Exhibit 10-a
TRUSTMARK CORPORATION
2005 STOCK AND INCENTIVE COMPENSATION PLAN
ARTICLE I
Establishment, Purpose and Duration
1.1 Establishment of the Plan. Trustmark Corporation (hereinafter referred to as
the "Company"), a Mississippi corporation, hereby establishes an incentive
compensation plan to be known as the "2005 Stock and Incentive Compensation
Plan" (hereinafter referred to as the "Plan"), as set forth in this document.
Unless otherwise defined herein, all capitalized terms shall have the meanings
set forth in Section 2.1 herein. The Plan permits the grant of Incentive Stock
Options, Non-Qualified Stock Options (including Reload Options), Stock
Appreciation Rights, Restricted Stock, Restricted Stock Units and/or Performance
Units to Key Associates and Directors.
The Plan was adopted by the Board of Directors of the Company on March 8, 2005,
to become effective (the "Effective Date") as of May 10, 2005 if approved at the
May 10, 2005 annual meeting of the Company's shareholders by vote of
shareholders of the Company in accordance with applicable laws and any
applicable rules of any national securities exchange or system on which the
Stock is then listed or reported. Except for Performance Unit Awards payable
only in cash (with payment also contingent on shareholder approval of the 2005
Plan), Awards may not be granted under the Plan prior to shareholder approval of
the Plan.
1.2 Purpose of the Plan. The purpose of the Plan is to promote the success of
the Company and its Subsidiaries by providing incentives to Key Associates and
Directors that will promote the identification of their personal interest with
the long term financial success of the Company and with growth in shareholder
value. The Plan is designed to provide flexibility to the Company in its ability
to motivate, attract, and retain the services of Key Associates and Directors
upon whose judgment, interest, and special effort the successful conduct of its
operation is largely dependent.
In addition, the Plan permits the grant of a Reload Option in order to restore
an Option opportunity on the number of shares of Stock surrendered to exercise
an Option to encourage a Participant to maximize his ownership interest in the
Company without reducing the percentage interests of shareholders.
1.3 Duration of the Plan. The Plan shall commence on the Effective Date, as
described in Section 1.1 herein, and shall remain in effect, subject to the
right of the Board of Directors to terminate the Plan at any time pursuant to
Article XII herein, until May 9, 2015, at which time it shall terminate except
with respect to Awards (including any outstanding Reload Option obligation) made
prior to, and outstanding on, that date which shall remain valid in accordance
with their terms.
ARTICLE II
Definitions
2.1 Definitions. Except as otherwise defined in the Plan, the following terms
shall have the meanings set forth below:
(a) "Agreement" means a written agreement implementing the grant of each Award
signed by an authorized officer of the Company and by the Participant.
(b) "Award" means, individually or collectively, a grant under the Plan of
Incentive Stock Options, Non-Qualified Stock Options (including Reload
Options), Stock Appreciation Rights, Restricted Stock, Restricted Stock
Units and/or Performance Units.
(c) "Award Date" or "Grant Date" means the date on which an Award is made by
the Committee under the Plan.
(d) "Board" or "Board of Directors" means the Board of Directors of the
Company.
(e) "Change in Control" shall be deemed to have occurred if the conditions set
forth in any one of the following paragraphs shall have been satisfied:
(i) the acquisition of ownership of, holding or power to vote more than
20% of the Company's voting stock; or
(ii) the acquisition of the ability to control the election of a majority
of the Company's Board; or
(iii)the acquisition of a controlling influence over the management or
policies of the Company by any person or by persons acting as a
"group" (within the meaning of Section 13(d) of the Exchange Act); or
(iv) during any period of two consecutive years, individuals (the
"Continuing Directors") who at the beginning of such period constitute
the Board (the "Existing Board") cease for any reason to constitute at
least two-thirds thereof, provided that any individual whose election
or nomination for election as a member of the Existing Board was
approved by a vote of at least two-thirds of the Continuing Directors
then in office shall be considered a Continuing Director.
Notwithstanding the foregoing, in the case of (i), (ii) and (iii) hereof,
ownership or control of the Company's voting stock by the Trustmark
National Bank (the "Bank") or any employee benefit plan sponsored by the
Company or the Bank shall not constitute a Change in Control. For purposes
of this paragraph only, the term "person" refers to an individual or a
corporation, partnership, trust, association, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization of any other
form of entity not specifically listed herein.
(f) "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
(g) "Committee" means the committee of the Board appointed to administer the
Plan pursuant to Article III herein, all of the members of which shall be
"non-employee directors" as defined in Rule 16b-3, as amended, under the
Exchange Act, or any similar or successor rule, and "outside directors"
within the meaning of Section 162(m)(4)(C)(i) of the Code. Unless otherwise
determined by the Board, the Human Resources Committee of the Board, or any
successor committee responsible for executive compensation, shall
constitute the Committee.
(h) "Company" means Trustmark Corporation, or any successor thereto as provided
in Article XIV herein.
(i) "Director" means a director of the Company or any Subsidiary thereof, which
term shall not include an advisory or honorary director.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
(k) "Fair Market Value" of a Share means the mean between the high and low
sales price of the Stock on the relevant date if it is a trading date, or
if not, on the most recent date on which the Stock was traded prior to such
date, as reported by the NASDAQ National Market System, or if, in the
opinion of the Committee, this method is inapplicable or inappropriate for
any reason, the fair market value as determined pursuant to a reasonable
method adopted by the Committee in good faith for such purpose.
(l) "Incentive Stock Option" or "ISO" means an option to purchase Stock,
granted under Article VI herein, which is designated as an incentive stock
option and is intended to meet the requirements of Section 422 of the Code.
(m) "Key Associate" means an officer or other key associate of the Company or
its Subsidiaries who, in the opinion of the Committee, can contribute
significantly to the growth and profitability of, or perform services of
major importance to, the Company and its Subsidiaries. "Key Associates"
includes Directors who are also associates of the Company or its
Subsidiaries.
(n) "Non-Qualified Stock Option" or "NQSO" means an option to purchase Stock,
granted under Article VI herein, which is not intended to be an Incentive
Stock Option.
(o) "Option" means an Incentive Stock Option or a Non-Qualified Stock Option.
(p) "Option Price" means the exercise price per share of Stock covered by an
Option.
(q) "Participant" means a Key Associate or a Director who has been granted an
Award under the Plan and whose Award remains outstanding.
(r) "Performance-Based Compensation Award" means any Award for which exercise,
full enjoyment or receipt thereof by the Participant is contingent on
satisfaction or achievement of the Performance Goal applicable thereto. If
a Performance-Based Compensation Award is intended to be "performance-based
compensation" within the meaning of Section 162(m)(4)(C) of the Code, the
grant of the Award, the establishment of the Performance Goal, the making
of any modifications or adjustments and the determination of satisfaction
or achievement of the Performance Goal shall be made during the period or
periods required under and in conformity with the requirements of Section
162(m) of the Code therefor. The terms and conditions of each
Performance-Based Compensation Award, including the Performance Goal and
Performance Period, shall be set forth in an Agreement or in a subplan of
the Plan which is incorporated by reference into an Agreement.
(s) "Performance Goal" means one or more performance measures or goals set by
the Committee in its discretion for each grant of a Performance-Based
Compensation Award. The extent to which such performance measures or goals
are met will determine the amount or value of the Performance-Based
Compensation Award to which a Participant is entitled to exercise, receive
or retain. Performance Goals may be particular to a Participant, may relate
to the performance of the Subsidiary, division, strategic business unit or
line of business which employs him, or may be based on the performance of
the Company generally. Performance Goals may be based on Stock value or
increases therein, earnings per share or earnings per share growth, net
earnings, earnings or earnings growth (before or after one or more of
taxes, interest, depreciation and/or amortization), operating profit,
operating cash flow, operating or other expenses, operating efficiency,
return on equity, assets, capital or investment, sales or revenues or
growth thereof, deposits, loan and/or equity levels or growth thereof,
working capital targets or cost control measures, regulatory compliance,
gross, operating or other margins, efficiency ratio (as generally
recognized and used for bank financial reporting and analysis), interest
income, non-interest income, credit quality, net charge-offs and/or
non-performing assets (excluding such loans or classes of loans as may be
designated for exclusion), productivity, customer satisfaction,
satisfactory internal or external audits, improvement of financial ratings,
achievement of balance sheet or income statement objectives, quality
measures, and any component or components of the foregoing (including,
without limitation, determination thereof with or without the effect of
discontinued operations and dispositions of business segments,
non-recurring items, material extraordinary items that are both unusual and
infrequent, special charges, and/or accounting changes), or implementation,
management or completion of critical projects or processes. Performance
Goals may include a threshold level of performance below which no payment
or vesting may occur, levels of performance at which specified payments or
specified vesting will occur, and a maximum level of performance above
which no additional payment or vesting will occur. Performance Goals may be
absolute in their terms or measured against or in relationship to a market
index, a group of other companies comparably, similarly or otherwise
situated, or a combination thereof. The Committee shall determine the
Performance Period during which the Performance Goal must be met; and
attainment of Performance Goals shall be subject to certification by the
Committee. Each of the Performance Goals shall be determined, where
applicable and except as provided above, in accordance with generally
accepted accounting principles.
(t) "Performance Period" means the time period during which the Performance
Goal must be met in connection with a Performance-Based Compensation Award.
Such time period shall be set by the Committee.
(u) "Performance Unit" means an Award, designated as a performance unit,
granted to a Participant pursuant to Article X herein and valued as a fixed
dollar amount.
(v) "Period of Restriction" means the period during which the transfer of
Shares of Restricted Stock is restricted, pursuant to Article VIII herein.
(w) "Plan" means the Trustmark Corporation 2005 Stock and Incentive
Compensation Plan, as herein described and as hereafter from time to time
amended.
(x) "Related Option" means an Option with respect to which a Stock Appreciation
Right has been granted.
(y) "Reload Option" means a Non-Qualified Stock Option granted pursuant to
Section 6.9 in the event the Participant exercises all or a part of an
Option by paying the Option Price pursuant to Section 6.6 with Stock in
order to restore an Option opportunity on the number of shares of Stock
surrendered to exercise an Option.
(z) "Restricted Stock" means an Award of Stock granted to a Participant
pursuant to Article VIII herein which is subject to restrictions and
forfeiture until the designated conditions for the lapse of the
restrictions are satisfied.
(aa) "Restricted Stock Unit" or "RSU" means an Award, designated as a Restricted
Stock Unit, granted to a Participant pursuant to Article IX herein and
valued by reference to Stock, which is subject to restrictions and
forfeiture until the designated conditions for the lapse of the
restrictions are satisfied.
(bb) "Stock" or "Shares" means the common stock of the Company.
(cc) "Stock Appreciation Right" or "SAR" means an Award, designated as a stock
appreciation right, granted to a Participant pursuant to Article VII
herein.
(dd) "Subsidiary" means any subsidiary corporation of the Company within the
meaning of Section 424(f) of the Code.
ARTICLE III
Administration
3.1 Administration of the Plan by the Committee. The Plan shall be administered
by the Committee which shall have all powers necessary or desirable for such
administration. The express grant in the Plan of any specific power to the
Committee shall not be construed as limiting any power or authority of the
Committee. In addition to any other powers and, subject to the provisions of the
Plan, the Committee shall have the following specific powers: (i) to determine
the terms and conditions upon which the Awards may be made and exercised; (ii)
to determine all terms and conditions of each Agreement, which need not be
identical; (iii) to construe and interpret the Agreements and the Plan; (iv) to
establish, amend or waive rules or regulations for the Plan's administration;
(v) to accelerate the exercisability of any Award, the end of a Performance
Period or termination of any Period of Restriction or other restrictions imposed
under the Plan; and (vi) to make all other determinations and take all other
actions necessary or advisable for the administration of the Plan.
The Chairman of the Committee and such other directors and officers of the
Company as shall be designated by the Committee are hereby authorized to execute
Agreements on behalf of the Company and to cause them to be delivered to the
recipients of Awards.
For purposes of determining the applicability of Section 422 of the Code
(relating to Incentive Stock Options), or in the event that the terms of any
Award provide that it may be exercised only during employment or service or
within a specified period of time after termination of employment or service,
the Committee may decide to what extent leaves of absence for governmental or
military service, illness, temporary disability, or other reasons shall not be
deemed interruptions of employment or service or continuous employment or
service.
Subject to limitations under applicable law, the Committee is authorized in its
discretion to issue Awards and/or accept notices, elections, consents and/or
other forms or communications by Participants by electronic or similar means,
including, without limitation, transmissions through e-mail, voice mail,
recorded messages on electronic telephone systems, and other permissible
methods, on such basis and for such purposes as it determines from time to time.
A majority of the entire Committee shall constitute a quorum and the action of a
majority of the members present at any meeting at which a quorum is present (in
person or as otherwise permitted by applicable law), or acts approved in writing
by a majority of the Committee without a meeting, shall be deemed the action of
the Committee.
3.2 Selection of Participants. The Committee shall have the authority to grant
Awards under the Plan, from time to time, to such Key Associates and/or
Directors as may be selected by it. Each Award shall be evidenced by an
Agreement.
3.3 Decisions Binding. All determinations and decisions made by the Board or the
Committee pursuant to the provisions of the Plan shall be final, conclusive and
binding.
3.4 Requirements of Rule 16b-3 and Section 162(m) of the Code. Notwithstanding
any other provision of the Plan, the Board or the Committee may impose such
conditions on any Award, and amend the Plan in any such respects, as may be
required to satisfy the requirements of Rule 16b-3, as amended (or any successor
or similar rule), under the Exchange Act.
Any provision of the Plan to the contrary notwithstanding, and except to the
extent that the Committee determines otherwise: (i) transactions by and with
respect to officers and directors of the Company who are subject to Section
16(b) of the Exchange Act (hereafter, "Section 16 Persons") shall comply with
any applicable conditions of SEC Rule 16b-3; (ii) transactions with respect to
persons whose remuneration is subject to the provisions of Section 162(m) of the
Code shall conform to the requirements of Section 162(m)(4)(C) of the Code; and
(iii) every provision of the Plan shall be administered, interpreted, and
construed to carry out the foregoing provisions of this sentence.
Notwithstanding any provision of the Plan to the contrary, the Plan is intended
to give the Committee the authority to grant Awards that qualify as
performance-based compensation under Section 162(m)(4)(C) of the Code as well as
Awards that do not so qualify. Every provision of the Plan shall be
administered, interpreted, and construed to carry out such intention, and any
provision that cannot be so administered, interpreted, and construed shall to
that extent be disregarded; and any provision of the Plan that would prevent an
Award that the Committee intends to qualify as performance-based compensation
under Section 162(m)(4)(C) of the Code from so qualifying shall be administered,
interpreted, and construed to carry out such intention, and any provision that
cannot be so administered, interpreted, and construed shall to that extent be
disregarded.
3.5 Indemnification of Committee. In addition to such other rights of
indemnification as they may have as directors or as members of the Committee,
the members of the Committee shall be indemnified by the Company against
reasonable expenses, including attorneys' fees, actually and reasonably incurred
in connection with the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection with the
Plan or any Award granted or made hereunder, and against all amounts reasonably
paid by them in settlement thereof or paid by them in satisfaction of a judgment
in any such action, suit or proceeding, if such members acted in good faith and
in a manner which they believed to be in, and not opposed to, the best interests
of the Company and its Subsidiaries.
ARTICLE IV
Stock Subject to the Plan
4.1 Number of Shares. Subject to adjustment as provided in Section 4.4 herein,
the maximum aggregate number of Shares that may be issued pursuant to Awards
made under the Plan shall not exceed the sum of (i) 6,000,000 plus (ii) that
number of Shares represented by options under the Second Amended Trustmark
Corporation 1997 Long Term Incentive Plan which expire or are otherwise
terminated or forfeited at any time after the Effective Date of the Plan. Except
as provided in Sections 4.2 and 4.3 herein, the issuance of Shares in connection
with the exercise of, or as other payment for Awards, under the Plan shall
reduce the number of Shares available for future Awards under the Plan.
Stock that may be issued under the Plan may either be authorized but unissued
Shares, Shares held in treasury, or Shares held in a grantor trust created by
the Company.
The Company, during the term of the Plan and thereafter during the term of any
outstanding Award which may be settled in Stock, shall reserve and keep
available a number of Shares sufficient to satisfy the requirements of the Plan.
4.2 Lapsed Awards or Forfeited Shares. If any Award granted under the Plan
terminates, expires, or lapses for any reason other than by virtue of exercise
of the Award, or if Shares issued pursuant to Awards are forfeited, any Stock
subject to such Award again shall be available for the grant of an Award under
the Plan, subject to Section 7.3.
4.3 Delivery of Shares as Payment. In the event a Participant pays the Option
Price for Shares pursuant to the exercise of an Option with previously acquired
Shares, the number of Shares available for future Awards under the Plan shall be
reduced only by the net number of new Shares issued upon the exercise of the
Option. In addition, in determining the number of shares of Stock available for
Awards, if Stock has been delivered or exchanged by a Participant as full or
partial payment to the Company for payment of withholding taxes, or if the
number of shares of Stock otherwise deliverable has been reduced for payment of
withholding taxes, the number of shares of Stock exchanged as payment in
connection with the withholding tax or so reduced shall again be available for
purpose of Awards under the Plan.
4.4 Capital Adjustments. The number and class of Shares subject to each
outstanding Award, the Option Price and the annual limits on and aggregate
number of Shares for which Awards thereafter may be made shall be subject to
such adjustment, if any, as the Committee in its sole discretion deems
appropriate to reflect such events as stock dividends, stock splits,
recapitalizations, mergers, consolidations or reorganizations of or by the
Company.
ARTICLE V
Eligibility
Persons eligible to participate in the Plan include (i) all associates of the
Company and its Subsidiaries (including any corporation which becomes a
Subsidiary after the adoption of the Plan by the Board) who, in the opinion of
the Committee, are Key Associates and (ii) all Directors.
Multiple grants of Awards under the Plan may be made in any calendar year to a
Participant, provided, however, that Awards of Options and SARs (disregarding
any Tandem SARs as defined in Section 7.1) granted in any calendar year to any
one Participant shall not provide for the issuance of, and/or cash payment with
respect to, more than 90,000 Shares in the aggregate, that Awards of Restricted
Stock and Restricted Stock Units granted in any calendar year to any one
Participant shall not provide for the issuance of, and/or cash payment with
respect to, more than 50,000 Shares in the aggregate, and that Performance Units
granted in any calendar year to any one Participant shall not provide for the
payment of more than $1,000,000 in the aggregate.
ARTICLE VI
Stock Options
6.1 Grant of Options. Subject to the terms and conditions of the Plan, Options
may be granted to Key Associates and Directors at any time and from time to time
as shall be determined by the Committee. The Committee shall have complete
discretion in determining the number of Shares subject to Options granted to
each Participant, provided, however, that (i) only Non-Qualified Stock Options
may be granted to Directors who are not associates of the Company or a
Subsidiary, (ii) no Participant may be granted Options in any calendar year for
more than 90,000 Shares (with Options cancelled in the same year as granted
counted against this limit and with Options for which the Option Price is
reduced treated as cancelled and reissued for this annual limit) and (iii) the
aggregate Fair Market Value (determined at the time the Award is made) of Shares
with respect to which any Participant may first exercise ISOs granted under the
Plan during any calendar year may not exceed $100,000 or such amount as shall be
specified in Section 422 of the Code and rules and regulations thereunder.
6.2 Option Agreement. Each Option grant shall be evidenced by an Agreement that
shall specify the type of Option granted, the Option Price (as hereinafter
defined), the duration of the Option, the number of Shares to which the Option
pertains, any conditions imposed upon the exercisability of Options in the event
of retirement, death, disability or other termination of employment or service,
and such other provisions as the Committee shall determine. The Agreement shall
specify whether the Option is intended to be an Incentive Stock Option within
the meaning of Section 422 of the Code, or a Non-Qualified Stock Option not
intended to be within the provisions of Section 422 of the Code, provided,
however, that if an Option is intended to be an Incentive Stock Option but fails
to be such for any reason, it shall continue in full force and effect as a
Non-Qualified Stock Option. If an Option is intended to be a Performance-Based
Compensation Award, the terms and conditions thereof, including the Performance
Goal and Performance Period, shall be set forth in an Agreement or in a subplan
of the Plan which is incorporated by reference into an Agreement and the
requirements to satisfy or achieve the Performance Goal as so provided therein
shall be considered to be restrictions under the Plan.
6.3 Option Price. The Option Price of an Option shall be determined by the
Committee subject to the following limitations. The Option Price shall not be
less than 100% of the Fair Market Value of such Stock on the Grant Date. In
addition, an ISO granted to a Key Associate (including any Director who is a Key
Associate) who, at the time of grant, owns (within the meaning of Section 424(d)
of the Code) stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company, shall have an Option Price which is at
least equal to 110% of the Fair Market Value of such Stock on the Grant Date.
6.4 Duration of Options. Each Option shall expire at such time as the Committee
shall determine, provided, however, that no Option shall be exercisable after
the expiration of ten years from its Award Date. In addition, an ISO granted to
a Key Associate (including any Key Associate who is a Director) who, at the time
of grant, owns (within the meaning of Section 424(d) of the Code) stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company, shall not be exercisable after the expiration of five
years from its Award Date.
6.5 Exercisability. Options granted under the Plan shall be exercisable at such
times and be subject to such restrictions and conditions as the Committee shall
determine, which need not be the same for all Participants.
6.6 Method of Exercise. Options shall be exercised by the delivery of a written
notice to the Company in the form prescribed by the Committee setting forth the
number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares and payment of (or an arrangement
satisfactory to the Company for the Participant to pay) any tax withholding
required in connection with the Option exercise. The Option Price shall be
payable to the Company in full either in cash, by delivery of Shares of Stock
valued at Fair Market Value at the time of exercise or by a combination of the
foregoing.
To the extent permitted under the applicable laws and regulations, at the
request of the Participant and with the consent of the Committee, the Company
agrees to cooperate in a "cashless exercise" of an Option. The cashless exercise
shall be effected by the Participant delivering to a securities broker
instructions to exercise all or part of the Option, including instructions to
sell a sufficient number of shares of Stock to cover the costs and expenses
associated therewith.
As soon as practicable, after receipt of written notice and payment of the
Option Price and completion of payment of (or an arrangement satisfactory to the
Company for the Participant to pay) any tax withholding required in connection
with the Option exercise, the Company shall deliver to the Participant, stock
certificates in an appropriate amount based upon the number of Options
exercised, issued in the Participant's name.
6.7 Restrictions on Stock Transferability. The Committee shall impose such
restrictions on any Shares acquired pursuant to the exercise of an Option under
the Plan as it may deem advisable, including, without limitation, restrictions
under applicable Federal securities law, under the requirements of the National
Association of Securities Dealers, Inc. or any stock exchange upon which such
Shares are then listed and under any blue sky or state securities laws
applicable to such Shares. The Committee may specify in an Agreement that Stock
delivered on exercise of an Option is Restricted Stock or Stock subject to a
buyback right by the Company in the amount of, or based on, the Option Price
therefor in the event the Participant does not complete a specified service
period after exercise.
6.8 Nontransferability of Options. No Option granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, all Options
granted to a Participant under the Plan shall be exercisable during his lifetime
only by such Participant or his guardian or legal representative.
Notwithstanding the foregoing or any other provision of the Plan to the
contrary, to the extent permissible under Rule 16b-3 of the Exchange Act, a
Participant who is granted Non-Qualified Stock Options pursuant to the Plan may
transfer such Non-Qualified Stock Options to his or her spouse, lineal
ascendants, lineal descendants, or to trusts for their benefit, provided that
the Non-Qualified Stock Option so transferred may not again be transferred other
than to the Participant originally receiving the grant of Non-Qualified Stock
Options or to an individual or trust to whom such Participant could have
transferred Non-Qualified Stock Options pursuant to this Section 6.8.
Non-Qualified Stock Options which are transferred pursuant to this Section 6.8
shall be exercisable by the transferee subject to the same terms and conditions
as would have applied to such Non-Qualified Stock Options in the hands of the
Participant originally receiving the grant of such Non-Qualified Stock Options.
6.9 Reload Options. The Committee shall have the authority to specify at the
Award Date for an Option that a Participant receiving the Option shall be
granted the right to a further Non-Qualified Stock Option (a "Reload Option") in
the event the Participant exercises all or a part of the Option, including a
Reload Option (an "Original Option"), by surrendering in accordance with Section
6.6 hereof already owned shares of Stock in full or partial payment of the
Option Price under such Original Option. Each Reload Option shall be granted on
the date of exercise of the Original Option, shall cover a number of shares of
Stock not exceeding the whole number of shares of Stock surrendered in payment
of the Option Price under such Original Option, shall have an Option Price equal
to the Fair Market Value on the Award Date of such Reload Option, shall expire
on the stated expiration date of the Original Option and shall be subject to
such other terms and conditions as the Committee may determine.
ARTICLE VII
Stock Appreciation Rights
7.1 Grant of Stock Appreciation Rights. Subject to the terms and conditions of
the Plan, Stock Appreciation Rights may be granted to Key Associates and
Directors, at the discretion of the Committee, in any of the following forms,
provided, however, that no Participant may be granted more than 90,000 SARs in
any calendar year (with SARs cancelled in the same year as granted counted
against this limit and with SARs for which the base amount on which the SAR
payment at exercise is calculated is reduced treated as cancelled and reissued
for this annual limit):
(a) In connection with the grant, and exercisable in lieu of, Options ("Tandem
SARs");
(b) In connection with and exercisable in addition to the grant of Options
("Additive SARs");
(c) Independent of grant of the Options ("Freestanding SARs"); or
(d) In any combination of the foregoing.
7.2 SAR Agreement. Each SAR grant shall be evidenced by an Agreement that shall
specify its type of SAR and its terms and conditions. If an SAR grant is
intended to be a Performance-Based Compensation Award, the Performance Goal and
Performance Period shall be set forth in an Agreement or in a subplan of the
Plan which is incorporated by reference into an Agreement and the requirements
to satisfy or achieve the Performance Goal as so provided therein shall be
considered to be restrictions under the Plan.
7.3 Exercise of Tandem SARs. Tandem SARs may be exercised with respect to all or
part of the Shares subject to the Related Option. The exercise of Tandem SARs
shall cause a reduction in the number of Shares subject to the Related Option
equal to the number of Shares with respect to which the Tandem SAR is exercised.
Conversely, the exercise, in whole or part, of a Related Option, shall cause a
reduction in the number of Shares subject to the Related Option equal to the
number of Shares with respect to which the Related Option is exercised. Shares
with respect to which the Tandem SAR shall have been exercised may not be
subject again to an Award under the Plan.
Notwithstanding any other provision of the Plan to the contrary, a Tandem SAR
shall expire no later than the expiration of the Related Option, shall be
transferable only when and under the same conditions as the Related Option and
shall be exercisable only when the Related Option is eligible to be exercised.
In addition, if the Related Option is an ISO, a Tandem SAR shall be exercised
for no more than 100% of the difference between the Option Price of the Related
Option and the Fair Market Value of Shares subject to the Related Option at the
time the Tandem SAR is exercised.
7.4 Exercise of Additive SARs. Additive SARs shall be deemed to be exercised
upon, and in addition to, the exercise of the Related Options. The deemed
exercise of Additive SARs shall not reduce the number of Shares with respect to
which the Related Options remains unexercised.
7.5 Exercise of Freestanding SARs. Freestanding SARs may be exercised upon
whatever terms and conditions the Committee, in its sole discretion, imposes
upon such SARs.
7.6 Other Conditions Applicable to SARs. In no event shall the term of any SAR
granted under the Plan exceed ten years from the Grant Date. A SAR may be
exercised only when the Fair Market Value of a Share exceeds either (i) the Fair
Market Value per Share on the Grant Date in the case of a Freestanding SAR or
(ii) the Option Price of the Related Option in the case of either a Tandem or
Additive SAR. A SAR shall be exercised by delivery to the Committee of a notice
of exercise in the form prescribed by the Committee.
7.7 Payment after Exercise of SARs. Subject to the provisions of the Agreement,
upon the exercise of a SAR, the Participant is entitled to receive, without any
payment to the Company (other than required tax withholding amounts), an amount
equal (the "SAR Value") to the product of multiplying (i) the number of Shares
with respect to which the SAR is exercised by (ii) an amount equal to the excess
of (A) the Fair Market Value per Share on the date of exercise of the SAR over
(B) either (x) the Fair Market Value per Share on the Award Date in the case of
a Freestanding SAR or (y) the Option Price of the Related Option in the case of
either a Tandem or Additive SAR. The Agreement may provide for payment of the
SAR Value at the time of exercise or, on an elective or non-elective basis, for
payment of the SAR Value at a later date, adjusted (if so provided in the
Agreement) from the date of exercise based on an interest, dividend equivalent,
earnings, or other basis (including deemed investment of the SAR Value in
Shares) set out in the Agreement (the "adjusted SAR Value"). The Committee is
expressly authorized to grant SARs which are deferred compensation covered by
Section 409A of the Code, as well as SARs which are not deferred compensation
covered by Section 409A of the Code.
Payment of the SAR Value or adjusted SAR Value to the Participant shall be made
in Shares, valued at the Fair Market Value on the date of exercise in the case
of an immediate payment after exercise or at the Fair Market Value on the date
of settlement in the event of an elective or non-elective delayed payment, in
cash or a combination thereof as determined by the Committee, either at the time
of the Award or thereafter, and as provided in the Agreement.
7.8 Nontransferability of SARs. No SAR granted under the Plan, and no right to
receive payment in connection therewith, may be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution. Further, all SARs, and rights in connection
therewith, granted to a Participant under the Plan shall be exercisable during
his lifetime only by such Participant or his guardian or legal representative.
ARTICLE VIII
Restricted Stock
8.1 Grant of Restricted Stock. Subject to the terms and conditions of the Plan,
the Committee, at any time and from time to time, may grant Shares of Restricted
Stock under the Plan to such Key Associates and Directors and in such amounts as
it shall determine, provided, however, that no Participant may be granted more
than 50,000 Shares of Restricted Stock in any calendar year. Participants
receiving Restricted Stock Awards are not required to pay the Company therefor
(except for applicable tax withholding) other than the rendering of services. If
determined by the Committee, custody of Shares of Restricted Stock may be
retained by the Company until the termination of the Period of Restriction
pertaining thereto.
8.2 Restricted Stock Agreement. Each Restricted Stock Award shall be evidenced
by an Agreement that shall specify the Period of Restriction, the number of
Restricted Stock Shares granted, and the applicable restrictions and such other
provisions as the Committee shall determine. If an Award of Restricted Stock is
intended to be a Performance-Based Compensation Award, the terms and conditions
of such Award, including the Performance Goal and Performance Period, shall be
set forth in an Agreement or in a subplan of the Plan which is incorporated by
reference into an Agreement and the requirements to satisfy or achieve the
Performance Goal as so provided therein shall be considered to be restrictions
under the Plan.
8.3 Nontransferability of Restricted Stock. Except as provided in this Article
VIII and subject to the limitation in the next sentence, the Shares of
Restricted Stock granted hereunder may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated until the termination of the
applicable Period of Restriction or upon the earlier satisfaction of other
conditions as specified by the Committee in its sole discretion and set forth in
the Agreement. All rights with respect to the Restricted Stock granted to a
Participant under the Plan shall be exercisable during his lifetime only by such
Participant or his guardian or legal representative.
8.4 Other Restrictions. The Committee may impose such other restrictions on any
Shares of Restricted Stock granted pursuant to the Plan as it may deem advisable
including, without limitation, restrictions under applicable Federal or state
securities laws, and may legend the certificates representing Restricted Stock
to give appropriate notice of such restrictions.
8.5 Certificate Legend. In addition to any legends placed on certificates
pursuant to Section 8.4 herein, each certificate representing Shares of
Restricted Stock granted pursuant to the Plan shall bear the following legend:
The sale or other transfer of the Shares of Stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is
subject to certain restrictions on transfer set forth in the Trustmark
Corporation 2005 Stock and Incentive Compensation Plan, in the rules and
administrative procedures adopted pursuant to such Plan, and in an
Agreement dated <<date of grant>>. A copy of the Plan, such rules and
procedures, and such Restricted Stock Agreement may be obtained from the
Secretary of Trustmark Corporation.
8.6 Removal of Restrictions. Except as otherwise provided in this Article,
Shares of Restricted Stock covered by each Restricted Stock Award made under the
Plan shall become freely transferable by the Participant after the last day of
the Period of Restriction and, where applicable, after a determination of the
satisfaction or achievement on any applicable Performance Goal. Once the Shares
are released from the restrictions, the Participant shall be entitled to have
the legend required by Section 8.5 herein removed from his Stock certificate.
8.7 Voting Rights. During the Period of Restriction, Participants holding Shares
of Restricted Stock granted hereunder may exercise full voting rights with
respect to those Shares.
8.8 Dividends and Other Distributions. Unless otherwise provided in the
Agreement, during the Period of Restriction, Participants entitled to or holding
Shares of Restricted Stock granted hereunder shall be entitled to receive all
dividends and other distributions paid with respect to those Shares while they
are so held. If any such dividends or distributions are paid in Shares, the
Shares shall be subject to the same restrictions on transferability and the same
rules for custody as the Shares of Restricted Stock with respect to which they
were distributed.
8.9 Termination of Employment or Service. Unless otherwise provided in the
Agreement, in the event that a Participant terminates his employment or service
with the Company for any reason during the Period of Restriction, then any
Shares of Restricted Stock still subject to restrictions as of the date of such
termination shall automatically be forfeited and returned to the Company. The
Committee may provide for vesting of Restricted Stock in connection with the
termination of a Participant's employment or service on such basis as it deems
appropriate.
ARTICLE IX
Restricted Stock Units
9.1 Grant of Restricted Stock Units. Subject to the terms and conditions of the
Plan, the Committee, at any time and from time to time, may grant Restricted
Stock Units under the Plan (with one Unit representing one Share) to such Key
Associates and Directors and in such amounts as it shall determine, provided,
however, that no Participant may be granted more than 50,000 Restricted Stock
Units in any calendar year. Participants receiving Restricted Stock Unit Awards
are not required to pay the Company therefor (except for applicable tax
withholding) other than the rendering of services.
9.2 Restricted Stock Unit Agreement. Each Restricted Stock Unit Award shall be
evidenced by an Agreement that shall specify the Period of Restriction, the
number of Restricted Stock Units granted, and the applicable restrictions and
such other provisions as the Committee shall determine. If an Award of
Restricted Stock Units is intended to be a Performance-Based Compensation Award,
the terms and conditions of such Award, including the Performance Goal and
Performance Period, shall be set forth in an Agreement or in a subplan of the
Plan which is incorporated by reference into an Agreement and the requirements
to satisfy or achieve the Performance Goal as so provided therein shall be
considered to be restrictions under the Plan.
Unless otherwise provided in the Agreement, during the Period of Restriction,
Participants holding Restricted Stock Units shall have added to their rights all
dividends and other distributions which would have been paid with respect to the
Shares represented by those Restricted Stock Units if such Shares were
outstanding, and such deemed dividends or distributions shall be subject to the
same restrictions, vesting and payment as the Restricted Stock Units to which
they are attributable. Unless otherwise provided in the Agreement, during the
Period of Restriction, any such deemed dividends and other distributions shall
be deemed converted to additional Restricted Stock Units based on the Fair
Market Value of a Share on the date of payment or distribution of the deemed
dividend or distribution.
9.3 Payment after Lapse of Restrictions. Subject to the provisions of the
Agreement, upon the lapse exercise of restrictions with respect to a Restricted
Stock Unit, the Participant is entitled to receive, without any payment to the
Company (other than required tax withholding amounts), an amount equal (the "RSU
Value") to the product of multiplying (i) the number of Shares with respect to
which the restrictions lapse by (ii) the Fair Market Value per Share on the date
the restrictions lapse.
The Agreement may provide for payment of the RSU Value at the time of exercise
or, on an elective or non-elective basis, for payment of the RSU Value at a
later date, adjusted (if so provided in the Agreement) from the date of exercise
based on an interest, dividend equivalent, earnings, or other basis (including
deemed investment of the RSU Value in Shares) set out in the Agreement (the
"adjusted RSU Value"). The Committee is expressly authorized to grant Restricted
Stock Units which are deferred compensation covered by Section 409A of the Code,
as well as Restricted Stock Units which are not deferred compensation covered by
Section 409A of the Code.
Payment of the RSU Value or adjusted RSU Value to the Participant shall be made
in Shares, valued at the Fair Market Value on the date the restrictions therefor
lapse in the case of an immediate payment after vesting or at the Fair Market
Value on the date of settlement in the event of an elective or non-elective
delayed payment, in cash or a combination thereof as determined by the
Committee, either at the time of the Award or thereafter, and as provided in the
Agreement.
9.4 Nontransferability of Restricted Stock Units. No Restricted Stock Unit
granted under the Plan, and no right to receive payment in connection therewith,
may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and distribution.
Further, all Restricted Stock Units, and rights in connection therewith, granted
to a Participant under the Plan shall be exercisable during his lifetime only by
such Participant or his guardian or legal representative.
9.5 Termination of Employment or Service. Unless otherwise provided in the
Agreement, in the event that a Participant terminates his employment or service
with the Company for any reason during the Period of Restriction, then any
Restricted Stock Units still subject to restrictions as of the date of such
termination shall automatically be forfeited and returned to the Company. The
Committee may provide for vesting of Restricted Stock Units in connection with
the termination of a Participant's employment or service on such basis as it
deems appropriate.
ARTICLE X
Performance Units
10.1 Grant of Performance Units. Subject to the terms and conditions of the
Plan, Performance Units may be granted to Key Associates and Directors at any
time and from time to time as shall be determined by the Committee, provided,
however, that no Participant may be granted Performance Units with a dollar
value in excess of $1,000,000 in any calendar year. Otherwise, the Committee
shall have complete discretion in determining the number of Performance Units
granted to each Participant. Participants receiving such Awards are not required
to pay the Company therefor (except for applicable tax withholding) other than
the rendering of services.
10.2 Performance Unit Agreement. Each Performance Unit is intended to be a
Performance-Based Compensation Award, and the terms and conditions of each such
Award, including the Performance Goal and Performance Period (which may be equal
to, less than or more than one year), shall be set forth in an Agreement or in a
subplan of the Plan which is incorporated by reference into an Agreement. The
Committee shall set the Performance Goal in its discretion for each Participant
who is granted a Performance Unit.
10.3 Settlement of Performance Units. After a Performance Period has ended, the
holder of a Performance Unit shall be entitled to receive the value thereof
based on the degree to which the Performance Goals and other conditions
established by the Committee and set forth in the Agreement (or in a subplan of
the Plan which is incorporated by reference into an Agreement) have been
satisfied.
10.4 Form of Payment. Payment of the amount to which a Participant shall be
entitled upon the settlement of a Performance Unit shall be made in cash, Stock
or a combination thereof as determined by the Committee. Payment may be made in
a lump sum or installments as determined by the Committee.
10.5 Nontransferability of Performance Units. No Performance Unit granted under
the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, otherwise than by will or by the laws of descent and distribution.
All rights with respect to Performance Units granted to a Participant under the
Plan shall be exercisable during his lifetime only by such Participant or his
guardian or legal representative.
ARTICLE XI
Change in Control
In the event of a Change in Control of the Company, the Committee, as
constituted before such Change in Control, in its sole discretion may, as to any
outstanding Award, either at the time the Award is made or any time thereafter,
take any one or more of the following actions: (i) provide for the acceleration
of any time periods relating to the exercise or realization of any such Award so
that such Award may be exercised or realized in full on or before a date
initially fixed by the Committee; (ii) provide for the purchase or settlement of
any such Award by the Company, upon a Participant's request, for an amount of
cash equal to the amount which could have been obtained upon the exercise of
such Award or realization of such Participant's rights had such Award been
currently exercisable or payable; (iii) make such adjustment to any such Award
then outstanding as the Committee deems appropriate to reflect such Change in
Control; or (iv) cause any such Award then outstanding to be assumed, or new
rights substituted therefor, by the acquiring or surviving corporation in such
Change in Control.
ARTICLE XII
Modification, Extension and Renewal of Awards
Subject to the terms and conditions and within the limitations of the Plan, the
Committee may modify, extend or renew outstanding Awards and may modify the
terms of an outstanding Agreement, provided that the exercise price of any Award
may not be lowered other than pursuant to Section 4.4 herein. In addition, the
Committee may accept the surrender of outstanding Awards (to the extent not yet
exercised) granted under the Plan or outstanding awards granted under any other
equity compensation plan of the Company and authorize the granting of new Awards
pursuant to the Plan in substitution therefor so long as the new or substituted
awards do not specify a lower exercise price than the surrendered Awards or
awards, and otherwise the new Awards may be of a different type than the
surrendered Awards or awards, may specify a longer term than the surrendered
Awards or awards, may provide for more rapid vesting and exercisability than the
surrendered Awards or awards, and may contain any other provisions that are
authorized by the Plan. Notwithstanding the foregoing, however, no modification
of an Award, shall, without the consent of the Participant, adversely affect the
rights or obligations of the Participant.
ARTICLE XIII
Amendment, Modification and Termination of the Plan
13.1 Amendment, Modification and Termination. At any time and from time to time,
the Board may terminate, amend, or modify the Plan. Such amendment or
modification may be without shareholder approval except to the extent that such
approval is required by the Code, pursuant to the rules under Section 16 of the
Exchange Act, by any national securities exchange or system on which the Stock
is then listed or reported, by any regulatory body having jurisdiction with
respect thereto or under any other applicable laws, rules or regulations.
13.2 Awards Previously Granted. No termination, amendment or modification of the
Plan other than pursuant to Section 4.4 herein shall in any manner adversely
affect any Award theretofore granted under the Plan, without the written consent
of the Participant.
ARTICLE XIV
Withholding
14.1 Tax Withholding. The Company shall have the power and the right to deduct
or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, State and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any grant, exercise, or payment made under or as a result of the Plan.
14.2 Stock Withholding. With respect to withholding required upon the exercise
of Non-Qualified Stock Options, or upon the lapse of restrictions on Restricted
Stock, or upon the occurrence of any other taxable event with respect to any
Award, Participants may elect, subject to the approval of the Committee, or the
Committee may require Participants to satisfy the withholding requirement, in
whole or in part, by having the Company withhold Shares of Stock having a Fair
Market Value equal to the amount required to be withheld. The value of the
Shares to be withheld shall be based on Fair Market Value of the Shares on the
date that the amount of tax to be withheld is to be determined. All elections by
Participants shall be irrevocable and be made in writing and in such manner as
determined by the Committee in advance of the day that the transaction becomes
taxable.
ARTICLE XV
Successors
All obligations of the Company under the Plan, with respect to Awards granted
hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation or otherwise, of all or substantially all of the business
and/or assets of the Company.
ARTICLE XVI
General
16.1 Requirements of Law. The granting of Awards and the issuance of Shares of
Stock under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or self
regulatory organizations as may be required.
16.2 Effect of the Plan. The establishment of the Plan shall not confer upon any
Key Associate or Director any legal or equitable right against the Company, a
Subsidiary or the Committee, except as expressly provided in the Plan. The Plan
does not constitute an inducement or consideration for the employment or service
of any Key Associate or Director, nor is it a contract between the Company or
any of its Subsidiaries and any Key Associate or Director. Participation in the
Plan shall not give any Key Associate or Director any right to be retained in
the service of the Company or any of its Subsidiaries. No Key Associate or
Director who receives an Award shall have rights as a shareholder of the Company
prior to the date Shares are issued to the Participant pursuant to the Plan.
16.3 Creditors. The interests of any Participant under the Plan or any Agreement
are not subject to the claims of creditors and may not, in any way, be assigned,
alienated or encumbered.
16.4 Governing Law. The Plan, and all Agreements hereunder, shall be governed,
construed and administered in accordance with and governed by the laws of the
State of Mississippi and the intention of the Company is that ISOs granted under
the Plan qualify as such under Section 422 of the Code.
16.5 Severability. In the event any provision of the Plan shall be held illegal
or invalid for any reason, the illegality or invalidity shall not affect the
remaining parts of the Plan, and the Plan shall be construed and enforced as if
the illegal or invalid provision had not been included.
16.6 Unfunded Status of Plan. The Plan is intended to constitute an "unfunded"
plan for incentive and deferred compensation. With respect to any payments as to
which a Participant has a fixed and vested interest but which are not yet made
to a Participant by the Company, nothing contained herein shall give any such
Participant any rights that are greater than those of a general unsecured
creditor of the Company.
16.7 Nonqualified Deferred Compensation Plan Omnibus Provision. It is intended
that any compensation, benefits or other remuneration which is provided pursuant
to or in connection with the Plan which is considered to be nonqualified
deferred compensation subject to Section 409A of the Code shall be provided and
paid in a manner, and at such time and in such form, as complies with the
applicable requirements of Section 409A of the Code to avoid the unfavorable tax
consequences provided therein for non-compliance. The Committee is authorized to
amend any Award Agreement as may be determined by it to be necessary or
appropriate to evidence or further evidence required compliance with IRC Section
409A.