VI.A but for the occurrence of the recalculation.  Each installment shall be in an equal amount including interest at the Guaranteed Rate in effect as of January 1 of the year in which the recalculation occurs.  Interest at the aforesaid Guaranteed Rate shall accrue on any remaining Accrual Account balance from and after the date of the first installment following the recalculation.

3

7.           Section VI.C of the Plan is hereby amended to add the following sentence at the end of such section:

No Interim Distributions shall be made after December 31, 2006.

8.           Notwithstanding any provisions of Section VI.D and VI.E of the Plan to the contrary, all payments under such sections shall only be made in one lump sum on the date therein specified and no installment payments shall be made under such sections.

9.           Section VI.G of the Plan is hereby amended to delete the first two sentences of such section in their entirety and to substitute in lieu thereof the following:

If a Participant other than a  Nonemployee Director separates from service with the Company after the date on which he or she qualifies for early retirement (as such term is defined in the First Tennessee National Corporation Pension Plan or upon satisfaction of a “Rule of 75”, where the sum of a Participant’s age and years of service with the Company equals at least 75), or if a Participant who is a Nonemployee Director separates from service as a director of the Company after at least 10 years of services as a director of the Company, then the Participant shall be entitled to receive a monthly benefit as described in Section VI.A, however, the Accrual Account shall be recalculated over the entire period of deferral using an interest rate equal to the Guaranteed Rate (unless a higher rate is approved by the Committee).  In addition, said benefit shall commence on the thirty-first (31^st) day of January following the calendar year in which the Participant attains the age of 65.

10.           Section VI.H(ii) of the Plan is hereby amended to delete the first two sentences of such section in its entirety and to substitute in lieu thereof the following:

Notwithstanding any provision of this Plan to the contrary, in the event a Change in Control occurs, the Company shall make a lump sum payment (a “Payment”) to each Participant other than current or former Nonemployee Directors (except as provided below) on the date of the Change of Control simultaneously with the closing thereof, if administratively practicable, or as soon thereafter as is administratively practicable, but no later than 2 business days after the Change in Control has occurred (the “Payment Date”).  For purposes of this Section VI.H(ii), “Determination Date” shall mean the date of the Change in Control (or, if an agreement to effectuate a Change in Control pursuant to a Business Combination (as defined under the Plan prior to this Amendment) has been executed, the date one month prior to the date such agreement was executed).

11.           Notwithstanding any provision of the Plan or this Amendment to the contrary, with respect to a Participant who is a Specified Employee (as defined in Section 13 of this Amendment) as of the date such Participant incurs a separation from service, payment shall be

4

made no earlier than the first day of the seventh month following the month in which such separation from service occurs. On such date, the Participant shall receive all payments that would have been made on or before such date but for the provisions of this section, and the terms of this section shall not affect the timing or amount of any payments to be made after such date under the other provisions of the Plan or this Amendment.

12.           Notwithstanding any provision in Section VIII of the Plan to the contrary, any exercise of discretion by the Committee under Section VIII shall be limited to determining the calculation of the amount of benefits payable and not to changing the time or form of payment of any benefit due to the Participant hereunder.

13.           Capitalized terms not otherwise defined in this Amendment shall have the meaning given to such terms in the Plan.  In addition, the following definitions shall apply to this Amendment:

(a)           “Specified Employee” means a Participant who, as of the date of his separation from service, is a “key employee” of the Company or any Affiliate, any stock of which is actively traded on an established securities market or otherwise.  A Participant is a key employee if he or she meets the requirements of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code, (applied in accordance with applicable regulations thereunder and without regard to Section 416(i)(5)) at any time during the 12-month period ending on the Specified Employee Identification Date. Such Participant shall be treated as a key employee for the entire 12-month period beginning on the Specified Employee Effective Date.

For purposes of determining whether a Participant is a Specified Employee, the compensation of the Participant shall be determined in accordance with the definition of compensation provided under Treas. Reg. Section 1.415(c)-2(d)(3) (wages within the meaning of Section 3401(a) of the Code for purposes of income tax withholding at the source, plus amounts excludible from gross income under Section 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k) or 457(b), without regard to rules that limit the remuneration included in wages based on the nature or location of the employment or the services performed); provided, however, that, with respect to a nonresident alien who is not a Participant in the Plan, compensation shall not include compensation that is not includible in the gross income of such person under Sections 872, 893, 894, 911, 931 and 933, provided such compensation is not effectively connected with the conduct of a trade or business within the United States.

Notwithstanding anything in this paragraph to the contrary, (i) if a different definition of compensation has been designated by the Company with respect to another nonqualified deferred compensation plan in which a key employee participates, the definition of compensation shall be the definition provided in Treas. Reg. Section 1.409A-1(i)(2), and (ii) the Company may through action that is legally binding with respect to all nonqualified deferred compensation plans maintained by the Company, elect to use a different definition of compensation.

5

In the event of corporate transactions described in Treas. Reg. Section 1.409A-1(i)(6), the identification of Specified Employees shall be determined in accordance with the default rules described therein, unless the Company elects to utilize the available alternative methodology through designations made within the timeframes specified therein.

(b)           “Specified Employee Identification Date” means September 30, unless the Company has elected a different date through action that is legally binding with respect to all nonqualified deferred compensation plans maintained by the Company.

(c)           “Specified Employee Effective Date” means the first day of the fourth month following the Specified Employee Identification Date, or such earlier date as is selected by the Committee.

14.           The foregoing provisions of this Amendment are intended to cause the Plan as amended to conform with the requirements of Section 409A of the Code, including the regulations thereunder, and the provisions of this Amendment shall be construed in accordance with that intention.  If any provision of this Amendment shall be inconsistent or in conflict with the applicable requirements of Section 409A, then such requirements shall be deemed to override and supersede the inconsistent or conflicting provision.  Any provision required for compliance with Section 409A that is omitted from this Amendment shall be incorporated herein by reference and shall apply retroactively, if necessary, and be deemed part of this Amendment to the same extent as though expressly set forth herein.  The Company will bear no responsibility for any determination by any other person or persons that the terms, arrangements or administration of the Plan has given rise to any tax liability under Section 409A of the Code.

15.           This Amendment shall take effect with respect to all benefits payable under the Plan after December 31, 2007.

IN WITNESS WHEREOF, the Compensation Committee of the Board of Directors of First Horizon National Corporation has caused this Amendment to the Plan to be executed by its duly authorized representative this _______ day of _________________, 2007.

___________________________________

Name

___________________________________

Title

6

EXHIBIT A

ADDENDUM TO DEFERRAL AND ACKNOWLEDGEMENT AGREEMENT

FOR THE FIRST HORIZON NATIONAL CORPORATION

DIRECTORS AND EXECUTIVES DEFERRED COMPENSATION PLAN

The undersigned agrees that each and every Deferral and Acknowledgement Agreement between the undersigned and First Horizon National Corporation (and/or its affiliates) under the First Horizon National Corporation Directors and Executives Deferred Compensation Plan is hereby amended to be subject to all applicable terms, conditions and provisions as set forth in the Amendment to the Plan as adopted by the Compensation Committee on the ______ day of ____________________, 2007.

_____________________________

Signature

_____________________________

Print Name

_____________________________

Date

Accepted by Company:

By:  ___________________________________________

Title: ___________________________

Date: ___________________________

7

EX-10

Exhibit 10.1(c)

First Horizon National Corporation

Deferred Compensation Plan

As Amended and Restated

Article I

Establishment and Purpose .................................................................1

Article II

Definitions .........................................................................................1

Article III

Eligibility and Participation ...................................................................9

Article IV

Deferrals .........................................................................................10

Article V

Company Contributions ....................................................................13

Article VI

Benefits ..........................................................................................13

Article VII

Modifications to Payment Schedules ...................................................17

Article VIII

Valuation of Account Balances; Investments ........................................18

Article IX

Administration ..................................................................................20

Article X

Amendment and Termination ..............................................................21

Article XI

Informal Funding ..............................................................................22

Article XII

Claims ...........................................................................................22

Article XIII

General Provisions ..........................................................................29

Article I

Establishment and Purpose

First Horizon National Corporation (the “Company”) hereby amends and restates the First Tennessee National Corporation Nonqualified Deferred Compensation Plan originally effective September 1, 2003 (the “Plan”), effective January 1, 2008. This amendment and restatement applies only to amounts deferred under the Plan on or after January 1, 2005, and to amounts deferred prior to January 1, 2005 that were not vested as of December 31, 2004. Amounts deferred under the Plan prior to January 1, 2005 that were vested as of December 31, 2004 (the “Grandfathered Accounts”) shall be subject to the provisions of the Plan as in effect on October 3, 2004, as the same may be amended from time to time by the Company without material modification, it being expressly intended that such Grandfathered Accounts are to remain exempt from the requirements of Code Section 409A. The provisions of the Plan applicable to Grandfathered Accounts are reflected in this document for ease of reference.

The purpose of the Plan continues to be to attract and retain key employees and quality directors by providing each Participant with an opportunity to defer receipt of a portion of their salary, bonus, and other specified compensation. The Plan is not intended to meet the qualification requirements of Code Section 401(a), but is intended to meet the requirements of Code Section 409A, and shall be operated and interpreted consistent with that intent.

The Plan constitutes an unsecured promise by a Participating Employer to pay benefits in the future. Participants in the Plan shall have the status of general unsecured creditors of the Company or the Adopting Employer, as applicable. Each Participating Employer shall be solely responsible for payment of the benefits of its employees and their beneficiaries. The Plan is unfunded for Federal tax purposes and is intended to be an unfunded arrangement for eligible employees who are part of a select group of management or highly compensated employees of the Employer within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA. Any amounts set aside to defray the liabilities assumed by the Company or an Adopting Employer will remain the general assets of the Company or the Adopting Employer and shall remain subject to the claims of the Company’s or the Adopting Employer's creditors until such amounts are distributed to the Participants.

Article II

Definitions

2.1 Account. Account means a bookkeeping account maintained by the Committee to record the payment obligation of a Participating Employer to a Participant as determined under the terms of the Plan. The Committee may maintain an Account to record the total obligation to a Participant and component Accounts to reflect amounts payable at different times and in different forms. Reference to an Account means any such Account established by the Committee, as the context requires. Accounts are intended to constitute unfunded obligations within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.

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2.2 Account Balance. Account Balance means, with respect to any Account, the total payment obligation owed to a Participant from such Account as of the most recent Valuation Date.

2.3 Adopting Employer. Adopting Employer means an Affiliate who, with the consent of the Company, has adopted the Plan for the benefit of its eligible employees.

2.4 Affiliate. Affiliate means a corporation, trade or business that, together with the Company, is treated as a single employer under Code Section 414(b) or (c).

2.5 Beneficiary. Beneficiary means a natural person, estate, or trust designated by a Participant to receive payments to which a Beneficiary is entitled in accordance with provisions of the Plan. The Participant’s spouse, if living, otherwise the Participant’s estate, shall be the Beneficiary if: (i)the Participant has failed to properly designate a Beneficiary, or (ii) all designated Beneficiaries have predeceased the Participant.

A former spouse shall have no interest under the Plan, as Beneficiary or otherwise, unless the Participant designates such person as a Beneficiary after dissolution of the marriage, except to the extent provided under the terms of a domestic relations order as described in  Code Section 414(p)(1)(B).

2.6 Business Day. A Business Day is each day on which the New York Stock Exchange is open for business.

2.7 Change in Control. Change in Control, with respect to a Participating Employer that is organized as a corporation, occurs on the date on which any of the following events occur (i) a change in the ownership of the Participating Employer; (ii) a change in the effective control of the Participating Employer; (iii) a change in the ownership of a substantial portion of the assets of the Participating Employer.

For purposes of this Section, a change in the ownership of the Participating Employer occurs on the date on which any one person, or more than one person acting as a group, acquires ownership of stock of the Participating Employer that, together with stock held by such person or group constitutes more than 50% of the total fair market value or total voting power of the stock of the Participating Employer. A change in the effective control of the Participating Employer occurs on the date on which either (i) a person, or more than one person acting as a group, acquires ownership of stock of the Participating Employer possessing 30% or more of the total voting power of the stock of the Participating Employer, taking into account all such stock acquired during the 12-month period ending on the date of the most recent acquisition, or (ii) a [majority] of the members of the Participating Employer’s Board of Directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of such Board of Directors prior to the date of the appointment or election, but only if no other corporation is a majority shareholder of the Participating Employer . A change in the ownership of a substantial portion of assets occurs on the date on which

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any one person, or more than one person acting as a group, other than a person or group of persons that is related to the Participating Employer, acquires assets from the Participating Employer that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Participating Employer immediately prior to such acquisition or acquisitions, taking into account all such assets acquired during the 12-month period ending on the date of the most recent acquisition.

An event constitutes a Change in Control with respect to a Participant only if the Participant performs services for the Participating Employer that has experienced the Change in Control, or the Participant’s relationship to the affected Participating Employer otherwise satisfies the requirements of Treasury Regulation Section 1.409A-3(i)(5)(ii).

The determination as to the occurrence of a Change in Control shall be based on objective facts and in accordance with the requirements of Code Section 409A.

2.8 Claimant. Claimant means a Participant or Beneficiary filing a claim under Article XII of this Plan.

2.9 Code. Code means the Internal Revenue Code of 1986, as amended from time to time.

2.10 Code Section 409A. Code Section 409A means section 409A of the Code, and regulations and other guidance issued by the Treasury Department and Internal Revenue Service thereunder.

2.11 Committee. Committee means the Human Resources Committee of the Board of Directors of the Company.

2.12 Company. Company means First Horizon National Corporation.

2.13 Company Contribution. Company Contribution means a credit by a Participating Employer to a Participant’s Account(s) in accordance with the provisions of Article V of the Plan. Company Contributions are credited at the sole discretion of the Participating Employer and the fact that a Company Contribution is credited in one year shall not obligate the Participating Employer to continue to make such Company Contribution in subsequent years. Unless the context clearly indicates otherwise, a reference to Company Contribution shall include Earnings attributable to such contribution.

2.15 Compensation. Compensation means a Participant’s base salary, bonus, commission, Restricted Stock Units, and such other cash or equity-based compensation (if any) approved by the Committee as Compensation that may be deferred under this Plan.  Compensation shall not include any compensation that has been previously deferred under this Plan or any other arrangement subject to Code Section 409A.

2.16 Compensation Deferral Agreement. Compensation Deferral Agreement means an agreement between a Participant and a Participating Employer that specifies (i) the

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amount of each component of Compensation that the Participant has elected to defer to the Plan in accordance with the provisions of Article IV, and (ii) the Payment Schedule applicable to one or more Accounts. The Committee may permit different deferral amounts for each component of Compensation and may establish a minimum or maximum deferral amount for each such component. Unless otherwise specified by the Committee in the Compensation Deferral Agreement, Participants may defer up to 80% of their base salary and up to 100% of other types of Compensation for a Plan Year. A Compensation Deferral Agreement may also specify the investment allocation described in Section 8.4.

2.17 Death Benefit. Death Benefit means the benefit payable under the Plan to a Participant’s Beneficiary(ies) upon the Participant’s death as provided in Section 6.1 of the Plan.

2.18 Deferral. Deferral means a credit to a Participant’s Account(s) that records that portion of the Participant’s Compensation that the Participant has elected to defer to the Plan in accordance with the provisions of Article IV. Unless the context of the Plan clearly indicates otherwise, a reference to Deferrals includes Earnings attributable to such Deferrals.

Deferrals shall be calculated with respect to the cash Compensation payable to the Participant, but shall be reduced by the Committee as necessary so that Deferrals plus non-deferred Compensation do not exceed 100% of the cash Compensation of the Participant.  Changes to payroll withholdings and welfare plan co-payments that affect the amount of Compensation being deferred to the Plan shall be allowed only to the extent permissible under Code Section 409A.

2.19 Disability Benefit. Disability Benefit means the benefit payable under the Plan to a Participant in the event such Participant is determined to be Disabled.

2.20 Disabled. Disabled means that a Participant is, by reason of any medically-determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve months, (i) unable to engage in any substantial gainful activity, or (ii) receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Participant’s employer. The Committee shall determine whether a Participant is Disabled in accordance with Code Section 409A provided, however, that a Participant shall be deemed to be Disabled if determined to be totally disabled by the Social Security Administration or the Railroad Retirement Board, or if the Participant is determined to be Disabled under the Company disability insurance program utilizing the definition provided herein.

2.21 Earnings. Earnings means an adjustment to the value of an Account in accordance with Article VIII.

2.22 Effective Date. Effective Date means January 1, 2008.

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2.23 Eligible Employee. Eligible Employee means a member of a “select group of management or highly compensated employees” of a Participating Employer within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, and a non-employee director of the Company or a Participating Employer who is an independent contractor, as determined by the Committee from time to time in its sole discretion.

2.24 Employee. Employee means a common-law employee of an Employer.

2.25 Employer. Employer means, with respect to Employees it employs, the Company and each Affiliate.

2.26 ERISA. ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time.

2.27 Fiscal Year Compensation. Fiscal Year Compensation means Compensation earned during one or more consecutive fiscal years of a Participating Employer, all of which is paid after the last day of such fiscal year or years.

2.28 Grandfathered Account. Grandfathered Account means amounts deferred under the Plan prior to January 1, 2005 that were vested as of December 31, 2004, and Earnings on such amounts.

2.29 Participant. Participant means an Eligible Employee or an independent contractor who has received notification of his or her eligibility to defer Compensation under the Plan under Section 3.1 and any other person with an Account Balance greater than zero, regardless of whether such individual continues to be an Eligible Employee. A Participant’s continued participation in the Plan shall be governed by Section 3.2 of the Plan.

2.30 Participating Employer. Participating Employer means the Company and each Adopting Employer.

2.31 Payment Schedule. Payment Schedule means the date as of which payment of an Account under the Plan will commence and the form in which payment of such Account will be made.

2.32 Performance-Based Compensation. Performance-Based Compensation means Compensation where the amount of, or entitlement to, the Compensation is contingent on the satisfaction of pre-established organizational or individual performance criteria relating to a performance period of at least twelve consecutive months. Organizational or individual performance criteria are considered pre-established if established in writing by not later than ninety (90) days after the commencement of the period of service to which the criteria relate, provided that the outcome is substantially uncertain at the time the criteria are established. The determination of whether Compensation qualifies as

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 “Performance-Based Compensation” will be made in accordance with Treas. Reg. Section 1.409A-1(e) and subsequent guidance.

2.33 Plan. Generally, the term Plan means the “First Horizon National Corporation Deferred Compensation Plan” as documented herein and as may be amended from time to time hereafter. However, to the extent permitted or required under Code Section 409A, the term Plan may in the appropriate context also mean a portion of the Plan that is treated as a single plan under Treas. Reg. Section 1.409A-1(c), or the Plan or portion of the Plan and any other nonqualified deferred compensation plan or portion thereof that is treated as a single plan under such section.

2.34 Plan Year. Plan Year means January 1 through December 31.

2.35 Retirement. Retirement means the first to occur of: (i) a Participant’s Separation from Service after attainment of age 55 and completion of 15 Years of Service; or (ii) a Participant’s Separation from Service after attainment of age 65 and completion of 5 Years of Service.

2.36 Retirement Benefit. Retirement Benefit means the benefit payable to a Participant under the Plan following the Retirement of the Participant.

2.37 Retirement/Termination Account. Retirement/Termination Account means an Account established by the Committee to record the amounts payable to a Participant that have not been allocated to a Specified Date Account. Unless the Participant has established a Specified Date Account, all Deferrals and Company Contributions shall be allocated to a Retirement/Termination Account on behalf of the Participant.

2.38 Separation from Service. An Employee incurs a Separation from Service upon termination of employment with the Employer. Whether a Separation from Service has occurred shall be determined by the Committee in accordance with Code Section 409A. Except in the case of an Employee on a bona fide leave of absence as provided below, an Employee is deemed to have incurred a Separation from Service if the Employer and the Employee reasonably anticipated that the level of services to be performed by the Employee after a date certain would be reduced to 20% or less of the average services rendered by the Employee during the immediately preceding 36-month period (or the total period of employment, if less than 36 months) disregarding periods during which the Employee was on a bona fide leave of absence.

An Employee who is absent from work due to military leave, sick leave, or other bona fide leave of absence shall incur a Separation from Service on the first date immediately following the later of (i) the six-month anniversary of the commencement of the leave or (ii) the expiration of the Employee’s right, if any, to reemployment under statute or contract.

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For purposes of determining whether a Separation from Service has occurred, the Employer means the Employer as defined in Section 2.25 of the Plan, except that for purposes of determining whether another organization is an Affiliate of the Company, common ownership of at least 50% shall be determinative.

The Committee specifically reserves the right to determine whether a sale or other disposition of substantial assets to an unrelated party constitutes a Separation from Service with respect to a Participant providing services to the seller immediately prior to the transaction and providing services to the buyer after the transaction. Such determination shall be made in accordance with the requirements of Code Section 409A.

2.39 Specified Date Account. A Specified Date Account means an Account established pursuant to Section 4.3 that will be paid (or that will commence to be paid) at a future date as specified in the Participant’s Compensation Deferral Agreement. Unless otherwise determined by the Committee, a Participant may maintain no more than three Specified Date Accounts. A Specified Date Account may be identified in enrollment materials as an “In-Service Account”.

2.40 Specified Date Benefit. Specified Date Benefit means the benefit payable to a Participant under the Plan in accordance with Section 6.1(C).

2.41 Specified Employee. Specified Employee means an Employee who, as of the date of his Separation from Service, is a “key employee” of the Company or any Affiliate, any stock of which is actively traded on an established securities market or otherwise.

An Employee is a key employee if he meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with applicable regulations thereunder and without regard to Code Section 416(i)(5)) at any time during the 12-month period ending on the Specified Employee Identification Date. Such Employee shall be treated as a key employee for the entire 12-month period beginning on the Specified Employee Effective Date.

For purposes of determining whether an Employee is a Specified Employee, the compensation of the Employee shall be determined in accordance with the definition of compensation provided under Treas. Reg. Section 1.415(c)-2(d)(3) (wages within the meaning of Code section 3401(a) for purposes of income tax withholding at the source, plus amounts excludible from gross income under section 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k) or 457(b), without regard to rules that limit the remuneration included in wages based on the nature or location of the employment or the services performed); provided, however, that, with respect to a nonresident alien who is not a Participant in the Plan, compensation shall not include compensation that is not includible in the gross income of the Employee under Code Sections 872, 893, 894, 911, 931 and 933, provided such compensation is not effectively connected with the conduct of a trade or business within the United States.

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Notwithstanding anything in this paragraph to the contrary, (i) if a different definition of compensation has been designated by the Company with respect to another nonqualified deferred compensation plan in which a key employee participates, the definition of compensation shall be the definition provided in Treas. Reg. Section 1.409A-1(i)(2), and (ii) the Company may through action that is legally binding with respect to all nonqualified deferred compensation plans maintained by the Company, elect to use a different definition of compensation.

In the event of corporate transactions described in Treas. Reg. Section 1.409A-1(i)(6), the identification of Specified Employees shall be determined in accordance with the default rules described therein, unless the Employer elects to utilize the available alternative methodology through designations made within the timeframes specified therein.

2.42 Specified Employee Identification Date. Specified Employee Identification Date means September 30, unless the Employer has elected a different date through action that is legally binding with respect to all nonqualified deferred compensation plans maintained by the Employer.

2.43 Specified Employee Effective Date. Specified Employee Effective Date means the first day of the fourth month following the Specified Employee Identification Date, or such earlier date as is selected by the Committee.

2.44 Substantial Risk of Forfeiture. Substantial Risk of Forfeiture shall have the meaning specified in Treas. Reg. Section 1.409A-1(d).

2.45 Termination Benefit. Termination Benefit means the benefit payable to a Participant under the Plan following the Participant’s Separation from Service prior to Retirement.

2.46 Unforeseeable Emergency. An Unforeseeable Emergency means a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, the Participant’s dependent (as defined in Code section 152(a)), or a Beneficiary; loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example,  as a result of a natural disaster); or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The types of events which may qualify as an Unforeseeable Emergency shall be specified by the Committee in administrative documents or forms.

2.47 Valuation Date. Valuation Date shall mean each Business Day.

2.48 Year of Service. A Year of Service shall mean each 12-month period of continuous service with the Employer.

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Article III

Eligibility and Participation

3.1 Eligibility and Participation. An Eligible Employee becomes a Participant upon the earlier to occur of (i) a credit of Company Contributions under Article V or (ii) receipt of notification of eligibility to participate.

3.2   Duration. A Participant shall be eligible to defer Compensation and receive allocations of Company Contributions, subject to the terms of the Plan, for as long as such Participant remains an Eligible Employee. A Participant who is no longer an Eligible Employee but has not Separated from Service may not defer Compensation under the Plan but may otherwise exercise all of the rights of a Participant under the Plan with respect to his or her Account(s). On and after a Separation from Service, a Participant shall remain a Participant as long as his or her Account Balance is greater than zero and during such time may continue to make allocation elections as provided in Section 8.4. An individual shall cease being a Participant in the Plan when all benefits under the Plan to which he or she is entitled have been paid

Article IV

Deferrals

4.1   Deferral Elections, Generally.

(a)   An Eligible Employee shall submit a Compensation Deferral Agreement during the enrollment periods established by the Committee and in the manner specified by the Committee, but in any event, in accordance with Section 4.2. A Compensation Deferral Agreement that is not timely filed with respect to a service period or component of Compensation shall be considered void and shall have no effect with respect to such service period or Compensation. The Committee may modify any Compensation Deferral Agreement prior to the date the election becomes irrevocable under the rules of Section 4.2.

(b)   The Participant shall specify on his or her Compensation Deferral Agreement whether to allocate Deferrals to a Retirement/Termination Account or to a Specified Date Account. If no designation is made, all Deferrals shall be allocated to the Retirement/Termination Account. A Participant may also specify in his or her Compensation Deferral Agreement the Payment Schedule applicable to his or her Plan Accounts. If the Payment Schedule is not specified in a Compensation Deferral Agreement, the Payment Schedule shall be the Payment Schedule specified in Section 6.2.

4.2           Timing Requirements for Compensation Deferral Agreements.

(a)   First Year of Eligibility. In the case of the first year in which an Eligible Employee becomes eligible to participate in the Plan, he has up to 30 days following his initial eligibility to submit a Compensation Deferral Agreement

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with respect to Compensation to be earned during such year. The Compensation Deferral Agreement described in this paragraph becomes irrevocable upon the end of such 30-day period. The determination of whether an Eligible Employee may file a Compensation Deferral Agreement under this paragraph shall be determined in accordance with the rules of Code Section 409A, including the provisions of Treas. Reg. Section 1.409A-2(a)(7).

A Compensation Deferral Agreement filed under this paragraph applies to Compensation earned on and after the date the Compensation Deferral Agreement becomes irrevocable.

(b)   Prior Year Election. Except as otherwise provided in this Section 4.2, Participants may defer Compensation by filing a Compensation Deferral Agreement no later than December 31 of the year prior to the year in which the Compensation to be deferred is earned. A Compensation Deferral Agreement described in this paragraph shall become irrevocable with respect to such Compensation as of January 1 of the year in which such Compensation is earned.

(c)   Performance-Based Compensation. Participants may file a Compensation Deferral Agreement with respect to Performance-Based Compensation no later than the date that is six months before the end of the performance period, provided that:

i. the Participant performs services continuously from the later of the beginning of the performance period or the date the criteria are established through the date the Compensation Deferral Agreement is submitted; and

ii. the Compensation is not readily ascertainable as of the date the Compensation Deferral Agreement is filed.

A Compensation Deferral Agreement becomes irrevocable with respect to Performance-Based Compensation as of the day immediately following the latest date for filing such election. Any election to defer Performance-Based Compensation that is made in accordance with this paragraph and that becomes payable as a result of the Participant’s death or Disability or upon a Change in Control prior to the satisfaction of the performance criteria, will be void.

(d)   Sales Commissions. Sales commissions (as defined in Treas. Reg. Section 1.409A-2(a)(12)(i)) are considered to be earned in the taxable year of the Participant in which the sale occurs. The Compensation Deferral Agreement must be filed before the last day of the year preceding the year in which the sales commissions are earned and becomes irrevocable after that date.

(e)   Investment Commissions. Investment commissions (as defined in Treas. Reg. Section 1.409A-2(a)(12)(ii)) are considered to be earned in the 12-month period immediately preceding the date assets are valued for purposes of calculating the

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 commission. Investment Commissions must be deferred under the timing rules set forth in this Section 4.2.

(f)   Fiscal Year Compensation. A Participant may defer Fiscal Year Compensation by filing a Compensation Deferral Agreement prior to the first day of the fiscal year or years in which such Fiscal Year Compensation is earned. The Compensation Deferral Agreement described in this paragraph becomes irrevocable on the first day of the fiscal year or years to which it applies.

(g)   Short-Term Deferrals. Compensation that meets the definition of a “short-term deferral” described in Treas. Reg. Section 1.409A-1(b)(4) may be deferred in accordance with the rules of Article VII, applied as if the date the Substantial Risk of Forfeiture lapses is the date payments were originally scheduled to commence, provided, however, that the provisions of Section 7.3 shall not apply to payments attributable to a Change in Control.

(h)   Certain Forfeitable Rights. With respect to a legally binding right to a payment in a subsequent year that is subject to a forfeiture condition requiring the Participant’s continued services for a period of at least twelve months from the date the Participant obtains the legally binding right, an election to defer such Compensation may be made on or before the 30th day after the Participant obtains the legally binding right to the Compensation, provided that the election is made at least twelve months in advance of the earliest date at which the forfeiture condition could lapse. The Compensation Deferral Agreement described in this paragraph becomes irrevocable after such 30th day. If the forfeiture condition applicable to the payment lapses before the end of the required service period as a result of the Participant’s death or Disability or upon a Change in Control, the Compensation Deferral Agreement will be void unless it would be considered timely under another rule described in this Section.

(i)   Company Awards. Participating Employers may unilaterally provide for deferrals of Company awards prior to the date of such awards. Deferrals of Company awards (such as sign-on, retention, or severance pay) may be negotiated with a Participant prior to the date the Participant has a legally binding right to such Compensation.

(j)   “Evergreen” Deferral Elections. The Committee, in its discretion, may provide in the Compensation Deferral Agreement that such Compensation Deferral Agreement will continue in effect for each subsequent year or performance period. Such “evergreen” Compensation Deferral Agreements will become effective with respect to an item of Compensation on the date such election becomes irrevocable under this Section 4.2. An evergreen Compensation Deferral Agreement may be terminated or modified prospectively with respect to Compensation for which such election remains revocable under this Section 4.2. A Participant whose Compensation Deferral Agreement is cancelled

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 in accordance with Section 4.6 will be required to file a new Compensation Deferral Agreement under this Article IV in order to recommence Deferrals under the Plan.

4.3 Allocation of Deferrals. A Compensation Deferral Agreement may allocate Deferrals to one or more Specified Date Accounts and/or to the Retirement/Termination Account. The Committee may, in its discretion, establish a minimum deferral period for Specified Date Accounts (for example, the third Plan Year following the year Compensation subject to the Compensation Deferral Agreement is earned).

4.4 Deductions from Pay. The Committee has the authority to determine the payroll practices under which any component of Compensation subject to a Compensation Deferral Agreement will be deducted from a Participant’s Compensation.

4.5 Vesting. Participant Deferrals shall be 100% vested at all times.

4.6 Cancellation of Deferrals. The Committee may cancel a Participant’s Deferrals (i) for the balance of the Plan Year in which an Unforeseeable Emergency payment is made, (ii) if the Participant receives a hardship distribution under the Employer’s qualified 401(k) plan, through the end of the Plan Year in which the six-month anniversary of the hardship distribution falls, and (iii) during periods in which the Participant is unable to perform the duties of his or her position or any substantially similar position due to a mental or physical impairment that can be expected to result in death or last for a continuous period of at least six months. In the event a Participant receives a voluntary withdrawal from a Grandfathered Account, the Participant shall not be permitted to make Deferrals to the Plan in the Plan Year following the Plan Year in which the withdrawal is made.

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Article V

Company Contributions

5.1 Discretionary Company Contributions. The Company may, from time to time in its sole and absolute discretion, credit Company Contributions to any Participant in any amount determined by the Company. Such contributions will be credited to a Participant’s Retirement/Termination Account.

5.2 Vesting. Company Contributions described in Section 5.1, above, and the Earnings thereon, shall vest in accordance with the vesting schedule(s) established by the Committee at the time that the Company Contribution is made.  The Participating Employer may, at any time, in its sole discretion, increase a Participant’s vested interest in a Company Contribution. The portion of a Participant’s Accounts that remains unvested upon his or her Separation from Service after the application of the terms of this Section 5.2 shall be forfeited.

Article VI

Benefits

6.1   Benefits, generally. A Participant shall be entitled to the following benefits under the Plan:

(a)   Retirement Benefit. Upon the Participant’s Separation from Service due to Retirement, he or she shall be entitled to a Retirement Benefit. The Retirement Benefit shall be equal to the vested portion of the Retirement/Termination Account and the vested portion of balances in any Specified Date Accounts that are not in pay status. The Retirement Benefit shall be based on the value of that Account as of the end of the month in which Separation from Service occurs. Payment of the Retirement Benefit will be made or begin on or after the first day of the month following the month in which Separation from Service occurs, provided, however, that with respect to a Participant who is a Specified Employee as of the date such Participant incurs a Separation from Service, payment will be made or begin on the first day of the seventh month following the month in which such Separation from Service occurs. If the Retirement Benefit is to be paid in the form of installments, any subsequent installment payments to a Specified Employee will be paid on the anniversary of the date the first payment would have been made had the Participant not been classified as a Specified Employee.

(b)   Termination Benefit. Upon the Participant’s Separation from Service for reasons other than death, Disability or Retirement, he or she shall be entitled to a Termination Benefit. The Termination Benefit shall be equal to the vested portion of the Retirement/Termination Account and the vested portion of any unpaid

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balances in any Specified Date Accounts. The Termination Benefit shall be based on the value of the Retirement/Termination Account as of the end of the month in which Separation from Service occurs. Payment of the Termination Benefit will be made or begin on or after the first day of the month following the month in which Separation from Service occurs, provided, however, that with respect to a Participant who is a Specified Employee as of the date such Participant incurs a Separation from Service, payment will be made or begin on the first day of the seventh month following the month in which such Separation from Service occurs.

(c)   Specified Date Benefit. If the Participant has established one or more Specified Date Accounts, he or she shall be entitled to a Specified Date Benefit with respect to each such Specified Date Account. The Specified Date Benefit shall be equal to the vested portion of the Specified Date Account, based on the value of that Account as of the end of the month designated by the Participant at the time the Account was established. Payment of the Specified Date Benefit will be made or begin on or after the first day of the month following the designated month.

(d)   Disability Benefit. Upon a determination by the Committee that a Participant is Disabled, he or she shall be entitled to a Disability Benefit. The Disability Benefit shall be equal to the vested portion of the Retirement/Termination Account and the vested portion of any unpaid balances in any Specified Date Accounts. The Disability Benefit shall be based on the value of the Accounts as of the last day of the month in which Disability occurs and will be paid on or after the first day of the following month.

(e)   Death Benefit. In the event of the Participant’s death, his or her designated Beneficiary(ies) shall be entitled to a Death Benefit. The Death Benefit shall be equal to the vested portion of the Retirement/Termination Account and the vested portion of any unpaid balances in any Specified Date Accounts. The Death Benefit shall be based on the value of the Accounts as of the end of the month in which death occurred, with payment made on or after the first day of the following month.

(f)   Unforeseeable Emergency Payments. A Participant who experiences an Unforeseeable Emergency may submit a written request to the Committee to receive payment of all or any portion of his or her vested Accounts. Whether a Participant or Beneficiary is faced with an Unforeseeable Emergency permitting an emergency payment shall be determined by the Committee based on the relevant facts and circumstances of each case, but, in any case, a distribution on account of Unforeseeable Emergency may not be made to the extent that such emergency is or may be reimbursed through insurance or otherwise, by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not cause severe financial hardship, or by cessation of Deferrals under this Plan. If an emergency payment is approved by the Committee, the amount of the

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payment shall not exceed the amount reasonably necessary to satisfy the need, taking into account the additional compensation that is available to the Participant as the result of cancellation of deferrals to the Plan, including amounts necessary to pay any taxes or penalties that the Participant reasonably anticipates will result from the payment. The amount of the emergency payment shall be subtracted first from the vested portion of the Participant's Retirement/Termination Account until depleted and then from the vested Specified Date Accounts, beginning with the Specified Date Account with the latest payment commencement date. Emergency payments shall be paid in a single lump sum within the 90-day period following the date the payment is approved by the Committee.

(g)   Voluntary Withdrawals of Grandfathered Accounts. A Participant may elect at any time to voluntarily withdraw the amounts credited to his or her Grandfathered Account. If such a withdrawal is requested, the Participant shall forfeit an amount equal to 10% of the balance of the Grandfathered Account, and he or she shall not be permitted to make Deferrals to the Plan in the Plan Year following the Plan Year in which the withdrawal is made.

6.2 Form of Payment.

(a)   Retirement Benefit. A Participant who is entitled to receive a Retirement Benefit shall receive payment of such benefit in a single lump sum, unless the Participant elects on his or her initial Compensation Deferral Agreement to have such benefit paid in one of the following alternative forms of payment (i) substantially equal annual installments over a period of two to five years, as elected by the Participant; or (ii) a lump sum payment of a percentage of the balance in the Retirement/ Termination Account, with the balance paid in substantially equal annual installments over a period of two to five years, as elected by the Participant.

(b)   Termination Benefit. A Participant who is entitled to receive a Termination Benefit shall receive payment of such benefit in a single lump sum.

(c)   Specified Date Benefit. The Specified Date Benefit shall be paid in a single lump sum, unless the Participant elects on the Compensation Deferral Agreement with which the account was established to have the Specified Date Account paid in substantially equal annual installments over a period of two to five years, as elected by the Participant.

Notwithstanding any election of a form of payment by the Participant, upon a Separation from Service the unpaid balance of a Specified Date Account shall be paid in accordance with the form of payment applicable to the Retirement Benefit or Termination Benefit, as applicable, if the Participant Separates from Service prior to the date the Specified Date Account has been fully paid.

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(d)   Disability Benefit. A Participant who is entitled to receive a Disability Benefit shall receive payment of such benefit in a single lump sum.

(e)   Death Benefit. A Designated Beneficiary who is entitled to receive a Death Benefit shall receive payment of such benefit in a single lump sum.

(f)   Small Account Balances. The Committee may, in its sole discretion which shall be evidenced in writing no later than the date of payment, elect to pay the value of the Participant’s Accounts upon a Separation from Service in a single lump sum if the balance of such Accounts is not greater than the applicable dollar amount under Code Section 402(g)(1)(B), provided the payment represents the complete liquidation of the Participant’s interest in the Plan.

(g)   Rules Applicable to Installment Payments. If a Payment Schedule specifies installment payments, annual payments will be made beginning as of the payment commencement date for such installments and shall continue on each anniversary thereof until the number of installment payments specified in the Payment Schedule has been paid. The amount of each installment payment shall be determined by dividing (a) by (b), where (a) equals the Account Balance as of the Valuation Date and (b) equals the remaining number of installment payments.

For purposes of Article VII, installment payments will be treated as a single form of payment. If a lump sum equal to less than 100% of the Retirement/Termination Account is paid, the payment commencement date for the installment form of payment will be the first anniversary of the payment of the lump sum.

6.3 Acceleration of or Delay in Payments. The Committee, in its sole and absolute discretion, may elect to accelerate the time or form of payment of a benefit owed to the Participant hereunder, provided such acceleration is permitted under Treas. Reg. Section 1.409A-3(j)(4). The Committee may also, in its sole and absolute discretion, delay the time for payment of a benefit owed to the Participant hereunder, to the extent permitted under Treas. Reg. Section 1.409A-2(b)(7). If the Plan receives a domestic relations order (within the meaning of Code Section 414(p)(1)(B)) directing that all or a portion of a Participant’s Accounts be paid to an “alternate payee,” any amounts to be paid to the alternate payee(s) shall be paid in a single lump sum.

Article VII

Modifications to Payment Schedules

7.1 Participant’s Right to Modify. A Participant may modify any or all of the alternative Payment Schedules with respect to an Account, consistent with the permissible Payment Schedules available under the Plan, provided such modification complies with the requirements of this Article VII.

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7.2 Time of Election. The date on which a modification election is submitted to the Committee must be at least twelve months prior to the date on which payment is scheduled to commence under the Payment Schedule in effect prior to the modification.

7.3 Date of Payment under Modified Payment Schedule. Except with respect to modifications that relate to the payment of a Death Benefit or a Disability Benefit, the date payments are to commence under the modified Payment Schedule must be no earlier than five years after the date payment would have commenced under the original Payment Schedule. Under no circumstances may a modification election result in an acceleration of payments in violation of Code Section 409A.

7.4 Effective Date. A modification election submitted in accordance with this Article VII is irrevocable upon receipt by the Committee and becomes effective 12 months after such date.

7.5 Effect on Accounts. An election to modify a Payment Schedule is specific to the Account or payment event to which it applies, and shall not be construed to affect the Payment Schedules of any other Accounts.

7.6 Modifications to Grandfathered Accounts. Notwithstanding the preceding provisions of this Article VII, a Participant may modify the time or form of payment applicable to a Grandfathered Account at any time, provided the modification is submitted in writing at least 13 months in advance of the date the Grandfathered Account is scheduled to be paid.

Article VIII

Valuation of Account Balances; Investments

8.1 Valuation. Deferrals shall be credited to appropriate Accounts on the date such Compensation would have been paid to the Participant absent the Compensation Deferral Agreement. Company Contributions shall be credited to the Retirement/Termination Account at the times determined by the Committee. Valuation of Accounts shall be performed under procedures approved by the Committee.

8.2 Earnings Credit. Each Account will be credited with Earnings on each Business Day, based upon the Participant’s investment allocation among a menu of investment options selected in advance by the Committee, in accordance with the provisions of this Article VIII (“investment allocation”).

8.3 Investment Options. Investment options will be determined by the Committee. The Committee, in its sole discretion, shall be permitted to add or remove investment options from the Plan menu from time to time, provided that any such additions or removals of

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investment options shall not be effective with respect to any period prior to the effective date of such change.

8.4 Investment Allocations. A Participant’s investment allocation constitutes a deemed, not actual, investment among the investment options comprising the investment menu. At no time shall a Participant have any real or beneficial ownership in any investment option included in the investment menu, nor shall the Participating Employer or any trustee acting on its behalf have any obligation to purchase actual securities as a result of a Participant’s investment allocation. A Participant’s investment allocation shall be used solely for purposes of adjusting the value of a Participant’s Account Balances.

A Participant shall specify an investment allocation for each of his Accounts in accordance with procedures established by the Committee.  Allocation among the investment options must be designated in increments of 1%. The Participant’s investment allocation will become effective on the same Business Day or, in the case of investment allocations received after a time specified by the Committee, the next Business Day.

A Participant may change an investment allocation on any Business Day, both with respect to future credits to the Plan and with respect to existing Account Balances, in accordance with procedures adopted by the Committee. Changes shall become effective on the same Business Day or, in the case of investment allocations received after a time specified by the Committee, the next Business Day, and shall be applied prospectively.

8.5 Unallocated Deferrals and Accounts. If the Participant fails to make an investment allocation with respect to an Account, such Account shall be invested in an investment option, the primary objective of which is the preservation of capital, as determined by the Committee.

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Article IX

Administration

9.1 Plan Administration. This Plan shall be administered by the Committee which shall have discretionary authority to make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Plan and to utilize its discretion to decide or resolve any and all questions, including but not limited to eligibility for benefits and interpretations of this Plan and its terms, as may arise in connection with the Plan. Claims for benefits shall be filed with the Committee and resolved in accordance with the claims procedures in Article XII.

9.2 Administration Upon Change in Control. Upon a Change in Control, the Committee, as constituted immediately prior to such Change in Control, shall continue to act as the Committee. The individual who was the Chief Executive Officer of the Company (or if such person is unable or unwilling to act, the next highest ranking officer) prior to the Change in Control shall have the authority (but shall not be obligated) to appoint an independent third party to act as the Committee.

Upon such Change in Control, the Company may not remove the Committee, unless 2/3rds of the members of the Board of Directors of the Company and a majority of Participants and Beneficiaries with Account Balances consent to the removal and replacement Committee. Notwithstanding the foregoing, neither the Committee nor the officer described above shall have authority to direct investment of trust assets under any rabbi trust described in Section 11.2.

The Participating Employer shall, with respect to the Committee identified under this Section, (i) pay all reasonable expenses and fees of the Committee, (ii) indemnify the Committee (including individuals serving as Committee) against any costs, expenses and liabilities including, without limitation, attorneys’ fees and expenses arising in connection with the performance of the Committee hereunder, except with respect to matters resulting from the Committee’s gross negligence or willful misconduct and (iii) supply full and timely information to the Committee on all matters related to the Plan, any rabbi trust, Participants, Beneficiaries and Accounts as the Committee may reasonably require.

9.3 Withholding. The Participating Employer shall have the right to withhold from any payment due under the Plan (or with respect to any amounts credited to the Plan) any taxes required by law to be withheld in respect of such payment (or credit). Withholdings with respect to amounts credited to the Plan shall be deducted from Compensation that has not been deferred to the Plan.

9.4 Indemnification. The Participating Employers shall indemnify and hold harmless each employee, officer, director, agent or organization, to whom or to which are delegated duties, responsibilities, and authority under the Plan or otherwise with respect to administration of the Plan, including, without limitation, the Committee and its agents, against all claims, liabilities, fines and penalties, and all expenses reasonably incurred by

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or imposed upon him or it (including but not limited to reasonable attorney fees) which arise as a result of his or its actions or failure to act in connection with the operation and administration of the Plan to the extent lawfully allowable and to the extent that such claim, liability, fine, penalty, or expense is not paid for by liability insurance purchased or paid for by the Participating Employer. Notwithstanding the foregoing, the Participating Employer shall not indemnify any person or organization if his or its actions or failure to act are due to gross negligence or willful misconduct or for any such amount incurred through any settlement or compromise of any action unless the Participating Employer consents in writing to such settlement or compromise.

9.5 Delegation of Authority. In the administration of this Plan, the Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit, and may from time to time consult with legal counsel who shall be legal counsel to the Company.

9.6 Binding Decisions or Actions. The decision or action of the Committee in respect of any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations thereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.

Article X

Amendment and Termination

10.1 Amendment and Termination. The Company may at any time and from time to time amend the Plan or may terminate the Plan as provided in this Article X. Each Participating Employer may also terminate its participation in the Plan.

10.2 Amendments. The Company, by action taken by its Board of Directors, may amend the Plan at any time and for any reason, provided that any such amendment shall not reduce the vested Account Balances of any Participant accrued as of the date of any such amendment or restatement (as if the Participant had incurred a voluntary Separation from Service on such date) or reduce any rights of a Participant under the Plan or other Plan features with respect to Deferrals made prior to the date of any such amendment or restatement without the consent of the Participant. The Board of Directors of the Company may delegate to the Committee the authority to amend the Plan without the consent of the Board of Directors for the purpose of (i) conforming the Plan to the requirements of law, (ii) facilitating the administration of the Plan, (iii) clarifying provisions based on the Committee’s interpretation of the document and (iv) making such other amendments as the Board of Directors may authorize.

10.3 Termination. The Company, by action taken by its Board of Directors, may terminate the Plan and pay Participants and Beneficiaries their Account Balances in a single lump sum at any time, to the extent and in accordance with Treas. Reg. Section 1.409A-3(j)(4)(ix).

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If a Participating Employer terminates its participation in the Plan, the benefits of affected Employees shall be paid at the time provided in Article VI.

10.4 Accounts Taxable Under Code Section 409A. The Plan is intended to constitute a plan of deferred compensation that meets the requirements for deferral of income taxation under Code Section 409A. The Committee, pursuant to its authority to interpret the Plan, may sever from the Plan or any Compensation Deferral Agreement any provision or exercise of a right that otherwise would result in a violation of Code Section 409A.

Article XI

Informal Funding

11.1 General Assets. Obligations established under the terms of the Plan may be satisfied from the general funds of the Participating Employers, or a trust described in this Article XI. No Participant, spouse or Beneficiary shall have any right, title or interest whatever in assets of the Participating Employers. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship, between the Participating Employers and any Employee, spouse, or Beneficiary. To the extent that any person acquires a right to receive payments hereunder, such rights are no greater than the right of an unsecured general creditor of the Participating Employer.

11.2 Rabbi Trust. A Participating Employer may, in its sole discretion, establish a grantor trust, commonly known as a rabbi trust, as a vehicle for accumulating assets to pay benefits under the Plan. Payments under the Plan may be paid from the general assets of the Participating Employer or from the assets of any such rabbi trust. Payment from any such source shall reduce the obligation owed to the Participant or Beneficiary under the Plan.

Article XII

Claims

12.1 Filing a Claim. Any controversy or claim arising out of or relating to the Plan shall be filed in writing with the Committee which shall make all determinations concerning such claim. Any claim filed with the Committee and any decision by the Committee denying such claim shall be in writing and shall be delivered to the Participant or Beneficiary filing the claim (the “Claimant”).

a.   In General. Notice of a denial of benefits (other than Disability benefits) will be provided within ninety (90) days of the Committee’s receipt of the Claimant's claim for benefits. If the Committee determines that it needs additional time to review the claim, the Committee will provide the Claimant with a notice of the extension before the end of the initial ninety (90) day period. The extension will not be more than ninety (90) days from the end of the initial ninety (90) day

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 period and the notice of extension will explain the special circumstances that require the extension and the date by which the Committee expects to make a decision.

b.   Disability Benefits. Notice of denial of Disability benefits will be provided within forty-five (45) days of the Committee’s receipt of the Claimant’s claim for Disability benefits. If the Committee determines that it needs additional time to review the Disability claim, the Committee will provide the Claimant with a notice of the extension before the end of the initial forty-five (45) day period. If the Committee determines that a decision cannot be made within the first extension period due to matters beyond the control of the Committee, the time period for making a determination may be further extended for an additional thirty (30) days. If such an additional extension is necessary, the Committee shall notify the Claimant prior to the expiration of the initial thirty (30) day extension. Any notice of extension shall indicate the circumstances necessitating the extension of time, the date by which the Committee expects to furnish a notice of decision, the specific standards on which such entitlement to a benefit is based, the unresolved issues that prevent a decision on the claim and any additional information needed to resolve those issues. A Claimant will be provided a minimum of forty-five (45) days to submit any necessary additional information to the Committee. In the event that a thirty (30) day extension is necessary due to a Claimant’s failure to submit information necessary to decide a claim, the period for furnishing a notice of decision shall be tolled from the date on which the notice of the extension is sent to the Claimant until the earlier of the date the Claimant responds to the request for additional information or the response deadline.

c.   Contents of Notice. If a claim for benefits is completely or partially denied, notice of such denial shall be in writing and shall set forth the reasons for denial in plain language. The notice shall (i) cite the pertinent provisions of the Plan document and (ii) explain, where appropriate, how the Claimant can perfect the claim, including a description of any additional material or information necessary to complete the claim and why such material or information is necessary. The claim denial also shall include an explanation of the claims review procedures and the time limits applicable to such procedures, including a statement of the Claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse decision on review. In the case of a complete or partial denial of a Disability benefit claim, the notice shall provide a statement that the Committee will provide to the Claimant, upon request and free of charge, a copy of any internal rule, guideline, protocol, or other similar criterion that was relied upon in making the decision.

12.2 Appeal of Denied Claims. A Claimant whose claim has been completely or partially denied shall be entitled to appeal the claim denial by filing a written appeal with a committee designated to hear such appeals (the “Appeals Committee”). A Claimant who timely requests a review of the denied claim (or his or her authorized representative) may

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review, upon request and free of charge, copies of all documents, records and other information relevant to the denial and may submit written comments, documents, records and other information relevant to the claim to the Appeals Committee. All written comments, documents, records, and other information shall be considered “relevant” if the information (i) was relied upon in making a benefits determination,(ii) was submitted, considered or generated in the course of making a benefits decision regardless of whether it was relied upon to make the decision, or (iii) demonstrates compliance with administrative processes and safeguards established for making benefit decisions. The Appeals Committee may, in its sole discretion and if it deems appropriate or necessary, decide to hold a hearing with respect to the claim appeal.

(a)   In General. Appeal of a denied benefits claim (other than a Disability benefits claim) must be filed in writing with the Appeals Committee no later than sixty (60) days after receipt of the written notification of such claim denial. The Appeals Committee shall make its decision regarding the merits of the denied claim within sixty (60) days following receipt of the appeal (or within one hundred and twenty (120) days after such receipt, in a case where there are special circumstances requiring extension of time for reviewing the appealed claim). If an extension of time for reviewing the appeal is required because of special circumstances, written notice of the extension shall be furnished to the Claimant prior to the commencement of the extension. The notice will indicate the special circumstances requiring the extension of time and the date by which the Appeals Committee expects to render the determination on review. The review will take into account comments, documents, records and other information submitted by the Claimant relating to the claim without regard to whether such information was submitted or considered in the initial benefit determination.

(b)   Disability Benefits. Appeal of a denied Disability benefits claim must be filed in writing with the Appeals Committee no later than one hundred eighty (180) days after receipt of the written notification of such claim denial. The review shall be conducted by the Appeals Committee (exclusive of the person who made the initial adverse decision or such person’s subordinate). In reviewing the appeal, the Appeals Committee shall (i) not afford deference to the initial denial of the claim, (ii) consult a medical professional who has appropriate training and experience in the field of medicine relating to the Claimant’s disability and who was neither consulted as part of the initial denial nor is the subordinate of such individual and (iii) identify the medical or vocational experts whose advice was obtained with respect to the initial benefit denial, without regard to whether the advice was relied upon in making the decision. The Appeals Committee shall make its decision regarding the merits of the denied claim within forty-five (45) days following receipt of the appeal (or within ninety (90) days after such receipt, in a case where there are special circumstances requiring extension of time for reviewing the appealed claim). If an extension of time for reviewing the appeal is required because of special circumstances, written notice of the extension shall be furnished to the Claimant prior to the commencement of the extension. The notice

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will indicate the special circumstances requiring the extension of time and the date by which the Appeals Committee expects to render the determination on review. Following its review of any additional information submitted by the Claimant, the Appeals Committee shall render a decision on its review of the denied claim.

(c)   Contents of Notice. If a benefits claim is completely or partially denied on review, notice of such denial shall be in writing and shall set forth the reasons for denial in plain language.

The decision on review shall set forth (i) the specific reason or reasons for the denial, (ii) specific references to the pertinent Plan provisions on which the denial is based, (iii) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records, or other information relevant (as defined above) to the Claimant’s claim, and (iv) a statement describing any voluntary appeal procedures offered by the plan and a statement of the Claimant’s right to bring an action under Section 502(a) of ERISA.

(d)   For the denial of a Disability benefit, the notice will also include a statement that the Appeals Committee will provide, upon request and free of charge, (i) any internal rule, guideline, protocol or other similar criterion relied upon in making the decision, (ii) any medical opinion relied upon to make the decision and (iii) the required statement under Section 2560.503-1(j)(5)(iii) of the Department of Labor regulations.

12.3 Claims Appeals Upon Change in Control. Upon a Change in Control, the Appeals Committee, as constituted immediately prior to such Change in Control, shall continue to act as the Appeals Committee. Upon such Change in Control, the Company may not remove any member of the Appeals Committee, but may replace resigning members if 2/3rds of the members of the Board of Directors of the Company and a majority of Participants and Beneficiaries with Account Balances consent to the replacement.

The Appeals Committee shall have the exclusive authority at the appeals stage to interpret the terms of the Plan and resolve appeals under the Claims Procedure.

Each Participating Employer shall, with respect to the Committee identified under this Section, (i) pay its proportionate share of all reasonable expenses and fees of the Appeals Committee, (ii) indemnify the Appeals Committee (including individual committee members) against any costs, expenses and liabilities including, without limitation, attorneys’ fees and expenses arising in connection with the performance of the Appeals Committee hereunder, except with respect to matters resulting from the Appeals Committee’s gross negligence or willful misconduct and (iii) supply full and timely information to the Appeals Committee on all matters related to the Plan, any rabbi trust,

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Participants, Beneficiaries and Accounts as the Appeals Committee may reasonably require.

12.4 Legal Action. A Claimant may not bring any legal action, including commencement of any arbitration, relating to a claim for benefits under the Plan unless and until the Claimant has followed the claims procedures under the Plan and exhausted his or her administrative remedies under such claims procedures.

If a Participant or Beneficiary prevails in a legal proceeding brought under the Plan to enforce the rights of such Participant or any other similarly situated Participant or Beneficiary, in whole or in part, the Company shall reimburse such Participant or Beneficiary for all legal costs, expenses, attorneys’ fees and such other liabilities incurred as a result of such proceedings. If the legal proceeding is brought in connection with a Change in Control, or a “change in control” as defined in a rabbi trust described in Section 11.2, the Participant or Beneficiary may file a claim directly with the trustee for reimbursement of such costs, expenses and fees. For purposes of the preceding sentence, the amount of the claim shall be treated as if it were an addition to the Participant’s or Beneficiary’s Account Balance and will be included in determining the Company’s trust funding obligation under Section 11.2.

12.5 Discretion of Appeals Committee. All interpretations, determinations and decisions of the Appeals Committee with respect to any claim shall be made in its sole discretion, and shall be final and conclusive.

12.6 Arbitration.

(a)   Prior to Change in Control. If, prior to a Change in Control, any claim or controversy between a Participating Employer and a Participant or Beneficiary is not resolved through the claims procedure set forth in Article XII, such claim shall be submitted to and resolved exclusively by expedited binding arbitration by a single arbitrator.  Arbitration shall be conducted in accordance with the following procedures:

The complaining party shall promptly send written notice to the other party identifying the matter in dispute and the proposed remedy. Following the giving of such notice, the parties shall meet and attempt in good faith to resolve the matter. In the event the parties are unable to resolve the matter within twenty one (21) days, the parties shall meet and attempt in good faith to select a single arbitrator acceptable to both parties. If a single arbitrator is not selected by mutual consent within ten (10) Business Days following the giving of the written notice of dispute, an arbitrator shall be selected from a list of nine persons each of whom shall be an attorney who is either engaged in the active practice of law or recognized arbitrator and who, in either event, is experienced in serving as an arbitrator in disputes between employers and employees, which list shall be provided by the main office of either JAMS, the American Arbitration Associate

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(“AAA”) or the Federal Mediation and Conciliation Service. If, within three Business Days of the parties’ receipt of such list, the parties are unable to agree on an arbitrator from the list, then the parties shall each strike names alternatively from the list, with the first to strike being determined by the flip of a coin. After each party has had four strikes, the remaining name on the list shall be the arbitrator. If such person is unable to serve for any reason, the parties shall repeat this process until an arbitrator is selected.

Unless the parties agree otherwise, within sixty (60) days of the selection of the arbitrator, a hearing shall be conducted before such arbitrator at a time and a place agreed upon by the parties. In the event the parties are unable to agree upon the time or place of the arbitration, the time and place shall be designated by the arbitrator after consultation with the parties. Within thirty (30) days of the conclusion of the arbitration hearing, the arbitrator shall issue an award, accompanied by a written decision explaining the basis for the arbitrator’s award.

In any arbitration hereunder, the Participating Employer shall pay all administrative fees of the arbitration and all fees of the arbitrator, except that the Participant or Beneficiary may, if he/she/it wishes, pay up to one-half of those amounts. Each party shall pay its own attorneys’ fees, costs, and expenses, unless the arbitrator orders otherwise. The prevailing party in such arbitration, as determined by the arbitrator, and in any enforcement or other court proceedings, shall be entitled, to the extent permitted by law, to reimbursement from the other party for all of the prevailing party’s costs (including but not limited to the arbitrator’s compensation), expenses, and attorneys’ fees. The arbitrator shall have no authority to add to or to modify this Plan, shall apply all applicable law, and shall have no lesser and no greater remedial authority than would a court of law resolving the same claim or controversy. The arbitrator shall have no authority to add to or to modify this Plan, shall apply all applicable law, and shall have no lesser and no greater remedial authority than would a court of law resolving the same claim or controversy. The arbitrator shall, upon an appropriate motion, dismiss any claim without an evidentiary hearing if the party bringing the motion establishes that it would be entitled to summary judgment if the matter had been pursued in court litigation.

The parties shall be entitled to discovery as follows: Each party may take no more than three depositions. The Participating Employer may depose the Participant or Beneficiary plus two other witnesses, and the Participant or Beneficiary may depose the Participating Employer, pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure, plus two other witnesses. Each party may make such reasonable document discovery requests as are allowed in the discretion of the arbitrator.

The decision of the arbitrator shall be final, binding, and non-appealable, and may be enforced as a final judgment in any court of competent jurisdiction.

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This arbitration provision of the Plan shall extend to claims against any parent, subsidiary, or affiliate of each party, and, when acting within such capacity, any officer, director, shareholder, Participant, Beneficiary, or agent of any party, or of any of the above, and shall apply as well to claims arising out of state and federal statutes and local ordinances as well as to claims arising under the common law or under this Plan.

Notwithstanding the foregoing, and unless otherwise agreed between the parties, either party may apply to a court for provisional relief, including a temporary restraining order or preliminary injunction, on the ground that the arbitration award to which the applicant may be entitled may be rendered ineffectual without provisional relief.

Any arbitration hereunder shall be conducted in accordance with the Federal Arbitration Act: provided, however, that, in the event of any inconsistency between the rules and procedures of the Act and the terms of this Plan, the terms of this Plan shall prevail.

If any of the provisions of this Section 12.6(A) are determined to be unlawful or otherwise unenforceable, in the whole part, such determination shall not affect the validity of the remainder of this section and this section shall be reformed to the extent necessary to carry out its provisions to the greatest extent possible and to insure that the resolution of all conflicts between the parties, including those arising out of statutory claims, shall be resolved by neutral, binding arbitration. If a court should find that the provisions of this Section 12.6(A) are not absolutely binding, then the parties intend any arbitration decision and award to be fully admissible in evidence in any subsequent action, given great weight by any finder of fact and treated as determinative to the maximum extent permitted by law.

The parties do not agree to arbitrate any putative class action or any other representative action. The parties agree to arbitrate only the claims(s) of a single Participant or Beneficiary.

(b)   Upon Change in Control. If, upon the occurrence of a Change in Control, any dispute, controversy or claim arises between a Participant or Beneficiary and the Participating Employer out of or relating to or concerning the provisions of the Plan, such dispute, controversy or claim shall be finally settled by a court of competent jurisdiction which, notwithstanding any other provision of the Plan, shall apply a de novo standard of review to any determination made by the Company or its Board of Directors, a Participating Employer, the Committee, or the Appeals Committee.

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Article XIII

General Provisions

13.1 Anti-assignment Rule. No interest of any Participant, spouse or Beneficiary under this Plan and no benefit payable hereunder shall be assigned as security for a loan, and any such purported assignment shall be null, void and of no effect, nor shall any such interest or any such benefit be subject in any manner, either voluntarily or involuntarily, to anticipation, sale, transfer, assignment or encumbrance by or through any Participant, spouse or Beneficiary. Notwithstanding anything to the contrary herein, however, the Committee has the discretion to make payments to an alternate payee in accordance with the terms of a domestic relations order (as defined in Code Section 414(p)(1)(B)).

13.2 No Legal or Equitable Rights or Interest. No Participant or other person shall have any legal or equitable rights or interest in this Plan that are not expressly granted in this Plan. Participation in this Plan does not give any person any right to be retained in the service of the Participating Employer. The right and power of a Participating Employer to dismiss or discharge an Employee is expressly reserved. The Participating Employers make no representations or warranties as to the tax consequences to a Participant or a Participant’s beneficiaries resulting from a deferral of income pursuant to the Plan.

13.3 No Employment Contract. Nothing contained herein shall be construed to constitute a contract of employment between an Employee and a Participating Employer.

13.4 Notice. Any notice or filing required or permitted to be delivered to the Committee under this Plan shall be delivered in writing, in person, or through such electronic means as is established by the Committee. Notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. Written transmission shall be sent by certified mail to:

FIRST HORIZON NATIONAL CORPORATION

ATTN: EVP—EMPLOYEE SERVICES

165 MADISON AVENUE

 MEMPHIS, TENNESSEE

Any notice or filing required or permitted to be given to a Participant under this Plan shall be sufficient if in writing or hand-delivered, or sent by mail to the last known address of  the Participant.

13.5 Headings. The headings of Sections are included solely for convenience of reference, and if there is any conflict between such headings and the text of this Plan, the text shall control.

13.6 Invalid or Unenforceable Provisions. If any provision of this Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions

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hereof and the Committee may elect in its sole discretion to construe such invalid or unenforceable provisions in a manner that conforms to applicable law or as if such provisions, to the extent invalid or unenforceable, had not been included.

13.7 Lost Participants or Beneficiaries. Any Participant or Beneficiary who is entitled to a benefit from the Plan has the duty to keep the Committee advised of his or her current mailing address. If benefit payments are returned to the Plan or are not presented for payment after a reasonable amount of time, the Committee shall presume that the payee is missing. The Committee, after making such efforts as in its discretion it deems reasonable and appropriate to locate the payee, shall stop payment on any uncashed checks and may discontinue making future payments until contact with the payee is restored.

13.8 Governing Law. To the extent not preempted by ERISA, the laws of the State of Tennessee shall govern the construction and administration of the Plan.

IN WITNESS WHEREOF, the undersigned executed this Plan as of the _____th day of _______________, 2007, to be effective as of the Effective Date.

First Horizon National Corporation

By: _______________________________ (Print Name)

Its: __________________________________ (Title)

____________________________________ (Signature)

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EX-10

Exhibit 10.1(i)

First Horizon

Deferred Compensation Plan

As Amended and Restated

Article I

Establishment and Purpose .................................................................1

Article II

Definitions .........................................................................................1

Article III

Eligibility and Participation ...................................................................9

Article IV

Deferrals .........................................................................................10

Article V

Company Contributions ....................................................................13

Article VI

Benefits ..........................................................................................13

Article VII

Modifications to Payment Schedules ...................................................17

Article VIII

Valuation of Account Balances; Investments ........................................18

Article IX

Administration ..................................................................................20

Article X

Amendment and Termination ..............................................................21

Article XI

Informal Funding ..............................................................................22

Article XII

Claims ...........................................................................................22

Article XIII

General Provisions ..........................................................................29

Article I

Establishment and Purpose

First Horizon National Corporation (the “Company”) hereby amends and restates the First Horizon Nonqualified Deferred Compensation Plan originally sponsored by the First Tennessee National Corporation and originally effective as of July 1, 2003 (the “Plan”).  This amendment and restatement is effective January 1, 2008. This amendment and restatement applies only to amounts deferred under the Plan on or after January 1, 2005, and to amounts deferred prior to January 1, 2005 that were not vested as of December 31, 2004. Amounts deferred under the Plan prior to January 1, 2005 that were vested as of December 31, 2004 (the “Grandfathered Accounts”) shall be subject to the provisions of the Plan as in effect on October 3, 2004, as the same may be amended from time to time by the Company without material modification, it being expressly intended that such Grandfathered Accounts are to remain exempt from the requirements of Code Section 409A. Certain provisions of the Plan applicable to Grandfathered Accounts are reflected in this document for ease of reference.

The purpose of the Plan continues to be to attract and retain selected eligible employees of First Horizon Home Loan Corporation and its subsidiaries, and such of the Company and the subsidiaries, divisions or affiliates of the Company, that have adopted the Plan for their Eligible Employees (as defined herein) by providing each Participant with an opportunity to defer receipt of a portion of their salary, bonus, commission (including mortgage production incentives) and other specified compensation. The Plan is not intended to meet the qualification requirements of Code Section 401(a), but is intended to meet the requirements of Code Section 409A, and shall be operated and interpreted consistent with that intent.

The Plan constitutes an unsecured promise by an Adopting Employer and the Company to pay benefits in the future. Participants in the Plan shall have the status of general unsecured creditors of the Company or the Adopting Employer, as applicable. Each Participating Employer shall be solely responsible for payment of the benefits of its employees and their beneficiaries. The Plan is unfunded for Federal tax purposes and is intended to be an unfunded arrangement for eligible employees who are part of a select group of management or highly compensated employees of the Employer within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA. Any amounts set aside to defray the liabilities assumed by the Company or an Adopting Employer will remain the general assets of the Company or the Adopting Employer and shall remain subject to the claims of the Company’s or the Adopting Employer's creditors until such amounts are distributed to the Participants.

Article II

Definitions

2.1 Account. Account means a bookkeeping account maintained by the Committee to record the payment obligation of a Participating Employer to a Participant as determined under the terms of the Plan. The Committee may maintain an Account to record the total

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obligation to a Participant and component Accounts to reflect amounts payable at different times and in different forms. Reference to an Account means any such Account established by the Committee, as the context requires. Accounts are intended to constitute unfunded obligations within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.

2.2 Account Balance. Account Balance means, with respect to any Account, the total payment obligation owed to a Participant from such Account as of the most recent Valuation Date.

2.3 Adopting Employer. Adopting Employer means an Affiliate who, with the consent of the Company, has adopted the Plan for the benefit of its eligible employees.

2.4 Affiliate. Affiliate means a corporation, trade or business that, together with the Company, is treated as a single employer under Code Section 414(b) or (c).

2.5 Beneficiary. Beneficiary means a natural person, estate, or trust designated by a Participant to receive payments to which a Beneficiary is entitled in accordance with provisions of the Plan. The Participant’s spouse, if living, otherwise the Participant’s estate, shall be the Beneficiary if: (i)the Participant has failed to properly designate a Beneficiary, or (ii) all designated Beneficiaries have predeceased the Participant.

A former spouse shall have no interest under the Plan, as Beneficiary or otherwise, unless the Participant designates such person as a Beneficiary after dissolution of the marriage, except to the extent provided under the terms of a domestic relations order as described in  Code Section 414(p)(1)(B).

2.6 Business Day. A Business Day is each day on which the New York Stock Exchange is open for business.

2.7 Change in Control. Change in Control, with respect to a Participating Employer that is organized as a corporation, occurs on the date on which any of the following events occur (i) a change in the ownership of the Participating Employer; (ii) a change in the effective control of the Participating Employer; (iii) a change in the ownership of a substantial portion of the assets of the Participating Employer.

For purposes of this Section, a change in the ownership of the Participating Employer occurs on the date on which any one person, or more than one person acting as a group, acquires ownership of stock of the Participating Employer that, together with stock held by such person or group constitutes more than 50% of the total fair market value or total voting power of the stock of the Participating Employer. A change in the effective control of the Participating Employer occurs on the date on which either (i) a person, or more than one person acting as a group, acquires ownership of stock of the Participating Employer possessing 30% or more of the total voting power of the stock of the

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Participating Employer, taking into account all such stock acquired during the 12-month period ending on the date of the most recent acquisition, or (ii) a [majority] of the members of the Participating Employer’s Board of Directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of such Board of Directors prior to the date of the appointment or election, but only if no other corporation is a majority shareholder of the Participating Employer . A change in the ownership of a substantial portion of assets occurs on the date on which any one person, or more than one person acting as a group, other than a person or group of persons that is related to the Participating Employer, acquires assets from the Participating Employer that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Participating Employer immediately prior to such acquisition or acquisitions, taking into account all such assets acquired during the 12-month period ending on the date of the most recent acquisition.

An event constitutes a Change in Control with respect to a Participant only if the Participant performs services for the Participating Employer that has experienced the Change in Control, or the Participant’s relationship to the affected Participating Employer otherwise satisfies the requirements of Treasury Regulation Section 1.409A-3(i)(5)(ii).

The determination as to the occurrence of a Change in Control shall be based on objective facts and in accordance with the requirements of Code Section 409A.

2.8 Claimant. Claimant means a Participant or Beneficiary filing a claim under Article XII of this Plan.

2.9 Code. Code means the Internal Revenue Code of 1986, as amended from time to time.

2.10 Code Section 409A. Code Section 409A means section 409A of the Code, and regulations and other guidance issued by the Treasury Department and Internal Revenue Service thereunder.

2.11 Committee. Committee means the Human Resources Committee of the Board of Directors of the Company.

2.12 Company. Company means First Horizon National Corporation.

2.13 Company Contribution. Company Contribution means a credit by a Participating Employer to a Participant’s Account(s) in accordance with the provisions of Article V of the Plan. Company Contributions are credited at the sole discretion of the Participating Employer and the fact that a Company Contribution is credited in one year shall not obligate the Participating Employer to continue to make such Company Contribution in subsequent years. Unless the context clearly indicates otherwise, a reference to Company Contribution shall include Earnings attributable to such contribution.

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2.15 Compensation. Compensation means a Participant’s base salary, bonus, commission, (including mortgage production incentives), and such other cash or equity-based compensation (if any) approved by the Committee as Compensation that may be deferred under this Plan.  Compensation shall not include any compensation that has been previously deferred under this Plan or any other arrangement subject to Code Section 409A.

2.16 Compensation Deferral Agreement. Compensation Deferral Agreement means an agreement between a Participant and a Participating Employer that specifies (i) the amount of each component of Compensation that the Participant has elected to defer to the Plan in accordance with the provisions of Article IV, and (ii) the Payment Schedule applicable to one or more Accounts. The Committee may permit different deferral amounts for each component of Compensation and may establish a minimum or maximum deferral amount for each such component. Unless otherwise specified by the Committee in the Compensation Deferral Agreement, Participants may defer up to 80% of their base salary and up to 100% of other types of Compensation for a Plan Year. A Compensation Deferral Agreement may also specify the investment allocation described in Section 8.4.

2.17 Death Benefit. Death Benefit means the benefit payable under the Plan to a Participant’s Beneficiary(ies) upon the Participant’s death as provided in Section 6.1 of the Plan.

2.18 Deferral. Deferral means a credit to a Participant’s Account(s) that records that portion of the Participant’s Compensation that the Participant has elected to defer to the Plan in accordance with the provisions of Article IV. Unless the context of the Plan clearly indicates otherwise, a reference to Deferrals includes Earnings attributable to such Deferrals.

Deferrals shall be calculated with respect to the cash Compensation payable to the Participant, but shall be reduced by the Committee as necessary so that Deferrals plus non-deferred Compensation do not exceed 100% of the cash Compensation of the Participant.  Changes to payroll withholdings and welfare plan co-payments that affect the amount of Compensation being deferred to the Plan shall be allowed only to the extent permissible under Code Section 409A.

2.19 Disability Benefit. Disability Benefit means the benefit payable under the Plan to a Participant in the event such Participant is determined to be Disabled.

2.20 Disabled. Disabled means that a Participant is, by reason of any medically-determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve months, (i) unable to engage in any substantial gainful activity, or (ii) receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Participant’s employer. The Committee shall determine whether a

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Participant is Disabled in accordance with Code Section 409A provided, however, that a Participant shall be deemed to be Disabled if determined to be totally disabled by the Social Security Administration or the Railroad Retirement Board or if the Participant is determined to be Disabled under the Company disability insurance program utilizing the definition provided herein.

2.21 Earnings. Earnings means an adjustment to the value of an Account in accordance with Article VIII.

2.22 Effective Date. Effective Date means January 1, 2008.

2.23 Eligible Employee. Eligible Employee means a member of a “select group of management or highly compensated employees” of a Participating Employer within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA as determined by the Committee from time to time in its sole discretion.

2.24 Employee. Employee means a common-law employee of an Employer.

2.25 Employer. Employer means, with respect to the Employees it employs, First Horizon Home Loan Corporation and its subsidiaries, and each Adopting Employer (if any).

2.26 ERISA. ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time.

2.27 Fiscal Year Compensation. Fiscal Year Compensation means Compensation earned during one or more consecutive fiscal years of a Participating Employer, all of which is paid after the last day of such fiscal year or years.

2.28 Grandfathered Account. Grandfathered Account means amounts deferred under the Plan prior to January 1, 2005 that were vested as of December 31, 2004, and Earnings on such amounts.

2.29 Participant. Participant means an Eligible Employee or an independent contractor who has received notification of his or her eligibility to defer Compensation under the Plan under Section 3.1 and any other person with an Account Balance greater than zero, regardless of whether such individual continues to be an Eligible Employee. A Participant’s continued participation in the Plan shall be governed by Section 3.2 of the Plan.

2.30 Participating Employer. Participating Employer means the Employer and each Adopting Employer.

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2.31 Payment Schedule. Payment Schedule means the date as of which payment of an Account under the Plan will commence and the form in which payment of such Account will be made.

2.32 Performance-Based Compensation. Performance-Based Compensation means Compensation where the amount of, or entitlement to, the Compensation is contingent on the satisfaction of pre-established organizational or individual performance criteria relating to a performance period of at least twelve consecutive months. Organizational or individual performance criteria are considered pre-established if established in writing by not later than ninety (90) days after the commencement of the period of service to which the criteria relate, provided that the outcome is substantially uncertain at the time the criteria are established. The determination of whether Compensation qualifies as “Performance-Based Compensation” will be made in accordance with Treas. Reg. Section 1.409A-1(e) and subsequent guidance.

2.33 Plan. Generally, the term Plan means the “First Horizon Deferred Compensation Plan” as documented herein and as may be amended from time to time hereafter. However, to the extent permitted or required under Code Section 409A, the term Plan may in the appropriate context also mean a portion of the Plan that is treated as a single plan under Treas. Reg. Section 1.409A-1(c), or the Plan or portion of the Plan and any other nonqualified deferred compensation plan or portion thereof that is treated as a single plan under such section.

2.34 Plan Year. Plan Year means January 1 through December 31.

2.35 Retirement. Retirement means the first to occur of: (i) a Participant’s Separation from Service after attainment of age 55 and completion of 15 Years of Service; or (ii) a Participants Separation from Service after attainment of age 65 and completion of 5 Years of Service.

2.36 Retirement Benefit. Retirement Benefit means the benefit payable to a Participant under the Plan following the Retirement of the Participant.

2.37 Retirement/Termination Account. Retirement/Termination Account means an Account established by the Committee to record the amounts payable to a Participant that have not been allocated to a Specified Date Account. Unless the Participant has established a Specified Date Account, all Deferrals and Company Contributions shall be allocated to a Retirement/Termination Account on behalf of the Participant.

2.38 Separation from Service. An Employee incurs a Separation from Service upon termination of employment with the Employer. Whether a Separation from Service has occurred shall be determined by the Committee in accordance with Code Section 409A. Except in the case of an Employee on a bona fide leave of absence as provided below, an Employee is deemed to have incurred a Separation from Service if the Employer and the

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Employee reasonably anticipated that the level of services to be performed by the Employee after a date certain would be reduced to 20% or less of the average services rendered by the Employee during the immediately preceding 36-month period (or the total period of employment, if less than 36 months) disregarding periods during which the Employee was on a bona fide leave of absence.

An Employee who is absent from work due to military leave, sick leave, or other bona fide leave of absence shall incur a Separation from Service on the first date immediately following the later of (i) the six-month anniversary of the commencement of the leave or (ii) the expiration of the Employee’s right, if any, to reemployment under statute or contract.

For purposes of determining whether a Separation from Service has occurred, the Employer means the Employer as defined in Section 2.25 of the Plan, except that for purposes of determining whether another organization is an Affiliate of the Company, common ownership of at least 50% shall be determinative.

The Committee specifically reserves the right to determine whether a sale or other disposition of substantial assets to an unrelated party constitutes a Separation from Service with respect to a Participant providing services to the seller immediately prior to the transaction and providing services to the buyer after the transaction. Such determination shall be made in accordance with the requirements of Code Section 409A.

2.39 Specified Date Account. A Specified Date Account means an Account established pursuant to Section 4.3 that will be paid (or that will commence to be paid) at a future date as specified in the Participant’s Compensation Deferral Agreement. Unless otherwise determined by the Committee, a Participant may maintain no more than three Specified Date Accounts. A Specified Date Account may be identified in enrollment materials as an “In-Service Account”.

2.40 Specified Date Benefit. Specified Date Benefit means the benefit payable to a Participant under the Plan in accordance with Section 6.1(C).

2.41 Specified Employee. Specified Employee means an Employee who, as of the date of his Separation from Service, is a “key employee” of the Company or any Affiliate, any stock of which is actively traded on an established securities market or otherwise.

An Employee is a key employee if he meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with applicable regulations thereunder and without regard to Code Section 416(i)(5)) at any time during the 12-month period ending on the Specified Employee Identification Date. Such Employee shall be treated as a key employee for the entire 12-month period beginning on the Specified Employee Effective Date.

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For purposes of determining whether an Employee is a Specified Employee, the compensation of the Employee shall be determined in accordance with the definition of compensation provided under Treas. Reg. Section 1.415(c)-2(d)(3) (wages within the meaning of Code section 3401(a) for purposes of income tax withholding at the source, plus amounts excludible from gross income under section 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k) or 457(b), without regard to rules that limit the remuneration included in wages based on the nature or location of the employment or the services performed); provided, however, that, with respect to a nonresident alien who is not a Participant in the Plan, compensation shall not include compensation that is not includible in the gross income of the Employee under Code Sections 872, 893, 894, 911, 931 and 933, provided such compensation is not effectively connected with the conduct of a trade or business within the United States.

Notwithstanding anything in this paragraph to the contrary, (i) if a different definition of compensation has been designated by the Company with respect to another nonqualified deferred compensation plan in which a key employee participates, the definition of compensation shall be the definition provided in Treas. Reg. Section 1.409A-1(i)(2), and (ii) the Company may through action that is legally binding with respect to all nonqualified deferred compensation plans maintained by the Company, elect to use a different definition of compensation.

In the event of corporate transactions described in Treas. Reg. Section 1.409A-1(i)(6), the identification of Specified Employees shall be determined in accordance with the default rules described therein, unless the Employer elects to utilize the available alternative methodology through designations made within the timeframes specified therein.

2.42 Specified Employee Identification Date. Specified Employee Identification Date means September 30, unless the Employer has elected a different date through action that is legally binding with respect to all nonqualified deferred compensation plans maintained by the Employer.

2.43 Specified Employee Effective Date. Specified Employee Effective Date means the first day of the fourth month following the Specified Employee Identification Date, or such earlier date as is selected by the Committee.

2.44 Substantial Risk of Forfeiture. Substantial Risk of Forfeiture shall have the meaning specified in Treas. Reg. Section 1.409A-1(d).

2.45 Termination Benefit. Termination Benefit means the benefit payable to a Participant under the Plan following the Participant’s Separation from Service prior to Retirement.

2.46 Unforeseeable Emergency. An Unforeseeable Emergency means a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, the Participant’s dependent (as defined in Code section 152(a)), or a

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Beneficiary; loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example,  as a result of a natural disaster); or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The types of events which may qualify as an Unforeseeable Emergency shall be specified by the Committee in administrative documents or forms.

2.47 Valuation Date. Valuation Date shall mean each Business Day.

2.48 Year of Service. A Year of Service shall mean each 12-month period of continuous service with the Employer.

Article III

Eligibility and Participation

3.1 Eligibility and Participation. An Eligible Employee becomes a Participant upon the earlier to occur of (i) a credit of Company Contributions under Article V or (ii) receipt of notification of eligibility to participate.

3.2   Duration. A Participant shall be eligible to defer Compensation and receive allocations of Company Contributions, subject to the terms of the Plan, for as long as such Participant remains an Eligible Employee. A Participant who is no longer an Eligible Employee but has not Separated from Service may not defer Compensation under the Plan but may otherwise exercise all of the rights of a Participant under the Plan with respect to his or her Account(s). On and after a Separation from Service, a Participant shall remain a Participant as long as his or her Account Balance is greater than zero and during such time may continue to make allocation elections as provided in Section 8.4. An individual shall cease being a Participant in the Plan when all benefits under the Plan to which he or she is entitled have been paid

Article IV

Deferrals

4.1   Deferral Elections, Generally.

(a) An Eligible Employee shall submit a Compensation Deferral Agreement during the enrollment periods established by the Committee and in the manner specified by the Committee, but in any event, in accordance with Section 4.2. A Compensation Deferral Agreement that is not timely filed with respect to a service period or component of Compensation shall be considered void and shall have no effect with respect to such service period or Compensation. The

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Committee may modify any Compensation Deferral Agreement prior to the date the election becomes irrevocable under the rules of Section 4.2.

(b) The Participant shall specify on his or her Compensation Deferral Agreement whether to allocate Deferrals to a Retirement/Termination Account or to a Specified Date Account. If no designation is made, all Deferrals shall be allocated to the Retirement/Termination Account. A Participant may also specify in his or her Compensation Deferral Agreement the Payment Schedule applicable to his or her Plan Accounts. If the Payment Schedule is not specified in a Compensation Deferral Agreement, the Payment Schedule shall be the Payment Schedule specified in Section 6.2.

4.2            Timing Requirements for Compensation Deferral Agreements.

(a)  First Year of Eligibility. In the case of the first year in which an Eligible Employee becomes eligible to participate in the Plan, he has up to 30 days following his initial eligibility to submit a Compensation Deferral Agreement with respect to Compensation to be earned during such year. The Compensation Deferral Agreement described in this paragraph becomes irrevocable upon the end of such 30-day period. The determination of whether an Eligible Employee may file a Compensation Deferral Agreement under this paragraph shall be determined in accordance with the rules of Code Section 409A, including the provisions of Treas. Reg. Section 1.409A-2(a)(7).

A Compensation Deferral Agreement filed under this paragraph applies to Compensation earned on and after the date the Compensation Deferral Agreement becomes irrevocable.

(b)   Prior Year Election. Except as otherwise provided in this Section 4.2, Participants may defer Compensation by filing a Compensation Deferral Agreement no later than December 31 of the year prior to the year in which the Compensation to be deferred is earned. A Compensation Deferral Agreement described in this paragraph shall become irrevocable with respect to such Compensation as of January 1 of the year in which such Compensation is earned.

(c)   Performance-Based Compensation. Participants may file a Compensation Deferral Agreement with respect to Performance-Based Compensation no later than the date that is six months before the end of the performance period, provided that:

i. the Participant performs services continuously from the later of the beginning of the performance period or the date the criteria are established through the date the Compensation Deferral Agreement is submitted; and

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ii. the Compensation is not readily ascertainable as of the date the Compensation Deferral Agreement is filed.

A Compensation Deferral Agreement becomes irrevocable with respect to Performance-Based Compensation as of the day immediately following the latest date for filing such election. Any election to defer Performance-Based Compensation that is made in accordance with this paragraph and that becomes payable as a result of the Participant’s death or Disability or upon a Change in Control prior to the satisfaction of the performance criteria, will be void.

(d)   Sales Commissions. Sales commissions (as defined in Treas. Reg. Section 1.409A-2(a)(12)(i)) are considered to be earned in the taxable year of the Participant in which the sale occurs.  The Compensation Deferral Agreement must be filed before the last day of the year preceding the year in which the sales commissions are earned and becomes irrevocable after that date.

(e)   Investment Commissions. Investment commissions (as defined in Treas. Reg. Section 1.409A-2(a)(12)(ii)) are considered to be earned in the 12-month period immediately preceding the date assets are valued for purposes of calculating the commission. Investment Commissions must be deferred under the timing rules set forth in this Section 4.2.

(f)   Fiscal Year Compensation. A Participant may defer Fiscal Year Compensation by filing a Compensation Deferral Agreement prior to the first day of the fiscal year or years in which such Fiscal Year Compensation is earned. The Compensation Deferral Agreement described in this paragraph becomes irrevocable on the first day of the fiscal year or years to which it applies.

(g)   Short-Term Deferrals. Compensation that meets the definition of a “short-term deferral” described in Treas. Reg. Section 1.409A-1(b)(4) may be deferred in accordance with the rules of Article VII, applied as if the date the Substantial Risk of Forfeiture lapses is the date payments were originally scheduled to commence, provided, however, that the provisions of Section 7.3 shall not apply to payments attributable to a Change in Control.

(h)   Certain Forfeitable Rights. With respect to a legally binding right to a payment in a subsequent year that is subject to a forfeiture condition requiring the Participant’s continued services for a period of at least twelve months from the date the Participant obtains the legally binding right, an election to defer such Compensation may be made on or before the 30th day after the Participant obtains the legally binding right to the Compensation, provided that the election is made at least twelve months in advance of the earliest date at which the forfeiture condition could lapse. The Compensation Deferral Agreement described in this paragraph becomes irrevocable after such 30th day. If the forfeiture condition

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applicable to the payment lapses before the end of the required service period as a result of the Participant’s death or Disability or upon a Change in Control, the Compensation Deferral Agreement will be void unless it would be considered timely under another rule described in this Section.

(i)   Company Awards. Participating Employers may unilaterally provide for deferrals of Company awards prior to the date of such awards. Deferrals of Company awards (such as sign-on, retention, or severance pay) may be negotiated with a Participant prior to the date the Participant has a legally binding right to such Compensation.

(j)   “Evergreen” Deferral Elections. The Committee, in its discretion, may provide in the Compensation Deferral Agreement that such Compensation Deferral Agreement will continue in effect for each subsequent year or performance period. Such “evergreen” Compensation Deferral Agreements will become effective with respect to an item of Compensation on the date such election becomes irrevocable under this Section 4.2. An evergreen Compensation Deferral Agreement may be terminated or modified prospectively with respect to Compensation for which such election remains revocable under this Section 4.2. A Participant whose Compensation Deferral Agreement is cancelled in accordance with Section 4.6 will be required to file a new Compensation Deferral Agreement under this Article IV in order to recommence Deferrals under the Plan.

4.3 Allocation of Deferrals. A Compensation Deferral Agreement may allocate Deferrals to one or more Specified Date Accounts and/or to the Retirement/Termination Account. The Committee may, in its discretion, establish a minimum deferral period for Specified Date Accounts (for example, the third Plan Year following the year Compensation subject to the Compensation Deferral Agreement is earned).

4.4 Deductions from Pay. The Committee has the authority to determine the payroll practices under which any component of Compensation subject to a Compensation Deferral Agreement will be deducted from a Participant’s Compensation.

4.5 Vesting. Participant Deferrals shall be 100% vested at all times.

4.6 Cancellation of Deferrals. The Committee may cancel a Participant’s Deferrals (i) for the balance of the Plan Year in which an Unforeseeable Emergency payment is made, (ii) if the Participant receives a hardship distribution under the Employer’s qualified 401(k) plan, through the end of the Plan Year in which the six-month anniversary of the hardship distribution falls, and (iii) during periods in which the Participant is unable to perform the duties of his or her position or any substantially similar position due to a mental or physical impairment that can be expected to result in death or last for a continuous period of at least six months. In the event a Participant receives a voluntary withdrawal from a

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Grandfathered Account, the Participant shall not be permitted to make Deferrals to the Plan in the Plan Year following the Plan Year in which the withdrawal is made.

Article V

Company Contributions

5.1 Discretionary Company Contributions. The Company may, from time to time in its sole and absolute discretion, credit Company Contributions to any Participant in any amount determined by the Company. Such contributions will be credited to a Participant’s Retirement/Termination Account.

5.2 Vesting. Company Contributions described in Section 5.1, above, and the Earnings thereon, shall vest in accordance with the vesting schedule(s) established by the Committee at the time that the Company Contribution is made.  The Participating Employer may, at any time, in its sole discretion, increase a Participant’s vested interest in a Company Contribution. The portion of a Participant’s Accounts that remains unvested upon his or her Separation from Service after the application of the terms of this Section 5.2 shall be forfeited.

Article VI

Benefits

6.1 Benefits, Generally. A Participant shall be entitled to the following benefits under the Plan:

(a)   Retirement Benefit. Upon the Participant’s Separation from Service due to Retirement, he or she shall be entitled to a Retirement Benefit. The Retirement Benefit shall be equal to the vested portion of the Retirement/Termination Account and the vested portion of balances in any Specified Date Accounts that are not in “pay status”. The Retirement Benefit shall be based on the value of that Account as of the end of the month in which Separation from Service occurs. Payment of the Retirement Benefit will be made or begin on or after the first day of the month following the month in which Separation from Service occurs, provided, however, that with respect to a Participant who is a Specified Employee as of the date such Participant incurs a Separation from Service, payment will be made or begin on the first day of the seventh month following the month in which such Separation from Service occurs. If the Retirement Benefit is to be paid in the form of installments, any subsequent installment payments to a Specified Employee will be paid on the anniversary of the date the first payment would have been made had the Participant not been classified as a Specified Employee.

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(b)   Termination Benefit. Upon the Participant’s Separation from Service for reasons other than death, Disability or Retirement, he or she shall be entitled to a Termination Benefit. The Termination Benefit shall be equal to the vested portion of the Retirement/Termination Account and the vested portion of any unpaid balances in any Specified Date Accounts. The Termination Benefit shall be based on the value of the Retirement/Termination Account as of the end of the month in which Separation from Service occurs. Payment of the Termination Benefit will be made or begin on or after the first day of the month following the month in which Separation from Service occurs, provided, however, that with respect to a Participant who is a Specified Employee as of the date such Participant incurs a Separation from Service, payment will be made or begin on the first day of the seventh month following the month in which such Separation from Service occurs.

(c)   Specified Date Benefit. If the Participant has established one or more Specified Date Accounts, he or she shall be entitled to a Specified Date Benefit with respect to each such Specified Date Account. The Specified Date Benefit shall be equal to the vested portion of the Specified Date Account, based on the value of that Account as of the end of the month designated by the Participant at the time the Account was established. Payment of the Specified Date Benefit will be made or begin on or after the first day of the month following the designated month.

(d)   Disability Benefit. Upon a determination by the Committee that a Participant is Disabled, he or she shall be entitled to a Disability Benefit. The Disability Benefit shall be equal to the vested portion of the Retirement/Termination Account and the vested portion of any unpaid balances in any Specified Date Accounts. The Disability Benefit shall be based on the value of the Accounts as of the last day of the month in which Disability occurs and will be paid on or after the first day of the following month.

(e)   Death Benefit. In the event of the Participant’s death, his or her designated Beneficiary(ies) shall be entitled to a Death Benefit. The Death Benefit shall be equal to the vested portion of the Retirement/Termination Account and the vested portion of any unpaid balances in any Specified Date Accounts. The Death Benefit shall be based on the value of the Accounts as of the end of the month in which death occurred, with payment made on or after the first day of the following month.

(f)   Unforeseeable Emergency Payments. A Participant who experiences an Unforeseeable Emergency may submit a written request to the Committee to receive payment of all or any portion of his or her vested Accounts. Whether a Participant or Beneficiary is faced with an Unforeseeable Emergency permitting an emergency payment shall be determined by the Committee based on the relevant facts and circumstances of each case, but, in any case, a distribution on

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account of Unforeseeable Emergency may not be made to the extent that such emergency is or may be reimbursed through insurance or otherwise, by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not cause severe financial hardship, or by cessation of Deferrals under this Plan. If an emergency payment is approved by the Committee, the amount of the payment shall not exceed the amount reasonably necessary to satisfy the need, taking into account the additional compensation that is available to the Participant as the result of cancellation of deferrals to the Plan, including amounts necessary to pay any taxes or penalties that the Participant reasonably anticipates will result from the payment. The amount of the emergency payment shall be subtracted first from the vested portion of the Participant's Retirement/Termination Account until depleted and then from the vested Specified Date Accounts, beginning with the Specified Date Account with the latest payment commencement date. Emergency payments shall be paid in a single lump sum within the 90-day period following the date the payment is approved by the Committee.

(g)   Voluntary Withdrawals of Grandfathered Accounts. A Participant may elect at any time to voluntarily withdraw the amounts credited to his or her Grandfathered Account. If such a withdrawal is requested, the Participant shall forfeit an amount equal to 10% of the balance of the Grandfathered Account.  The Plan as it pertains to Grandfathered Accounts is hereby modified in accordance with Reg. 1.409A -6(a)(4)(i)(B), such that the Deferrals of a Participant receiving a voluntary withdrawal in accordance herewith shall not be cancelled or revoked during the remainder of the Plan Year in which the voluntary withdrawal occurred, but said Participant shall not be permitted to make Deferrals to the Plan in the Plan Year following the Plan Year in which the withdrawal is made.

6.2 Form of Payment.

(a)   Retirement Benefit. A Participant who is entitled to receive a Retirement Benefit shall receive payment of such benefit in a single lump sum, unless the Participant elects on his or her initial Compensation Deferral Agreement to have such benefit paid in one of the following alternative forms of payment (i) substantially equal annual installments over a period of two to five years, as elected by the Participant; or (ii) a lump sum payment of a percentage of the balance in the Retirement/ Termination Account, with the balance paid in substantially equal annual installments over a period of two to five years, as elected by the Participant.

(b)   Termination Benefit. A Participant who is entitled to receive a Termination Benefit shall receive payment of such benefit in a single lump sum.

(c)   Specified Date Benefit. The Specified Date Benefit shall be paid in a single lump sum, unless the Participant elects on the Compensation Deferral Agreement with

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which the account was established to have the Specified Date Account paid in substantially equal annual installments over a period of two to five years, as elected by the Participant.

Notwithstanding any election of a form of payment by the Participant, upon a Separation from Service the unpaid balance of a Specified Date Account shall be paid in accordance with the form of payment applicable to the Retirement Benefit or Termination Benefit, as applicable, if the Participant Separates from Service prior to the date the Specified Date Account has been fully paid.

(d)   Disability Benefit. A Participant who is entitled to receive a Disability Benefit shall receive payment of such benefit in a single lump sum.

(e)   Death Benefit. A Designated Beneficiary who is entitled to receive a Death Benefit shall receive payment of such benefit in a single lump sum.

(f)   Small Account Balances. The Committee may, in its sole discretion which shall be evidenced in writing no later than the date of payment, elect to pay the value of the Participant’s Accounts upon a Separation from Service in a single lump sum if the balance of such Accounts is not greater than the applicable dollar amount under Code Section 402(g)(1)(B), provided the payment represents the complete liquidation of the Participant’s interest in the Plan.

(g)   Rules Applicable to Installment Payments. If a Payment Schedule specifies installment payments, annual payments will be made beginning as of the payment commencement date for such installments and shall continue on each anniversary thereof until the number of installment payments specified in the Payment Schedule has been paid. The amount of each installment payment shall be determined by dividing (a) by (b), where (a) equals the Account Balance as of the Valuation Date and (b) equals the remaining number of installment payments.

For purposes of Article VII, installment payments will be treated as a single form of payment. If a lump sum equal to less than 100% of the Retirement/Termination Account is paid, the payment commencement date for the installment form of payment will be the first anniversary of the payment of the lump sum.

6.3 Acceleration of or Delay in Payments. The Committee, in its sole and absolute discretion, may elect to accelerate the time or form of payment of a benefit owed to the Participant hereunder, provided such acceleration is permitted under Treas. Reg. Section 1.409A-3(j)(4). The Committee may also, in its sole and absolute discretion, delay the time for payment of a benefit owed to the Participant hereunder, to the extent permitted under Treas. Reg. Section 1.409A-2(b)(7). If the Plan receives a domestic relations order (within the meaning of Code Section 414(p)(1)(B)) directing that all or a portion of a

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Participant’s Accounts be paid to an “alternate payee,” any amounts to be paid to the alternate payee(s) shall be paid in a single lump sum.

Article VII

Modifications to Payment Schedules

7.1 Participant’s Right to Modify. A Participant may modify any or all of the alternative Payment Schedules with respect to an Account, consistent with the permissible Payment Schedules available under the Plan, provided such modification complies with the requirements of this Article VII.

7.2 Time of Election. The date on which a modification election is submitted to the Committee must be at least twelve months prior to the date on which payment is scheduled to commence under the Payment Schedule in effect prior to the modification.

7.3 Date of Payment under Modified Payment Schedule. Except with respect to modifications that relate to the payment of a Death Benefit or a Disability Benefit, the date payments are to commence under the modified Payment Schedule must be no earlier than five years after the date payment would have commenced under the original Payment Schedule. Under no circumstances may a modification election result in an acceleration of payments in violation of Code Section 409A.

7.4 Effective Date. A modification election submitted in accordance with this Article VII is irrevocable upon receipt by the Committee and becomes effective 12 months after such date.

7.5 Effect on Accounts. An election to modify a Payment Schedule is specific to the Account or payment event to which it applies, and shall not be construed to affect the Payment Schedules of any other Accounts.

7.6 Modifications to Grandfathered Accounts. Notwithstanding the preceding provisions of this Article VII, a Participant may modify the time or form of payment applicable to a Grandfathered Account at any time, provided the modification is submitted in writing at least 13 months in advance of the date the Grandfathered Account is scheduled to be paid.

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Article VIII

Valuation of Account Balances; Investments

8.1 Valuation. Deferrals shall be credited to appropriate Accounts on the date such Compensation would have been paid to the Participant absent the Compensation Deferral Agreement. Company Contributions shall be credited to the Retirement/Termination Account at the times determined by the Committee. Valuation of Accounts shall be performed under procedures approved by the Committee.

8.2 Earnings Credit. Each Account will be credited with Earnings on each Business Day, based upon the Participant’s investment allocation among a menu of investment options selected in advance by the Committee, in accordance with the provisions of this Article VIII (“investment allocation”).

8.3 Investment Options. Investment options will be determined by the Committee. The Committee, in its sole discretion, shall be permitted to add or remove investment options from the Plan menu from time to time, provided that any such additions or removals of investment options shall not be effective with respect to any period prior to the effective date of such change.

8.4 Investment Allocations. A Participant’s investment allocation constitutes a deemed, not actual, investment among the investment options comprising the investment menu. At no time shall a Participant have any real or beneficial ownership in any investment option included in the investment menu, nor shall the Participating Employer or any trustee acting on its behalf have any obligation to purchase actual securities as a result of a Participant’s investment allocation. A Participant’s investment allocation shall be used solely for purposes of adjusting the value of a Participant’s Account Balances.

A Participant shall specify an investment allocation for each of his Accounts in accordance with procedures established by the Committee.  Allocation among the investment options must be designated in increments of 1%. The Participant’s investment allocation will become effective on the same Business Day or, in the case of investment allocations received after a time specified by the Committee, the next Business Day.

A Participant may change an investment allocation on any Business Day, both with respect to future credits to the Plan and with respect to existing Account Balances, in accordance with procedures adopted by the Committee. Changes shall become effective on the same Business Day or, in the case of investment allocations received after a time specified by the Committee, the next Business Day, and shall be applied prospectively.

8.5 Unallocated Deferrals and Accounts. If the Participant fails to make an investment allocation with respect to an Account, such Account shall be invested in an investment

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option, the primary objective of which is the preservation of capital, as determined by the Committee.

Article IX

Administration

9.1 Plan Administration. This Plan shall be administered by the Committee which shall have discretionary authority to make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Plan and to utilize its discretion to decide or resolve any and all questions, including but not limited to eligibility for benefits and interpretations of this Plan and its terms, as may arise in connection with the Plan. Claims for benefits shall be filed with the Committee and resolved in accordance with the claims procedures in Article XII.

9.2 Administration Upon Change in Control. Upon a Change in Control, the Committee, as constituted immediately prior to such Change in Control, shall continue to act as the Committee. The individual who was the Chief Executive Officer of the Company (or if such person is unable or unwilling to act, the next highest ranking officer) prior to the Change in Control shall have the authority (but shall not be obligated) to appoint an independent third party to act as the Committee.

Upon such Change in Control, the Company may not remove the Committee, unless 2/3rds of the members of the Board of Directors of the Company and a majority of Participants and Beneficiaries with Account Balances consent to the removal and replacement Committee. Notwithstanding the foregoing, neither the Committee nor the officer described above shall have authority to direct investment of trust assets under any rabbi trust described in Section 11.2.

The Participating Employer shall, with respect to the Committee identified under this Section, (i) pay all reasonable expenses and fees of the Committee, (ii) indemnify the Committee (including individuals serving as Committee) against any costs, expenses and liabilities including, without limitation, attorneys’ fees and expenses arising in connection with the performance of the Committee hereunder, except with respect to matters resulting from the Committee’s gross negligence or willful misconduct and (iii) supply full and timely information to the Committee on all matters related to the Plan, any rabbi trust, Participants, Beneficiaries and Accounts as the Committee may reasonably require.

9.3 Withholding. The Participating Employer shall have the right to withhold from any payment due under the Plan (or with respect to any amounts credited to the Plan) any taxes required by law to be withheld in respect of such payment (or credit). Withholdings with respect to amounts credited to the Plan shall be deducted from Compensation that has not been deferred to the Plan.

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9.4 Indemnification. The Participating Employers shall indemnify and hold harmless each employee, officer, director, agent or organization, to whom or to which are delegated duties, responsibilities, and authority under the Plan or otherwise with respect to administration of the Plan, including, without limitation, the Committee and its agents, against all claims, liabilities, fines and penalties, and all expenses reasonably incurred by or imposed upon him or it (including but not limited to reasonable attorney fees) which arise as a result of his or its actions or failure to act in connection with the operation and administration of the Plan to the extent lawfully allowable and to the extent that such claim, liability, fine, penalty, or expense is not paid for by liability insurance purchased or paid for by the Participating Employer. Notwithstanding the foregoing, the Participating Employer shall not indemnify any person or organization if his or its actions or failure to act are due to gross negligence or willful misconduct or for any such amount incurred through any settlement or compromise of any action unless the Participating Employer consents in writing to such settlement or compromise.

9.5 Delegation of Authority. In the administration of this Plan, the Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit, and may from time to time consult with legal counsel who shall be legal counsel to the Company.

9.6 Binding Decisions or Actions. The decision or action of the Committee in respect of any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations thereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.

Article X

Amendment and Termination

10.1 Amendment and Termination. The Company may at any time and from time to time amend the Plan or may terminate the Plan as provided in this Article X. Each Participating Employer may also terminate its participation in the Plan.

10.2 Amendments. The Company, by action taken by its Board of Directors, may amend the Plan at any time and for any reason, provided that any such amendment shall not reduce the vested Account Balances of any Participant accrued as of the date of any such amendment or restatement (as if the Participant had incurred a voluntary Separation from Service on such date) or reduce any rights of a Participant under the Plan or other Plan features with respect to Deferrals made prior to the date of any such amendment or restatement without the consent of the Participant. The Board of Directors of the Company may delegate to the Committee the authority to amend the Plan without the consent of the Board of Directors for the purpose of (i) conforming the Plan to the requirements of law, (ii) facilitating the administration of the Plan, (iii) clarifying

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provisions based on the Committee’s interpretation of the document and (iv) making such other amendments as the Board of Directors may authorize.

10.3 Termination. The Company, by action taken by its Board of Directors, may terminate the Plan and pay Participants and Beneficiaries their Account Balances in a single lump sum at any time, to the extent and in accordance with Treas. Reg. Section 1.409A-3(j)(4)(ix). If a Participating Employer terminates its participation in the Plan, the benefits of affected Employees shall be paid at the time provided in Article VI.

10.4 Accounts Taxable Under Code Section 409A. The Plan is intended to constitute a plan of deferred compensation that meets the requirements for deferral of income taxation under Code Section 409A. The Committee, pursuant to its authority to interpret the Plan, may sever from the Plan or any Compensation Deferral Agreement any provision or exercise of a right that otherwise would result in a violation of Code Section 409A.

Article XI

Informal Funding

11.1 General Assets. Obligations established under the terms of the Plan may be satisfied from the general funds of the Participating Employers, or a trust described in this Article XI. No Participant, spouse or Beneficiary shall have any right, title or interest whatever in assets of the Participating Employers. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship, between the Participating Employers and any Employee, spouse, or Beneficiary. To the extent that any person acquires a right to receive payments hereunder, such rights are no greater than the right of an unsecured general creditor of the Participating Employer.

11.2 Rabbi Trust. A Participating Employer may, in its sole discretion, establish a grantor trust, commonly known as a rabbi trust, as a vehicle for accumulating assets to pay benefits under the Plan. Payments under the Plan may be paid from the general assets of the Participating Employer or from the assets of any such rabbi trust. Payment from any such source shall reduce the obligation owed to the Participant or Beneficiary under the Plan.

Article XII

Claims

12.1 Filing a Claim. Any controversy or claim arising out of or relating to the Plan shall be filed in writing with the Committee which shall make all determinations concerning such claim. Any claim filed with the Committee and any decision by the Committee denying

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such claim shall be in writing and shall be delivered to the Participant or Beneficiary filing the claim (the “Claimant”).

a.   In General. Notice of a denial of benefits (other than Disability benefits) will be provided within ninety (90) days of the Committee’s receipt of the Claimant's claim for benefits. If the Committee determines that it needs additional time to review the claim, the Committee will provide the Claimant with a notice of the extension before the end of the initial ninety (90) day period. The extension will not be more than ninety (90) days from the end of the initial ninety (90) day period and the notice of extension will explain the special circumstances that require the extension and the date by which the Committee expects to make a decision.

b.   Disability Benefits. Notice of denial of Disability benefits will be provided within forty-five (45) days of the Committee’s receipt of the Claimant’s claim for Disability benefits. If the Committee determines that it needs additional time to review the Disability claim, the Committee will provide the Claimant with a notice of the extension before the end of the initial forty-five (45) day period. If the Committee determines that a decision cannot be made within the first extension period due to matters beyond the control of the Committee, the time period for making a determination may be further extended for an additional thirty (30) days. If such an additional extension is necessary, the Committee shall notify the Claimant prior to the expiration of the initial thirty (30) day extension. Any notice of extension shall indicate the circumstances necessitating the extension of time, the date by which the Committee expects to furnish a notice of decision, the specific standards on which such entitlement to a benefit is based, the unresolved issues that prevent a decision on the claim and any additional information needed to resolve those issues. A Claimant will be provided a minimum of forty-five (45) days to submit any necessary additional information to the Committee. In the event that a thirty (30) day extension is necessary due to a Claimant’s failure to submit information necessary to decide a claim, the period for furnishing a notice of decision shall be tolled from the date on which the notice of the extension is sent to the Claimant until the earlier of the date the Claimant responds to the request for additional information or the response deadline.

c.   Contents of Notice. If a claim for benefits is completely or partially denied, notice of such denial shall be in writing and shall set forth the reasons for denial in plain language. The notice shall (i) cite the pertinent provisions of the Plan document and (ii) explain, where appropriate, how the Claimant can perfect the claim, including a description of any additional material or information necessary to complete the claim and why such material or information is necessary. The claim denial also shall include an explanation of the claims review procedures and the time limits applicable to such procedures, including a statement of the Claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse decision on review. In the case of a complete or partial denial of a Disability

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benefit claim, the notice shall provide a statement that the Committee will provide to the Claimant, upon request and free of charge, a copy of any internal rule, guideline, protocol, or other similar criterion that was relied upon in making the decision.

12.2 Appeal of Denied Claims. A Claimant whose claim has been completely or partially denied shall be entitled to appeal the claim denial by filing a written appeal with a committee designated to hear such appeals (the “Appeals Committee”). A Claimant who timely requests a review of the denied claim (or his or her authorized representative) may review, upon request and free of charge, copies of all documents, records and other information relevant to the denial and may submit written comments, documents, records and other information relevant to the claim to the Appeals Committee. All written comments, documents, records, and other information shall be considered “relevant” if the information (i) was relied upon in making a benefits determination,(ii) was submitted, considered or generated in the course of making a benefits decision regardless of whether it was relied upon to make the decision, or (iii) demonstrates compliance with administrative processes and safeguards established for making benefit decisions. The Appeals Committee may, in its sole discretion and if it deems appropriate or necessary, decide to hold a hearing with respect to the claim appeal.

(a)   In General. Appeal of a denied benefits claim (other than a Disability benefits claim) must be filed in writing with the Appeals Committee no later than sixty (60) days after receipt of the written notification of such claim denial. The Appeals Committee shall make its decision regarding the merits of the denied claim within sixty (60) days following receipt of the appeal (or within one hundred and twenty (120) days after such receipt, in a case where there are special circumstances requiring extension of time for reviewing the appealed claim). If an extension of time for reviewing the appeal is required because of special circumstances, written notice of the extension shall be furnished to the Claimant prior to the commencement of the extension. The notice will indicate the special circumstances requiring the extension of time and the date by which the Appeals Committee expects to render the determination on review. The review will take into account comments, documents, records and other information submitted by the Claimant relating to the claim without regard to whether such information was submitted or considered in the initial benefit determination.

(b)   Disability Benefits. Appeal of a denied Disability benefits claim must be filed in writing with the Appeals Committee no later than one hundred eighty (180) days after receipt of the written notification of such claim denial. The review shall be conducted by the Appeals Committee (exclusive of the person who made the initial adverse decision or such person’s subordinate). In reviewing the appeal, the Appeals Committee shall (i) not afford deference to the initial denial of the claim, (ii) consult a medical professional who has appropriate training and experience in the field of medicine relating to the Claimant’s disability and who was neither

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consulted as part of the initial denial nor is the subordinate of such individual and (iii) identify the medical or vocational experts whose advice was obtained with respect to the initial benefit denial, without regard to whether the advice was relied upon in making the decision. The Appeals Committee shall make its decision regarding the merits of the denied claim within forty-five (45) days following receipt of the appeal (or within ninety (90) days after such receipt, in a case where there are special circumstances requiring extension of time for reviewing the appealed claim). If an extension of time for reviewing the appeal is required because of special circumstances, written notice of the extension shall be furnished to the Claimant prior to the commencement of the extension. The notice will indicate the special circumstances requiring the extension of time and the date by which the Appeals Committee expects to render the determination on review. Following its review of any additional information submitted by the Claimant, the Appeals Committee shall render a decision on its review of the denied claim.

(c)   Contents of Notice. If a benefits claim is completely or partially denied on review, notice of such denial shall be in writing and shall set forth the reasons for denial in plain language.

The decision on review shall set forth (i) the specific reason or reasons for the denial, (ii) specific references to the pertinent Plan provisions on which the denial is based, (iii) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records, or other information relevant (as defined above) to the Claimant’s claim, and (iv) a statement describing any voluntary appeal procedures offered by the plan and a statement of the Claimant’s right to bring an action under Section 502(a) of ERISA.

(d)   For the denial of a Disability benefit, the notice will also include a statement that the Appeals Committee will provide, upon request and free of charge, (i) any internal rule, guideline, protocol or other similar criterion relied upon in making the decision, (ii) any medical opinion relied upon to make the decision and (iii) the required statement under Section 2560.503-1(j)(5)(iii) of the Department of Labor regulations.

12.3 Claims Appeals Upon Change in Control. Upon a Change in Control, the Appeals Committee, as constituted immediately prior to such Change in Control, shall continue to act as the Appeals Committee. Upon such Change in Control, the Company may not remove any member of the Appeals Committee, but may replace resigning members if 2/3rds of the members of the Board of Directors of the Company and a majority of Participants and Beneficiaries with Account Balances consent to the replacement.

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The Appeals Committee shall have the exclusive authority at the appeals stage to interpret the terms of the Plan and resolve appeals under the Claims Procedure.

Each Participating Employer shall, with respect to the Committee identified under this Section, (i) pay its proportionate share of all reasonable expenses and fees of the Appeals Committee, (ii) indemnify the Appeals Committee (including individual committee members) against any costs, expenses and liabilities including, without limitation, attorneys’ fees and expenses arising in connection with the performance of the Appeals Committee hereunder, except with respect to matters resulting from the Appeals Committee’s gross negligence or willful misconduct and (iii) supply full and timely information to the Appeals Committee on all matters related to the Plan, any rabbi trust, Participants, Beneficiaries and Accounts as the Appeals Committee may reasonably require.

12.4 Legal Action. A Claimant may not bring any legal action, including commencement of any arbitration, relating to a claim for benefits under the Plan unless and until the Claimant has followed the claims procedures under the Plan and exhausted his or her administrative remedies under such claims procedures.

If a Participant or Beneficiary prevails in a legal proceeding brought under the Plan to enforce the rights of such Participant or any other similarly situated Participant or Beneficiary, in whole or in part, the Company shall reimburse such Participant or Beneficiary for all legal costs, expenses, attorneys’ fees and such other liabilities incurred as a result of such proceedings. If the legal proceeding is brought in connection with a Change in Control, or a “change in control” as defined in a rabbi trust described in Section 11.2, the Participant or Beneficiary may file a claim directly with the trustee for reimbursement of such costs, expenses and fees. For purposes of the preceding sentence, the amount of the claim shall be treated as if it were an addition to the Participant’s or Beneficiary’s Account Balance and will be included in determining the Company’s trust funding obligation under Section 11.2.

12.5 Discretion of Appeals Committee. All interpretations, determinations and decisions of the Appeals Committee with respect to any claim shall be made in its sole discretion, and shall be final and conclusive.

12.6 Arbitration.

(a)   Prior to Change in Control. If, prior to a Change in Control, any claim or controversy between a Participating Employer and a Participant or Beneficiary is not resolved through the claims procedure set forth in Article XII, such claim shall be submitted to and resolved exclusively by expedited binding arbitration by a single arbitrator.  Arbitration shall be conducted in accordance with the following procedures:

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The complaining party shall promptly send written notice to the other party identifying the matter in dispute and the proposed remedy. Following the giving of such notice, the parties shall meet and attempt in good faith to resolve the matter. In the event the parties are unable to resolve the matter within twenty one (21) days, the parties shall meet and attempt in good faith to select a single arbitrator acceptable to both parties. If a single arbitrator is not selected by mutual consent within ten (10) Business Days following the giving of the written notice of dispute, an arbitrator shall be selected from a list of nine persons each of whom shall be an attorney who is either engaged in the active practice of law or recognized arbitrator and who, in either event, is experienced in serving as an arbitrator in disputes between employers and employees, which list shall be provided by the main office of either JAMS, the American Arbitration Associate (“AAA”) or the Federal Mediation and Conciliation Service. If, within three Business Days of the parties’ receipt of such list, the parties are unable to agree on an arbitrator from the list, then the parties shall each strike names alternatively from the list, with the first to strike being determined by the flip of a coin. After each party has had four strikes, the remaining name on the list shall be the arbitrator. If such person is unable to serve for any reason, the parties shall repeat this process until an arbitrator is selected.

Unless the parties agree otherwise, within sixty (60) days of the selection of the arbitrator, a hearing shall be conducted before such arbitrator at a time and a place agreed upon by the parties. In the event the parties are unable to agree upon the time or place of the arbitration, the time and place shall be designated by the arbitrator after consultation with the parties. Within thirty (30) days of the conclusion of the arbitration hearing, the arbitrator shall issue an award, accompanied by a written decision explaining the basis for the arbitrator’s award.

In any arbitration hereunder, the Participating Employer shall pay all administrative fees of the arbitration and all fees of the arbitrator, except that the Participant or Beneficiary may, if he/she/it wishes, pay up to one-half of those amounts. Each party shall pay its own attorneys’ fees, costs, and expenses, unless the arbitrator orders otherwise. The prevailing party in such arbitration, as determined by the arbitrator, and in any enforcement or other court proceedings, shall be entitled, to the extent permitted by law, to reimbursement from the other party for all of the prevailing party’s costs (including but not limited to the arbitrator’s compensation), expenses, and attorneys’ fees. The arbitrator shall have no authority to add to or to modify this Plan, shall apply all applicable law, and shall have no lesser and no greater remedial authority than would a court of law resolving the same claim or controversy. The arbitrator shall have no authority to add to or to modify this Plan, shall apply all applicable law, and shall have no lesser and no greater remedial authority than would a court of law resolving the same claim or controversy. The arbitrator shall, upon an appropriate motion, dismiss any claim without an evidentiary hearing if the party bringing the

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motion establishes that it would be entitled to summary judgment if the matter had been pursued in court litigation.

The parties shall be entitled to discovery as follows: Each party may take no more than three depositions. The Participating Employer may depose the Participant or Beneficiary plus two other witnesses, and the Participant or Beneficiary may depose the Participating Employer, pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure, plus two other witnesses. Each party may make such reasonable document discovery requests as are allowed in the discretion of the arbitrator.

The decision of the arbitrator shall be final, binding, and non-appealable, and may be enforced as a final judgment in any court of competent jurisdiction.

This arbitration provision of the Plan shall extend to claims against any parent, subsidiary, or affiliate of each party, and, when acting within such capacity, any officer, director, shareholder, Participant, Beneficiary, or agent of any party, or of any of the above, and shall apply as well to claims arising out of state and federal statutes and local ordinances as well as to claims arising under the common law or under this Plan.

Notwithstanding the foregoing, and unless otherwise agreed between the parties, either party may apply to a court for provisional relief, including a temporary restraining order or preliminary injunction, on the ground that the arbitration award to which the applicant may be entitled may be rendered ineffectual without provisional relief.

Any arbitration hereunder shall be conducted in accordance with the Federal Arbitration Act: provided, however, that, in the event of any inconsistency between the rules and procedures of the Act and the terms of this Plan, the terms of this Plan shall prevail.

If any of the provisions of this Section 12.6(A) are determined to be unlawful or otherwise unenforceable, in the whole part, such determination shall not affect the validity of the remainder of this section and this section shall be reformed to the extent necessary to carry out its provisions to the greatest extent possible and to insure that the resolution of all conflicts between the parties, including those arising out of statutory claims, shall be resolved by neutral, binding arbitration. If a court should find that the provisions of this Section 12.6(A) are not absolutely binding, then the parties intend any arbitration decision and award to be fully admissible in evidence in any subsequent action, given great weight by any finder of fact and treated as determinative to the maximum extent permitted by law.

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The parties do not agree to arbitrate any putative class action or any other representative action. The parties agree to arbitrate only the claims(s) of a single Participant or Beneficiary.

(b)   Upon Change in Control. If, upon the occurrence of a Change in Control, any dispute, controversy or claim arises between a Participant or Beneficiary and the Participating Employer out of or relating to or concerning the provisions of the Plan, such dispute, controversy or claim shall be finally settled by a court of competent jurisdiction which, notwithstanding any other provision of the Plan, shall apply a de novo standard of review to any determination made by the Company or its Board of Directors, a Participating Employer, the Committee, or the Appeals Committee.

Article XIII

General Provisions

13.1 Anti-assignment Rule. No interest of any Participant, spouse or Beneficiary under this Plan and no benefit payable hereunder shall be assigned as security for a loan, and any such purported assignment shall be null, void and of no effect, nor shall any such interest or any such benefit be subject in any manner, either voluntarily or involuntarily, to anticipation, sale, transfer, assignment or encumbrance by or through any Participant, spouse or Beneficiary. Notwithstanding anything to the contrary herein, however, the Committee has the discretion to make payments to an alternate payee in accordance with the terms of a domestic relations order (as defined in Code Section 414(p)(1)(B)).

13.2 No Legal or Equitable Rights or Interest. No Participant or other person shall have any legal or equitable rights or interest in this Plan that are not expressly granted in this Plan. Participation in this Plan does not give any person any right to be retained in the service of the Participating Employer. The right and power of a Participating Employer to dismiss or discharge an Employee is expressly reserved. The Participating Employers make no representations or warranties as to the tax consequences to a Participant or a Participant’s beneficiaries resulting from a deferral of income pursuant to the Plan.

13.3 No Employment Contract. Nothing contained herein shall be construed to constitute a contract of employment between an Employee and a Participating Employer.

13.4 Notice. Any notice or filing required or permitted to be delivered to the Committee under this Plan shall be delivered in writing, in person, or through such electronic means as is established by the Committee. Notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. Written transmission shall be sent by certified mail to:

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FIRST HORIZON NATIONAL CORPORATION

ATTN: EVP—EMPLOYEE SERVICES

165 MADISON AVENUE

 MEMPHIS, TENNESSEE

Any notice or filing required or permitted to be given to a Participant under this Plan shall be sufficient if in writing or hand-delivered, or sent by mail to the last known address of  the Participant.

13.5 Headings. The headings of Sections are included solely for convenience of reference, and if there is any conflict between such headings and the text of this Plan, the text shall control.

13.6 Invalid or Unenforceable Provisions. If any provision of this Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof and the Committee may elect in its sole discretion to construe such invalid or unenforceable provisions in a manner that conforms to applicable law or as if such provisions, to the extent invalid or unenforceable, had not been included.

13.7 Lost Participants or Beneficiaries. Any Participant or Beneficiary who is entitled to a benefit from the Plan has the duty to keep the Committee advised of his or her current mailing address. If benefit payments are returned to the Plan or are not presented for payment after a reasonable amount of time, the Committee shall presume that the payee is missing. The Committee, after making such efforts as in its discretion it deems reasonable and appropriate to locate the payee, shall stop payment on any uncashed checks and may discontinue making future payments until contact with the payee is restored.

13.8 Governing Law. To the extent not preempted by ERISA, the laws of the State of Tennessee shall govern the construction and administration of the Plan.

IN WITNESS WHEREOF, the undersigned executed this Plan as of the _____th day of _______________, 2007, to be effective as of the Effective Date.

First Horizon National Corporation

By: _______________________________ (Print Name)

Its: __________________________________ (Title)

___________________________________ (Signature)

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EX-10

Exhibit 10.1(j)

FTN Financial

Deferred Compensation Plan

Amended and Restated

Effective January 1, 2008

Article I

Establishment and Purpose .................................................................1

Article II

Definitions .........................................................................................1

Article III

Eligibility and Participation ...................................................................9

Article IV

Deferrals .........................................................................................10

Article V

Company Contributions ....................................................................13

Article VI

Benefits ..........................................................................................13

Article VII

Modifications to Payment Schedules ...................................................17

Article VIII

Valuation of Account Balances; Investments ........................................18

Article IX

Administration ..................................................................................20

Article X

Amendment and Termination ..............................................................21

Article XI

Informal Funding ..............................................................................22

Article XII

Claims ...........................................................................................22

Article XIII

General Provisions ..........................................................................29

FTN Financial Amended and Restated Deferred Compensation Plan

Article I

Establishment and Purpose

First Horizon National Corporation (the “Company”) hereby amends and restates the FTN Financial Deferred Compensation Plan originally sponsored by the First Tennessee National Corporation and originally effective as of January 1, 2003 (the “Plan”).  This amendment and restatement is effective January 1, 2008. This amendment and restatement applies only to amounts deferred under the Plan on or after January 1, 2005, and to amounts deferred prior to January 1, 2005 that were not vested as of December 31, 2004. Amounts deferred under the Plan prior to January 1, 2005 that were vested as of December 31, 2004 (the “Grandfathered Accounts”) shall be subject to the provisions of the Plan as in effect on October 3, 2004, as the same may be amended from time to time by the Company without material modification, it being expressly intended that such Grandfathered Accounts are to remain exempt from the requirements of Code Section 409A. Certain provisions of the Plan applicable to Grandfathered Accounts are reflected in this document for ease of reference.

The purpose of the Plan continues to be to attract and retain key employees of FTN Financial Group (the “Employer”) by providing each Participant with an opportunity to defer receipt of a portion of their bonus, commission, and other specified compensation. The Plan is not intended to meet the qualification requirements of Code Section 401(a), but is intended to meet the requirements of Code Section 409A, and shall be operated and interpreted consistent with that intent.

The Plan constitutes an unsecured promise by the Company and the Adopting Employer to pay benefits in the future.  Participants in the Plan shall have the status of general unsecured creditors of the Company or the Adopting Employer, as applicable. Each Adopting Employer shall be solely responsible for payment of the benefits of its employees and their beneficiaries. The Plan is unfunded for Federal tax purposes and is intended to be an unfunded arrangement for eligible employees who are part of a select group of management or highly compensated employees of the Employer within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA. Any amounts set aside to defray the liabilities assumed by the Company or an Adopting Employer will remain the general assets of the Company or the Adopting Employer and shall remain subject to the claims of the Company’s or the Adopting Employer's creditors until such amounts are distributed to the Participants.

Article II

Definitions

2.1 Account. Account means a bookkeeping account maintained by the Committee to record the payment obligation of a Participating Employer to a Participant as determined under the terms of the Plan. The Committee may maintain an Account to record the total obligation to a Participant and component Accounts to reflect amounts payable at different times and in different forms. Reference to an Account means any such Account established by the Committee, as the context requires. Accounts are intended to constitute unfunded obligations within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.

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2.2 Account Balance. Account Balance means, with respect to any Account, the total payment obligation owed to a Participant from such Account as of the most recent Valuation Date.

2.3 Adopting Employer. Adopting Employer means an Affiliate who, with the consent of the Company, has adopted the Plan for the benefit of its eligible employees.

2.4 Affiliate. Affiliate means a corporation, trade or business that, together with the Employer, is treated as a single employer under Code Section 414(b) or (c).

2.5 Beneficiary. Beneficiary means a natural person, estate, or trust designated by a Participant to receive payments to which a Beneficiary is entitled in accordance with provisions of the Plan. The Participant’s spouse, if living, otherwise the Participant’s estate, shall be the Beneficiary if: (i)the Participant has failed to properly designate a Beneficiary, or (ii) all designated Beneficiaries have predeceased the Participant.

A former spouse shall have no interest under the Plan, as Beneficiary or otherwise, unless the Participant designates such person as a Beneficiary after dissolution of the marriage, except to the extent provided under the terms of a domestic relations order as described in  Code Section 414(p)(1)(B).

2.6 Business Day. A Business Day is each day on which the New York Stock Exchange is open for business.

2.7 Change in Control. Change in Control, with respect to a Participating Employer that is organized as a corporation, occurs on the date on which any of the following events occur (i) a change in the ownership of the Participating Employer; (ii) a change in the effective control of the Participating Employer; (iii) a change in the ownership of a substantial portion of the assets of the Participating Employer.

For purposes of this Section, a change in the ownership of the Participating Employer occurs on the date on which any one person, or more than one person acting as a group, acquires ownership of stock of the Participating Employer that, together with stock held by such person or group constitutes more than 50% of the total fair market value or total voting power of the stock of the Participating Employer. A change in the effective control of the Participating Employer occurs on the date on which either (i) a person, or more than one person acting as a group, acquires ownership of stock of the Participating Employer possessing 30% or more of the total voting power of the stock of the Participating Employer, taking into account all such stock acquired during the 12-month period ending on the date of the most recent acquisition, or (ii) a [majority] of the members of the Participating Employer’s Board of Directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of such Board of Directors prior to the date of the appointment or election, but only if no other corporation is a majority shareholder of the Participating Employer . A change in the ownership of a substantial portion of assets occurs on the date on which any one person, or more than one person acting as a group, other than a person or group of persons that is related to the Participating Employer, acquires assets from the Participating Employer that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Participating Employer immediately prior to such acquisition or acquisitions, taking into account all such assets acquired during the 12-month period ending on the date of the most recent acquisition.

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An event constitutes a Change in Control with respect to a Participant only if the Participant performs services for the Participating Employer that has experienced the Change in Control, or the Participant’s relationship to the affected Participating Employer otherwise satisfies the requirements of Treasury Regulation Section 1.409A-3(i)(5)(ii).

The determination as to the occurrence of a Change in Control shall be based on objective facts and in accordance with the requirements of Code Section 409A.

2.8 Claimant. Claimant means a Participant or Beneficiary filing a claim under Article XII of this Plan.

2.9 Code. Code means the Internal Revenue Code of 1986, as amended from time to time.

2.10 Code Section 409A. Code Section 409A means section 409A of the Code, and regulations and other guidance issued by the Treasury Department and Internal Revenue Service thereunder.

2.11   Committee. Committee means a committee of at least three (3) persons comprised of employees of the Employer who shall serve until the earlier of termination of service or appointment of a replacement by the remaining members of the Committee. The initial members of the Committee shall be the Chief Executive Officer of the Employer, the Chief Financial Officer of the Employer and the Chief Risk Officer of the Employer.

2.12 Company. Company means First Horizon National Corporation.

2.13 Company Contribution. Company Contribution means a credit by a Participating Employer to a Participant’s Account(s) in accordance with the provisions of Article V of the Plan. Company Contributions are credited at the sole discretion of the Participating Employer and the fact that a Company Contribution is credited in one year shall not obligate the Participating Employer to continue to make such Company Contribution in subsequent years. Unless the context clearly indicates otherwise, a reference to Company Contribution shall include Earnings attributable to such contribution.

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2.15 Compensation. Compensation means a Participant’s base salary, bonus, commission, and such other cash or equity-based compensation (if any) approved by the Committee as Compensation that may be deferred under this Plan.  Compensation shall not include any compensation that has been previously deferred under this Plan or any other arrangement subject to Code Section 409A.

2.16 Compensation Deferral Agreement. Compensation Deferral Agreement means an agreement between a Participant and a Participating Employer that specifies (i) the amount of each component of Compensation that the Participant has elected to defer to the Plan in accordance with the provisions of Article IV, and (ii) the Payment Schedule applicable to one or more Accounts. The Committee may permit different deferral amounts for each component of Compensation and may establish a minimum or maximum deferral amount for each such component. Unless otherwise specified by the Committee in the Compensation Deferral Agreement, Participants may defer up to 55% of their base salary (if any), commission, and bonus for a Plan Year. A Compensation Deferral Agreement may also specify the investment allocation described in Section 8.4.

2.17 Death Benefit. Death Benefit means the benefit payable under the Plan to a Participant’s Beneficiary(ies) upon the Participant’s death as provided in Section 6.1 of the Plan.

2.18 Deferral. Deferral means a credit to a Participant’s Account(s) that records that portion of the Participant’s Compensation that the Participant has elected to defer to the Plan in accordance with the provisions of Article IV. Unless the context of the Plan clearly indicates otherwise, a reference to Deferrals includes Earnings attributable to such Deferrals.

Deferrals shall be calculated with respect to the cash Compensation payable to the Participant, but shall be reduced by the Committee as necessary so that Deferrals plus non-deferred Compensation do not exceed 100% of the cash Compensation of the Participant.  Changes to payroll withholdings and welfare plan co-payments that affect the amount of Compensation being deferred to the Plan shall be allowed only to the extent permissible under Code Section 409A.

2.19 Disability Benefit. Disability Benefit means the benefit payable under the Plan to a Participant in the event such Participant is determined to be Disabled.

2.20 Disabled. Disabled means that a Participant is, by reason of any medically-determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve months, (i) unable to engage in any substantial gainful activity, or (ii) receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Participant’s employer. The Committee shall determine whether a Participant is Disabled in accordance with Code Section 409A provided, however, that a Participant shall be deemed to be Disabled if determined to be totally disabled by the Social Security Administration or the Railroad Retirement Board or if the Participant is determined to be Disabled under the Company disability insurance program utilizing the definition provided herein.

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2.21 Earnings. Earnings means an adjustment to the value of an Account in accordance with Article VIII.

2.22 Effective Date. Effective Date means January 1, 2008.

2.23 Eligible Employee. Eligible Employee means a member of a “select group of management or highly compensated employees” of a Participating Employer within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA as determined by the Committee from time to time in its sole discretion.

2.24 Employee. Employee means a common-law employee of an Employer.

2.25 Employer. Employer means, with respect to Employees it employs, FTN Financial Group, a division of the Company, and each other Adopting Employer (if any).

2.26 ERISA. ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time.

2.27 Fiscal Year Compensation. Fiscal Year Compensation means Compensation earned during one or more consecutive fiscal years of a Participating Employer, all of which is paid after the last day of such fiscal year or years.

2.28 Grandfathered Account. Grandfathered Account means amounts deferred under the Plan prior to January 1, 2005 that were vested as of December 31, 2004, and Earnings on such amounts.

2.29 Participant. Participant means an Eligible Employee or an independent contractor who has received notification of his or her eligibility to defer Compensation under the Plan under Section 3.1 and any other person with an Account Balance greater than zero, regardless of whether such individual continues to be an Eligible Employee. A Participant’s continued participation in the Plan shall be governed by Section 3.2 of the Plan.

2.30 Participating Employer. Participating Employer means the Employer and each Adopting Employer.

2.31 Payment Schedule. Payment Schedule means the date as of which payment of an Account under the Plan will commence and the form in which payment of such Account will be made.

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2.32 Performance-Based Compensation. Performance-Based Compensation means Compensation where the amount of, or entitlement to, the Compensation is contingent on the satisfaction of pre-established organizational or individual performance criteria relating to a performance period of at least twelve consecutive months. Organizational or individual performance criteria are considered pre-established if established in writing by not later than ninety (90) days after the commencement of the period of service to which the criteria relate, provided that the outcome is substantially uncertain at the time the criteria are established. The determination of whether Compensation qualifies as “Performance-Based Compensation” will be made in accordance with Treas. Reg. Section 1.409A-1(e) and subsequent guidance.

2.33 Plan. Generally, the term Plan means the “FTN Financial Deferred Compensation Plan” as amended and restated herein and as may be further amended from time to time hereafter. However, to the extent permitted or required under Code Section 409A, the term Plan may in the appropriate context also mean a portion of the Plan that is treated as a single plan under Treas. Reg. Section 1.409A-1(c), or the Plan or portion of the Plan and any other nonqualified deferred compensation plan or portion thereof that is treated as a single plan under such section.

2.34 Plan Year. Plan Year means January 1 through December 31.

2.35 Retirement. Retirement means the first to occur of: (i) a Participant’s Separation from Service after attainment of age 55 and completion of 10 Years of Service; or (ii) a Participant’s Separation from Service after attainment of age 65.

2.36 Retirement Benefit. Retirement Benefit means the benefit payable to a Participant under the Plan following the Retirement of the Participant.

2.37 Retirement/Termination Account. Retirement/Termination Account means an Account established by the Committee to record the amounts payable to a Participant that have not been allocated to a Specified Date Account. Unless the Participant has established a Specified Date Account, all Deferrals and Company Contributions shall be allocated to a Retirement/Termination Account on behalf of the Participant.

2.38 Separation from Service. An Employee incurs a Separation from Service upon termination of employment with the Employer. Whether a Separation from Service has occurred shall be determined by the Committee in accordance with Code Section 409A. Except in the case of an Employee on a bona fide leave of absence as provided below, an Employee is deemed to have incurred a Separation from Service if the Employer and the Employee reasonably anticipated that the level of services to be performed by the Employee after a date certain would be reduced to 20% or less of the average services rendered by the Employee during the immediately preceding 36-month period (or the total period of employment, if less than 36 months) disregarding periods during which the Employee was on a bona fide leave of absence.

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An Employee who is absent from work due to military leave, sick leave, or other bona fide leave of absence shall incur a Separation from Service on the first date immediately following the later of (i) the six-month anniversary of the commencement of the leave or (ii) the expiration of the Employee’s right, if any, to reemployment under statute or contract.

For purposes of determining whether a Separation from Service has occurred, the Employer means the Employer as defined in Section 2.25 of the Plan, except that for purposes of determining whether another organization is an Affiliate of the Company, common ownership of at least 50% shall be determinative.

The Committee specifically reserves the right to determine whether a sale or other disposition of substantial assets to an unrelated party constitutes a Separation from Service with respect to a Participant providing services to the seller immediately prior to the transaction and providing services to the buyer after the transaction. Such determination shall be made in accordance with the requirements of Code Section 409A.

2.39 Specified Date Account. A Specified Date Account means an Account established pursuant to Section 4.3 that will be paid (or that will commence to be paid) at a future date as specified in the Participant’s Compensation Deferral Agreement. Unless otherwise determined by the Committee, a Participant may maintain no more than three Specified Date Accounts. A Specified Date Account may be identified in enrollment materials as an “In-Service Account”.

2.40 Specified Date Benefit. Specified Date Benefit means the benefit payable to a Participant under the Plan in accordance with Section 6.1(C).

2.41 Specified Employee. Specified Employee means an Employee who, as of the date of his Separation from Service, is a “key employee” of the Company or any Affiliate, any stock of which is actively traded on an established securities market or otherwise.

An Employee is a key employee if he meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with applicable regulations thereunder and without regard to Code Section 416(i)(5)) at any time during the 12-month period ending on the Specified Employee Identification Date. Such Employee shall be treated as a key employee for the entire 12-month period beginning on the Specified Employee Effective Date.

For purposes of determining whether an Employee is a Specified Employee, the compensation of the Employee shall be determined in accordance with the definition of compensation provided under Treas. Reg. Section 1.415(c)-2(d)(3) (wages within the meaning of Code section 3401(a) for purposes of income tax withholding at the source, plus amounts excludible from gross income under section 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k) or 457(b), without regard to rules that limit the remuneration included in wages based on the nature or location of the employment or the services performed); provided, however, that, with respect to a nonresident alien who is not a Participant in the Plan, compensation shall not include compensation that is not includible in the gross income of the Employee under Code Sections 872, 893, 894, 911, 931 and 933, provided such compensation is not effectively connected with the conduct of a trade or business within the United States.

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Notwithstanding anything in this paragraph to the contrary, (i) if a different definition of compensation has been designated by the Company with respect to another nonqualified deferred compensation plan in which a key employee participates, the definition of compensation shall be the definition provided in Treas. Reg. Section 1.409A-1(i)(2), and (ii) the Company may through action that is legally binding with respect to all nonqualified deferred compensation plans maintained by the Company, elect to use a different definition of compensation.

In the event of corporate transactions described in Treas. Reg. Section 1.409A-1(i)(6), the identification of Specified Employees shall be determined in accordance with the default rules described therein, unless the Employer elects to utilize the available alternative methodology through designations made within the timeframes specified therein.

2.42 Specified Employee Identification Date. Specified Employee Identification Date means September 30, unless the Employer has elected a different date through action that is legally binding with respect to all nonqualified deferred compensation plans maintained by the Employer.

2.43 Specified Employee Effective Date. Specified Employee Effective Date means the first day of the fourth month following the Specified Employee Identification Date, or such earlier date as is selected by the Committee.

2.44 Substantial Risk of Forfeiture. Substantial Risk of Forfeiture shall have the meaning specified in Treas. Reg. Section 1.409A-1(d).

2.45 Termination Benefit. Termination Benefit means the benefit payable to a Participant under the Plan following the Participant’s Separation from Service prior to Retirement.

2.46 Unforeseeable Emergency. An Unforeseeable Emergency means a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, the Participant’s dependent (as defined in Code section 152(a)), or a Beneficiary; loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example,  as a result of a natural disaster); or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The types of events which may qualify as an Unforeseeable Emergency shall be specified by the Committee in administrative documents or forms.

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2.47 Valuation Date. Valuation Date shall mean each Business Day.

2.48 Year of Service. A Year of Service shall mean each 12-month period of continuous service with the Employer.

Article III

Eligibility and Participation

3.1 Eligibility and Participation. An Eligible Employee becomes a Participant upon the earlier to occur of (i) a credit of Company Contributions under Article V or (ii) receipt of notification of eligibility to participate.

3.2   Duration. A Participant shall be eligible to defer Compensation and receive allocations of Company Contributions, subject to the terms of the Plan, for as long as such Participant remains an Eligible Employee. A Participant who is no longer an Eligible Employee but has not Separated from Service may not defer Compensation under the Plan but may otherwise exercise all of the rights of a Participant under the Plan with respect to his or her Account(s). On and after a Separation from Service, a Participant shall remain a Participant as long as his or her Account Balance is greater than zero and during such time may continue to make allocation elections as provided in Section 8.4. An individual shall cease being a Participant in the Plan when all benefits under the Plan to which he or she is entitled have been paid

Article IV

Deferrals

4.1   Deferral Elections, Generally.

(a) A Participant shall submit a Compensation Deferral Agreement during the enrollment periods established by the Committee and in the manner specified by the Committee, but in any event, in accordance with Section 4.2. A Compensation Deferral Agreement that is not timely filed with respect to a service period or component of Compensation shall be considered void and shall have no effect with respect to such service period or Compensation. The Committee may modify any Compensation Deferral Agreement prior to the date the election becomes irrevocable under the rules of Section 4.2.

(b) The Participant shall specify on his or her Compensation Deferral Agreement whether to allocate Deferrals to a Retirement/Termination Account or to a Specified Date Account. If no designation is made, all Deferrals shall be allocated to the Retirement/Termination Account. A Participant may also specify in his or her Compensation Deferral Agreement the Payment Schedule applicable to his or her Plan Accounts. If the Payment Schedule is not specified in a Compensation Deferral Agreement, the Payment Schedule shall be the Payment Schedule specified in Section 6.2.

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4.2            Timing Requirements for Compensation Deferral Agreements.

(a)  First Year of Eligibility. In the case of the first year in which an Eligible Employee becomes eligible to participate in the Plan, he has up to 30 days following his initial eligibility to submit a Compensation Deferral Agreement with respect to Compensation to be earned during such year. The Compensation Deferral Agreement described in this paragraph becomes irrevocable upon the end of such 30-day period. The determination of whether an Eligible Employee may file a Compensation Deferral Agreement under this paragraph shall be determined in accordance with the rules of Code Section 409A, including the provisions of Treas. Reg. Section 1.409A-2(a)(7).

A Compensation Deferral Agreement filed under this paragraph applies to Compensation earned on and after the date the Compensation Deferral Agreement becomes irrevocable.

(b)   Prior Year Election. Except as otherwise provided in this Section 4.2, Participants may defer Compensation by filing a Compensation Deferral Agreement no later than December 31 of the year prior to the year in which the Compensation to be deferred is earned. A Compensation Deferral Agreement described in this paragraph shall become irrevocable with respect to such Compensation as of January 1 of the year in which such Compensation is earned.

(c)   Performance-Based Compensation. Participants may file a Compensation Deferral Agreement with respect to Performance-Based Compensation no later than the date that is six months before the end of the performance period, provided that:

i. the Participant performs services continuously from the later of the beginning of the performance period or the date the criteria are established through the date the Compensation Deferral Agreement is submitted; and

ii. the Compensation is not readily ascertainable as of the date the Compensation Deferral Agreement is filed.

A Compensation Deferral Agreement becomes irrevocable with respect to Performance-Based Compensation as of the day immediately following the latest date for filing such election. Any election to defer Performance-Based Compensation that is made in accordance with this paragraph and that becomes payable as a result of the Participant’s death or Disability or upon a Change in Control prior to the satisfaction of the performance criteria, will be void.

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(d)   Sales Commissions. Sales commissions (as defined in Treas. Reg. Section 1.409A-2(a)(12)(i)) are considered to be earned in the taxable year of the Participant in which the sale occurs. The Compensation Deferral Agreement must be filed before the last day of the year preceding the year in which the sales commissions are earned and becomes irrevocable after that date.

(e)   Investment Commissions. Investment commissions (as defined in Treas. Reg. Section 1.409A-2(a)(12)(ii)) are considered to be earned in the 12-month period immediately preceding the date assets are valued for purposes of calculating the commission. Investment Commissions must be deferred under the timing rules set forth in this Section 4.2.

(f)   Fiscal Year Compensation. A Participant may defer Fiscal Year Compensation by filing a Compensation Deferral Agreement prior to the first day of the fiscal year or years in which such Fiscal Year Compensation is earned. The Compensation Deferral Agreement described in this paragraph becomes irrevocable on the first day of the fiscal year or years to which it applies.

(g)   Short-Term Deferrals. Compensation that meets the definition of a “short-term deferral” described in Treas. Reg. Section 1.409A-1(b)(4) may be deferred in accordance with the rules of Article VII, applied as if the date the Substantial Risk of Forfeiture lapses is the date payments were originally scheduled to commence, provided, however, that the provisions of Section 7.3 shall not apply to payments attributable to a Change in Control.

(h)   Certain Forfeitable Rights. With respect to a legally binding right to a payment in a subsequent year that is subject to a forfeiture condition requiring the Participant’s continued services for a period of at least twelve months from the date the Participant obtains the legally binding right, an election to defer such Compensation may be made on or before the 30th day after the Participant obtains the legally binding right to the Compensation, provided that the election is made at least twelve months in advance of the earliest date at which the forfeiture condition could lapse. The Compensation Deferral Agreement described in this paragraph becomes irrevocable after such 30th day. If the forfeiture condition applicable to the payment lapses before the end of the required service period as a result of the Participant’s death or Disability or upon a Change in Control, the Compensation Deferral Agreement will be void unless it would be considered timely under another rule described in this Section.

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(i)   Company Awards. Participating Employers may unilaterally provide for deferrals of Company awards prior to the date of such awards. Deferrals of Company awards (such as sign-on, retention, or severance pay) may be negotiated with a Participant prior to the date the Participant has a legally binding right to such Compensation.

(j)   “Evergreen” Deferral Elections. The Committee, in its discretion, may provide in the Compensation Deferral Agreement that such Compensation Deferral Agreement will continue in effect for each subsequent year or performance period. Such “evergreen” Compensation Deferral Agreements will become effective with respect to an item of Compensation on the date such election becomes irrevocable under this Section 4.2. An evergreen Compensation Deferral Agreement may be terminated or modified prospectively with respect to Compensation for which such election remains revocable under this Section 4.2. A Participant whose Compensation Deferral Agreement is cancelled in accordance with Section 4.6 will be required to file a new Compensation Deferral Agreement under this Article IV in order to recommence Deferrals under the Plan.

4.3 Allocation of Deferrals. A Compensation Deferral Agreement may allocate Deferrals to one or more Specified Date Accounts and/or to the Retirement/Termination Account. The Committee may, in its discretion, establish a minimum deferral period for Specified Date Accounts (for example, the third Plan Year following the year Compensation subject to the Compensation Deferral Agreement is earned).

4.4 Deductions from Pay. The Committee has the authority to determine the payroll practices under which any component of Compensation subject to a Compensation Deferral Agreement will be deducted from a Participant’s Compensation.

4.5 Vesting. Participant Deferrals shall be 100% vested at all times.

4.6   Cancellation of Deferrals. The Committee may cancel a Participant’s Deferrals (i) for the balance of the Plan Year in which an Unforeseeable Emergency payment is made, (ii) if the Participant receives a hardship distribution under the Employer’s qualified 401(k) plan, through the end of the Plan Year in which the six-month anniversary of the hardship distribution falls, and (iii) during periods in which the Participant is unable to perform the duties of his or her position or any substantially similar position due to a mental or physical impairment that can be expected to result in death or last for a continuous period of at least six months.

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Article V

Company Contributions

5.1 Discretionary Company Contributions. The Company may, from time to time in its sole and absolute discretion, credit Company Contributions to any Participant in any amount determined by the Company. Such contributions will be credited to a Participant’s Retirement/Termination Account.

5.2 Vesting. Company Contributions described in Section 5.1, above, and the Earnings thereon, shall vest in accordance with the vesting schedule(s) established by the Committee at the time that the Company Contribution is made.  The Participating Employer may, at any time, in its sole discretion, increase a Participant’s vested interest in a Company Contribution. The portion of a Participant’s Accounts that remains unvested upon his or her Separation from Service after the application of the terms of this Section 5.2 shall be forfeited.

Article VI

Benefits

6.1 Benefits, Generally. A Participant shall be entitled to the following benefits under the Plan:

(a)   Retirement Benefit. Upon the Participant’s Separation from Service due to Retirement, he or she shall be entitled to a Retirement Benefit. The Retirement Benefit shall be equal to the vested portion of the Retirement/Termination Account and the vested portion of any Specified Date Accounts that are not in “pay status”. The Retirement Benefit shall be based on the value of that Account as of the end of the month in which Separation from Service occurs. Payment of the Retirement Benefit will be made or begin on or after the first day of the month following the month in which Separation from Service occurs, provided, however, that with respect to a Participant who is a Specified Employee as of the date such Participant incurs a Separation from Service, payment will be made or begin on the first day of the seventh month following the month in which such Separation from Service occurs. If the Retirement Benefit is to be paid in the form of installments, any subsequent installment payments to a Specified Employee will be paid on the anniversary of the date the first payment would have been made had the Participant not been classified as a Specified Employee.

(b)   Termination Benefit. Upon the Participant’s Separation from Service for reasons other than death, Disability or Retirement, he or she shall be entitled to a Termination Benefit. The Termination Benefit shall be equal to the vested portion of the Retirement/Termination Account and the vested portion of any unpaid balances in any Specified Date Accounts. The Termination Benefit shall be based on the value of the Retirement/Termination Account as of the end of the month in which Separation from Service occurs. Payment of the Termination Benefit will be made or begin on or after the first day of the month following the month in which Separation from Service occurs, provided, however, that with respect to a Participant who is a Specified Employee as of the date such Participant incurs a Separation from Service, payment will be made or begin on the first day of the seventh month following the month in which such Separation from Service occurs.

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(c)   Specified Date Benefit. If the Participant has established one or more Specified Date Accounts, he or she shall be entitled to a Specified Date Benefit with respect to each such Specified Date Account. The Specified Date Benefit shall be equal to the vested portion of the Specified Date Account, based on the value of that Account as of the end of the month designated by the Participant at the time the Account was established. Payment of the Specified Date Benefit will be made or begin on or after the first day of the month following the designated month.

(d)   Disability Benefit. Upon a determination by the Committee that a Participant is Disabled, he or she shall be entitled to a Disability Benefit. The Disability Benefit shall be equal to the vested portion of the Retirement/Termination Account and the vested portion of any unpaid balances in any Specified Date Accounts. The Disability Benefit shall be based on the value of the Accounts as of the last day of the month in which Disability occurs and will be paid on or after the first day of the following month.

(e)   Death Benefit. In the event of the Participant’s death, his or her designated Beneficiary(ies) shall be entitled to a Death Benefit. The Death Benefit shall be equal to the vested portion of the Retirement/Termination Account and the vested portion of any unpaid balances in any Specified Date Accounts. The Death Benefit shall be based on the value of the Accounts as of the end of the month in which death occurred, with payment made on or after the first day of the following month.

(f)   Unforeseeable Emergency Payments. A Participant who experiences an Unforeseeable Emergency may submit a written request to the Committee to receive payment of all or any portion of his or her vested Accounts. Whether a Participant or Beneficiary is faced with an Unforeseeable Emergency permitting an emergency payment shall be determined by the Committee based on the relevant facts and circumstances of each case, but, in any case, a distribution on account of Unforeseeable Emergency may not be made to the extent that such emergency is or may be reimbursed through insurance or otherwise, by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not cause severe financial hardship, or by cessation of Deferrals under this Plan. If an emergency payment is approved by the Committee, the amount of the payment shall not exceed the amount reasonably necessary to satisfy the need, taking into account the additional compensation that is available to the Participant as the result of cancellation of deferrals to the Plan, including amounts necessary to pay any taxes or penalties that the Participant reasonably anticipates will result from the payment. The amount of the emergency payment shall be subtracted first from the vested portion of the Participant's Retirement/Termination Account until depleted and then from the vested Specified Date Accounts, beginning with the Specified Date Account with the latest payment commencement date. Emergency payments shall be paid in a single lump sum within the 90-day period following the date the payment is approved by the Committee.

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(g)   Voluntary Withdrawals of Grandfathered Accounts. A Participant may elect at any time to voluntarily withdraw the amounts credited to his or her Grandfathered Account. If such a withdrawal is requested, the Participant shall forfeit an amount equal to 10% of the balance of the Grandfathered Account.  The Plan as it pertains to Grandfathered Accounts is hereby modified in accordance with Reg. 1.409A -6(a)(4)(i)(B), such that the Deferrals of a Participant receiving a voluntary withdrawal in accordance herewith shall not be cancelled or revoked during the remainder of the Plan Year in which the voluntary withdrawal occurred, but said Participant shall not be permitted to make Deferrals to the Plan in the Plan Year following the Plan Year in which the withdrawal is made.

6.2 Form of Payment.

(a)   Retirement Benefit. A Participant who is entitled to receive a Retirement Benefit shall receive payment of such benefit in a single lump sum, unless the Participant elects on his or her initial Compensation Deferral Agreement to have such benefit paid in one of the following alternative forms of payment (i) substantially equal annual installments over a period of two to twenty years, as elected by the Participant; or (ii) a lump sum payment of a percentage of the balance in the Retirement/ Termination Account, with the balance paid in substantially equal annual installments over a period of two to twenty years, as elected by the Participant.

(b)   Termination Benefit. A Participant who is entitled to receive a Termination Benefit shall receive payment of such benefit in a single lump sum.

(c)   Specified Date Benefit. The Specified Date Benefit shall be paid in a single lump sum, unless the Participant elects on the Compensation Deferral Agreement with which the account was established to have the Specified Date Account paid in substantially equal annual installments over a period of two to five years, as elected by the Participant.

Notwithstanding any election of a form of payment by the Participant, upon a Separation from Service the unpaid balance of a Specified Date Account shall be paid in accordance with the form of payment applicable to the Retirement Benefit or Termination Benefit, as applicable, if the Participant Separates from Service prior to the Payment Date for the Specified Date Account (e.g. prior to the commencement of payments of a Specified Date Account).

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(d)   Disability Benefit. A Participant who is entitled to receive a Disability Benefit shall receive payment of such benefit in accordance with the Payment Schedule applicable to the Retirement Benefit.

(e)   Death Benefit. A Designated Beneficiary who is entitled to receive a Death Benefit shall receive payment of such benefit in a single lump sum.

(f)   Small Account Balances. The Committee may, in its sole discretion which shall be evidenced in writing no later than the date of payment, elect to pay the value of the Participant’s Accounts upon a Separation from Service in a single lump sum if the balance of such Accounts is not greater than the applicable dollar amount under Code Section 402(g)(1)(B), provided the payment represents the complete liquidation of the Participant’s interest in the Plan.

(g)   Rules Applicable to Installment Payments. If a Payment Schedule specifies installment payments, annual payments will be made beginning as of the payment commencement date for such installments and shall continue on each anniversary thereof until the number of installment payments specified in the Payment Schedule has been paid. The amount of each installment payment shall be determined by dividing (a) by (b), where (a) equals the Account Balance as of the Valuation Date and (b) equals the remaining number of installment payments.

For purposes of Article VII, installment payments will be treated as a single form of payment. If a lump sum equal to less than 100% of the Retirement/Termination Account is paid, the payment commencement date for the installment form of payment will be the first anniversary of the payment of the lump sum.

6.3 Acceleration of or Delay in Payments. The Committee, in its sole and absolute discretion, may elect to accelerate the time or form of payment of a benefit owed to the Participant hereunder, provided such acceleration is permitted under Treas. Reg. Section 1.409A-3(j)(4). The Committee may also, in its sole and absolute discretion, delay the time for payment of a benefit owed to the Participant hereunder, to the extent permitted under Treas. Reg. Section 1.409A-2(b)(7). If the Plan receives a domestic relations order (within the meaning of Code Section 414(p)(1)(B)) directing that all or a portion of a Participant’s Accounts be paid to an “alternate payee,” any amounts to be paid to the alternate payee(s) shall be paid in a single lump sum.

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Article VII

Modifications to Payment Schedules

7.1 Participant’s Right to Modify. A Participant may modify any or all of the alternative Payment Schedules with respect to an Account, consistent with the permissible Payment Schedules available under the Plan, provided such modification complies with the requirements of this Article VII.

7.2 Time of Election. The date on which a modification election is submitted to the Committee must be at least twelve months prior to the date on which payment is scheduled to commence under the Payment Schedule in effect prior to the modification.

7.3 Date of Payment under Modified Payment Schedule. Except with respect to modifications that relate to the payment of a Death Benefit or a Disability Benefit, the date payments are to commence under the modified Payment Schedule must be no earlier than five years after the date payment would have commenced under the original Payment Schedule. Under no circumstances may a modification election result in an acceleration of payments in violation of Code Section 409A.

7.4 Effective Date. A modification election submitted in accordance with this Article VII is irrevocable upon receipt by the Committee and becomes effective 12 months after such date.

7.5 Effect on Accounts. An election to modify a Payment Schedule is specific to the Account or payment event to which it applies, and shall not be construed to affect the Payment Schedules of any other Accounts.

7.6 Modifications to Grandfathered Accounts. Notwithstanding the preceding provisions of this Article VII, a Participant may modify the time or form of payment applicable to a Grandfathered Account at any time, provided the modification is submitted in writing at least 13 months in advance of the date the Grandfathered Account is scheduled to be paid.

Article VIII

Valuation of Account Balances; Investments

8.1 Valuation. Deferrals shall be credited to appropriate Accounts on the date such Compensation would have been paid to the Participant absent the Compensation Deferral Agreement. Company Contributions shall be credited to the Retirement/Termination Account at the times determined by the Committee. Valuation of Accounts shall be performed under procedures approved by the Committee.

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8.2 Earnings Credit. Each Account will be credited with Earnings on each Business Day, based upon the Participant’s investment allocation among a menu of investment options selected in advance by the Committee, in accordance with the provisions of this Article VIII (“investment allocation”).

8.3 Investment Options. Investment options will be determined by the Committee. The Committee, in its sole discretion, shall be permitted to add or remove investment options from the Plan menu from time to time, provided that any such additions or removals of investment options shall not be effective with respect to any period prior to the effective date of such change.

8.4 Investment Allocations. A Participant’s investment allocation constitutes a deemed, not actual, investment among the investment options comprising the investment menu. At no time shall a Participant have any real or beneficial ownership in any investment option included in the investment menu, nor shall the Participating Employer or any trustee acting on its behalf have any obligation to purchase actual securities as a result of a Participant’s investment allocation. A Participant’s investment allocation shall be used solely for purposes of adjusting the value of a Participant’s Account Balances.

A Participant shall specify an investment allocation for each of his Accounts in accordance with procedures established by the Committee.  Allocation among the investment options must be designated in increments of 1%. The Participant’s investment allocation will become effective on the same Business Day or, in the case of investment allocations received after a time specified by the Committee, the next Business Day.

A Participant may change an investment allocation on any Business Day, both with respect to future credits to the Plan and with respect to existing Account Balances, in accordance with procedures adopted by the Committee. Changes shall become effective on the same Business Day or, in the case of investment allocations received after a time specified by the Committee, the next Business Day, and shall be applied prospectively.

8.5 Unallocated Deferrals and Accounts. If the Participant fails to make an investment allocation with respect to an Account, such Account shall be invested in an investment option, the primary objective of which is the preservation of capital, as determined by the Committee.

Article IX

Administration

9.1 Plan Administration. This Plan shall be administered by the Committee which shall have discretionary authority to make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Plan and to utilize its discretion to decide or resolve any and all questions, including but not limited to eligibility for benefits and interpretations of this Plan and its terms, as may arise in connection with the Plan. Claims for benefits shall be filed with the Committee and resolved in accordance with the claims procedures in Article XII.

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9.2 Administration Upon Change in Control. Upon a Change in Control, the Committee, as constituted immediately prior to such Change in Control, shall continue to act as the Committee. The individual who was the Chief Executive Officer of the Company (or if such person is unable or unwilling to act, the next highest ranking officer) prior to the Change in Control shall have the authority (but shall not be obligated) to appoint an independent third party to act as the Committee.

Upon such Change in Control, the Company may not remove the Committee, unless 2/3rds of the members of the Board of Directors of the Company and a majority of Participants and Beneficiaries with Account Balances consent to the removal and replacement Committee. Notwithstanding the foregoing, neither the Committee nor the officer described above shall have authority to direct investment of trust assets under any rabbi trust described in Section 11.2.

The Participating Employer shall, with respect to the Committee identified under this Section, (i) pay all reasonable expenses and fees of the Committee, (ii) indemnify the Committee (including individuals serving as Committee) against any costs, expenses and liabilities including, without limitation, attorneys’ fees and expenses arising in connection with the performance of the Committee hereunder, except with respect to matters resulting from the Committee’s gross negligence or willful misconduct and (iii) supply full and timely information to the Committee on all matters related to the Plan, any rabbi trust, Participants, Beneficiaries and Accounts as the Committee may reasonably require.

9.3 Withholding. The Participating Employer shall have the right to withhold from any payment due under the Plan (or with respect to any amounts credited to the Plan) any taxes required by law to be withheld in respect of such payment (or credit). Withholdings with respect to amounts credited to the Plan shall be deducted from Compensation that has not been deferred to the Plan.

9.4 Indemnification. The Participating Employers shall indemnify and hold harmless each employee, officer, director, agent or organization, to whom or to which are delegated duties, responsibilities, and authority under the Plan or otherwise with respect to administration of the Plan, including, without limitation, the Committee and its agents, against all claims, liabilities, fines and penalties, and all expenses reasonably incurred by or imposed upon him or it (including but not limited to reasonable attorney fees) which arise as a result of his or its actions or failure to act in connection with the operation and administration of the Plan to the extent lawfully allowable and to the extent that such claim, liability, fine, penalty, or expense is not paid for by liability insurance purchased or paid for by the Participating Employer. Notwithstanding the foregoing, the Participating Employer shall not indemnify any person or organization if his or its actions or failure to act are due to gross negligence or willful misconduct or for any such amount incurred through any settlement or compromise of any action unless the Participating Employer consents in writing to such settlement or compromise.

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9.5 Delegation of Authority. In the administration of this Plan, the Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit, and may from time to time consult with legal counsel who shall be legal counsel to the Company.

9.6 Binding Decisions or Actions. The decision or action of the Committee in respect of any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations thereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.

Article X

Amendment and Termination

10.1 Amendment and Termination. The Company may at any time and from time to time amend the Plan or may terminate the Plan as provided in this Article X. Each Participating Employer may also terminate its participation in the Plan.

10.2 Amendments. The Company, by action taken by its Board of Directors, may amend the Plan at any time and for any reason, provided that any such amendment shall not reduce the vested Account Balances of any Participant accrued as of the date of any such amendment or restatement (as if the Participant had incurred a voluntary Separation from Service on such date) or reduce any rights of a Participant under the Plan or other Plan features with respect to Deferrals made prior to the date of any such amendment or restatement without the consent of the Participant. The Board of Directors of the Company may delegate to the Committee the authority to amend the Plan without the consent of the Board of Directors for the purpose of (i) conforming the Plan to the requirements of law, (ii) facilitating the administration of the Plan, (iii) clarifying provisions based on the Committee’s interpretation of the document and (iv) making such other amendments as the Board of Directors may authorize.

10.3 Termination. The Company, by action taken by its Board of Directors, may terminate the Plan and pay Participants and Beneficiaries their Account Balances in a single lump sum at any time, to the extent and in accordance with Treas. Reg. Section 1.409A-3(j)(4)(ix). If a Participating Employer terminates its participation in the Plan, the benefits of affected Employees shall be paid at the time provided in Article VI.

10.4 Accounts Taxable Under Code Section 409A. The Plan is intended to constitute a plan of deferred compensation that meets the requirements for deferral of income taxation under Code Section 409A. The Committee, pursuant to its authority to interpret the Plan, may sever from the Plan or any Compensation Deferral Agreement any provision or exercise of a right that otherwise would result in a violation of Code Section 409A.

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Article XI

Informal Funding

11.1 General Assets. Obligations established under the terms of the Plan may be satisfied from the general funds of the Participating Employers, or a trust described in this Article XI. No Participant, spouse or Beneficiary shall have any right, title or interest whatever in assets of the Participating Employers. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship, between the Participating Employers and any Employee, spouse, or Beneficiary. To the extent that any person acquires a right to receive payments hereunder, such rights are no greater than the right of an unsecured general creditor of the Participating Employer.

11.2 Rabbi Trust. A Participating Employer may, in its sole discretion, establish a grantor trust, commonly known as a rabbi trust, as a vehicle for accumulating assets to pay benefits under the Plan. Payments under the Plan may be paid from the general assets of the Participating Employer or from the assets of any such rabbi trust. Payment from any such source shall reduce the obligation owed to the Participant or Beneficiary under the Plan.

Article XII

Claims

12.1 Filing a Claim. Any controversy or claim arising out of or relating to the Plan shall be filed in writing with the Committee which shall make all determinations concerning such claim. Any claim filed with the Committee and any decision by the Committee denying such claim shall be in writing and shall be delivered to the Participant or Beneficiary filing the claim (the “Claimant”).

a.   In General. Notice of a denial of benefits (other than Disability benefits) will be provided within ninety (90) days of the Committee’s receipt of the Claimant's claim for benefits. If the Committee determines that it needs additional time to review the claim, the Committee will provide the Claimant with a notice of the extension before the end of the initial ninety (90) day period. The extension will not be more than ninety (90) days from the end of the initial ninety (90) day period and the notice of extension will explain the special circumstances that require the extension and the date by which the Committee expects to make a decision.

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b.   Disability Benefits. Notice of denial of Disability benefits will be provided within forty-five (45) days of the Committee’s receipt of the Claimant’s claim for Disability benefits. If the Committee determines that it needs additional time to review the Disability claim, the Committee will provide the Claimant with a notice of the extension before the end of the initial forty-five (45) day period. If the Committee determines that a decision cannot be made within the first extension period due to matters beyond the control of the Committee, the time period for making a determination may be further extended for an additional thirty (30) days. If such an additional extension is necessary, the Committee shall notify the Claimant prior to the expiration of the initial thirty (30) day extension. Any notice of extension shall indicate the circumstances necessitating the extension of time, the date by which the Committee expects to furnish a notice of decision, the specific standards on which such entitlement to a benefit is based, the unresolved issues that prevent a decision on the claim and any additional information needed to resolve those issues. A Claimant will be provided a minimum of forty-five (45) days to submit any necessary additional information to the Committee. In the event that a thirty (30) day extension is necessary due to a Claimant’s failure to submit information necessary to decide a claim, the period for furnishing a notice of decision shall be tolled from the date on which the notice of the extension is sent to the Claimant until the earlier of the date the Claimant responds to the request for additional information or the response deadline.

c.   Contents of Notice. If a claim for benefits is completely or partially denied, notice of such denial shall be in writing and shall set forth the reasons for denial in plain language. The notice shall (i) cite the pertinent provisions of the Plan document and (ii) explain, where appropriate, how the Claimant can perfect the claim, including a description of any additional material or information necessary to complete the claim and why such material or information is necessary. The claim denial also shall include an explanation of the claims review procedures and the time limits applicable to such procedures, including a statement of the Claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse decision on review. In the case of a complete or partial denial of a Disability benefit claim, the notice shall provide a statement that the Committee will provide to the Claimant, upon request and free of charge, a copy of any internal rule, guideline, protocol, or other similar criterion that was relied upon in making the decision.

12.2 Appeal of Denied Claims. A Claimant whose claim has been completely or partially denied shall be entitled to appeal the claim denial by filing a written appeal with a committee designated to hear such appeals (the “Appeals Committee”). A Claimant who timely requests a review of the denied claim (or his or her authorized representative) may review, upon request and free of charge, copies of all documents, records and other information relevant to the denial and may submit written comments, documents, records and other information relevant to the claim to the Appeals Committee. All written comments, documents, records, and other information shall be considered “relevant” if the information (i) was relied upon in making a benefits determination,(ii) was submitted, considered or generated in the course of making a benefits decision regardless of whether it was relied upon to make the decision, or (iii) demonstrates compliance with administrative processes and safeguards established for making benefit decisions. The Appeals Committee may, in its sole discretion and if it deems appropriate or necessary, decide to hold a hearing with respect to the claim appeal.

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(a)   In General. Appeal of a denied benefits claim (other than a Disability benefits claim) must be filed in writing with the Appeals Committee no later than sixty (60) days after receipt of the written notification of such claim denial. The Appeals Committee shall make its decision regarding the merits of the denied claim within sixty (60) days following receipt of the appeal (or within one hundred and twenty (120) days after such receipt, in a case where there are special circumstances requiring extension of time for reviewing the appealed claim). If an extension of time for reviewing the appeal is required because of special circumstances, written notice of the extension shall be furnished to the Claimant prior to the commencement of the extension. The notice will indicate the special circumstances requiring the extension of time and the date by which the Appeals Committee expects to render the determination on review. The review will take into account comments, documents, records and other information submitted by the Claimant relating to the claim without regard to whether such information was submitted or considered in the initial benefit determination.

(b)   Disability Benefits. Appeal of a denied Disability benefits claim must be filed in writing with the Appeals Committee no later than one hundred eighty (180) days after receipt of the written notification of such claim denial. The review shall be conducted by the Appeals Committee (exclusive of the person who made the initial adverse decision or such person’s subordinate). In reviewing the appeal, the Appeals Committee shall (i) not afford deference to the initial denial of the claim, (ii) consult a medical professional who has appropriate training and experience in the field of medicine relating to the Claimant’s disability and who was neither consulted as part of the initial denial nor is the subordinate of such individual and (iii) identify the medical or vocational experts whose advice was obtained with respect to the initial benefit denial, without regard to whether the advice was relied upon in making the decision. The Appeals Committee shall make its decision regarding the merits of the denied claim within forty-five (45) days following receipt of the appeal (or within ninety (90) days after such receipt, in a case where there are special circumstances requiring extension of time for reviewing the appealed claim). If an extension of time for reviewing the appeal is required because of special circumstances, written notice of the extension shall be furnished to the Claimant prior to the commencement of the extension. The notice will indicate the special circumstances requiring the extension of time and the date by which the Appeals Committee expects to render the determination on review. Following its review of any additional information submitted by the Claimant, the Appeals Committee shall render a decision on its review of the denied claim.

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(c)   Contents of Notice. If a benefits claim is completely or partially denied on review, notice of such denial shall be in writing and shall set forth the reasons for denial in plain language.

The decision on review shall set forth (i) the specific reason or reasons for the denial, (ii) specific references to the pertinent Plan provisions on which the denial is based, (iii) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records, or other information relevant (as defined above) to the Claimant’s claim, and (iv) a statement describing any voluntary appeal procedures offered by the plan and a statement of the Claimant’s right to bring an action under Section 502(a) of ERISA.

(d)   For the denial of a Disability benefit, the notice will also include a statement that the Appeals Committee will provide, upon request and free of charge, (i) any internal rule, guideline, protocol or other similar criterion relied upon in making the decision, (ii) any medical opinion relied upon to make the decision and (iii) the required statement under Section 2560.503-1(j)(5)(iii) of the Department of Labor regulations.

12.3 Claims Appeals Upon Change in Control. Upon a Change in Control, the Appeals Committee, as constituted immediately prior to such Change in Control, shall continue to act as the Appeals Committee. Upon such Change in Control, the Company may not remove any member of the Appeals Committee, but may replace resigning members if 2/3rds of the members of the Board of Directors of the Company and a majority of Participants and Beneficiaries with Account Balances consent to the replacement.

The Appeals Committee shall have the exclusive authority at the appeals stage to interpret the terms of the Plan and resolve appeals under the Claims Procedure.

Each Participating Employer shall, with respect to the Committee identified under this Section, (i) pay its proportionate share of all reasonable expenses and fees of the Appeals Committee, (ii) indemnify the Appeals Committee (including individual committee members) against any costs, expenses and liabilities including, without limitation, attorneys’ fees and expenses arising in connection with the performance of the Appeals Committee hereunder, except with respect to matters resulting from the Appeals Committee’s gross negligence or willful misconduct and (iii) supply full and timely information to the Appeals Committee on all matters related to the Plan, any rabbi trust, Participants, Beneficiaries and Accounts as the Appeals Committee may reasonably require.

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12.4 Legal Action. A Claimant may not bring any legal action, including commencement of any arbitration, relating to a claim for benefits under the Plan unless and until the Claimant has followed the claims procedures under the Plan and exhausted his or her administrative remedies under such claims procedures.

If a Participant or Beneficiary prevails in a legal proceeding brought under the Plan to enforce the rights of such Participant or any other similarly situated Participant or Beneficiary, in whole or in part, the Company shall reimburse such Participant or Beneficiary for all legal costs, expenses, attorneys’ fees and such other liabilities incurred as a result of such proceedings. If the legal proceeding is brought in connection with a Change in Control, or a “change in control” as defined in a rabbi trust described in Section 11.2, the Participant or Beneficiary may file a claim directly with the trustee for reimbursement of such costs, expenses and fees. For purposes of the preceding sentence, the amount of the claim shall be treated as if it were an addition to the Participant’s or Beneficiary’s Account Balance and will be included in determining the Company’s trust funding obligation under Section 11.2.

12.5 Discretion of Appeals Committee. All interpretations, determinations and decisions of the Appeals Committee with respect to any claim shall be made in its sole discretion, and shall be final and conclusive.

12.6 Arbitration.

(a)   Prior to Change in Control. If, prior to a Change in Control, any claim or controversy between a Participating Employer and a Participant or Beneficiary is not resolved through the claims procedure set forth in Article XII, such claim shall be submitted to and resolved exclusively by expedited binding arbitration by a single arbitrator.  Arbitration shall be conducted in accordance with the following procedures:

The complaining party shall promptly send written notice to the other party identifying the matter in dispute and the proposed remedy. Following the giving of such notice, the parties shall meet and attempt in good faith to resolve the matter. In the event the parties are unable to resolve the matter within twenty one (21) days, the parties shall meet and attempt in good faith to select a single arbitrator acceptable to both parties. If a single arbitrator is not selected by mutual consent within ten (10) Business Days following the giving of the written notice of dispute, an arbitrator shall be selected from a list of nine persons each of whom shall be an attorney who is either engaged in the active practice of law or recognized arbitrator and who, in either event, is experienced in serving as an arbitrator in disputes between employers and employees, which list shall be provided by the main office of either JAMS, the American Arbitration Associate (“AAA”) or the Federal Mediation and Conciliation Service. If, within three Business Days of the parties’ receipt of such list, the parties are unable to agree on an arbitrator from the list, then the parties shall each strike names alternatively from the list, with the first to strike being determined by the flip of a coin. After each party has had four strikes, the remaining name on the list shall be the arbitrator. If such person is unable to serve for any reason, the parties shall repeat this process until an arbitrator is selected.

Page 25 of 31 

Unless the parties agree otherwise, within sixty (60) days of the selection of the arbitrator, a hearing shall be conducted before such arbitrator at a time and a place agreed upon by the parties. In the event the parties are unable to agree upon the time or place of the arbitration, the time and place shall be designated by the arbitrator after consultation with the parties. Within thirty (30) days of the conclusion of the arbitration hearing, the arbitrator shall issue an award, accompanied by a written decision explaining the basis for the arbitrator’s award.

In any arbitration hereunder, the Participating Employer shall pay all administrative fees of the arbitration and all fees of the arbitrator, except that the Participant or Beneficiary may, if he/she/it wishes, pay up to one-half of those amounts. Each party shall pay its own attorneys’ fees, costs, and expenses, unless the arbitrator orders otherwise. The prevailing party in such arbitration, as determined by the arbitrator, and in any enforcement or other court proceedings, shall be entitled, to the extent permitted by law, to reimbursement from the other party for all of the prevailing party’s costs (including but not limited to the arbitrator’s compensation), expenses, and attorneys’ fees. The arbitrator shall have no authority to add to or to modify this Plan, shall apply all applicable law, and shall have no lesser and no greater remedial authority than would a court of law resolving the same claim or controversy. The arbitrator shall have no authority to add to or to modify this Plan, shall apply all applicable law, and shall have no lesser and no greater remedial authority than would a court of law resolving the same claim or controversy. The arbitrator shall, upon an appropriate motion, dismiss any claim without an evidentiary hearing if the party bringing the motion establishes that it would be entitled to summary judgment if the matter had been pursued in court litigation.

The parties shall be entitled to discovery as follows: Each party may take no more than three depositions. The Participating Employer may depose the Participant or Beneficiary plus two other witnesses, and the Participant or Beneficiary may depose the Participating Employer, pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure, plus two other witnesses. Each party may make such reasonable document discovery requests as are allowed in the discretion of the arbitrator.

Page 26 of 31 

The decision of the arbitrator shall be final, binding, and non-appealable, and may be enforced as a final judgment in any court of competent jurisdiction.

This arbitration provision of the Plan shall extend to claims against any parent, subsidiary, or affiliate of each party, and, when acting within such capacity, any officer, director, shareholder, Participant, Beneficiary, or agent of any party, or of any of the above, and shall apply as well to claims arising out of state and federal statutes and local ordinances as well as to claims arising under the common law or under this Plan.

Notwithstanding the foregoing, and unless otherwise agreed between the parties, either party may apply to a court for provisional relief, including a temporary restraining order or preliminary injunction, on the ground that the arbitration award to which the applicant may be entitled may be rendered ineffectual without provisional relief.

Any arbitration hereunder shall be conducted in accordance with the Federal Arbitration Act: provided, however, that, in the event of any inconsistency between the rules and procedures of the Act and the terms of this Plan, the terms of this Plan shall prevail.

If any of the provisions of this Section 12.6(A) are determined to be unlawful or otherwise unenforceable, in the whole part, such determination shall not affect the validity of the remainder of this section and this section shall be reformed to the extent necessary to carry out its provisions to the greatest extent possible and to insure that the resolution of all conflicts between the parties, including those arising out of statutory claims, shall be resolved by neutral, binding arbitration. If a court should find that the provisions of this Section 12.6(A) are not absolutely binding, then the parties intend any arbitration decision and award to be fully admissible in evidence in any subsequent action, given great weight by any finder of fact and treated as determinative to the maximum extent permitted by law.

The parties do not agree to arbitrate any putative class action or any other representative action. The parties agree to arbitrate only the claims(s) of a single Participant or Beneficiary.

(b)   Upon Change in Control. If, upon the occurrence of a Change in Control, any dispute, controversy or claim arises between a Participant or Beneficiary and the Participating Employer out of or relating to or concerning the provisions of the Plan, such dispute, controversy or claim shall be finally settled by a court of competent jurisdiction which, notwithstanding any other provision of the Plan, shall apply a de novo standard of review to any determination made by the Company or its Board of Directors, a Participating Employer, the Committee, or the Appeals Committee.

Page 27 of 31 

Article XIII

General Provisions

13.1 Anti-assignment Rule. No interest of any Participant, spouse or Beneficiary under this Plan and no benefit payable hereunder shall be assigned as security for a loan, and any such purported assignment shall be null, void and of no effect, nor shall any such interest or any such benefit be subject in any manner, either voluntarily or involuntarily, to anticipation, sale, transfer, assignment or encumbrance by or through any Participant, spouse or Beneficiary. Notwithstanding anything to the contrary herein, however, the Committee has the discretion to make payments to an alternate payee in accordance with the terms of a domestic relations order (as defined in Code Section 414(p)(1)(B)).

13.2 No Legal or Equitable Rights or Interest. No Participant or other person shall have any legal or equitable rights or interest in this Plan that are not expressly granted in this Plan. Participation in this Plan does not give any person any right to be retained in the service of the Participating Employer. The right and power of a Participating Employer to dismiss or discharge an Employee is expressly reserved. The Participating Employers make no representations or warranties as to the tax consequences to a Participant or a Participant’s beneficiaries resulting from a deferral of income pursuant to the Plan.

13.3 No Employment Contract. Nothing contained herein shall be construed to constitute a contract of employment between an Employee and a Participating Employer.

13.4 Notice. Any notice or filing required or permitted to be delivered to the Committee under this Plan shall be delivered in writing, in person, or through such electronic means as is established by the Committee. Notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. Written transmission shall be sent by certified mail to:

FTN FINANCIAL

ATTN: MAUREEN WILSON

845 CROSSOVER LANE, SUITE 240

MEMPHIS, TENNESSEE  38117

Any notice or filing required or permitted to be given to a Participant under this Plan shall be sufficient if in writing or hand-delivered, or sent by mail to the last known address of  the Participant.

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13.5 Headings. The headings of Sections are included solely for convenience of reference, and if there is any conflict between such headings and the text of this Plan, the text shall control.

13.6 Invalid or Unenforceable Provisions. If any provision of this Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof and the Committee may elect in its sole discretion to construe such invalid or unenforceable provisions in a manner that conforms to applicable law or as if such provisions, to the extent invalid or unenforceable, had not been included.

13.7 Lost Participants or Beneficiaries. Any Participant or Beneficiary who is entitled to a benefit from the Plan has the duty to keep the Committee advised of his or her current mailing address. If benefit payments are returned to the Plan or are not presented for payment after a reasonable amount of time, the Committee shall presume that the payee is missing. The Committee, after making such efforts as in its discretion it deems reasonable and appropriate to locate the payee, shall stop payment on any uncashed checks and may discontinue making future payments until contact with the payee is restored.

13.8 Governing Law. To the extent not preempted by ERISA, the laws of the State of Tennessee shall govern the construction and administration of the Plan.

SIGNATURES ON NEXT PAGE

IN WITNESS WHEREOF, the undersigned executed this amendment and restatement of the Plan as of the _____th day of _______________, 2007, to be effective as of the Effective Date.

First Horizon National Corporation

By: _______________________________ (Print Name)

Its: __________________________________ (Title)

____________________________________ (Signature)

Page 29 of 31 

EX-10

Exhibit 10.2(b2)

AMENDMENT TO

FIRST HORIZON NATIONAL CORPORATION

1992 RESTRICTED STOCK INCENTIVE PLAN

(AS AMENDED AND RESTATED 4/20/1999)

The 1992 Restricted Stock Incentive Plan of First Horizon National Corporation (as amended and restated April 20, 1999) (the “Plan”) is hereby amended as follows:

1.           Notwithstanding any provision in the Plan to the contrary, any deferral elections may be made under Section 16 of the Plan only if approved by the Committee or such officers of the Company to whom such approval authority has been delegated.  The right to approve any deferral elections may be withheld in the sole and absolute discretion of the Committee or its delegatee.

2.           Notwithstanding any provision in the Plan to the contrary, any deferral elections under Section 16, any supplemental cash payments under Section 6 and any loans under Section 7 may be made subject to such terms and conditions that the Committee or its delegatee may impose in their sole and absolute discretion, specifically including, but not limited to, any terms or conditions necessary in order for such deferral election, supplemental cash payments or loans to comply with Section 409A of the Internal Revenue Code.

3.           This Amendment shall take effect as of January 1, 2008, and shall apply to all awards that were outstanding on such date or made thereafter; provided, however, this Amendment shall not apply to any restricted stock units outstanding on January 1, 2008, if the deferral election was made before October 3, 2004, and if the restricted stock units were issued effective upon the lapse of vesting conditions no later than December 31, 2004.

EX-10

Exhibit 10.2(e2)

AMENDMENT TO

FIRST HORIZON NATIONAL CORPORATION

2000 EMPLOYEE STOCK OPTION PLAN

(ADOPTED 10/20/99)

The 2000 Employee Stock Option Plan of First Horizon National Corporation (as adopted October 20, 1999) (the “Plan”) is hereby amended as follows:

1.           Section 8(d) of the Plan is hereby amended to delete the second sentence thereof in its entirety and to substitute in lieu thereof the following:

The Committee shall promptly terminate the postponement as soon as, in the reasonable belief of the Committee, the exercise of an option would no longer result in a violation of state or federal law.  The exercise period for any option outstanding at the commencement of any postponement shall expire upon the later of (i) thirty (30) days after the Committee terminates the postponement or (ii) the date that the option would otherwise expire in accordance with its terms.

2.           This Amendment shall take effect immediately upon its adoption by the Compensation Committee and shall apply to all options granted after the date of adoption.

EX-10

Exhibit 10.2(f2)

AMENDMENT TO

FIRST HORIZON NATIONAL CORPORATION

2003 EQUITY COMPENSATION PLAN

(as Amended and Restated January 16, 2007)

The First Horizon National Corporation 2003 Equity Compensation Plan (as Amended and Restated January 16, 2007) is hereby amended as follows:

1.           The following definitions shall be added to Section 2 of the Plan:

“Deferred Compensation Award” means any Award that is not an Exempt Award.

“Exempt Award” means any Award that does not constitute deferred compensation subject to Section 409A of the Internal Revenue Code (the “Code”) under any relevant exception by statute, regulation or rule, specifically including, but not limited to, Treas. Reg. §§1.409A-1(b)(4) (short-term deferrals), 1.409A-1(b)(5) (certain stock options and stock appreciation rights) and 1.409A-1(b)(6) (restricted stock).

“Specified Employee” means a Participant who, as of the date of his separation from service, is a “key employee” of the Company or any Affiliate, any stock of which is actively traded on an established securities market or otherwise.  A Participant is a key employee if he or she meets the requirements of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code, (applied in accordance with applicable regulations thereunder and without regard to Section 416(i)(5)) at any time during the 12-month period ending on the Specified Employee Identification Date. Such Participant shall be treated as a key employee for the entire 12-month period beginning on the Specified Employee Effective Date.

For purposes of determining whether a Participant is a Specified Employee, the compensation of the Participant shall be determined in accordance with the definition of compensation provided under Treas. Reg. Section 1.415(c)-2(d)(3) (wages within the meaning of Section 3401(a) of the Code for purposes of income tax withholding at the source, plus amounts excludible from gross income under Section 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k) or 457(b), without regard to rules that limit the remuneration included in wages based on the nature or location of the employment or the services performed); provided, however, that, with respect to a nonresident alien who is not a Participant in the Plan, compensation shall not include compensation that is not includible in the gross income of such person under Sections 872, 893, 894, 911, 931 and 933, provided such compensation is not effectively connected with the conduct of a trade or business within the United States.

Notwithstanding anything in this paragraph to the contrary, (i) if a different definition of compensation has been designated by the Company with respect to another nonqualified deferred compensation plan in which a key employee participates, the definition of compensation shall be the definition provided in Treas. Reg. Section 1.409A-1(i)(2), and (ii) the Company may through action that is legally binding with respect to all nonqualified deferred compensation plans maintained by the Company, elect to use a different definition of compensation.

In the event of corporate transactions described in Treas. Reg. Section 1.409A-1(i)(6), the identification of Specified Employees shall be determined in accordance with the default rules described therein, unless the Company elects to utilize the available alternative methodology through designations made within the timeframes specified therein.

“Specified Employee Identification Date” means September 30, unless the Company has elected a different date through action that is legally binding with respect to all nonqualified deferred compensation plans maintained by the Company.

“Specified Employee Effective Date” means the first day of the fourth month following the Specified Employee Identification Date, or such earlier date as is selected by the Committee.

2.           The Plan is hereby amended to add a new Section 13 and to renumber all subsequent sections and references to such sections accordingly.  The new Section 13 shall read as follows:

SECTION 13 – Compliance with Section 409A of the Code.

(A)           The foregoing definitions of “Change in Control” and “Qualifying Termination” shall not be changed or modified by this Section 13 to the extent that such definitions apply to an Exempt Award, and such definitions shall not be changed or modified by this Section 13 to the extent relevant to vesting of a Deferred Compensation Award, rather than payment of a Deferred Compensation Award, and compliance with Section 409A of such definitions is not otherwise required.  In all other cases, “Change in Control” shall have the meaning set forth in Section 13(B), and a Qualifying Termination shall not constitute a Qualifying Termination unless such event also constitutes a separation from service as provided in Section 13(C).

(B)           “Change in Control” means the occurrence with respect to the Company of any of the following events:  (i) a change in the ownership of the Company; (ii) a change in the effective control of the Company; (iii) a change in the ownership of a substantial portion of the assets of the Company.

For purposes of this Section, a change in the ownership of the Company occurs on the date on which any one person, or more than one person acting as a group, acquires ownership of stock of the Company that, together with stock held by such person or group constitutes more than 50% of the total fair market value or total voting power of the stock of the Company. A change in the effective control of the Company occurs on the date on which either (i) a person, or more than one person acting as a group, acquires ownership of stock of the Company possessing 30% or more of the total voting power of the stock of the Company, taking into account all such stock acquired during the 12-month period ending on the date of the most recent acquisition, or (ii) a majority of the members of the Company’s Board of Directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of such Board of Directors prior to the date of the appointment or election. A change in the ownership of a substantial portion of assets occurs on the date on which any one person, or more than one person acting as a group, other than a person or group of persons that is related to the Company, acquires assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions, taking into account all such assets acquired during the 12-month period ending on the date of the most recent acquisition.

2

An event constitutes a Change in Control with respect to a Participant only if the Participant performs services for the Company, or the Participant’s relationship to the Company otherwise satisfies the requirements of Treasury Regulation Section 1.409A-3(i)(5)(ii).

The determination as to the occurrence of a Change in Control shall be based on objective facts and in accordance with the requirements of Section 409A of the Code.

(C)           Whether a separation from service has occurred shall be determined in accordance with Section 409A of the Code, and the following rules shall apply:

(i)           Except in the case of a Participant on a bona fide leave of absence as provided below, a Participant is deemed to have incurred a separation from service if the Company and the Participant reasonably anticipate that the level of services to be performed by the Participant after a date certain would be reduced to twenty percent (20%) or less of the average services rendered by the Participant during the immediately preceding thirty-six (36) month period disregarding periods during which the Participant was on a bona fide leave of absence.

(ii)           A Participant who is absent from work due to military leave, sick leave or other bona fide leave of absence shall incur a separation from service on the first day immediately following the later of (a) the six-month anniversary of the commencement of the leave or (b) the expiration of the Participant’s right, if any, to reemployment or to return to work under statute or contract.

(iii)           For purposes of determine whether a separation from service has occurred, the Company and its affiliates shall be treated as a single employer.  For this purpose, an affiliate means a corporation, trade or business that, together with the Company, is treated as a single employer under Section 414(b) or (c) of the Code, except that for the foregoing purposes, common ownership of at least fifty percent (50%) shall be determinative.

3

(iv)           The Committee specifically reserves the right to determine whether a sale or other disposition of substantial assets to an unrelated party constitutes a separation from service with respect to a Participant providing services to the seller immediately prior to the transaction and providing services to the buyer after the transaction.  Such determination shall be made in accordance with the requirements of Section 409A of the Code.

(D)           Notwithstanding any provision of the Plan to the contrary, with respect to a Deferred Compensation Award to a Participant who is a Specified Employee as of the date such Participant incurs a separation from service (as provided in Section 13(C)), payment shall be made no earlier than the first day of the seventh month following the month in which such separation from service occurs.  On such date, the Participant shall receive all payments that would have been made on or before such date but for the provisions of this section, and the terms of this section shall not affect the timing or amount of any payment to be made after such date under other provisions of the Plan, this Amendment or the Award.

3.           The Plan is hereby amended to add a new Section 15(R) to read as follows:

Notwithstanding any provision of the Plan to the contrary, specifically including, but not limited to, Section 3(A)(v), (vii), (ix) and (x) and Section 14, with respect to any Deferred Compensation Award:

(a)  Neither the Company nor the Committee may accelerate the time or form of payment of any benefit due to the Participant hereunder unless such acceleration is permitted under Treas. Reg. §1.409A-3(j)(4); and

(b)  Neither the Company nor the Committee may delay the time for payment of any benefit due to the Participant hereunder except to the extent permitted under Treas. Reg. §1.409A-2(b)(7).

4.           The Plan is hereby amended to add a new Section 15(S) to read as follows:

4

All references herein to Treasury Regulation §1.409A-1(b)(4) shall be to such regulation as amended from time to time or to any successor provision.  The foregoing provisions of this Plan as amended are intended to cause the Plan to conform with the requirements of a plan providing only for short-term deferrals as provided in Treasury Regulation §1.409A-1(b)(4), and the provisions of this Plan as amended shall be construed in accordance with that intention.  If any provision of this Plan shall be inconsistent or in conflict with any applicable requirements for a short-term deferral plan, then such requirement shall be deemed to override and supersede the inconsistent or conflicting provision.  Any required provision of a short-term deferral plan that is omitted from this Plan shall be incorporated herein by reference and shall apply retroactively, if necessary, and be deemed to be a part of this Plan to the same extent as though expressly set forth herein.  The Company will bear no responsibility for any determination by any other person or persons that the terms, arrangements or administration of the Plan has given rise to any tax liability under Section 409A of the Code.

5.           This Amendment shall take effect on October 16, 2007, and apply to all Awards made thereafter.

5

EX-10

Exhibit 10.6(a2)

AMENDMENT TO FIRST HORIZON NATIONAL CORPORATION

2002 MANAGEMENT INCENTIVE PLAN

(AS AMENDED AND RESTATED APRIL 19, 2005)

The 2002 Management Incentive Plan of First Horizon National Corporation (as amended and restated April 19, 2005) is hereby amended as follows:

1.           Section 5.2 is hereby amended to delete such section in its entirety and to substitute in lieu thereof the following:

The Committee shall establish in writing the Performance Goals for the selected Performance Measures applicable to a Performance Period, including the Threshold Performance and Superior Performance, within 90 days of the commencement of the Performance Period and an Award for that Performance Period shall be earned, paid, vested or otherwise deliverable upon the completion of the Performance Period only if such Performance Goals are attained and the applicable employment requirement in Section 6.2(c) is satisfied.

2.           The first sentence of Section 6.2 is hereby amended to delete such first sentence in its entirety and to substitute in lieu thereof the following:

The Committee shall have the sole and absolute authority and discretion to determine the time and manner in which Awards, if any, shall be paid under this Plan; provided, however, such discretion may not be exercisable in any manner which would cause the payment of an Award not to satisfy the requirements for a short-term deferral under Treasury Regulation §1.409A-1(b)(4).

3.           Section 6.2(b) is hereby amended to delete such section in its entirety and to substitute in lieu thereof the following:

Date of Payment:  Payment of Awards shall be made as soon as practicable (as determined by the Committee) following the close of the Performance Period (the “Payment Date”), but except as expressly provided herein, payment of Awards shall be made on or before the 15^th day of the 3^rd month following the end of the fiscal year of the Company that coincides with the end of the Performance Period.  Notwithstanding the foregoing:

(i) To the extent permissible under Treasury Regulation §1.409A-1(b)(4)(ii), the Payment Date may be delayed within the discretion of the Committee on the following grounds:

(A)  It is administratively impracticable to make the payment by the regular Payment Date due to unforeseeable reasons;

(B)  The payment would jeopardize the Company’s ability to continue as a going concern;

(C)  The payment is reasonably anticipated not to be deductible under Section 162(m) of the Code due to circumstances that a reasonable person would not have anticipated; or

(D)  Such other grounds as may be from time to time permissible under the foregoing regulation;

Provided, however, any delayed payment shall be made within the period required under the foregoing regulation.

(ii) Section 6.2(c)(iii) shall control the date or dates of the Payment of Awards to the extent applicable.

4.           Section 6.2(c)(iii) is hereby amended to add the following sentence at the end thereof:

Notwithstanding the foregoing, no payment of an Award shall be made later than the date required under Section 6.2(b).

5.           The second sentence of Section 8.1 is hereby amended to delete such second sentence in its entirety and to substitute in lieu thereof the following:

In the event of such termination, in whole or in part, of the Plan, the Committee may in its sole discretion direct the payment to Participants of any amount specified in Article VI and theretofore not paid out, prior to the Payment Date, and in a lump sum on installments as the Committee shall prescribe with respect to each such Participant; provided, however, such payments shall in all events be made within the period permissible for short-term deferrals under Treasury Regulation §1.409A-1(b)(4).

6.           The Plan is hereby amended to add a new Section 9.8 to read as follows:

All references herein to Treasury Regulation §1.409A-1(b)(4) shall be to such regulation as amended from time to time or to any successor provision.  The foregoing provisions of this Plan as amended are intended to cause the Plan to conform with the requirements of a plan providing only for short-term deferrals as provided in Treasury Regulation §1.409A-1(b)(4), and the provisions of this Plan as amended shall be construed in accordance with that intention.  If any provision of this Plan shall be inconsistent or in conflict with any applicable requirements for a short-term deferral plan, then such requirement shall be deemed to override and supersede the inconsistent or conflicting provision.  Any required provision of a short-term deferral plan that is omitted from this Plan shall be incorporated herein by reference and shall apply retroactively, if necessary, and be deemed to be a part of this Plan to the same extent as though expressly set forth herein.  The Company will bear no responsibility for any determination by any other person or persons that the terms, arrangements or administration of the Plan has given rise to any tax liability under Section 409A of the Code.

2

7.           This Amendment shall take effect as of October 16, 2007 and shall apply to all Awards that have not yet been paid under the Plan.

3

EX-10

Exhibit 10.6(c2)

AMENDMENT TO

CAPITAL MARKETS INCENTIVE COMPENSATION PLAN

The Capital Markets Incentive Compensation Plan (the “Plan”) is hereby amended as follows:

1.           A new Section IV is hereby added to the Plan and shall read as follows:

After calculation of the amount of each bonus pool and the determination of the amount to be awarded to each participant therein, payment of bonuses under the Plan will be made as soon as practicable, but except as expressly provided herein, payment of all bonuses shall be made on or before the 15^th day of the 3^rd month following the end of the applicable fiscal year of the First Tennessee Bank National Association (the “Company”).  Notwithstanding the foregoing, to the extent permissible under Treasury Regulation §1.409A-1(b)(4)(ii), the payment may be delayed within the discretion of the Company on the following grounds:

A.  It is administratively impracticable to make the payment by the regular payment date due to unforeseeable reasons;

B.  The payment would jeopardize the Company’s ability to continue as a going concern;

C.  The payment is reasonably anticipated not to be deductible under Section 162(m) of the Internal Revenue Code due to circumstances that a reasonable person would not have anticipated; or

D.  Such other grounds as may be from time to time permissible under the foregoing regulation;

Provided, however, any delayed payment shall be made within the period required under the foregoing regulation.

2.           All references herein to Treasury Regulation §1.409A-1(b)(4) shall be to such regulation as amended from time to time or to any successor provision.  The foregoing provisions of this Amendment are intended to cause the Plan to conform with the requirements of a plan providing only for short-term deferrals as provided in Treasury Regulation §1.409A-1(b)(4), and the provisions of this Amendment shall be construed in accordance with that intention.  If any provision of this Amendment shall be inconsistent or in conflict with any applicable requirements for a short-term deferral plan, then such requirement shall be deemed to override and supersede the inconsistent or conflicting provision, and any required provision of a short-term deferral plan that is omitted from this Amendment shall be incorporated herein by reference and shall apply retroactively, if necessary, and be deemed to be a part of this Amendment to the same extent as though expressly set forth herein.  The Company will bear no responsibility for any determination by any other person or persons that the terms, arrangements or administration of the Plan has given rise to any tax liability under Section 409A of the Internal Revenue Code.

3.           This Amendment shall take effect as of January 1, 2008 and shall apply to all bonuses that have not yet been paid under the Plan.

EX-10

Exhibit 10.7(a3)

_____________________________

[Description:  Form of Amendment to pre-2007 form of change-in-control severance agreement between the registrant and its executive officers. This is an amendment to exhibit 10.7(a1) to the registrant’s annual report on Form 10-K for the year ended December 31, 2006.]

_______________________________

AMENDMENT TO CHANGE IN CONTROL AGREEMENT

WHEREAS, the parties entered into a letter change in control agreement between First Horizon National Corporation (the “Corporation”) and _______ (“you”), dated ____ __, 200_ (the “Agreement”);

WHEREAS the parties desire to amend the Agreement in order to comply with Section 409A of the Internal Revenue Code, as amended (the “Code”) as set forth herein.

NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and agreements contained in the Agreement, as amended, and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1.              Section 4(iv) of the Agreement is hereby deleted and replaced with the following:

“Good Reason.  Termination of your employment by you for "Good Reason" shall mean termination based upon the occurrence after a change in control of the Company of any of the following events, without your written consent specifically acknowledging that any such event shall not give rise to Good Reason under this Agreement:

(A)  a material adverse change in your authority, duties or responsibilities with the Company as in effect immediately prior to the change in control, including, without limitation, the assignment to you of any duties or responsibilities which are inconsistent with such status, title(s), or position(s) as in effect immediately prior to the change in control, or any removal of you from, or any failure to reappoint or reelect you to, such position(s) (except in connection with the termination of your employment for Cause, Disability or Retirement or as a result of your death or by you other than for Good Reason);

(B)  a material reduction by the Company in your aggregate base salary or annual target bonus opportunity (including any material adverse change in the formula for such annual bonus target) as in effect immediately prior to the change in control or as the same may be increased from time to time thereafter;

(C)  the failure by the Company to provide you with Plans that provide you with equivalent benefits in the aggregate to the Plans as in effect immediately prior to the change in control (at substantially equivalent cost with respect to welfare benefit plans), in each case which would materially adversely affect you;

(D)  the Company's requiring you to be based at an office that is greater than 25 miles from where your office is located immediately prior to the change in control;

(E)  the failure by the Company to obtain from any Successor (as hereinafter defined) the assent to this Agreement contemplated by Section 6 hereof; or

(F)  any purported termination by the Company of your employment which is not effected pursuant to a Notice of Termination satisfying the requirements of paragraph (v) below (and, if applicable, paragraph (iii) above); and for purposes of this Agreement, no such purported termination shall be effective.

An isolated and inadvertent action taken in good faith and which is remedied by the Company within thirty (30) days after receipt of written notice thereof given by you describing in reasonable detail the Good Reason event that has occurred (which notice in any event must be provided within ninety (90) days of you obtaining knowledge of such event) shall not constitute Good Reason.  For purposes of this Agreement, "Plan" shall mean any compensation plan such as an incentive, stock option, restricted stock, pension restoration or deferred compensation plan or any employee benefit plan such as a thrift, pension, profit sharing, medical, disability, accident, life insurance plan or a relocation plan or policy or any other plan, program or policy of the Company intended to benefit employees, including, without limitation, any Plans established after the date hereof.”

2.              Section 5(iv) of this Agreement is hereby amended by replacing the word “fifth” in the fourth line of Section 5(iv) with the word “sixtieth”.

3.              Section 5(v) of this Agreement is hereby amended by: (i) replacing the words “three (3) years” in the fifth line of Section 5(v) with the words “eighteen (18) months”, (ii) replacing the words “thirty-six (36) months” on the sixteenth line with the words “eighteen (18) months”, (iii) deleting the two sentences starting with the words “In the event” on the twenty first line until “Plans” on the second last line of Section 5(v) and (iv) adding the following sentence as the second-last sentence of Section 5(v): “Notwithstanding anything to the contrary in this paragraph (v), the term of the preceding benefits provided pursuant to this paragraph 5(v) will be reduced to the extent required to comply with Section 409A of the Code (“Section 409A”).”

4.              Section 5(vii) of this Agreement is hereby amended by adding the following words at the end of Section 5(vii): “for the period through the last day of the second calendar year following the calendar year during which your termination of employment occurred”.

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5.              Section 5(viii) is hereby amended by: (i) adding the words “(within thirty days from such determination)” after the word “you” on the tenth line of Section 5(viii); and (ii) adding the words “(but in any event no later than by the end of your taxable year next following your taxable year in which the Underpayment of Excise Tax is remitted)” after the word “benefit” on the ninth line of the first full paragraph on Page 11.

6.              Section 5(ix) of this Agreement is hereby amended by: (i) adding the words “if you are a specified employee ((within the meaning of Section 409A) and as determined pursuant to procedures established by the Company)” after the word “disability” on the sixth line, and (ii) adding the words “if you are a specified employee” at the end of the first paragraph of Section 5(ix).

7.              Section 7(i) of this Agreement is hereby amended by adding the following sentences at the end of Section 7(i): “The amount of reimbursement for fees and expenses for which you may be reimbursed during a calendar year shall not affect the amount of fees and expenses for which you are eligible for reimbursement in any other calendar year.  Your right to reimbursement for fees and expenses is not subject to liquidation or exchange for another benefit.”

8.              The Agreement, as amended by this Amendment, contains the entire agreement between the parties hereto and there are no agreements, warranties or representations which are not set forth therein or herein.  This Amendment may not be modified or amended except by an instrument in writing duly signed by or on behalf of the parties hereto.

9.              This Amendment shall be governed by and construed and enforced in accordance with the laws of the State of Tennessee.

10.              This Amendment may be executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

*           *           *           *           *

IN WITNESS WHEREOF, the parties have executed this Amendment, in duplicate, as of ______________, 2007.

____________________________

____________________________

First Horizon National Corporation

Name: _______________________

Title: ________________________

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EX-10

Exhibit 10.7(a4)

_____________________________

[Description:  Form of Amendment to 2007 form of change-in-control severance agreement between the registrant and its executive officers. This is an amendment to exhibit 10.7(a2) to the registrant’s annual report on Form 10-K for the year ended December 31, 2006.]

_______________________________

AMENDMENT TO CHANGE IN CONTROL AGREEMENT

WHEREAS, the parties entered into a letter change in control agreement between First Horizon National Corporation (the “Corporation”) and _______ (“you”), dated ____ __, 200_ (the “Agreement”);

WHEREAS the parties desire to amend the Agreement in order to comply with Section 409A of the Internal Revenue Code, as amended (the “Code”) as set forth herein.

NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and agreements contained in the Agreement, as amended, and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1.              Section 4(iv) of the Agreement is hereby deleted and replaced with the following:

“Good Reason.  Termination of your employment by you for "Good Reason" shall mean termination based upon the occurrence after a change in control of the Company of any of the following events, without your written consent specifically acknowledging that any such event shall not give rise to Good Reason under this Agreement:

(A)  a material adverse change in your authority, duties or responsibilities with the Company as in effect immediately prior to the change in control, including, without limitation, the assignment to you of any duties or responsibilities which are inconsistent with such status, title(s), or position(s) as in effect immediately prior to the change in control, or any removal of you from, or any failure to reappoint or reelect you to, such position(s) (except in connection with the termination of your employment for Cause, Disability or Retirement or as a result of your death or by you other than for Good Reason);

(B)  a material reduction by the Company in your aggregate base salary or annual target bonus opportunity (including any material adverse change in the formula for such annual bonus target) as in effect immediately prior to the change in control or as the same may be increased from time to time thereafter;

(C)  the failure by the Company to provide you with Plans that provide you with equivalent benefits in the aggregate to the Plans as in effect immediately prior to the change in control (at substantially equivalent cost with respect to welfare benefit plans), in each case which would materially adversely affect you;

(D)  the Company's requiring you to be based at an office that is greater than 25 miles from where your office is located immediately prior to the change in control;

(E)  the failure by the Company to obtain from any Successor (as hereinafter defined) the assent to this Agreement contemplated by Section 7 hereof; or

(F)  any purported termination by the Company of your employment which is not effected pursuant to a Notice of Termination satisfying the requirements of paragraph (v) below (and, if applicable, paragraph (iii) above); and for purposes of this Agreement, no such purported termination shall be effective.

An isolated and inadvertent action taken in good faith and which is remedied by the Company within thirty (30) days after receipt of written notice thereof given by you describing in reasonable detail the Good Reason event that has occurred (which notice in any event must be provided within ninety (90) days of you obtaining knowledge of such event) shall not constitute Good Reason.  For purposes of this Agreement, "Plan" shall mean any compensation plan such as an incentive, stock option, restricted stock, pension restoration or deferred compensation plan or any employee benefit plan such as a thrift, pension, profit sharing, medical, disability, accident, life insurance plan or a relocation plan or policy or any other plan, program or policy of the Company intended to benefit employees, including, without limitation, any Plans established after the date hereof.”

2.              Section 5(iv) of this Agreement is hereby amended by replacing the word “fifth” in the fourth line of Section 5(iv) with the word “sixtieth”.

3.              Section 5(v) of this Agreement is hereby amended by: (i) replacing the words “three (3) years” in the fifth line of Section 5(v) with the words “eighteen (18) months”, (ii) replacing the words “thirty-six (36) months” on the sixteenth line with the words “eighteen (18) months” and (iii) deleting the three sentences starting with the words “In the event” on the twenty first line until “Section 409A” on the third last line of Section 5(v).

4.              Section 5(viii) of this Agreement is hereby amended by adding the following words at the end of Section 5(viii): “for the period through the last day of the second calendar year following the calendar year during which your termination of employment occurred”.

5.              Section 5(ix) is hereby amended by: (i) adding the words “(within thirty days from such determination)” after the word “you” on the tenth line of Section 5(ix); and (ii) adding the words “(but in any event no later than by the end of your taxable year next following your taxable year in which the Underpayment of Excise Tax is remitted)” after the word “benefit” on the ninth line of Page 12.

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6.              Section 5(x) of this Agreement is hereby amended by: (i) adding the words “if you are a specified employee ((within the meaning of Section 409A of the Code (“Section 409A”) and as determined pursuant to procedures established by the Company))” after the word “disability” on the sixth line, and (ii) adding the words “if you are a specified employee” at the end of the first paragraph of Section 5(x).

7.              Section 8(i) of this Agreement is hereby amended by adding the following sentences at the end of Section 8(i): “The amount of reimbursement for fees and expenses for which you may be reimbursed during a calendar year shall not affect the amount of fees and expenses for which you are eligible for reimbursement in any other calendar year.  Your right to reimbursement for fees and expenses is not subject to liquidation or exchange for another benefit.”

8.              The Agreement, as amended by this Amendment, contains the entire agreement between the parties hereto and there are no agreements, warranties or representations which are not set forth therein or herein.  This Amendment may not be modified or amended except by an instrument in writing duly signed by or on behalf of the parties hereto.

9.              This Amendment shall be governed by and construed and enforced in accordance with the laws of the State of Tennessee.

10.              This Amendment may be executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

*           *           *           *           *

IN WITNESS WHEREOF, the parties have executed this Amendment, in duplicate, as of ______________, 2007.

____________________________

____________________________

First Horizon National Corporation

Name: _______________________

Title: ________________________

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EX-10

Exhibit 10.7(a5)

[October 16, 2007 Form of Change in Control

Severance Agreement Offered to Executive Officers]

_______________________________

«Date»

«Name»

«Company_Business_Line»

«Address»

Dear «Name»:

First Horizon National Corporation, a Tennessee corporation (including any successor thereto, the "Company"), considers the establishment and maintenance of a sound and vital management to be essential to protecting and enhancing the best interests of the Company and its shareholders.  In this connection, the Company recognizes that, as is the case with many publicly held corporations, the possibility of a change in control may arise and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its shareholders.  Accordingly, the Board of Directors of the Company (the "Board") has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company's management to their assigned duties without distraction in circumstances arising from the possibility of a change in control of the Company.  In particular, the Board believes it important, should the Company or its shareholders receive a proposal for transfer of control of the Company, that you be able, if requested, to assess and advise the Board whether such proposal would be in the best interests of the Company and its shareholders and to take such other action regarding such proposal as the Board might determine to be appropriate, without being influenced by the uncertainties of your own situation.

In order to induce you to remain in the employ of the Company, this letter agreement, which has been approved by the Board, sets forth certain benefits which the Company agrees will be provided to you in the event of a "change in control" of the Company under the circumstances described below.

1.  Agreement to Provide Services; Right to Terminate.

(i)  Except as otherwise provided in paragraph (ii) below, the Company or you may terminate your employment at any time, subject to the Company's providing the benefits hereinafter specified in accordance with the terms hereof.

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(ii)  In the event a tender offer or exchange offer is made by a Person (as hereinafter defined) for more than 20 percent (20%) of the combined voting power of the Company's outstanding securities ordinarily having the right to vote at elections of directors, including shares of the common capital stock of First Horizon National Corporation, par value $0.625 per share (the "Company Voting Securities"), you agree that you will not leave the employ of the Company (other than as a result of Disability, Retirement, or upon an event which would constitute Good Reason if such event occurred after a change in control of the Company, as such terms are hereinafter defined) and will render the services contemplated in the recitals to this Agreement until such tender offer or exchange offer has been abandoned or terminated or a change in control of the Company, as defined in Section 3 hereof, has occurred; provided, however, that such obligation shall not extend for a period exceeding one hundred and eighty (180) days from the initial event resulting in the obligation under this paragraph (ii). For purposes of this Agreement, the term "Person" shall mean and include any individual, corporation, partnership, group, association or other "person", as such term is defined in 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, other than the Company, an entity in which the Company directly or indirectly beneficially owns more than 50% of the voting securities or interests (a "Subsidiary"), or any employee stock ownership or other employee benefit plan or trust sponsored by the Company or a Subsidiary.

2.  Term of Agreement.  This Agreement shall commence on the date hereof and shall continue in effect until you or the Company shall have given three (3) years prior written notice of termination of this Agreement; provided, that, notwithstanding the delivery of any such notice, this Agreement shall continue in effect for a period of thirty-six (36) months after a change in control of the Company, as defined in Section 3 hereof, if such change in control shall have occurred during the term of this Agreement.  Notwithstanding anything in this Section 2 to the contrary, this Agreement shall terminate if you or the Company terminate your employment prior to a change in control of the Company, unless you reasonably demonstrate that such termination of employment was at the request of a third party who has taken steps reasonably calculated to effect a change in control or otherwise arose in connection with or in anticipation of a change in control, in which case your employment shall for all purposes of this Agreement be deemed to have been terminated by you for Good Reason immediately following a change in control of the Company.

3.  Change in Control.  For purposes of this Agreement, 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;

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(ii)  any Person 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 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 any underwriter temporarily holding securities pursuant to an offering of such securities, or (B) pursuant to a Non-Qualifying Transaction (as defined in paragraph (iii));

(iii)  the consummation of 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 stockholders, whether for such transaction or the issuance of securities in the transaction (a "Business Combination"), unless immediately following such Business Combination:  (A) more than 60% 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 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 two-thirds (2/3) 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 stockholders 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.

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.

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4.  Termination Following Change in Control.  If any of the events described in Section 3 hereof constituting a change in control of the Company shall have occurred, you shall be entitled to the benefits provided in Section 5 upon your termination of employment within thirty-six (36) months following such change in control; provided, however, that you shall be entitled to the benefits provided in Section 5(ix) whether or not your employment has been terminated.  For purposes of this Agreement, "Disability," "Retirement," "Cause" and "Good Reason" have the meanings set forth below in this Section 4.

(i)  Disability.  Termination by the Company of your employment based on "Disability" shall mean termination because of your "disability" under the Company's Long Term Disability Plan, or any successor or substitute plan or plans of the Company, in effect immediately prior to the change in control of the Company.

(ii)  Retirement.  Termination by you or by the Company of your employment based on "Retirement" shall mean termination as a result of your mandatory retirement in accordance with the Company's retirement policy generally applicable to similarly situated officers, as in effect immediately prior to the change in control of the Company, or in accordance with any retirement arrangement established with your written consent.

(iii)  Cause.  Termination by the Company of your employment for "Cause" shall mean termination upon (a) the willful and continued failure by you to perform substantially your duties with the Company (other than any such failure resulting from your incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to you by the Chairman of the Board, Chief Executive Officer or President of the Company which specifically identifies the manner in which such person believes that you have not substantially performed your duties or have failed to follow the policies and procedures of the Company, which failure to perform causes material and demonstrable economic harm to the Company or its Affiliates, (b) the willful engaging by you in illegal conduct which is materially and demonstrably injurious to the Company, (c) the conviction of, or a plea of guilty or nolocontendere to, a felony, (d) the failure by you to cooperate with all government authorities on matters pertaining to any investigation, litigation or administrative proceeding concerning the Company, (e) the willful and material breach by you of Section 6 of this Agreement or the Company’s written code of business conduct and ethics (however, to the extent the breach is curable, the Company must give you notice and a reasonable opportunity to cure), (f) your becoming subject to the prohibitions of Section 19(a)(1) of the Federal Deposit Insurance Act or Section 21C(f) of the Exchange Act or (g) the failure by you to comply with the terms of this Agreement, including but not limited to Section 6.  For purposes of this paragraph (iii), no act, or failure to act, on your part shall be considered "willful" unless done, or omitted to be done, by you in bad faith and without reasonable belief that your action or omission was in, or not opposed to, the best interests of the Company or its Affiliates.  Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company or upon the instructions of the Chief Executive Officer or other senior executive officer of the Company shall be conclusively presumed to be done, or omitted to be done, by you in good faith and in the best interests of the Company and its Affiliates.  For purposes of this Agreement, "Affiliate" means any person directly or indirectly controlling, controlled by, or under common control with the Company.  It is also expressly understood that your attention to matters or your engagement in activities not directly related to

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the business of the Company shall not provide a basis for termination for Cause so long as the Board has approved your engagement in such activities prior to or following a change in control.  Notwithstanding the foregoing, in the case of clause (a), (b), (d), (e) or (g) of this paragraph (iii), you shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to you a copy of a resolution duly adopted by the affirmative vote of not less than three-fourths (3/4) of the entire membership of the Board (excluding you if you are a Board member) at a meeting of the Board called and held for such purpose (after reasonable notice to you and an opportunity for you, together with your counsel, to be heard before the Board), finding that in the good faith opinion of the Board you were guilty of the conduct set forth above in such clause of this paragraph (iii) and specifying the particulars thereof in detail.  The Company must notify you of any event constituting Cause within ninety (90) days following the Company's knowledge of its existence or such event shall not constitute Cause under this Agreement.  The Company may place you on paid leave for up to 30 consecutive days while it is determining whether there is a basis to terminate your employment for Cause.  This leave will not constitute Good Reason.

(iv)  Good Reason.  Termination of your employment by you for "Good Reason" shall mean termination based upon the occurrence after a change in control of the Company of any of the following events, without your written consent specifically acknowledging that any such event shall not give rise to Good Reason under this Agreement:

(A)  a material adverse change in your authority, duties or responsibilities with the Company as in effect immediately prior to the change in control, including, without limitation, the assignment to you of any duties or responsibilities which are inconsistent with such status, title(s), or position(s) as in effect immediately prior to the change in control, or any removal of you from, or any failure to reappoint or reelect you to, such position(s) (except in connection with the termination of your employment for Cause, Disability or Retirement or as a result of your death or by you other than for Good Reason);

(B)  a material reduction by the Company in your aggregate base salary or annual target bonus opportunity (including any material adverse change in the formula for such annual bonus target) as in effect immediately prior to the change in control or as the same may be increased from time to time thereafter;

(C)  the failure by the Company to provide you with Plans that provide you with equivalent benefits in the aggregate to the Plans as in effect immediately prior to the change in control (at substantially equivalent cost with respect to welfare benefit plans), in each case which would materially adversely affect you;

(D)  the Company's requiring you to be based at an office that is greater than 25 miles from where your office is located immediately prior to the change in control;

(E)  the failure by the Company to obtain from any Successor (as hereinafter defined) the assent to this Agreement contemplated by Section 7 hereof; or

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(F)  any purported termination by the Company of your employment which is not effected pursuant to a Notice of Termination satisfying the requirements of paragraph (v) below (and, if applicable, paragraph (iii) above); and for purposes of this Agreement, no such purported termination shall be effective.

An isolated and inadvertent action taken in good faith and which is remedied by the Company within thirty (30) days after receipt of written notice thereof given by you describing in reasonable detail the Good Reason event that has occurred (which notice in any event must be provided within ninety (90) days of you obtaining knowledge of such event) shall not constitute Good Reason.  For purposes of this Agreement, "Plan" shall mean any compensation plan such as an incentive, stock option, restricted stock, pension restoration or deferred compensation plan or any employee benefit plan such as a thrift, pension, profit sharing, medical, disability, accident, life insurance plan or a relocation plan or policy or any other plan, program or policy of the Company intended to benefit employees, including, without limitation, any Plans established after the date hereof.

(v)  Notice of Termination.  Any purported termination by the Company or by you following a change in control shall be communicated by written Notice of Termination to the other party hereto.  For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon.

(vi)  Date of Termination.  "Date of Termination" means (A) the effective date on which your employment by the Company terminates as specified in a prior written notice by the Company or you, as the case may be, to the other, delivered pursuant to Section 11 or (B) if your employment by the Company terminates by reason of death, the date of your death.  In the case of termination by the Company of your employment for Cause, if you have not previously expressly agreed in writing to the termination, then within thirty (30) days after receipt by you of the Notice of Termination with respect thereto, you may notify the Company that a dispute exists concerning the termination, in which event the Date of Termination shall be the date set by mutual written agreement of the parties.  During the pendency of any such dispute, the Company will continue to pay you your full compensation in effect just prior to the time the Notice of Termination is given and until the dispute is resolved.

5.   Compensation Upon Termination or During Disability; Other Agreements.

(i)  In the event that during the thirty-six (36) month period following a change in control of the Company you fail to perform your duties as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate then in effect and any benefits or awards under any Plans shall continue to accrue during such period, to the extent not inconsistent with such Plans, until your employment is terminated pursuant to and in accordance with paragraphs 4(i) and 4(vi) hereof.  Thereafter, if your employment is terminated for Disability within thirty-six (36) months after a change in control of the Company, your benefits shall be determined in accordance with the Plans, and you shall receive benefits under the Company's disability policies at the greater of the rate immediately prior to the change in control or your Date of Termination.

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(ii)  If, within thirty-six (36) months after a change in control of the Company, your employment by the Company shall be terminated by the Company for Cause or by you (other than for Good Reason or Retirement), the Company shall pay you your base salary (subject to any deferral elections) through the Date of Termination at the rate in effect just prior to the time a Notice of Termination is given plus any bonus amounts which have become earned or payable, but which have not yet been paid to you.  Thereupon the Company shall have no further obligations to you under this Agreement.  Following your termination of employment, your accrued benefits under the Company's Plans shall be paid pursuant to the terms of such Plans.

(iii)  If, within thirty-six (36) months after a change in control of the Company, your employment by the Company shall be terminated on account of Disability, death or Retirement, the Company shall pay you your base salary (subject to any deferral elections) through the Date of Termination at the rate in effect just prior to the time a Notice of Termination is given plus any bonus amounts which have become earned or payable, but which have not yet been paid to you, and a portion of your annual bonus for the fiscal year in which your Date of Termination occurs in an amount at least equal to (A) the product of (1) your bonus amount (as defined below), and (2) a fraction, the numerator of which is the number of days in the fiscal year in which the Date of Termination occurs through the Date of Termination, and the denominator of which is three hundred sixty-five (365), reduced by (B) any amounts paid from the Company's annual incentive plan for the fiscal year in which your Date of Termination occurs.  Thereupon, the Company shall have no further obligations to you under this Agreement.  Following your termination of employment, your accrued benefits under the Company's Plans shall be paid pursuant to the terms of such Plans; provided, however, that in the event of termination of employment on account of your death within thirty-six (36) months after a change in control of the Company, life insurance benefits paid pursuant to the Company's welfare benefit plans shall be based on the terms of such plans in effect on the date of death, or if more favorable to you, the terms of such plans in effect immediately prior to the change in control.

 (iv)  If, within thirty-six (36) months after a change in control of the Company, your employment by the Company shall be terminated (a) by the Company other than for Cause, Disability or Retirement or (b) by you for Good Reason, then the Company shall pay to you, no later than the sixtieth day following the Date of Termination, without regard to any contrary provisions of any Plan, a lump sum cash amount equal to the sum of the following amounts:

(A)  your base salary (subject to any deferral elections) through the Date of Termination at the rate in effect just prior to the time a Notice of Termination is given (not taking into account any reductions constituting Good Reason) plus any bonus amounts which have become earned or payable, but which have not yet been paid to you, plus the value of your accrued but unused vacation days;

(B)  a portion of your annual bonus for the fiscal year in which your Date of Termination occurs in an amount at least equal to (1) the product of (x) your bonus amount (as defined below), and (y) a fraction, the numerator of which is the number of days in the fiscal year in which the Date of Termination occurs through the Date of Termination, and the denominator of which is three hundred sixty-five (365), reduced by (2) any amounts paid from the Company's annual incentive plan for the fiscal year in which your Date of Termination occurs; and

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(C)  an amount equal to three (3) times the sum of (1) your highest annual rate of base salary from the Company (or if applicable any Subsidiary or Parent (as defined in Section 16)) during the 12-month period immediately prior to your Date of Termination, and (2) your bonus amount.

For purposes of this Agreement, the term "base salary" shall include any amounts deducted with respect to you or for your account pursuant to Sections 125 and 401(k) of the Internal Revenue Code of 1986, as amended, (the "Code") or any other deferred compensation plan or program.  For purposes of this Agreement, the term "bonus amount" means the average of the annual bonuses received under the Management Incentive Plan, as amended, or any successor or substitute plan (“MIP”) for the five full fiscal years immediately prior to your Date of Termination after excluding the highest and lowest of such full-year annual bonuses; provided, however, that, (1) if you have received at least three but fewer than five full-year bonuses under the MIP, the term “bonus amount” will be the average of your three most recent full-year annual bonuses that you received under the MIP without giving effect to the preceding exclusions, (2) if you have received fewer than three full-year bonuses under the MIP, the term “bonus amount” will be the average of  any full-year annual bonuses you received under the MIP and, for this purpose only, 100% of your target bonus under the MIP in effect immediately prior to your Date of Termination will be treated as having been received by you in addition to any actual full-year bonuses, and (3) if any full-year bonus referred to above was determined using a formula based on a percentage of your business unit pre-tax income or other similar measure of business unit operating results, such bonus for purposes of this calculation shall not exceed the greater of 100% of your annual base salary in effect immediately prior to your Date of Termination or 100% of your annual base salary in effect immediately prior to the change in control.

(v)  If, within thirty-six (36) months after a change in control of the Company, your employment by the Company shall be terminated (a) by the Company other than for Cause, Disability or Retirement or (b) by you for Good Reason, then the Company shall maintain in full force and effect, for the continued benefit of you and your spouse and dependents for a period terminating on the earliest of (a) eighteen (18) months the Date of Termination, (b) the commencement date of equivalent benefits from a new employer or (c) your normal retirement date under the terms of the First Horizon National Corporation Pension Plan, as amended (or any successor or substitute plan or plans of the Company), the medical, dental and life insurance benefits provided to you and your spouse and dependents in which you were entitled to participate immediately prior to the Date of Termination (or, if more favorable to you, the benefits provided under such plans, on a plan by plan basis, in which you were entitled to participate immediately prior to the change in control), provided that your continued participation is possible under the general terms and provisions of such plans (and any applicable funding media) and you continue to pay an amount equal to your contribution as in effect prior to the change in control or your Date of Termination, as applicable to the benefit provided under such plans for such participation.  If, at the end of eighteen (18) months after the Termination Date, you have not reached your normal retirement date and you have not previously received or are not then receiving equivalent benefits from a new employer, the Company shall arrange, at its sole cost and expense, to enable you to convert your and your spouse's and dependents' coverage under such plans to individual policies or programs upon the same terms as employees of the Company may apply for such conversions.  Following your termination of employment, your accrued benefits under the Company's Plans shall be paid pursuant to the terms of such Plans.

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(vi)  If, within thirty-six (36) months after a change in control of the Company, your employment by the Company shall be terminated (a) by the Company other than for Cause, Disability, death or Retirement or (b) by you for Good Reason, disability or retirement all stock options, shares of restricted stock or other stock-based awards, in each case granted following January 1, 2007 pursuant to any stock-based incentive plan of the Company, that are then outstanding and unvested in accordance with the terms and conditions of the grant or award shall become fully vested upon the Date of Termination (and, in the case of stock-options and similar awards, remain exercisable for the greater of (I) the period remaining for exercise provided by the terms of each applicable award or its related plan or (II) 90 days after the Date of Termination or, if earlier, until they would have expired but for your termination. If your employment by the Company shall be terminated on account of Retirement, your stock options and similar awards will remain exercisable for thirty-six (36) months after the Date of Termination or, if earlier, until they would have expired but for your termination).

(vii)   Except as specifically provided in paragraph (v) above, the amount of any payment provided for in this Section 5 shall not be reduced, offset or subject to recovery by the Company by reason of any compensation earned by you as the result of employment by another employer after the Date of Termination, or otherwise.

(viii)  If, within thirty-six (36) months after a change in control of the Company, your employment by the Company shall be terminated (a) by the Company other than for Cause, Disability or Retirement or (b) by you for Good Reason, then the Company shall provide you with reasonable outplacement services for the period through the last day of the second calendar year following the calendar year during which your termination of employment occurred.

           (ix)  Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment, award, benefit or distribution (or any acceleration of any payment, award, benefit or distribution) by the Company (or any of its Affiliates) or any entity which effectuates a change in control (or any of its affiliated entities) to you or for your benefit (whether pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 5(ix)) (the "Payments") would be subject to the excise tax imposed by Section 4999 of the Code, or any interest or penalties are incurred by you with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Company shall pay to you (within thirty days from such determination) an additional payment or payments (collectively, a "Gross-Up Payment") in an amount such that after payment by you of all taxes (including any Excise Tax) imposed upon the Gross-Up Payment, you retain an amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed upon the Payments and (y) the product of any deductions disallowed because of the inclusion of the Gross-up Payment in your adjusted gross income and the highest applicable marginal rate of federal income taxation for the

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calendar year in which the Gross-up Payment is to be made.  For purposes of determining the amount of the Gross-up Payment, you shall be deemed to (i) pay federal income taxes at the highest marginal rates of federal income taxation for the calendar year in which the Gross-up Payment is to be made, (ii) pay applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes and (iii) have otherwise allowable deductions for federal income tax purposes at least equal to the Gross-up Payment.  The receipt of a Gross-Up Payment shall in no event be conditioned upon your termination of employment or your receipt of any other benefits under this Agreement. Notwithstanding the foregoing provisions of this Section 5(ix), if it shall be determined that you are entitled to a Gross-Up Payment, but that the Payments would not be subject to the Excise Tax if the Payments were reduced by an amount that is less than the greater of (A) 5% of the portion of the Payments that would be treated as parachute payments under Section 280G of the Code and (B) $50,000, then the amounts payable to you under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to you without giving rise to the Excise Tax (the Safe Harbor Cap), and no Gross-Up Payment shall be made to you.  The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payments under Section 5(iv)(C), unless an alternative method of reduction is elected by you.  For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments) shall be reduced.  If the reduction of the amounts payable hereunder would not result in a reduction of the Payments to the Safe Harbor Cap, no amounts payable under this Agreement shall be reduced pursuant to this provision.

Subject to the foregoing provisions of this Section 5(ix), all determinations required to be made under this Section 5, including whether and when a Gross-Up Payment or reduction to the Safe Harbor Cap is required, the amount of such Gross-Up Payment or reduction to the Safe Harbor Cap and the assumptions to be utilized in arriving at such determinations, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the change in control (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and you within fifteen (15) business days of the receipt of notice from the Company or you that there has been a Payment, or such earlier time as is requested by the Company (collectively, the "Determination").  In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the change in control, the Company shall appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder).  All fees and expenses of the Accounting Firm shall be borne solely by the Company and the Company shall enter into any agreement requested by the Accounting Firm in connection with the performance of the services hereunder.  The Gross-up Payment under this Section 5(ix) with respect to any Payments shall be made no later than thirty (30) days following such Payment.  If the Accounting Firm determines that no Excise Tax is payable by you, it shall furnish you with a written opinion to such effect, and to the effect that failure to report the Excise Tax, if any, on your applicable federal income tax return will not result in the imposition of a negligence or similar penalty.  The Determination by the Accounting Firm shall be binding upon the Company and you.

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As a result of the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that a Gross-Up Payment which will not have been made by the Company should have been made ("Underpayment") or a Gross-Up Payment is made by the Company which should not have been made ("Overpayment"), consistent with the calculations required to be made hereunder.  In the event that you thereafter are required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to you or for your benefit (but in any event no later than by the end of your taxable year next following your taxable year in which the Underpayment of Excise Tax is remitted).  In the event the amount of the Gross-up Payment exceeds the amount necessary to reimburse you for your Excise Tax, the Accounting Firm shall determine the amount of the Overpayment that has been made and any such Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by you (but only to the extent you have received a refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the benefit of the Company.  You shall cooperate, to the extent your expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or disputes with the Internal Revenue Service in connection with the Excise Tax.

           (x)  To the extent you would otherwise be entitled to any payment during the six months beginning on termination of your employment that would be subject to the additional tax under Section 409A, (i) the payment will not be made to you and instead will be made to a trust in compliance with Revenue Procedure 92-64 (the "Rabbi Trust") and (ii) the payment, together with earnings on it, will be paid to you on the earlier of the six-month anniversary of your date of termination or your death or disability if you are a specified employee (within the meaning of Section 409A of the Code (“Section 409A”) and as determined pursuant to procedures established by the Company).  Similarly, to the extent you would otherwise be entitled to any benefit (other than a payment) during the six months beginning on termination of your employment that would be subject to the Section 409A additional tax, the benefit will be delayed and will begin being provided (together, if applicable, with an adjustment to compensate you for the delay) on the earlier of the six-month anniversary of your date of termination or your death or disability (within the meaning of Section 409A) if you are a specified employee.

           The Company will bear all costs related to the establishment and operation of the Rabbi Trust.  It is understood that the Rabbi Trust may also be used for similar arrangements with other executives of the Company.

6.   Obligations Following Termination of Employment.

           (i)  During your employment with the Company, and for a one year period after your  employment terminates for any reason, your shall not, in any manner, directly or indirectly (without the prior written consent of the Company) Solicit anyone who is then an employee of the Company (or who was an employee of the Company within the prior 12 months) to resign from the Company or to apply for or accept employment with any other business or enterprise.  For this purpose, “Solicit” means any direct or indirect communication of any kind, regardless of who initiates it, that in any way invites, advises, encourages or requests any person to take or refrain from taking any action.

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           (ii) During the term of this Agreement and following termination of your employment for any reason, you shall not, in any manner, directly or indirectly make or publish any statement (orally or in writing) that would libel, slander, disparage, denigrate, ridicule or criticize the Company, any of its affiliates or any of their employees, officers or directors.

           (iii)   You agree that you will cooperate (i) with the Company in the defense of any legal claim involving any matter that arose during your employment with the Company, and (ii) with all government authorities on matters pertaining to any investigation, litigation or administrative proceeding concerning the Company. The Company will reimburse you for any reasonable travel and out of pocket expenses incurred by you in providing such cooperation.

7.   Successors; Binding Agreement.

(i)  The Company will seek, by written request at least five (5) business days prior to the time a Person becomes a Successor (as hereinafter defined), to have such Person, by agreement in form and substance satisfactory to you, assent to the fulfillment of the Company's obligations under this Agreement.  Failure of such Person to furnish such assent by the later of (A) three (3) business days prior to the time such Person becomes a Successor or (B) two (2) business days after such Person receives a written request to so assent shall constitute Good Reason for termination by you of your employment if a change in control of the Company occurs or has occurred.  For purposes of this Agreement, "Successor" shall mean any Person that succeeds to, or has the practical ability to control (either immediately or with the passage of time), the Company's business directly, by merger or consolidation, or indirectly, by purchase of the Company's voting securities or otherwise.

(ii)  This Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.  If you should die following your termination of employment while any amount would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to your devisee, legatee or other designee or, if there be no such designee, to your estate.

(iii)  For purposes of this Agreement, the "Company" shall include any corporation or other entity which is the surviving or continuing entity in respect of any merger, consolidation or form of business combination in which the Company ceases to exist.

8.  Fees and Expenses; Mitigation.  (i) The Company shall reimburse you, on a current basis upon receipt of reasonable written evidence of such fees and expenses, for all legal fees and related expenses incurred by you in connection with this Agreement (including claims under the First Horizon National Corporation Directors and Executives Deferred Compensation Plan, or any successor plan or plans thereto) following a change in control of the Company, including, without limitation, (a) all such fees and expenses, if any, incurred in contesting or disputing any termination of your employment or incurred by you in seeking advice with respect to the matters set forth in Section 5(ix) hereof or (b) your seeking to obtain or enforce any right or benefit provided by this Agreement, in each case, regardless of whether or not your claim is upheld by a court of competent jurisdiction; provided, however, you shall be required to repay any such amounts to the Company to the extent that a court issues a final and non-appealable order setting forth the determination that the position taken by you was frivolous or advanced by you in bad faith. The amount of reimbursement for fees and expenses for which you may be reimbursed during a calendar year shall not affect the amount of fees and expenses for which you are eligible for reimbursement in any other calendar year.  Your right to reimbursement for fees and expenses is not subject to liquidation or exchange for another benefit.

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(ii)  You shall not be required to mitigate the amount of any payment the Company becomes obligated to make to you in connection with this Agreement, by seeking other employment or otherwise.

9.  Taxes.  All payments to be made to you under this Agreement will be subject to required withholding of federal, state and local income and employment taxes.

10.  Survival.  The respective obligations of, and benefits afforded to, the Company and you as provided in Sections 5, 7(ii), 8, 9, 14 and 15 of this Agreement shall survive termination of this Agreement.

11.  Notice.  (i)  For the purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid and addressed, in the case of the Company, to the address set forth on the first page of this Agreement or, in the case of the undersigned employee, to the address set forth below his signature, provided that all notices to the Company shall be directed to the attention of the Chairman of the Board, Chief Executive Officer or President of the Company, with a copy to the Secretary of the Company, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

(ii)  A written notice of your Date of Termination by the Company or you, as the case may be, to the other, shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated and (iii) specify the termination date (which date shall be not less than fifteen (15) (thirty (30), if termination is by the Company for Disability) nor more than sixty (60) days after the giving of such notice).  The failure by you or the Company to set forth in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right you or the Company have hereunder or preclude you or the Company from asserting such fact or circumstance in enforcing your or the Company's rights hereunder.

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12.  Miscellaneous.  No provision of this Agreement may be modified, waived or discharged unless such modification, waiver or discharge is agreed to in a writing signed by you and, on behalf of the Company, by the Chairman of the Board, Chief Executive Officer or President of the Company.  No waiver by either party hereto at any time of any breach by the other party hereto of, or of compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.  No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Tennessee.

13.  Validity.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

14.  Employee's Commitment.  You agree that subsequent to your period of employment with the Company, you will not at any time communicate or disclose to any unauthorized person, without the written consent of the Company, any proprietary processes of the Company or any Affiliate or other confidential information concerning their business, affairs, products, suppliers or customers which, if disclosed, would have a material adverse effect upon the business or operations of the Company and its Affiliates, taken as a whole; it being understood, however, that the obligations under this Section 14 shall not apply to the extent that the aforesaid matters (a) are disclosed in circumstances where you are legally required to do so or (b) become generally known to and available for use by the public otherwise than by your wrongful act or omission.

15.  Related Agreements.  To the extent that any provision of any other agreement between the Company or any of its Subsidiaries and you shall limit, qualify or be inconsistent with any provision of this Agreement, then for purposes of this Agreement, while the same shall remain in force, the provision of this Agreement shall control and such provision of such other agreement shall be deemed to have been superseded, and to be of no force or effect, as if such other agreement had been formally amended to the extent necessary to accomplish such purpose.  Moreover, the benefits provided under this Agreement shall offset any and all benefits provided under any severance plan, program or similar arrangement (including any severance provisions of any employment agreement) of the Company and its Subsidiaries.

           The Company will not take any action that would expose any payment or benefit to you under this Agreement or under any plan, arrangement or other agreement to the additional tax of Section 409A, unless (i) the Company is obligated to take the action under an agreement, plan or arrangement to which you are a party, (ii) you request the action, (iii) the Company advises you in writing that the action may result in the imposition of the additional tax and (iv) you subsequently request the action in a writing that acknowledges you will be responsible for any effect of the action under Section 409A.  The Company will hold you harmless for any action it may take in violation of this paragraph.

           It is our intention that the benefits and rights to which you could become entitled in connection with termination of employment covered under this Agreement comply with Section 409A.  If you or the Company believes, at any time, that any of such benefit or right does not comply, it will promptly advise the other and will negotiate reasonably and in good faith to amend the terms of such arrangement such that it complies (with the most limited possible economic effect on you and on the Company).

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16.  Employment.  Employment with the Company for purposes of this Agreement shall include employment with any of its Subsidiaries or with any entity which directly or indirectly beneficially owns more than 50% of the voting securities of the Company ("Parent").

17.  Counterparts.  This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

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If this letter correctly sets forth our agreement on the subject matter hereof, kindly signand return to the Company the enclosed copy of this letter which will then constitute ouragreement on this subject.

Sincerely,

FIRST HORIZON NATIONAL CORPORATION

By _______________________________________

Name:  Kenneth R. Bottoms

Title:     Manager – Total Rewards

Agreed to this __  day of                                                       , 200___.

_______________________________

(insert full name)

Home Address:

_______________________________

_______________________________

_______________________________

Title:
_______________________________

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EX-10

Exhibit 10.7(e)

First Horizon National Corporation

Pension Restoration Plan

(Amended and Restated as of January 1, 2008)

Contents

Article 1. The Plan ................................................................................................................................1

1.1 Background of Plan ...................................................................................................................................1

1.2 Purpose of Plan ........................................................................................................................................1

1.3 Applicability of Plan ...................................................................................................................................1

Article 2. Definitions ...........................................................................................................................2

2.1 Actuarial Equivalent ...................................................................................................................................2

2.2 Affiliate .....................................................................................................................................................2

2.3 Beneficiary ...............................................................................................................................................2

2.4 Board ......................................................................................................................................................2

2.5 Change in Control .....................................................................................................................................2

2.6 Code .......................................................................................................................................................3

2.7 Committee ................................................................................................................................................3

2.8 Company .................................................................................................................................................4

2.9 Employee .................................................................................................................................................4

2.10 Employer ................................................................................................................................................4

2.11 ERISA ...................................................................................................................................................4

2.12 Normal Retirement Date ............................................................................................................................4

2.13 Participant ...............................................................................................................................................4

2.14 Pension Plan ...........................................................................................................................................4

2.15 Plan .......................................................................................................................................................4

2.16 Plan Year ...............................................................................................................................................4

2.17 Separation from Service ...........................................................................................................................4

2.18 Ten-Year Certain and Life Annuity ..............................................................................................................5

2.19 Vesting Service .......................................................................................................................................6

Article 3. Participation  .......................................................................................................................7

3.1 Eligibility ..................................................................................................................................................7

3.2 Duration ...................................................................................................................................................7

Article 4. Benefits  .................................................................................................................................8

4.1 Retirement Benefits ....................................................................................................................................8

4.2 Preretirement Death Benefits ......................................................................................................................10

4.3 Change in Control ....................................................................................................................................11

4.4 Permissible Delays or Accelerations ...........................................................................................................13

Article 5. Article 5. Financing  ........................................................................................................14

5.1 Financing ................................................................................................................................................14

5.2 Unsecured Interest ...................................................................................................................................14

Article 6. Administration  .................................................................................................................15

6.1 Administration ..........................................................................................................................................15

6.2 Appeals from Denial of Claims ...................................................................................................................15

6.3 Tax Withholding .......................................................................................................................................16

6.4 Expenses ...............................................................................................................................................16

Article 7. Adoption of the Plan by Affiliate;

Amendment and Termination of the Plan  ................................................................................17

7.1 Adoption of the Plan by Affiliate ..................................................................................................................17

7.2 Amendment and Termination ......................................................................................................................17

7.3 Successors ............................................................................................................................................17

Article 8. Miscellaneous Provisions  ..........................................................................................18

8.1 No Contract of Employment ......................................................................................................................18

8.2 Nonalienation of Benefits ...........................................................................................................................18

8.3 Severability ............................................................................................................................................18

8.4 Applicable Law ........................................................................................................................................18

Article 1. The Plan

1.1 Background of Plan

First Horizon National Corporation (the “Company”) presently maintains a supplemental retirement plan for eligible Employees of the Company and participating Affiliates. This plan was originally effective as of January 1, 1984, and it is known as the First Horizon National Corporation Pension Restoration Plan (the “Plan”). The Plan was previously amended and restated as of January 16, 2007.

The Plan is hereby amended and restated, effective as of January 1, 2008, to comply with the American Jobs Creation Act of 2004 and to make other related changes.

1.2 Purpose of Plan

The Plan restores benefits that are curtailed as a result of legal limits applicable to the First Horizon National Corporation Pension Plan (the “Pension Plan”).

The portion of the Plan that restores benefits affected by the limits described in Code section 415 is intended to be an “excess benefit plan” as defined in section 3(36) of ERISA. The portion of the Plan that restores benefits affected by the limit described in Code section 401(a)(17) is intended to be a plan maintained for the purposes of provided deferred compensation to a “select group of management or highly compensated employees” within the meaning of section 201(2) of ERISA.

The Plan is intended to be exempt from the participation, vesting, funding, and fiduciary requirements of Title I of ERISA.

1.3 Applicability of Plan

This Plan applies only to eligible Employees who are in the active employ of the Company or a participating Affiliate on or after January 1, 2008. Except as otherwise provided in this restatement, any Employee who was covered by the Plan as in effect before January 1, 2008 and who terminated employment before that date, shall continue to be entitled to the benefits (if any) provided under the Plan as in effect before January 1, 2008.

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Article 2. Definitions

Whenever used in the Plan, the following terms shall have the meanings set forth below unless otherwise expressly provided. When the defined meaning is intended, the term is capitalized. The definition of any term in the singular shall also include the plural, whichever is appropriate in the context.

2.1 Actuarial Equivalent

“Actuarial Equivalent” means a benefit having the same value as the benefit it replaces, as determined on the basis of the actuarial equivalence assumptions in effect under the Pension Plan, as adjusted to comply with any required law changes.

2.2 Affiliate

“Affiliate” means:

(a)   any corporation while it is a member of the same “controlled group” of corporations (within the meaning of Code section 414(b)) as the Company;

(b)   any other trade or business (whether or not incorporated) while it is under “common control” (within the meaning of Code section 414(c)) with the Company;

(c)   any organization during any period in which it (along with the Company) is a member of an “affiliated service group” (within the meaning of Code section 414(m)); or

(d)   any other entity during any period in which it is required to be aggregated with the Company under Code section 414(o).

2.3 Beneficiary

“Beneficiary” means any person (natural or otherwise) designated by a Participant to receive any death benefits payable on the Participant’s behalf under the Pension Plan, or in the absence of any such designation, the person or entity determined to be the Participant’s beneficiary under the Pension Plan.

2.4 Board

“Board” means the Company’s Board of Directors.

2.5 Change in Control

“Change in Control” means the occurrence of any one of the following events:

(a)   the occurrence of an acquisition (“Acquisition”) by any individual, entity, or group (“Person”) within the meaning of section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) of beneficial ownership (within the meaning of Rule 13d−3 promulgated under the Exchange Act) of a percentage of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (“Company Voting Securities”) that is 30 percent or more of the Company Voting Securities, but excluding:

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(1)   any acquisition directly from the Company (other than an acquisition by virtue of the exercise of a conversion privilege of a security that was not acquired directly from the Company),

(2)   any acquisition by the Company or an Affiliate, and

(3)   any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliate;

(b)   during any 12-month period, a majority of the directors who at the beginning of such period constitute the Board are replaced by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of the appointment or election;

(c)   the consummation of a merger, consolidation, reorganization, or similar corporate transaction, whether or not the Company is the surviving company in such transaction, other than a merger, consolidation, or reorganization that would result in the Persons who are beneficial owners of the Company Voting Securities outstanding immediately prior thereto continuing to beneficially own, directly or indirectly, in substantially the same proportions, at least 50 percent of the combined voting power of the Company Voting Securities (or the voting securities of the surviving entity) outstanding immediately after such merger, consolidation or reorganization; or

(d)   the sale or other disposition of the assets of the Company during any period of 12 consecutive months having a total gross fair market value equal to or more than 40 percent of the total gross fair market value of the assets of the Company and its Affiliates immediately before such sale or disposition.

The foregoing definition of “Change in Control” is intended to comply with the requirements of Code section 409A and Treasury Regulation section 1.409A-3(i)(5), and shall be interpreted and applied by the Committee in a manner consistent with this intent.

2.6 Code

“Code” means the Internal Revenue Code of 1986, as amended, or as it may be amended from time to time. A reference to a particular section of the Code shall also be deemed to refer to regulations and other regulatory guidance issued under that Code section.

2.7 Committee

“Committee” means the Administration Committee appointed by the Board to administer the Plan.

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2.8 Company

“Company” means First Horizon National Corporation and any successor thereto.

2.9 Employee

“Employee” means any person who is employed by an Employer.

2.10 Employer

“Employer” means the Company and each Affiliate that has adopted this Plan for the benefit of its eligible Employees.

2.11 ERISA

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, or as it may be amended from time to time. A reference to a particular section of ERISA shall also be deemed to refer to regulations and other regulatory guidance issued under that section.

2.12 Normal Retirement Date

“Normal Retirement Date” means Normal Retirement Date as defined in the Pension Plan.

2.13 Participant

“Participant” means an Employee who has met, and continues to meet, the eligibility requirements of section 3.1.

2.14 Pension Plan

“Pension Plan” means the First Horizon National Corporation Pension Plan, as amended from time to time.

2.15 Plan

“Plan” means this First Horizon National Corporation Pension Restoration Plan, as amended from time to time.

2.16 Plan Year

“Plan Year” means the calendar year.

2.17 Separation from Service

“Separation from Service” means, subject to subsections (a) and (b), an Employee’s termination from employment with the Company and all Affiliates, whether by retirement or resignation from or discharge by the Company or an Affiliate.

(a)   A Separation from Service shall be deemed to have occurred if an Employee and the Company or any Affiliate reasonably anticipate, based on the facts and circumstances, that either:

(1)   the Employee will not provide any additional services for the Company or an Affiliate after a certain date; or

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(2)   the level of bona fide services performed by the Employee after a certain date will permanently decrease to no more than 20 percent of the average level of bona fide services performed by the Employee over the immediately preceding 36 months.

(b)   If an Employee is absent from employment due to military leave, sick leave, or any other bona fide leave of absence authorized by the Company or an Affiliate and there is a reasonable expectation that the Employee will return to perform services for the Company or an Affiliate, a Separation from Service shall not occur until the later of:

(1)   the first date immediately following the date that is six months after the first date that an Employee was absent from employment; and

(2)   to the extent the Employee retains a right to reemployment with the Company or any Affiliates under applicable law or by contract, the date the Employee no longer retains a right to reemployment.

If a Participant fails to return to work upon the expiration of any military leave, sick leave, or other bona fide leave of absence where such leave is for less than six months, the Separation from Service shall occur as of the date of the expiration of such leave.

2.18 Ten-Year Certain and Life Annuity

“Ten-Year Certain and Life Annuity” means a monthly benefit payable for the life of the Participant, and if he or she dies before receiving 120 monthly payments, payments shall continue to the Participant’s Beneficiary until a total of 120 monthly payments have been made.

(a)   Death of Beneficiary. If a Beneficiary dies after payments begin to the Beneficiary, but before a total of 120 payments have been made to the Participant and the Beneficiary, the Actuarial Equivalent value of any remaining payments shall be paid in a single sum to the Beneficiary’s estate.

(b)   Death of Participant. If a Participant dies before receiving 120 monthly payments and there is no surviving designated Beneficiary, the Actuarial Equivalent value of any payments shall be paid in a single sum to:

(1)   the Participant’s surviving spouse;

(2)   if there is no surviving spouse, to the Participant’s surviving children and children of deceased children per stirpes;

(3)   if there are no surviving children or grandchildren, to the Participant’s surviving parents in equal shares;

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(4)   if there are no surviving parents, to the Participant’s surviving brothers and sisters and nephews and nieces who are children of deceased brothers and sisters per stirpes; or

(5)   if there are no surviving brothers, sisters, nephews, or nieces, to the Participant’s estate.

2.19 Vesting Service

“Vesting Service” means Vesting Service as determined under the Pension Plan.

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Article 3. Participation

3.1 Eligibility

Each Employee who is an active Participant in the Plan as in effect on December 31, 2007 shall automatically continue to be a Participant on January 1, 2008, if he or she is still an Employee. Any other Employee shall become a Participant as of:

(a)   the date as of which the Employee is designated by the Committee as a Participant; or

(b)   in the case of an Employee who has been designated by the Board as an executive officer, the date as of which his or her participation in the Plan is approved by the Human Resources Committee of the Board.

Participation in the part of the Plan that restores Pension Plan benefits curtailed under the compensation limit in effect under Code section 401(a)(17) shall be limited to Employees who are members of a “select group of management or highly compensated employees” within the meaning of ERISA section 201(2).

3.2 Duration

An Employee who becomes a Participant under section 3.1 shall remain an active Participant until the earlier of:

(a)   his or her Separation from Service; or

(b)   a declaration by the Committee that he or she is no longer eligible to participate in the Plan.

An individual whose active participation is terminated under this section 3.2 shall continue to be an inactive Participant until all benefits to which he or she is entitled under this Plan have been paid.

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Article 4. Benefits

4.1 Retirement Benefits

(a)   Eligibility. A Participant who incurs a Separation from Service after attaining age 65 or after attaining age 55 and completing at least 15 years of Vesting Service shall be eligible for a retirement benefit under this section 4.1. This retirement benefit shall be calculated as a Ten-Year Certain and Life Annuity payable at the time specified in subsection (d) or (f). Except as otherwise provided in section 4.3, a Participant who incurs a Separation from Service or who ceases to be an Employee before attaining age 65 or before attaining age 55 and completing 15 years of Vesting Service shall not be entitled to any benefit under this Plan.

(b)   Amount. A Participant who is eligible for a retirement benefit under subsection (a) shall be entitled to receive a benefit as of his or her Normal Retirement Date equal to the difference between (1) and (2) where—

(1)   is the benefit accrued through the commencement date determined under this Plan that would be payable to the Participant under the Pension Plan as of his or her Normal Retirement Date, calculated without regard to the benefit limits in effect under Code sections 401(a)(17) and 415; and

(2)   is the benefit accrued through the commencement date determined under this Plan that would be payable to the Participant under the Pension Plan as of his or her Normal Retirement Date.

In addition to the benefit otherwise payable under this subsection, the Employer and a Participant may agree in writing that the Participant shall be paid an additional monthly benefit in excess of that payable by the Pension Plan due to the limitations of Code sections 401(a)(17) and 415. Any such agreement with a Participant shall be referred to in an appendix to this Plan.

(c)   Early Commencement. Except as otherwise provided in section 4.3, if payment of a Participant’s retirement benefit commences or is paid before his or her Normal Retirement Date, the benefit amount calculated pursuant to subsection (b) shall be reduced for early commencement in accordance with the early retirement reduction factors applicable to calculation of the Participant’s benefit under the Pension Plan.

(d)   Commencement Date. Except as otherwise elected by a Participant pursuant to subsection (f), payment of a Participant’s retirement benefit shall commence as of the first day of the month coinciding with or next following the six-month anniversary of the Participant’s Separation from Service. In any case where the payment of benefits is delayed pursuant to this subsection, the Participant’s retirement benefit shall be calculated as of the first day of the month coinciding with or next following the Participant’s Separation from Service. The payments to which the Participant would be entitled during the first six months after his or her Separation from Service shall be accumulated and paid to the Participant as of the first day of the month coinciding with or next following the six-month anniversary of the Participant’s Separation from Service.

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(e)   Form of Payment. Except as otherwise elected by a Participant pursuant to subsection (f), benefits under this section shall be paid in the form of a Ten-Year Certain and Life Annuity. In lieu of this form of payment, a Participant may elect to receive his or her benefit in an optional method of payment that is the Actuarial Equivalent of the Ten-Year Certain and Life Annuity. The optional forms of payment shall be a single life annuity option, a contingent annuity option, and a lump sum payment.

(1)   Single Life Annuity Option. The single life annuity option is an annuity providing equal monthly payments for the lifetime of the Participant with no survivor benefits.

(2)   Contingent Annuity Option. The contingent annuity option is a reduced monthly benefit payable to the Participant for life and to a surviving named Beneficiary for the lifetime of the Beneficiary in an amount equal to 50 percent, 75 percent, or 100 percent (as elected by the Participant) of the amount payable during the Participant’s lifetime.

A Participant electing any contingent annuity option may elect a further reduced monthly benefit paying a minimum of 120 monthly payments. If the Participant and his or her Beneficiary both die before a total of 120 monthly payments have been made, the Actuarial Equivalent value of any remaining payments shall be paid to the estate of the last to die.

If a Participant elects a contingent annuity option, but his or her designated Beneficiary dies before payments commence, the Participant’s benefit shall be paid in the form of a Ten-Year Certain and Life Annuity unless the Participant validly elects a new form of payment pursuant to subsection (f).

(3)   Lump Sum Payment. A Participant may elect to receive his or her benefit in a single lump sum.

(f)   Election Procedures. A Participant may elect, at a time and in a manner specified by the Committee, to receive benefits in an optional form of payment described in subsection (e) and as of a benefit commencement date that is one, two, three, four, or five years after the first day of the month coinciding with or next following his or her Separation from Service. Notwithstanding the preceding sentence, any election pursuant to this subsection shall be void if the Participant’s benefit commencement date would be delayed later than the first day of the month coinciding with or next following his 70th birthday.

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(1)   Elections After Participation Begins. Except to the extent permitted under regulations or other regulatory guidance issued under Code section 409A, if a Participant makes any such election after he or she becomes a Participant—

(A)   the election may not take effect until at least 12 months after the date on which the election is made;

(B)   the first payment made pursuant to the election must be deferred for a period of five years from the date when the payment would otherwise have been made; and

(C)   the election may not be made less than 12 months before the date when the first payment was scheduled to be paid.

In any case where the payment of benefits is delayed in accordance with subparagraph (B), the date determined pursuant to that provision shall be the Participant’s benefit commencement date, and the Participant’s retirement benefit shall be calculated as of that date.

Any election pursuant to this paragraph (1) shall become irrevocable as of the latest date when the election may be made pursuant to this paragraph.

(2)   Exceptions to Election Restrictions. An election by a Participant shall not be subject to the restrictions in paragraph (1) if:

(A)   the election is made prior to January 1, 2008 and the election does not apply to payments that the Participant would otherwise receive prior to 2008 and does not cause payments to be made prior to 2008; or

(B)   the Participant elects before his or her benefit commencement date to change from a Ten-Year Certain and Life Annuity described in section 2.18 or an annuity form of payment described in subsection (e)(1) or (2) to a different annuity form of payment described in those provisions.

4.2 Preretirement Death Benefits

The Beneficiary of a Participant shall be eligible to receive a preretirement death benefit if the Participant dies after attaining age 65 or after attaining age 55 and completing at least 15 years of Vesting Service, but before starting to receive retirement benefits under this Plan. The amount of this death benefit shall be equal to the Actuarial Equivalent present value of the retirement benefit that would have been payable in a single lump sum payment as of the first day of the month coinciding with or next following the date of the Participant’s death. The preretirement death benefit shall be paid to the Beneficiary in a single lump sum payment as soon as administratively practicable following the date of the Participant’s death.

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4.3 Change in Control

Notwithstanding anything contained in this Plan to the contrary, the provisions of this section 4.3 shall govern and supersede any inconsistent terms or provisions of this Plan in the event of a Change in Control of the Company.

(a)   Notwithstanding anything herein to the contrary, the benefits payable under the Plan (both benefits that have accrued at the time of a Change in Control and those that accrue thereafter) may not be reduced or terminated after a Change in Control for any individual who was a participant in the Plan at the time of the Change in Control.

(b)   Notwithstanding anything in the Plan to the contrary, in the event a Change in Control or the “Pre-Change in Control Date” (as defined below) occurs, the Company shall make a lump sum payment (“Payment”) to each Participant not currently receiving benefits under the Plan on a date (the “Distribution Date”) no later than two business days after the Change in Control has occurred (or, if an agreement to effectuate a Change in Control pursuant to a Business Combination has been executed, on the date (the “Pre-Change in Control Date”) that is the third business day prior to the date the Chief Executive Officer of the Company believes in good faith will be the effective date of such Change in Control, but in any event prior to the effective date of such Change in Control).

(1)   The Payment shall be in an amount equal to the Actuarial Equivalent present value of the accrued benefit (the “Accrued Benefit”) under the Plan as of the Distribution Date, calculated in accordance with paragraphs (2) through (5) below. For purposes of determining this present value amount, the mortality table specified under the Pension Plan and an interest rate of 4.2% shall be used.

(2)   If a Participant is age 65 or older as of the Distribution Date, the Accrued Benefit shall be converted to an Actuarially Equivalent lump sum assuming that such Participant retired on the Distribution Date and immediately commenced receipt of the Accrued Benefit in the normal form of benefit under the Pension Plan.

(3)   If a Participant has not attained age 65 as of the Distribution Date, but is at least age 55, the Accrued Benefit shall be converted to an Actuarially Equivalent lump sum assuming that such Participant retired on the Distribution Date, the Accrued Benefit was reduced for early commencement using the reduction factors specified in the Pension Plan determined without regard to section 11.3(b) of the Pension Plan, and such Participant immediately commenced receipt of such reduced Accrued Benefit in the normal form of benefit under the Pension Plan.

(4)   If a Participant has not attained age 55 as of the Distribution Date, the Accrued Benefit shall first be converted to an Actuarially Equivalent lump sum assuming that such Participant was age 55 on the Distribution Date, the Accrued Benefit was reduced for early commencement using the reduction factors specified in the Pension Plan determined without regard to section 11.3(b) of the Pension Plan for a Participant retiring at age 55, and such Participant commenced receipt at age 55 of such reduced Accrued Benefit in the normal form of benefit under the Pension Plan. Such Actuarially Equivalent lump sum shall then be further reduced from age 55 to such Participant’s actual age as of the Distribution Date, using an interest rate of 4.2 percent, but without any reduction for mortality.

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(5)   In the event the Plan is continued and not terminated following a Change in Control, any amount finally determined under section 4.1 of the Plan upon such Participant’s Separation from Service shall be offset by the amount of the Accrued Benefit (as converted to the applicable form of benefit) determined under this section 4.3. To the extent that a Participant is entitled to an additional retirement benefit following a Change in Control as a result of continued employment with an Employer, such benefit shall be paid to the Participant in accordance with section 4.1.

(c)   For purposes of the Plan, a “CIC Participant” is any Participant who is:

(1)   a party to a Tier I change in control agreement (“CIC Agreement”) with the Company, as determined under the standard policies and procedures of the Company;

(2)   becomes entitled to a payment under and in accordance with Section 5(iv) of the standard form of CIC Agreement in effect for new agreements as of March 1, 2007, or any successor thereto, as a result of a termination of employment as contemplated in such CIC Agreement; and

(3)   at the time of such termination of employment has both attained at least age 50 and been credited with not fewer than ten years of Vesting Service.

A CIC Participant will be entitled to two distinct payments under this subsection (c) as described below. The first of those amounts (the “Initial Lump Sum”) is the Payment payable following the Change in Control, calculated and paid as provided in subsection (b). The second of those amounts (the “50/10 Enhancement Lump Sum”) is a supplement to the Initial Lump Sum calculated and payable following Separation from Service as provided in this subsection (c). The 50/10 Enhancement Lump Sum shall be calculated as follows:

(A)   The CIC Participant’s Payment under subsection (b) shall be recalculated as of the date of Separation from Service as if that date were the date that the Change in Control occurred. For purposes of recalculating the Payment to the CIC Participant (and only for those purposes), the calculation of Accrued Benefits under section 4.1 of the Plan will be modified by crediting the CIC Participant with three additional years of age and three additional years of benefit service, in each case additional to the CIC Participant’s actual age and years of service at the date of Separation from Service.

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(B)   The Initial Lump Sum paid shall be subtracted from the Payment as recalculated pursuant to paragraph (A), without actuarial or other adjustment for the time value of the amount and timing of the Initial Lump Sum payment. The difference resulting from that subtraction is the 50/10 Enhancement Lump Sum. The 50/10 Enhancement Lump Sum amount cannot be less than zero.

The additional years of age and benefit service contemplated by this subsection (c) will be credited only for purposes of adjusting the CIC Participant’s Accrued Benefit as described in this subsection (c), but not for purposes of making the CIC Participant eligible for early retirement benefits or otherwise.

The 50/10 Enhancement Lump Sum payment to a CIC Participant determined in accordance with this subsection (c) will be paid (without interest) on the first regular payroll date that occurs on or after 186 days after the CIC Participant experiences a Separation from Service.

4.4 Permissible Delays or Accelerations

Once benefit payments to a Participant commence, the payment of his or her retirement benefit shall not be delayed or accelerated, except as provided in this section. If the Company or the Committee determines that a delay or an acceleration of a Participant’s retirement benefit complies with the requirements under Code section 409A (including a delay to comply with Code section 162(m) or an acceleration to pay employment taxes), the Company or the Committee may either delay or accelerate the payment of a Participant’s retirement benefit in accordance with the terms of Code section 409A as it deems advisable in its sole discretion. If any payment is delayed in accordance with this provision, the Plan shall pay such delayed payments without interest following the expiration of the delay.

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Article 5. Article 5. Financing

5.1 Financing

The benefits under this Plan shall be paid out of the general assets of the Employers, except to the extent they are paid from the assets of a grantor trust established by an Employer to pay these benefits.

5.2 Unsecured Interest

No Participant shall have any interest whatsoever in any specific asset of the Company or an Affiliate. To the extent that any person acquires a right to receive payment under this Plan, such right shall be no greater than the right of any unsecured general creditor of an Employer.

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Article 6. Administration

6.1 Administration

The Plan shall be administered by the Committee.

The Committee shall have all powers necessary or appropriate to carry out the provisions of the Plan.  It may, from time to time, establish rules for the administration of the Plan and the transaction of the Plan's business.  In its sole discretion, the Committee may delegate any or all of its responsibilities relative to administration of the Plan to such officers of the Company as it designates.

The Committee shall have the exclusive right to make any finding of fact necessary or appropriate for any purpose under the Plan including, but not limited to, the determination of eligibility for and amount of any benefit.

The Committee shall have the exclusive right to interpret the terms and provisions of the Plan and to determine any and all questions arising under the Plan or in connection with its administration, including, without limitation, the right to remedy or resolve possible ambiguities, inconsistencies, or omissions by general rule or particular decision, all in its sole and absolute discretion.

To the extent permitted by law, all findings of fact, determinations, interpretations, and decisions of the Committee shall be conclusive and binding upon all persons having or claiming to have any interest or right under the Plan.

6.2 Appeals from Denial of Claims

If any claim for benefits under the Plan is wholly or partially denied, the claimant shall be given notice of the denial. This notice shall be given in writing within a reasonable period of time after receipt of the claim by the Committee. This period will not exceed 90 days after receipt of the claim, except that if the Committee determines that special circumstances require an extension of time, the period may be extended up to an additional 90 days. Written notice of the extension shall be furnished to the claimant prior to termination of the initial

90-day period, and it shall indicate the special circumstances requiring an extension of time and the date by which the benefit determination is expected.

Notice of any claim denial shall be written in a manner calculated to be understood by the claimant and shall set forth the following information:

(a)   the specific reasons for the denial;

(b)   a specific reference to the Plan provisions on which the denial is based;

(c)   a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why this material or information is necessary;

15

(d)   an explanation that a full and fair review by the Committee of the decision denying the claim may be requested by the claimant or an authorized representative by filing with the Committee, within 60 days after the notice has been received, a written request for review; and

(e)   a statement of the claimant’s right to bring a civil action under ERISA section 502(a) following an adverse decision upon review.

If a claimant files a written request for review of a denied claim, the claimant or his or her authorized representative may request, free of charge, reasonable access to and copies of all documents, records, and other information relevant to the claim and may submit written comments, documents, records, and other information relevant to the claim within the 60-day period specified in subsection (d) above. The notice of claim denial shall include a statement of the claimant’s rights to review and submit information pursuant to this paragraph.

The review by the Committee shall take into account all comments, documents, records, and other information submitted by the claimant relating to the claim without regard to whether such material was submitted or considered as part of the initial determination. The decision of the Committee upon review shall be made promptly, and not later than 60 days after the Committee’s receipt of the request for review. However, if the Committee determines that special circumstances require an extension of time, this period may be extended up to an additional 60 days. Written notice of the extension shall be furnished to the claimant prior to termination of the initial 60-day period, and it shall indicate the special circumstances requiring an extension of time and the date by which the decision on review is expected.

If the claim is denied, wholly or in part, the claimant shall be given a copy of the decision promptly. The decision shall be in writing and shall be written in a manner calculated to be understood by the claimant. The decision shall include specific reasons for the denial; specific references to the pertinent Plan provisions on which the denial is based; a statement that the claimant may request, free of charge, reasonable access to and copies of all documents, records, and other information relevant to the claim; and a statement of the claimant’s right to bring a civil action under ERISA section 502(a).

6.3 Tax Withholding

The Employer may withhold from any payment under this Plan any federal, state, or local taxes required by law to be withheld with respect to the payment and any sum the Employer may reasonably estimate as necessary to cover any taxes for which the Employer may be liable and that may be assessed with regard to the payment.

6.4 Expenses

All expenses incurred in the administration of the Plan shall be paid by the Employers.

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Article 7. Adoption of the Plan by Affiliate; Amendment and Termination of the Plan

7.1 Adoption of the Plan by Affiliate

An Affiliate may adopt the Plan by appropriate action of its board of directors or authorized officers or representatives, subject to the approval of the Board.

7.2 Amendment and Termination

The Company hereby reserves the right to amend, modify, or terminate the Plan at any time, and for any reason, by written resolution of the Board. However, no amendment or termination shall have the effect of reducing or terminating benefits for any Participant who has become entitled to a retirement benefit under section 4.1(a).

7.3 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 be bound by this Plan pursuant to the preceding sentence or by operation of law, 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 defined in section 2.8 and any successor or assignee to the business or assets that by reason hereof becomes bound by this Plan.

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Article 8. Miscellaneous Provisions

8.1 No Contract of Employment

Nothing contained in the Plan shall be construed to give any Participant the right to be retained in the service of the Company or its Affiliates or to interfere with the right of the Company or its Affiliates to discharge a Participant at any time.

8.2 Nonalienation of Benefits

No benefit payable at any time under the Plan shall be subject in any manner to alienation, sale, transfer, assignment, pledge, attachment or other legal process, or encumbrances of any kind. Any attempt to alienate, sell, transfer, assign, pledge, or otherwise encumber any such benefit, whether currently or hereafter payable, shall be void. Except as otherwise specifically provided by law, no such benefit shall, in any manner, be liable for or subject to the debts or liabilities of any Participant or any other person entitled to such benefit.

8.3 Severability

If any provision of this Plan shall be held illegal or invalid, the illegality or invalidity shall not affect its remaining parts. The Plan shall be construed and enforced as if it did not contain the illegal or invalid provision.

8.4 Applicable Law

Except to the extent preempted by applicable federal law, this Plan shall be governed by and construed in accordance with the laws of the state of Tennessee.

In Witness Whereof, the authorized officers of the Company have signed this document and have affixed the corporate seal on ____________________, 2007, effective as of January 1, 2008.

First Horizon National Corporation

Attest:

By: ________________________________

Its _________________________________

By: _____________________________

Its ______________________________

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EX-10

EXHIBIT 10.7(i)

LIST OF CERTAIN BENEFITS

AVAILABLE TO CERTAIN EXECUTIVE OFFICERS

(As in effect October 16, 2007)

The following benefits are available to some or all executive officers (among other persons), but not to all full-time employees of the registrant.

1)   If the Board has authorized a stock repurchase program, an executive may request the repurchase of shares of the registrant at the day’s volume-weighted average price with no payment of any fees or commissions if the repurchase of the shares is otherwise permissible under the authorized program.

2)   An automobile allowance is paid to certain executive officers and others up to a limit. The current limit for the CEO is $17,150 per year, and the annual limit for next lowest benefit level is $14,650. Certain maintenance and repair expenses associated with automobiles are included in the allowance.

3)   Employees above a certain grade level, including executive officers, who are members of a country club or other social organization and who use the club in part for business purposes may request payment of 50% of the annual dues associated with the club.

4)   The registrant’s disability insurance program generally is available to employees. Persons above a certain grade level, including executive officers, receive an additional benefit and are paid an amount each year intended to reimburse premiums associated with the additional benefit.

5)   The registrant makes available or pays for tax preparation, tax consulting, estate planning, and financial counseling services for executive officers. Current limits on this benefit applicable to executives are:  $15,000 per year for the CEO ($22,500 in any year in which a new financial counseling firm is engaged); and $5,000 per year for other executives ($7,500 in any year in which a new financial counseling firm is engaged).

6)   The registrant occasionally allows certain employees, including executive officers, or their spouses to travel for personal purposes in company aircraft on trips that occur for business reasons. Such cases typically result in no additional costs for the registrant, since the seat filled would have otherwise been empty, but do result in the recognition of taxable income for the employee involved.

7)   On occasion spouses of certain employees, including executive officers, are asked by the registrant, for business reasons, to accompany the employee on a business trip or function.  In those cases the registrant may pay the travel, accommodation, and other expenses of the spouse incidental to the trip or function, some or all of which can result in taxable income for the employee.  Also, on occasion the registrant may provide or pay for a memento, gift, or other gratuity that the employee or spouse receives in connection with the business trip or function.

8)   The registrant provides a relocation benefit to a wide range of employees, including executive officers, under varying circumstances and subject to certain constraints. The benefit may be in the form of an allowance or a reimbursement of actual expenses.

9)   The registrant offers certain health club benefits to a wide range of employees, including executive officers.

10)   The registrant provides a cash allowance to certain employees, including executive officers, which is intended to defray expenses associated with goods and services purchased personally and used at least in part for business purposes (such as cell phone service).

EX-10

Exhibit 10.7(k2)

AMENDMENT TO LIMITED CONFIDENTIALITY AND

NON-COMPETE AGREEMENT

THIS AMENDMENT is dated as of the _____ day of ___________, 200__, by and between First Horizon National Corporation and FTN Financial (collectively the “Company”) and Jim L. Hughes (“Hughes”).

WHEREAS, the parties hereto entered into a Limited Confidentiality and Non-Compete Agreement dated October 19, 2006 (the “Agreement”); and

WHEREAS, the parties desire to make certain technical changes to the Agreement in order for the Agreement to be fully compliant with Section 409A of the Internal Revenue Code.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby expressly acknowledged, the parties agree as follows:

1.           Paragraph I of the Agreement is hereby amended to delete the first sentence of such paragraph in its entirety and to substitute in lieu thereof the following:

Beginning January 1, 2007, and for a period of up to five (5) years thereafter, at Hughes’s sole option, the Company will provide office space, and an administrative assistant paid by the Company, equipment, and supplies for Hughes in an amount not in excess of $100,000 for each year of the five (5) year period in the event that Hughes opts to utilize the office and services for the full five (5) year period.

2.           While it is intended that the benefits conferred under the Agreement and this Amendment shall be provided in-kind, Hughes shall not be barred from seeking reimbursement of any amounts paid by him with respect to covered benefits not in excess of the foregoing annual limitation, provided that a properly documented claim for reimbursement is made on or before September 30 of the year following the year in which right to reimbursement first arose.  The Company shall pay all valid claims within thirty (30) days of submission.

3.           Notwithstanding any provision of the Agreement or this Amendment to the contrary, the right to in-kind benefits and/or reimbursement with respect to covered benefits is not subject (i) to liquidation for cash, (ii) to exchange for any other benefit or (iii) to acceleration, deferral or other change in the timing of the year in which such benefits must be consumed or forfeited.

4.           The foregoing provisions of this Amendment are intended to cause the Agreement as amended to conform with the requirements of Section 409A, including the regulations thereunder and in particular Treasury Regulations §1.409A-1(b)(9)(v) and/or §1.409A-3(i)(1)(iv)(A), and the provisions of this Amendment shall be construed in accordance with that intention.  If any provision of this Amendment shall be inconsistent or in conflict with the applicable requirements for Section 409A, then such requirements shall be deemed to override and supersede the inconsistent or conflicting provision.  Any provision required for compliance with Section 409A that is omitted from this Amendment shall be incorporated herein by reference and shall apply retroactively, if necessary, and be deemed a part of this Amendment to the same extent as though expressly set forth herein.

5.           This Amendment shall take effect as of January 1, 2008.

6.           Except as expressly amended hereby, the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the day and year first above written.

FIRST HORIZON NATIONAL CORPORATION

By:                                                                

Title:                                                                

FTN FINANCIAL

By:                                                                

Title:                                                                

Jim Hughes