Contract
EXHIBIT 10.3
AMENDED
AND RESTATED
This Amended and Restated Employment
Agreement ("Agreement")
is entered into as of November 20, 2008 by Trustmark Corporation, a
Mississippi corporation (the "Company"), and Xxxxxxx X.
Xxxxxxx (the "Executive"). The
Company and Executive have entered into this Agreement with reference to the
following facts:
A. The
Company and Executive entered into that certain agreement dated as of May 13,
1997, which the Company and Executive amended and restated effective as of March
12, 2002 and again as of October 23, 2007 ("Original Agreement");
and
B. The
Company and Executive now desire to amend and restate in its entirety the
Original Agreement as set forth in this Agreement to reflect certain substantive
changes in the terms and conditions relating to the Executive’s
employment.
NOW, THEREFORE, in consideration of
the mutual premises and agreements herein contained, and other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties, intending to be legally bound, hereby agree as follows:
1. Term of
Employment. Subject to Section 5 hereof, the term of the
Executive's employment under this Agreement commenced on the 13th day of May,
1997 (the "Commencement
Date"), and shall continue through the end of the day on which the Annual
Meeting of the Company’s shareholders is held in 2011 unless terminated earlier
as provided in Section 5 (the "Term"). For all
purposes of this Agreement, the day on which the Annual Meeting of the Company’s
shareholders is held is the day on which the meeting is opened in 2011, whether
or not adjourned or suspended and carried over to another day.
2. Duties of
Employment. The Executive agrees to render his services to the
Company through the earlier of December 31, 2010 or the end of the Term as
its Chairman of the Board, President and Chief Executive Officer, to render his
services to the Company’s subsidiary Trustmark National Bank (the "Bank") as its Chairman of the
Board and Chief Executive Officer and to hold such other office or position with
the Company and/or the Bank as may be reasonably requested by the Board of
Directors of the Company (the "Board"), and in connection
therewith, to perform such duties commensurate with his office or position as he
shall reasonably be directed by the Board to perform. For any portion
of the Term occurring after December 31, 2010, the Executive agrees to
render his services to the Company as an employee and as the Chairman of the
Board, but not as President and Chief Executive Officer of the Company, and to
render his services to the Bank as an employee and as the Chairman of the Board,
but not as Chief Executive Officer of the Bank. The Executive shall
perform such duties faithfully and diligently at all times. The
Executive shall have no other employment while he is employed by the Company;
provided, however, that the Executive may serve on the boards of directors of
companies which do not compete with the Company and in such capacity attend
regularly scheduled board meetings to the extent approved in writing in advance
by the Board. When and if requested to do so by the Board, the
Executive shall serve as a director and officer of any other subsidiary or
affiliate of the Company. The Company shall notify the Executive if
it believes that the Executive has breached any of his obligations under this
Section 2; in such event, the Executive shall have thirty (30) days within which
to cure such breach, other than a breach of his obligation to refrain from
employment with any person or entity other than the Company or any of its
subsidiaries or affiliates.
3. Compensation
and Other Benefits.
3.1. Salary. As
his full base compensation for all services to be rendered by the Executive
during the Term, the Company shall pay to the Executive a base salary for each
calendar year of the Term in an amount established each year by the Human
Resources Committee of the Board, or any successor committee of the Board
charged with oversight of and responsibility for executive compensation (the
"HR Committee"), and the
Board, but in no event less than $400,000 annually. Payment shall be
made in accordance with the Company's usual payroll practices for senior
executives (not less frequently than monthly). The annual base salary
set forth in this Section 3, as in effect at any particular time, shall
hereinafter be referred to as the "Base Salary." The Company
shall withhold or cause to be withheld from the Base Salary (and other wages
hereunder) all taxes and other amounts as are required by law to be
withheld. For 2011, the Executive’s Base Salary shall continue for
the portion of such year the Executive remains an employee at no less than the
annual rate in effect on December 31, 2010.
3.2. Annual
Bonus. In addition to the Base Salary, the Executive shall
have the opportunity annually to earn as a bonus seventy percent (70%) of his
Base Salary (the "Target Award
Opportunity"). In establishing the actual bonus earned each
year by the Executive (the "Annual Bonus"), the HR
Committee, in consultation with the Executive, shall have the discretion to
increase the Annual Bonus above or decrease the Annual Bonus below the Target
Award Opportunity for that year. In so doing the HR Committee's
determination shall be based upon an assessment of the performance of both the
Executive and the Company taking into consideration such performance goals as
may be established by the HR Committee periodically in consultation with the
Executive. The Executive's Annual Bonus shall not exceed one hundred
percent (100%) of the Base Salary for any one year. Any Annual Bonus
due hereunder shall be payable to the Executive no later than the 15th of the
third month following the end of the year to which the Annual Bonus relates
(subject to a reasonable delay in payment due to an unforeseeable event making
it administratively impracticable to make the payment by such
time). For 2011, the Executive shall not participate in Company’s
regular annual incentive plan, but the HR Committee may nevertheless provide for
a bonus payable to the Executive for the portion of such year the Executive
remains an employee on such basis, if any, as it may determine in its sole
discretion.
3.3. Equity
Compensation.
A. Equity
Compensation Awards. The Company will grant to the Executive
such equity compensation awards from time to time in such amounts as are
determined in the sole discretion of the HR Committee, provided, however, that
no equity compensation awards will be granted after 2009.
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B. Stock
Options. If the Executive’s employment ceases other than by
the Company’s termination for Cause (as hereinafter defined), all of the
Executive’s currently outstanding incentive stock options and currently
outstanding nonqualified stock options on the date of this Agreement shall be
amended to provide, and all of the Executive’s stock options which are granted
after the date of this Agreement shall provide, that to the extent they are
outstanding at the Executive’s cessation of employment they will be or become,
and will thereafter continue to be, exercisable for their full original
term. If the Executive’s employment ceases by the Company’s
termination for Cause, the Executive’s rights in his stock options shall be
governed by the terms set forth in the applicable award agreement(s) and not by
this Agreement.
C. Restricted
Stock. The Executive shall continue to be eligible to receive
awards under the Company’s 2005 Stock and Incentive Compensation Plan (or any
successor plan) of restricted stock, restricted stock units and/or performance
units through 2009 on such basis as the HR Committee may determine in its sole
discretion, provided, however, that subject to the applicable limitations of the
plan under which the awards are made, the awards for 2009 shall be twice the
amount of the usual annual award, one-half of the award for 2009 shall vest
based on performance and one-half shall vest based on service, the award amount
shall be based on the 2008 award formula (substituting 2009 stock value for 2008
stock value), the performance period for the performance-based portion of the
award shall be two years (2009 and 2010) and all earned shares and any cash
entitlement shall normally vest only if the Executive continues to be employed
by the Company until the day on which the Annual Meeting of the Company’s
shareholders is held in 2011, provided that vesting at earlier death, disability
or change in control shall also be provided on a basis substantially similar to
that provided in the 2008 awards to the Executive. No award shall be
made if the Executive is not employed by the Company on the date of
grant.
3.4. Vacation. The
Executive shall be entitled to four (4) weeks of paid vacation for each calendar
year of the Term hereof. Upon termination of employment, Executive
shall be paid for all unused vacation granted during the year of termination at
the Base Salary rate then existing as soon as practicable after the effective
date of termination in accordance with the Company’s usual payroll practices
(not less frequently than monthly). The Executive shall not be paid
for any unused vacation if terminated by the Company for Cause (as hereinafter
defined). No payment shall be made for unused vacation from any prior
years.
3.5. Participation
in Employee Benefit Plans. The Executive shall be permitted to
participate in all group life, hospitalization and disability insurance plans,
health programs, pension plans, similar benefit plans or other so-called "fringe
benefit programs" of the Company (the "Employee Benefits") as are now
existing or as may hereafter be revised or adopted and offered to senior
executives generally to the extent the Executive is eligible under the
eligibility provisions of the relevant plan.
4. Confidentiality,
Nonsolicitation and Noncompete.
4.1. Confidentiality. The
Executive covenants and agrees that all trade secrets, confidential information
(including but not limited to confidential information with respect to
marketing, product offerings or expansion plans), and financial matters of the
Company and its subsidiaries (collectively "Confidential Information")
which are learned by him in the course of his employment by the Company shall be
held in a fiduciary capacity and treated as confidential by him and shall not be
disclosed, communicated or divulged by him or used by him for the benefit of any
person or entity (other than the Company, its subsidiaries or affiliates) unless
expressly authorized in writing by the Board, or unless the Confidential
Information becomes generally available to the public otherwise than through
disclosure by the Executive.
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4.2. Nonsolicitation. The
Executive agrees that (1) during the period he is employed hereunder and for a
period of twenty-four (24) months thereafter, he will not, without the prior
written consent of the Board, directly or indirectly solicit, entice, persuade,
or induce any employee, director, officer, associate, consultant, agent or
independent contractor of the Company or its subsidiaries (i) to terminate such
person's employment or engagement by the Company or its subsidiaries or (ii) to
become employed by any person, firm partnership, corporation, or other such
enterprise other than the Company, its subsidiaries or affiliates, and (2) he
shall not following the termination of his employment hereunder represent that
he is in any way connected with the business of the Company or its subsidiaries
(except to the extent agreed to in writing by the Company).
4.3. Noncompete. The
Executive agrees that during the period he is employed hereunder and for a
period of twenty-four (24) months following the date of termination of his
employment for any reason except Retirement (as defined in Section 5.9), he will
not (except as a representative of the Company or with the prior written consent
of the Board), directly or indirectly, engage, participate or make any financial
investment, as an employee, director, officer, associate, consultant, agent,
independent contractor, lender or investor, in the business of any person, firm,
partnership, corporation or other enterprise that is engaged in direct
competition with the business of the Company in any geographic area in which the
Company is then conducting such business. Nothing in this Section 4.3
shall be construed to preclude the Executive from making any investments in the
securities of any business enterprise whether or not engaged in competition with
the Company, to the extent that such securities are actively traded on a
national securities exchange or in the over-the-counter market in the United
States or on any foreign securities exchange and represent less than one-percent
(1%) of any class of securities of such business
enterprise. Executive acknowledges that if his employment with the
Company terminates for any reason, he can earn a livelihood without violating
the foregoing restrictions and that the time period and scope of the foregoing
restrictions are reasonably required for the protection of the Company's valid
business interests.
4.4. Covenant
Payments. In consideration for the covenants contained in this
Section 4, which are considered material to the Company, the Company agrees to
pay Executive all amounts owed pursuant to this Agreement, and upon Executive's
termination by the Company for any reason other than Cause, death, disability or
Retirement (as defined below) or Executive’s resignation for Good Reason, to pay
Executive an amount (the "Covenant Payments") equal to
the product of two times the sum of (i) the Executive's Base Salary and (ii) the
highest Annual Bonus earned in any one of the three years preceding the
termination. Subject to Section 13 hereof, the Covenant Payments
shall be paid in twenty-four (24) equal monthly installments with the first
installment commencing on the 60th day
after the effective date of termination and continuing thereafter on the same
day of each following month until all twenty-four (24) monthly installments are
paid. In the event of the Executive's death following such date of
termination, any unpaid installments shall be paid to the Executive's estate in
a single undiscounted cash lump sum. Such lump sum shall be paid on
the 60th day
after the Executive's death. Notwithstanding anything herein to the
contrary, if the Executive is terminated by the Company for Cause or the
Executive voluntarily resigns other than for Good Reason or becomes disabled
during the Term, the Executive will remain subject to the covenants contained in
Section 4 but will not be entitled to the Covenant Payments.
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4.5. Remedies. The
Executive acknowledges and agrees that the Company would be damaged irreparably
if any provision of Section 4 was not performed by the Executive in accordance
with its terms or was otherwise breached and that money damages would be an
inadequate remedy for any such nonperformance or breach. Therefore,
the Company or its successors or assigns shall be entitled, in addition to any
other rights and remedies existing in their favor, including the right to retain
the Covenant Payments, to an injunction or injunctions to prevent any breach or
threatened breach of any such provisions and to enforce such provisions
specifically (without posting a bond or other security). Executive
agrees that Company or its successors or assigns may retain the Covenant
Payments as partially liquidated damages for such breach and not as a
penalty. The Company acknowledges and agrees that the Executive would
be damaged irreparably if any provision of Section 4 was not performed by the
Company in accordance with its terms or was otherwise breached and that money
damages would be an inadequate remedy for any such nonperformance or
breach. Therefore, the Executive shall be entitled, in addition to
any other rights and remedies existing in his favor, to an injunction or
injunctions to prevent any breach or threatened breach of any such provisions
and to enforce such provisions specifically (without posting a bond or other
security).
5. Termination
and Severance.
5.1. Notice of
Termination. Subject to the provisions of this Agreement, the
Company and the Executive may terminate the Term on thirty (30) days written
notice to the other party, which notice shall specify in detail the cause for
termination, except that no prior written notice need be given by the Company in
the event it terminates the Executive's employment hereunder for Cause (as
hereinafter defined and subject to applicable cure provisions).
5.2. Resignation. Except
as otherwise provided in Section 5.7 or 5.8 herein, the Executive may
voluntarily terminate the Term and resign from employment with the Company by
written notice to Company specifying the effective date of such
resignation. Upon receipt of such notice, the Company shall have the
right to terminate the Term immediately or at such earlier date as the Company
may elect by written notice to the Executive and, in such event the termination
shall be treated as a voluntary termination without Good Reason by the
Executive. Thereafter, the Company shall have no further obligations
or liabilities to the Executive, except for obligations to pay the Executive (1)
any unpaid Base Salary and accrued vacation benefits earned through the date of
termination; and (2) the Annual Bonus earned for the calendar year immediately
preceding the calendar year of termination to the extent not already
paid. Such unpaid Base Salary and accrued vacation benefits and the
Annual Bonus shall be paid to the Executive in a lump sum as soon as practicable
after the effective date of termination in accordance with the Company’s usual
payroll practices (not less frequently than monthly); provided, however, that if
payment of any such amounts at such time would result in a prohibited
acceleration under Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), then such
amount shall be paid at the time the amount would otherwise have been paid under
the applicable plan, policy, program or arrangement relating to such amount
absent such prohibited acceleration.
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5.3. Death. In
the event of the Executive's death during the Term, the Term and the Executive's
employment shall terminate automatically, and Company shall pay to his spouse or
designated beneficiary, or if none, to his estate (1) any unpaid Base Salary and
accrued vacation benefits earned through the date of death, (2) the Annual Bonus
earned for the calendar year immediately preceding the calendar year of death to
the extent not already paid, and (3) a pro rata share of the Target Award
Opportunity for the calendar year of Executive’s death (calculated on the basis
of the number of days elapsed in such year through the date of
death). The Company shall pay to the Executive, his spouse,
designated beneficiary or estate, as the case may be, such unpaid Base Salary
and accrued vacation benefits and such Annual Bonus in a lump sum as soon as
practicable after the effective date of termination of the Executive’s
employment on account of his death in accordance with the Company’s usual
payroll practices (not less frequently than monthly) and shall also pay the
pro-rata share of the Target Award Opportunity in a single lump sum on the
60th
day following termination of the Executive's employment on account of his death;
provided, however, that if payment of any such amounts at such time would result
in a prohibited acceleration under Section 409A of the Code, then such amount
shall be paid at the time the amount would otherwise have been paid under the
applicable plan, policy, program or arrangement relating to such amount absent
such prohibited acceleration.
5.4. Disability. If
the Executive becomes physically or mentally disabled during the Term so that he
is unable to perform the services required of him pursuant to this Agreement for
a period of 90 days, the Company may terminate the Term and the Executive's
services hereunder effective the 91st day
after the date of such disability, at which time the Company shall promptly pay
to the Executive (1) any unpaid Base Salary and accrued vacation benefits and
the Annual Bonus earned for the calendar year immediately preceding the calendar
year of disability to the extent not already paid in a lump sum as soon as
practicable after the effective date of termination of the Executive’s
employment on account of a disability in accordance with the Company’s usual
payroll practices (not less frequently than monthly) and (2) the pro-rata share
of the Target Award Opportunity for the calendar year of Executive’s disability
(calculated on the basis of the number of days elapsed in such year through the
date of disability) in a single lump sum on the 60th day
following termination of the Executive’s employment on account of disability;
provided, however, that if payment of any such amounts at such time would result
in a prohibited acceleration under Section 409A of the Code, then such amount
shall be paid at the time the amount would otherwise have been paid under the
applicable plan, policy, program or arrangement relating to such amount absent
such prohibited acceleration.
5.5. For
Cause. The Company may terminate the Executive's employment
during the Term for Cause. For purposes of this Agreement, "Cause" shall mean that the
Executive has (i) committed an act of personal dishonesty, embezzlement or
fraud; (ii) misused alcohol or drugs; (iii) failed to pay any obligation owed to
the Company or any affiliate; (iv) breached a fiduciary duty or deliberately
disregarded any rule of the Company or any affiliate; (v) committed an act of
willful misconduct or intentionally failed to perform stated duties; (vi)
willfully violated any law, rule or regulation (other than misdemeanors, traffic
violations or similar offenses) or any final cease-and-desist order; (vii)
disclosed without authorization any Confidential Information of the Company or
any affiliate, or engaged in any conduct constituting unfair competition, or
induced any customer of the Company or any affiliate to breach a contract with
the Company or any affiliate.
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If at any time during the Term the
Company shall terminate the Executive for Cause the Company shall pay the
Executive (i) any unpaid Base Salary through the date of termination, and (ii)
the Annual Bonus earned for the year immediately preceding the calendar year of
termination to the extent not already paid, without any further obligations to
the Executive. Such unpaid Base Salary and Annual Bonus will be paid
to the Executive in a lump sum as soon as practicable after the effective date
of termination in accordance with the Company’s usual payroll practices (not
less frequently than monthly); provided, however, that if payment of any such
amount at such time would result in a prohibited acceleration under Section 409A
of the Code, then such amount shall be paid at the time the amount would
otherwise have been paid under the applicable plan, policy, program or
arrangement relating to such amount absent such prohibited
acceleration.
5.6 Good
Reason. "Good
Reason" shall mean (1) a demotion in the Executive's status, title or
position, or the assignment to the Executive of duties or responsibilities which
are materially inconsistent with such status, title or position; (2) a material
breach of this Agreement by the Company, provided the Company has not remedied
such breach within thirty (30) days of receipt of written notice of such breach;
(3) a relocation of the executive offices of the Company to a location more than
50 miles outside of Jackson, Mississippi without the Executive's written consent
given to the Company within thirty (30) days of the Executive's receipt of
notification of such relocation by the Company; or (4) the failure of the
Executive to be named as the Chairman of the Board, President and Chief
Executive Officer of any successor by merger to the Company, or the Chairman of
the Board and Chief Executive Officer of any successor by merger to the Bank,
through December 31, 2010. Any good faith determination of Good
Reason made by the Executive shall be conclusive; provided, however, that it is
expressly agreed that the Executive’s cessation of status at December 31,
2010 as the Company’s President and Chief Executive Officer and the Bank’s Chief
Executive Officer contemplated in Section 2 and any related changes in duties,
responsibilities, status, title or position shall not constitute Good Reason;
and provided, further, that if the Executive is not Chairman of the Board of the
Company and the Bank, or Chairman of the Board of Directors of any successor by
merger to the Company or the Bank, during the Term for any reason other than his
death, disability, Retirement, termination by the Company for Cause, resignation
or refusal to stand for election or reelection, Good Reason would be present at
the time he first is not Chairman of the Board of the Company or the
Bank.
5.7. Severance
in Connection with a Change in Control. If at any time during
the Term and on or before December 31, 2009 both (i) the Company
experiences a Change in Control and (ii) either (a) the Term and the Executive
are terminated by the Company other than for Cause, death, disability or
Retirement or (b) the Executive resigns for Good Reason, the following
provisions shall apply:
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(i) "Change in Control" shall mean
any one of the following events occurring after the date of this Agreement: (1)
the acquisition by any person of ownership of, holding or power to vote more
than 20% of the Company's voting stock, (2) the acquisition by any person of the
ability to control the election of a majority of the Company's Board, (3) 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 Securities Exchange Act of 1934 (the “Exchange Act”), or (4) 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 (1), (2) and (3) hereof, ownership or control of the
Company's voting stock by the only subsidiary of the Company or any employee
benefit plan sponsored by the Company or any subsidiary shall not constitute a
Change in Control. For purposes of this subparagraph, 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;
(ii) Subject
to Section 13 hereof, the Company shall pay to the Executive the following
amounts:
A. The
sum of (1) the Executive's Base Salary and accrued vacation benefits through the
date of termination and the Annual Bonus earned for the calendar year
immediately preceding the calendar year of termination to the extent not already
paid as soon as practicable after the effective date of termination in
accordance with the Company’s usual payroll practices (not less frequently than
monthly) and (2) the additional sum of (i) the Executive's Base Salary
immediately prior to the Change in Control and (ii) the highest Annual Bonus
amount earned in any one of the three (3) years preceding the year of the Change
in Control on the 60th day
after the effective date of termination.
B. The
Company shall continue to provide to the Executive the Employee Benefits for one
year following the effective date of termination (based on the Employee Benefits
being provided to the Executive on the effective date of termination, but
subject to such changes as the Company may adopt from time to time thereafter
for its senior executives), reduced by any employment benefits received from
later employment, as the same may be changed from time to time for employees of
the Company generally, as if the Executive had continued employment during such
period; or, as an alternative, the Company may elect to pay Executive cash in
lieu of such participation in an amount equal to the Executive’s reasonable
after-tax cost of obtaining comparable coverage or benefits, where such
participation may not be continued by the Company (or where such participation
would adversely affect the tax status of the applicable plan pursuant to which
the benefits are provided), with any such cash payments to be made in accordance
with the ordinary payroll practices of the Company (not less frequently than
monthly) for employees generally for the period during which such cash payments
are to be provided.
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C. Any
stock options granted Executive by the Company which have not vested shall vest
in the Executive in full as of the Change in Control. Any such stock
options which were intended by the parties to be incentive stock options but
which exceed the "$100,000 first exercisable rule" shall be converted into
non-qualified stock options.
D. If
the Executive is unable to sell his home in Jackson, Mississippi for at least
the lesser of $900,000 or the then current appraised value of the home within
four (4) months following the effective date of his termination, Company shall
acquire such property at that time for a purchase price equal to the lesser of
$900,000 or the then current appraised value of the Executive's home in Jackson,
Mississippi in exchange for an unencumbered deed to the property. The
appraised value shall be determined in accordance with the Company’s practice
for home purchase relocation benefits in effect on the effective date of
termination. The Executive acknowledges that the current practice is
that appraised value is equal to the average of two independent appraisals
obtained by the Company.
E. In
consideration of the covenants set forth in Section 4, the Executive shall be
paid the Covenant Payments in an undiscounted cash lump sum on the 60th day
after the effective date of termination provided the Term and the Executive are
terminated within two (2) years after the date a Change in Control occurs and
the Change in Control also satisfies the definition of a change in the ownership
or effective control of the Company, or in the ownership of a substantial
portion of its assets, within the meaning of Section 409A(a)(2)(A)(v) of the
Code. Otherwise, the Executive shall be paid the Covenant Payments in
the manner provided in Section 4.4.
F. Notwithstanding
the foregoing, if payment of any of the foregoing amounts at the time designated
above would result in a prohibited acceleration under Section 409A of the Code,
then such amount shall be paid at the time the amount would otherwise have been
paid under the applicable plan, policy, program or arrangement relating to such
amount absent such prohibited acceleration.
5.8. Severance
Not in Connection with a Change in Control or after December 31,
2009. If (i) the Executive is not entitled to the
payments and benefits described in Section 5.7 because there has not been both a
Change in Control and a termination of employment before January 1, 2010
and (ii) either (a) the Company terminates the Term and the
Executive's employment for a reason other than Cause, death, disability or
Retirement or (b) if the Executive resigns for Good Reason, subject to
Section 13 hereof, the Company shall pay to the Executive the following
amounts:
A. The
Executive's Base Salary and accrued vacation benefits through the date of
termination and the Annual Bonus earned for the calendar year immediately
preceding the calendar year of termination to the extent not already paid in a
lump sum as soon as practicable following the effective date of the termination
in accordance with the Company’s usual payroll practices (not less frequently
than monthly).
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B. The
Company shall continue to provide to the Executive the Employee Benefits for a
period of eighteen (18) months following the effective date of the termination
(based on the Employee Benefits being provided to the Executive on the effective
date of termination, but subject to such changes as the Company may adopt from
time to time thereafter for its senior executives), reduced by any employee
benefits received from later employment, as the same may be changed from time to
time for employees of the Company generally, as if the Executive had continued
employment during such period; or, as an alternative, the Company may elect to
pay Executive cash in lieu of such participation in an amount equal to the
Executive’s reasonable after-tax cost of obtaining
comparable coverage or benefits, where such participation may not be continued
by the Company (or where such participation would adversely affect the tax
status of the applicable plan pursuant to which the benefits are provided), with
any such cash payments to be made in accordance with the ordinary payroll
practices of the Company (not less frequently than monthly) for employees
generally for the period during which such cash payments are to be
provided.
C. If
the Executive’s termination of employment occurs before January 1, 2010 and
the Executive is unable to sell his home in Jackson, Mississippi for at least
the lesser of $900,000 or the then current appraised value of the home within
four (4) months following the effective date of his termination, Company shall
acquire such property at that time for a purchase price equal to the lesser of
$900,000 or the then current appraised value of the Executive's home in Jackson,
Mississippi in exchange for an unencumbered deed to the property. The
appraised value shall be determined in accordance with the Company’s practice
for home purchase relocation benefits in effect on the effective date of
termination. The Executive acknowledges that the current practice is
that appraised value is equal to the average of two independent appraisals
obtained by the Company.
D. In
consideration of the covenants set forth in Section 4, the Executive shall be
paid the Covenant Payments in the manner provided in Section 4.4.
E. Notwithstanding
the foregoing, if payment of any of the foregoing amounts at the time designated
above would result in a prohibited acceleration under Section 409A of the Code,
then such amount shall be paid at the time the amount would otherwise have been
paid under the applicable plan, policy, program or arrangement relating to such
amount absent such prohibited acceleration.
5.9. Retirement. Unless
terminated earlier pursuant to this Section 5, the Term and the Executive's
employment shall automatically terminate at the end of the day on which the
Annual Meeting of the Company’s shareholders is held in 2011 ("Retirement"), in which event,
the Executive shall be entitled to receive such retirement benefits which have
accrued to the Executive by virtue of his employment hereunder, but not the
payments described in Sections 4.4, 5.7 and 5.8 hereof. In the event
of the Executive’s Retirement, the Company shall also pay the Executive (1) any
unpaid Base Salary and accrued vacation benefits earned through the date of
Retirement and (2) the Annual Bonus earned for the calendar year immediately
preceding the calendar year of Retirement to the extent not already
paid. Such unpaid Base Salary and accrued vacation benefits and the
Annual Bonus shall be paid to the Executive in a lump sum as soon as practicable
after the effective date of Retirement in accordance with the Company’s usual
payroll practices (not less frequently than monthly); provided, however, that if
payment of any such amounts at such time would result in a prohibited
acceleration under Section 409A of the Code, then such amount shall be paid at
the time the amount would otherwise have been paid under the applicable plan,
policy, program or arrangement relating to such amount absent such prohibited
acceleration. In addition, in the event of the Executive’s
Retirement, the Company shall provide the Executive with such office space and
clerical/secretarial support as it deems appropriate until the Executive reaches
age sixty-eight (68).
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5.10. Return of
Documents on Termination. On termination of employment, the
Executive shall promptly return to the Company all documents, materials, papers,
data, computer discs, statements and any other written material (including but
not limited to all copies thereof) and other property of the
Company.
5.11. Release. The
payments and benefits to which the Executive is entitled pursuant to Sections
4.4, 5.4(2), 5.7(ii)A(2), 5.7(ii)B-E, 5.8B-D and 8 are contingent upon the
Executive executing a release agreement in a form reasonably acceptable to the
Company, and the applicable revocation period having expired, before the 60th day
following effective date of termination.
6. Expenses. The
Company shall reimburse the Executive for his reasonable out-of-pocket expenses
incurred pursuant to this Agreement and in connection with the performance of
his duties under this Agreement, in accordance with the general policy of the
Company, upon submission of satisfactory documentation evidencing such
expenditures, no later than the last day of the year following the year in which
the Executive incurs the expense.
7. Non-Assignment. This
Agreement and all of the Executive's rights and obligations hereunder are
personal to the Executive and shall not be assignable; provided, however, that
upon his death all of the Executive's rights to cash payments under this
Agreement shall inure to the benefit of his widow, personal
representative, designees or other legal representatives, as the case
may be. Any person, firm or corporation succeeding to the business of
the Company by merger, purchase, consolidation or otherwise shall assume by
contract or operation of law the obligations of the Company hereunder; provided,
however, that the Company shall, notwithstanding such assumption, remain liable
and responsible for the fulfillment of its obligations under this
Agreement.
8. Arbitration. In
the event of a dispute between the Company and the Executive over the terms of
this Agreement which is not settled by the parties, the Company and the
Executive agree to settle any and all such disputed issues by arbitration in
accordance with the then-existing rules of the American Arbitration
Association. The Company and the Executive shall jointly appoint one
person to act as the arbitrator. In the event the Company and the
Executive cannot agree to an arbitrator within 30 days, the arbitrator shall be
chosen by the American Arbitration Association. The decision of the
arbitrator shall be binding upon the parties and there shall be no appeal
therefrom other than for bias, fraud or misconduct. The costs of the
arbitration, including the fees and expenses of the arbitrator, shall be borne
fifty percent by the Company, on the one hand, and fifty percent by the
Executive, on the other, but each party shall pay its own attorneys' fees and
other professional costs and expenses; provided, however, that if the arbitrator
shall rule for the Executive, the Company shall pay or reimburse the Executive's
reasonable attorneys' fees and other professional costs and expenses and the
Executive's share of the arbitration costs incurred in connection with such
arbitration as soon as administratively practicable after the final decision on
arbitration in accordance with the Company’s usual payroll practices (not less
frequently than monthly). Notwithstanding the foregoing, it is
specifically understood that the Executive shall remain free to assert and
enforce in any court of competent jurisdiction such rights, if any, as the
Executive may have under federal law, including without limitation, rights
arising under Title VII of the Civil Rights Act of 1964, as amended, the Age
Discrimination and Employment Act of 1967, as amended, and/or the Americans With
Disabilities Act of 1990. Any decision rendered by the arbitrator,
except as provided above, shall be final and binding.
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9. Excise
Tax Limitation.
9.1. Notwithstanding
anything contained in this Agreement (or in any other agreement between the
Executive and the Company) to the contrary, to the extent that any payments and
benefits provided under this Agreement or payments or benefits provided to, or
for the benefit of, the Executive under the Trustmark Corporation 1997 Long Term
Incentive Plan, the Trustmark Corporation 2005 Stock and Incentive Compensation
Plan or any other plan or agreement of the Company (such payments or benefits
are collectively referred to as the "Payments") would be subject to
the excise tax (the "Excise
Tax") imposed under Section 4999 of the Code , the Payments shall be
reduced if and to the extent that a reduction in the Payments would result in
the Executive retaining a larger amount, on an after-tax basis (taking into
account federal, state and local income taxes and the Excise Tax), than he would
have retained had he been entitled to receive all of the Payments (such reduced
amount is hereinafter referred to as the "Limited Payment
Amount"). In the event the Executive first becomes entitled to
Payments in 2008 which require reduction or elimination, the Company shall
reduce the Payments by first reducing or eliminating payments or benefits which
are not payable in cash and then by reducing or eliminating cash payments, in
each case in reverse order beginning with payments or benefits which are to be
paid the farthest in time from the date the "Determination" (as hereinafter
defined) is delivered to the Company and the Executive. In the event
the Executive first becomes entitled to Payments after 2008 which require
reduction or elimination, the Company shall reduce the Payments by first
reducing or eliminating cash payments and then by reducing or eliminating
payments or benefits which are not payable in cash, in each case in reverse
order beginning with payments or benefits which are to be paid the farthest in
time from the date the Determination is delivered to the Company and the
Executive.
9.2. The
determination as to whether the Payments shall be reduced to the Limited Payment
Amount and the amount of such Limited Payment Amount (the "Determination") shall be made
at the Company's expense by an accounting firm selected by the Company and
reasonably acceptable to the Executive which is designated as one of the five
(5) largest accounting firms in the United States (the "Accounting
Firm"). The Accounting Firm shall provide the Determination in
writing, together with detailed supporting calculations and documentation, to
the Company and the Executive on or prior to the date of termination of the
Executive's employment if applicable, or at such other time as requested by the
Company or by the Executive. Within ten (10) days of the delivery of
the Determination to the Executive, the Executive shall have the right to
dispute the Determination (the "Dispute") in writing setting
forth the precise basis of the dispute. If there is no Dispute, the
Determination shall be binding, final and conclusive upon the Company and the
Executive.
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9.3. Any
Excise Tax payable hereunder shall be paid by the Executive.
10. Severability. Whenever
possible, each provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction such invalidity, legality or
unenforceability will not affect any other provision or any other jurisdiction,
but this Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision had never been contained
herein.
11. Other
Provisions.
11.1. Notices. Any
notice or other communication required or permitted hereunder shall be in
writing and shall be delivered personally, telegraphed, telexed, sent by
facsimile transmission or sent by certified, registered or express mail, postage
prepaid. Any such notice shall be deemed given when so delivered
personally, telegraphed, telexed or sent by facsimile transmission, or if
mailed, five days after the date of deposit in the United States mail, as
follows:
(i) if
to the Company, to:
Trustmark Corporation
000 Xxxx Xxxxxxx Xxxxxx
Post Office Xxx 000
Xxxxxxx, XX 00000
Attention: Chairman of Executive
Committee
(ii) if
to the Executive, to:
Xxxxxxx X. Xxxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Any party may change its address for
notice hereunder by notice to the other parties hereto.
11.2. Entire
Agreement. This Agreement amends and restates the Original
Agreement. This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
representations, warranties and agreements, written or oral with respect thereto
between the Company and the Executive; provided, however, that any equity
compensation awards outstanding on the date of this Agreement shall remain in
effect in accordance with their terms except as may otherwise be expressly
provided in this Agreement.
-13-
11.3. Waivers
and Agreements. This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms and conditions hereof
may be waived, only by written instrument signed by the parties or, in the case
of a waiver, by the party waiving compliance. No delay on the part of
any party in exercising any right, power or privilege hereunder shall operate as
a waiver thereof, nor shall any waiver on the part of any party of any right,
power or privilege hereunder, nor any single or partial exercise of any right,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder.
11.4. Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Mississippi, without regard to its
principle of conflicts of law.
11.5. Counterparts. This
Agreement may be executed in two counterparts, each of which shall be deemed an
original but both of which together shall constitute one and the same
instrument.
11.6. Headings. The
headings in this Agreement are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement.
12. Board
Approval. The effectiveness of this Agreement shall be subject
to approval by a majority of the Board entitled to vote on the date
hereof.
13. Omnibus
409A Provision. Notwithstanding any other provision of this
Agreement, it is intended that any payment or benefit which is provided pursuant
to or in connection with this Agreement which is considered to be 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 requirements of
Section 409A of the Code to avoid any unfavorable tax
consequences. For purposes of this Agreement, all rights to payments
and benefits hereunder shall be treated as rights to receive a series of
separate payments and benefits to the fullest extent allowed by Section 409A of
the Code. Notwithstanding any other provision of this Agreement,
payments or provision of benefits in connection with the separation from service
will be delayed, to the extent applicable, until six months after the separation
from service or, if earlier, Executive’s death, if Executive is a “specified
employee” under Section 409A of the Code (the “409A Deferral
Period”). In the event such payments are otherwise due to be
made in installments or periodically during the 409A Deferral Period, the
payments which would otherwise have been made in the 409A Deferral Period shall
be accumulated and paid in a lump sum as soon as the 409A Deferral Period ends,
and the balance of the payments shall be made as otherwise
scheduled. In the event benefits are required to be deferred, any
such benefit may be provided during the 409A Deferral Period at Executive’s
expense, with Executive having a right to reimbursement from the Company once
the 409A Deferral Period ends, and the balance of the benefits shall be provided
as otherwise scheduled. For purposes of this Agreement, termination
of employment will be read to mean a “separation from service” within the
meaning of Section 409A of the Code where it is reasonably anticipated that no
further services would be performed after that date or that the level of
services Executive would perform after that date (whether as an employee or
independent contractor) would permanently decrease to less than 50% of the
average level of bona fide services performed over the immediately preceding
thirty-six (36) month period.
-14-
IN WITNESS WHEREOF, the parties have
executed this Agreement as of the date first above written.
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TRUSTMARK
CORPORATION
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BY:
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx
X. Xxxxxxx
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Chairman of
the Human Resources Committee
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EXECUTIVE
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BY:
/s/ Xxxxxxx X.
Xxxxxxx
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| Xxxxxxx X. Xxxxxxx |
-15-
