TRUSTMARK CORPORATION FORM OF PERFORMANCE-BASED RESTRICTED STOCK AGREEMENT
Exhibit
10-y
TRUSTMARK
CORPORATION
FORM
OF
This
Performance-Based Restricted Stock Agreement (“Agreement”) is entered into as of
<<grant date>> pursuant to the 2005 Stock and Incentive Compensation
Plan (the “Plan”) of Trustmark Corporation (the “Company”) and evidences the
grant of Restricted Stock (as defined in the Plan), and the terms, conditions
and restrictions pertaining thereto, to <<name>> (the
“Associate”).
WHEREAS,
the Company maintains the Plan under which the Committee (as defined in the
Plan) may, among other things, award shares of the Company’s common stock
(“Stock”) to such key associates of the Company and its Subsidiaries as the
Committee may determine, subject to terms, conditions and restrictions as it may
deem appropriate; and
WHEREAS,
as a result of its participation in the CPP (as defined below), the Company is
subject to, among other things, the executive compensation requirements of
Section 111(b) of the EESA (as defined below), with respect to the compensation
of certain current and future employees of the Company; and
WHEREAS,
the Committee previously approved an award of performance-based restricted stock
to the Associate under the Plan on <<initial approval date>>, but
before such award was formally documented in writing and signed by the Company
and the Associate, the ARRA (as defined below) was enacted on February 17,
2009, raising significant questions regarding the ability of the Company to
grant restricted stock to the Associate in compliance with the CPP Requirements
(as defined below), and therefore, the Committee determined it was in the
Company’s best interest to take a conservative approach and not grant the full
<<initial approval date>> award until the CPP Requirements were
further clarified; and
WHEREAS,
effective June 15, 2009, the Treasury Department issued interim final rules
clarifying the CPP Requirements and based on these interim final rules the
Committee and the Company’s Board of Directors now deem it desirable and
appropriate to complete the restricted stock awards originally approved on
<<initial approval date>>, to the extent permissible under the CPP
Requirements and, where limited, to prorate the restricted stock awards between
“Performance-Based” awards and “Time-Based” awards, by granting to the Associate
TARP-compliant long-term restricted stock (as defined below) under the CPP
Requirements; and
WHEREAS,
pursuant to the Plan, the Company, upon recommendation by the Committee and
approval by the Company’s Board of Directors, has granted to the Associate a
restricted stock award conditioned upon the execution by the Company and the
Associate of a Performance-Based Restricted Stock Agreement setting forth all
the terms and conditions applicable to such award;
NOW
THEREFORE, in consideration of the benefits which the Company expects to be
derived from the services rendered to it and its Subsidiaries by the Associate
and of the covenants contained herein, the parties hereby agree as
follows:
1. Award of
Shares. Under the terms of the Plan, the Company, upon
recommendation by the Committee and approval by the Company’s Board of Directors
on <<meeting date>>, awarded to the Associate a restricted stock
award (the “Award”) effective on <<grant date>> (“Award Date”),
covering <<shares>> shares of the Company’s Stock (the “Award
Shares”) subject to the terms, conditions, and restrictions set forth in this
Agreement.
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2.
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TARP
Terminology. For purposes of this Agreement, the
following terms have the following
meanings:
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(a)
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“Affected
MHCE” means one of the Company’s top five most highly compensated
employees as provided in the CPP Requirements for purposes of the golden
parachute prohibition thereof.
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(b)
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“Aggregate
TARP Financial Assistance” means all Company obligations arising from
financial assistance provided to the Company under the CPP pursuant to
authority granted under the EESA.
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(c)
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“ARRA”
means the American Recovery and Reinvestment Act of 2009, as amended from
time to time.
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(d)
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“CPP”
means the Troubled Asset Relief Program Capital Purchase Program created
by the Treasury Department pursuant to authority granted under the
EESA.
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1
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(e)
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“CPP
Requirements” means the guidance and regulations issued by the Treasury
Department with respect to the CPP, as such guidance and regulations may
be amended from time to time.
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(f)
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“EESA”
means the Emergency Economic Stabilization Act of 2008, as amended from
time to time.
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(g)
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“SEO”
means a senior executive officer as defined in the CPP
Requirements.
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(h)
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“TARP-compliant
long-term restricted stock” means restricted stock that complies with the
definition of “long-term restricted stock” for purposes of the exception
to the bonus prohibition in the CPP
Requirements.
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(i)
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“TARP
Period” has commenced on or before the Award Date and ends on the day all
Company obligations arising from financial assistance provided to the
Company under the CPP are satisfied as described in Section
111(b)(3)(D)(i) of the EESA, excluding any period in which the Treasury
Department only holds warrants to purchase common stock as provided in
Section 111(a)(5) of the EESA.
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(j)
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“Treasury
Department” means the U.S. Department of the
Treasury.
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3.
Vesting in the Award
Shares.
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(a)
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Subject
to earlier vesting or forfeiture as provided below, the Associate’s
interest in the following applicable portion of the Award Shares shall
become non-forfeitable (“Vested” or “Vesting”) on <<vesting
date>>, provided the Associate remains in employment with the
Company or its Subsidiaries through such date, with Vesting in the Award
Shares being determined by the Company’s return on average tangible equity
(“XXXXX”) and total shareholder return (“TSR”) ranking for the
<<number>> calendar quarters beginning <<beginning of
measurement period>> and ending <<end of measurement
period>> (the “Performance Period”) compared to the XXXXX and TSR
for the Peer Group (see Attachment A) as follows, where Vesting in
the Award Shares is equal to the number of the Award Shares multiplied by
the sum of the vesting percentage in (A) and the vesting percentage in (B)
below:
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(A)
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(B)
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XXXXX
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XXXXX
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TSR
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TSR
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Ranking
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Vesting Percentage
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Ranking
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Vesting Percentage
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<<rank>>
Percentile
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100%
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+
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<<rank>>
Percentile
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100%
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<<rank>>
Percentile
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90%
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+
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<<rank>>
Percentile
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90%
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<<rank>>
Percentile
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70%
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+
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<<rank>>
Percentile
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70%
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<<rank>>
Percentile
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50%
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+
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<<rank>>
Percentile
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50%
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<<rank>>
Percentile
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32.5%
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+
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<<rank>>
Percentile
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32.5%
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<<rank>>
Percentile
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22.5%
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+
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<<rank>>
Percentile
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22.5%
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<<rank>>
Percentile
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17.5%
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+
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<<rank>>
Percentile
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17.5%
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Less
than <<rank>>
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0%
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+
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Less
than <<rank>>
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0%
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If
the Company’s ranking is above the <<rank>> percentile, but
less than the <<rank>> percentile, then the vesting percentage
shall be determined by straight line interpolation (rounded, where not
otherwise resulting in a whole or half percent, to the next lowest whole
or half percent) where the ranking falls between identified percentile
tiers (for example, if the ranking is in the <<rank>>
percentile, then the vesting percentage is
<<%>>).
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If
the aggregate Vesting exceeds 100%, all Award Shares shall be Vested and
Excess Shares shall be granted as provided in Paragraph
13.
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All
determinations regarding Vesting in the Award Shares under this Paragraph
3(a) shall be made and certified to in writing by the Committee during the
first 2-1/2 months following the end of the Performance
Period.
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The
balance of any Award Shares that are not considered Vested by or as of the
last day of the Performance Period shall be
forfeited.
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(b)
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Subject
to earlier forfeiture as provided below, in the event a Vesting
Acceleration Event occurs while the Associate is an employee of the
Company or one of its Subsidiaries and prior to the last day of the
Performance Period, then the XXXXX and the TSR of the Company and the Peer
Group shall be determined for all calendar quarters in the Performance
Period ending on or prior to the date of the first such Vesting
Acceleration Event and the Vesting provisions set forth in Paragraph 3(a)
shall be applied to a time-weighted portion of the Award Shares
(determined by multiplying the number of Award Shares by a fraction (not
to exceed one), the numerator of which is the number of complete calendar
months from the beginning of the Performance Period to and including the
Vesting Acceleration Event, and the denominator of which is the number of
calendar months in the Performance Period) based on such XXXXX and the
TSR. In such event, the time-weighted portion of the Award
Shares, as so determined, shall automatically be Vested on the date of
such Vesting Acceleration Event. In such event, the balance of
the Award Shares which are not Vested shall be forfeited, and no Excess
Shares (as otherwise provided for in Paragraph 13) shall be
granted. All determinations regarding Vesting in the Award
Shares under this Paragraph 3(b) shall be made and certified to in writing
by the Committee during the period beginning on the date of the Vesting
Acceleration Event and ending 2-1/2 months following the end of the
calendar quarter in which the Vesting Acceleration Event
occurs.
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2
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(c)
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The
following terms have the following meanings for purposes
hereof:
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(i)
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“Cause”
means that the Associate (A) has committed an act of personal
dishonesty, embezzlement or fraud, (B) has misused alcohol or drugs,
(C) has failed to pay any obligation owed to the Company or any
affiliate, (D) has breached a fiduciary duty or deliberately
disregarded any rule of the Company or any affiliate, (E) has
committed an act of willful misconduct, or the intentional failure to
perform stated duties, (F) has willfully violated any law, rule or
regulation (other than misdemeanors, traffic violations or similar
offenses) or any final cease-and-desist order, (G) has disclosed
without authorization any confidential information of the Company or any
affiliate, (H) has engaged in any conduct constituting unfair
competition, or (I) has induced any customer of the Company or any
affiliate to breach a contract with the Company or any
affiliate.
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(ii)
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“Peer
Group” means the financial institutions listed on Attachment A
hereto; provided that subject to any restrictions and limitations under
Section 162(m) of the Internal Revenue Code, any listed financial
institution shall be eliminated if it is acquired or otherwise changes its
structure or business such that it is no longer reasonably comparable to
the Company (as determined by the Committee), and in the case of any such
elimination, the Committee may replace the eliminated financial
institution with another financial institution which it considers
reasonably comparable to the
Company.
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(iii)
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“XXXXX”
means the cumulative net earnings after taxes available to common
shareholders, adjusted for tax-affected amortization of intangibles, for
the calendar quarters in each calendar year in a specified period of time
divided by average shareholder’s tangible common equity (which is the
excess of the difference between the total assets, excluding total
identifiable intangible assets and goodwill, and the sum of total
liabilities and preferred equity, averaged for the calendar quarters in
each calendar year in the specified period), all as determined in
accordance with generally accepted accounting principles and as reported
in the company’s financial statements provided to shareholders and
converted to an annual rate by dividing by the number of years and partial
years (expressed in quarters) in the specified
period.
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(iv)
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“TSR”
means the return a holder of common stock earns over a specified period of
time, expressed as a percentage and including changes in Average Market
Value of, and dividends or other distributions with respect to, the stock
and converted to an annual rate by dividing the calculated percentage for
the specified period by the number of years and partial years (expressed
in quarters) in the specified period. TSR return shall be
determined as the sum of (A) the Ending Average Market Value reduced
by the Beginning Average Market Value and (B) dividends or other
distributions with respect to a share paid during the specified period and
with such dividends and other distributions deemed reinvested in Stock
(based on Market Share Price on the date of payment where not paid in
Stock), and (C) with such sum being divided by the Beginning Average
Market Value. TSR, including the value of reinvested dividends
and other distributions, shall be determined on the basis of the
appropriate total shareholder return model of Bloomberg L.P. or any
affiliate thereof or such other authoritative source as the Committee may
determine. For purposes
hereof:
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(A)
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“Average
Market Value” means the average of the closing sale price of such stock
for the applicable ten trading days beginning or ending on a specified
date for which such closing sales price is reported by Bloomberg L.P. or
any affiliate thereof or such other authoritative source as the Committee
may determine.
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(B)
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“Beginning
Average Market Value” means the Average Market Value based on the first
ten trading days of the Performance
Period.
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(C)
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“Ending
Average Market Value” means the Average Market Value based on the last ten
trading days of the Performance Period (or other period as of which Ending
Average Market Value is
calculated).
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(D)
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“Market
Share Price” means the closing sale price for the specified day (or the
last preceding day thereto for which reported) as reported by Bloomberg
L.P. or any affiliate thereof or such other authoritative source as the
Committee may determine.
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(v)
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“Vesting
Acceleration Event” means during the Performance Period with respect to
the Award Shares and during the Excess Share Vesting Period (as defined
below) with respect to the Excess Shares, as
applicable:
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(A)
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the
Associate’s death or termination of employment due to becoming disabled
(as defined for purposes of Section 22(e)(3) of the Internal Revenue Code,
whether or not the Associate has an Employment
Agreement);
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(B)
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the
Associate’s termination of employment on or after <<grant date + 2
years>> due to becoming disabled (as defined in his or her
Employment Agreement, if the Associate has an Employment Agreement and his
or her termination is not due to becoming disabled as defined for purposes
of Section 22(e)(3) of the Internal Revenue Code) if on the date of
termination either (i) the TARP Period has ended or (ii) the Associate is
not an SEO or an Affected MHCE;
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(C)
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the
Associate’s retirement on or after <<grant date + 2 years>>,
with the consent of the Committee or its delegate, at or after age
sixty-five (65) where there is no Cause (as defined above) for the Company
to terminate the Associate’s employment, if on the date of retirement
either (i) the TARP Period has ended or (ii) the Associate is not an SEO
or an Affected MHCE;
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(D)
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the
termination of the Associate’s employment with the Company and its
Subsidiaries by the Company on or after <<grant date + 2
years>> other than for Cause (as defined herein), if on the date of
termination either (i) the TARP Period has ended or (ii) the Associate is
not an SEO or an Affected MHCE;
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(E)
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the
termination of the Associate’s employment with the Company and its
Subsidiaries prior to <<grant date + 2 years>> due to of a
Change in Control (as defined in the Plan) which with respect to the
Associate is a change in the ownership or effective control of the Company
or in the ownership of a substantial portion of its assets (as defined in
Section 409A of the Internal Revenue Code), if the Change in Control is
also a change in control event (as defined in 26 CFR 1.280G-1, Q&A-27
through Q&A-29 or as defined in 26 CFR 1.409A-3(i)(5)(i)) and on the
date of termination either (i) the TARP Period has ended or (ii) the
Associate is not an SEO or an Affected
MHCE;
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(F)
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the
occurrence on or after <<grant date + 2 years>> of a Change in
Control (as defined in the Plan) which with respect to the Associate is a
change in the ownership or effective control of the Company or in the
ownership of a substantial portion of its assets (as defined in Section
409A of the Internal Revenue Code), if the Associate has remained employed
with the Company or a Subsidiary through the date the Change in Control
occurs, and on the date such Change in Control occurs either (i) the TARP
Period has ended or (ii) the Associate is not an SEO or an Affected MHCE;
or
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(G)
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if
the Associate has an Employment Agreement, the Associate’s termination of
employment with the Company and its Subsidiaries at his or her own
initiative on or after <<grant date + 2 years>> for “Good
Reason” (as defined in his or her Employment Agreement, but only if
defined therein) if on the date of termination either (i) the TARP Period
has ended or (ii) the Associate is not an SEO or an Affected
MHCE.
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For
purposes of determining a Vesting Acceleration Event, an “Employment
Agreement” means a written individual employment agreement, or if there is
no employment agreement, then a written individual change in control
agreement, as in effect on the Award Date between the Associate and the
Company or one of its Subsidiaries. If an Associate does not
have such a written individual employment agreement or change in control
agreement, the Associate is considered not to have an Employment Agreement
for purposes hereof.
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4.
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Transferability of
Award Shares.
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(a)
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If
the Vesting of any Award Shares occurs before the end of the TARP Period,
such Vested Award Shares shall not become freely transferable until the
first day after the TARP Period ends, subject however, to the following
accelerated transferability (determined on a cumulative basis for Vested
Award Shares:
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(i)
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25%
of the Award Shares (rounded down to the next whole share if a fractional
share would otherwise become transferable) may become freely transferable
at the time of the Company’s repayment of 25% of the Aggregate TARP
Financial Assistance,
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(ii)
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An
additional 25% of the Award Shares (rounded down to the next whole share
if a fractional share would otherwise become transferable) may become
freely transferable (for an aggregate total of 50% of the Award Shares) at
the time of the Company’s repayment of 50% of the Aggregate TARP Financial
Assistance,
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(iii)
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An
additional 25% of the Award Shares (rounded down to the next whole share
if a fractional share would otherwise become transferable) may become
freely transferable (for an aggregate total of 75% of the Award Shares) at
the time of the Company’s repayment of 75% of the Aggregate TARP Financial
Assistance, and
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(iv)
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The
remainder of the Award Shares may become freely transferable at the time
of the Company’s repayment of 100% of the Aggregate TARP Financial
Assistance.
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Notwithstanding
the foregoing, where the Associate does not make an election with respect
to the Award Shares under Section 83(b) of the Internal Revenue Code, at
any time beginning with the date upon which the Award Shares become
substantially vested (as defined in 26 CFR 1.83-3(b)) and ending on
December 31 of the calendar year including that date, a portion of
the Vested Award Shares (rounded down to the next whole share if a
fractional share would otherwise become transferable) shall be made freely
transferable as may reasonably be required to pay the federal, state,
local, or foreign taxes that are anticipated to apply to the income
recognized due to such Vesting, and the number of such Vested Award Shares
made freely transferable for this purpose shall not count toward the
percentages in the schedule ((i) through (iv))
above.
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(b)
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If
the Vesting of any Award Shares occurs after the end of the TARP Period,
such Vested Award Shares shall also become freely transferable at the same
time as Vesting occurs.
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(c)
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Except
as contemplated in Paragraph 4(a) and/or (b), the Award Shares, and the
rights and privileges conferred hereby, shall not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated in any way,
otherwise than by will or by the laws of descent and distribution, and
shall not be subject to execution, attachment or similar process, prior to
the later of their Vesting or the end of the TARP Period (the period from
the Award Date through such latter date being the “Non-Transferability
Period” with respect to the Award
Shares).
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5.
Stock
Certificates.
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(a)
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The
Company shall issue the Award Shares and Excess Shares, if any, either:
(i) in certificate form as provided in Paragraph 5(b) below; or (ii) in
book entry form, registered in the name of the Associate with notations
regarding the applicable restrictions on transfer imposed under this
Agreement.
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(b)
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Any
certificates representing Award Shares or Excess Shares shall be held by
the Company until such time as the Non-Transferability Period with respect
to such shares lapses, or such shares are forfeited
hereunder. Any Award Shares or Excess Shares issued in book
entry form shall be subject to the following legend, and any certificates
representing the Award Shares or Excess Shares shall bear the following
legend, during the Non-Transferability Period with respect to the Award
Shares or the Excess Shares, as
applicable:
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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 a Performance-Based Restricted Stock Agreement
dated <<grant date>>. A copy of the Plan, such rules and
procedures, and such Performance-Based Restricted Stock Agreement may be
obtained from the Secretary of Trustmark Corporation.
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(c)
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Promptly
after the Non-Transferability Period lapses with respect to any of the
Award Shares or Excess Shares, as applicable, the Company shall, as
applicable, either remove the notations on any of such shares issued in
book entry form as to which the Non-Transferability Period has lapsed or
deliver to the Associate a certificate or certificates evidencing the
number of such shares as to which the Non-Transferability Period has
lapsed.
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(d)
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The
Committee may require, concurrently with the execution and delivery of
this Agreement, the Associate to deliver to the Company an executed stock
power, in blank, with respect to the Award Shares or Excess
Shares. The Associate, by acceptance of the Award, shall be
deemed to appoint, and does so appoint by execution of this Agreement, the
Company and each of its authorized representatives as the Associate’s
attorney(s) in fact to effect any transfer of forfeited shares (or shares
otherwise reacquired or withheld by the Company hereunder), or any
adjustment to the number of Award Shares or Excess Shares pursuant to
Paragraph 15 or 16 below, to the Company as may be required pursuant to
the Plan or this Agreement and to execute such documents as the Company or
such representatives deem necessary or advisable in connection with any
such transfer.
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6.
Voting
Rights. During the Non-Transferability Period with respect to
the Award Shares, the Associate may exercise full voting rights with respect to
the Award Shares.
7.
Dividends and Other
Distributions. During the Non-Transferability Period with
respect to the Award Shares, subject to Paragraphs 15 and 16, all dividends and
other distributions paid with respect to the Award Shares (whether in cash,
property or shares of the Company’s Stock) shall be registered in the name of
the Associate and held by the Company until payable or forfeited pursuant
hereto. Such dividends and other distributions shall be subject to
the same Vesting rules and restrictions on transferability as the Award Shares
with respect to which they were paid and shall, to the extent Vested, be paid
when and to the extent the Non-Transferability Period has lapsed with respect to
the underlying Award Shares.
8. Forfeiture on Termination of
Employment. Except in connection with a Vesting Acceleration
Event defined in Paragraph 3(c)(v)(A) or 3(c)(v)(E), if the Associate’s
employment with the Company and its Subsidiaries ceases prior to <<grant
date + 2 years>>, all of the Award Shares shall be forfeited to the
Company and no Excess Shares shall be granted. If the Associate’s employment
with the Company and its Subsidiaries ceases on or after <<grant date + 2
years>>, any Award Shares that are not considered Vested by or at the
cessation of the Associate’s employment with the Company and its Subsidiaries
shall be forfeited to the Company. For purposes of this Agreement,
transfer of employment among the Company and its Subsidiaries shall not be
considered a termination or cessation of employment.
9.
Withholding
Taxes. The Company, or any of its Subsidiaries, shall have the
right to retain and withhold the amount of taxes required by any government to
be withheld or otherwise deducted and paid with respect to the Award
Shares. The Committee may require the Associate or any successor in
interest to pay or reimburse the Company, or any of its Subsidiaries, for any
such taxes required to be withheld by the Company, or any of its Subsidiaries,
and to withhold any distribution in whole or in part until the Company, or any
of its Subsidiaries, is so paid or reimbursed. In lieu thereof, the
Company, or any of its Subsidiaries, shall have the right to withhold from any
other cash amounts due to or to become due from the Company, or any of its
Subsidiaries, to or with respect to the Associate an amount equal to such taxes
required to be withheld by the Company, or any of its Subsidiaries, to pay or
reimburse the Company, or any of its Subsidiaries, for any such taxes or to
retain and withhold a number of shares of the Company’s Stock having a market
value not less than the amount of such taxes and cancel any such shares so
withheld in order to pay or reimburse the Company, or any of its Subsidiaries,
for any such taxes. The Associate or any successor in interest is
authorized to deliver shares of the Company’s Stock in satisfaction of minimum
statutorily required tax withholding obligations (whether or not such shares
have been held for more than six months and including shares acquired pursuant
to this Award if the Non-Transferability Period with respect to such shares has
lapsed).
10. Administration of
Plan. The Plan is administered by the Committee appointed by
the Company’s Board of Directors. The Committee has the authority to
construe and interpret the Plan, to make rules of general application relating
to the Plan, to amend outstanding awards pursuant to the Plan, and to require of
any person receiving an award, at the time of such receipt, at Vesting and/or at
the time of transferability, the execution of any paper or the making of any
representation or the giving of any commitment that the Committee shall, in its
discretion, deem necessary or advisable by reason of the securities laws of the
United States or any State, or the execution of any paper or the payment of any
sum of money in respect of taxes or the undertaking to pay or have paid any such
sum that the Committee shall in its discretion, deem necessary by reason of the
Internal Revenue Code or any rule or regulation thereunder, or by reason of the
tax laws of any State.
11. Plan and
Prospectus. This Award is granted pursuant to the Plan and is
subject to the terms thereof (including all applicable vesting, forfeiture,
settlement and other provisions). A copy of the Plan, as well as a
prospectus for the Plan, has been provided to the Associate, and the Associate
acknowledges receipt thereof.
12. Notices. Any
notice to the Company required under or relating to this Agreement shall be in
writing and addressed to:
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Trustmark
Corporation
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Mailing Address
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000
X. Xxxxxxx Xxxxxx
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X.X.
Xxx 000
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Xxxxxxx,
XX 00000
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Xxxxxxx,
XX 00000
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Attention: Secretary
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6
Any
notice to the Associate required under or relating to this Agreement shall be in
writing and addressed to the Associate at his or her address as it appears on
the records of the Company.
13. Terms and Conditions
Applicable to Excess Shares Where Vesting in the Award Shares Exceeds
100%.
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(a)
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Since
Vesting in the Award Shares pursuant to Paragraph 3(a) equals the number
of Award Shares multiplied by the sum of the applicable XXXXX vesting
percentage and the applicable TSR vesting percentage, the aggregate
Vesting pursuant to Paragraph 3(a) could exceed 100%. In that
event, additional Restricted Stock (“Excess Shares”) shall be granted to
the Associate within the first 2-1/2 months following the end of the
Performance Period in a number equal to the excess of the aggregate
Vesting pursuant to Paragraph 3(a) over 100% multiplied by the number of
Award Shares granted on the Award Date (as adjusted by the Committee
pursuant to Section 4.4 of the Plan to reflect such events as stock
dividends, stock splits, recapitalizations, mergers, consolidations or
reorganizations of or by the Company). No Excess Shares shall
be granted in connection with Vesting pursuant to Paragraph
3(b).
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(b)
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The
Excess Shares, if any, shall be subject to the following terms and
conditions:
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(i)
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Voting
rights shall be provided from the date of grant of the Excess
Shares.
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(ii)
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During
the Non-Transferability Period with respect to the Excess Shares and after
the date of grant thereof, subject to Paragraphs 15 and 16, all dividends
and other distributions paid with respect to the Excess Shares (whether in
cash, property or shares of the Company’s Stock) shall be registered in
the name of the Associate and held by the Company until payable or
forfeited pursuant hereto. Such dividends and other
distributions shall be subject to the same Vesting rules and restrictions
on transferability as the Excess Shares with respect to which they were
paid and shall, to the extent Vested, be paid when and to the extent the
Non-Transferability Period has lapsed with respect to the underlying
Excess Shares. No dividends and other distributions shall be
accumulated for periods before the date of grant of the Excess
Shares.
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(iii)
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Subject
to earlier vesting or forfeiture as provided below, if the Associate
remains continuously employed by the Company or one of its Subsidiaries
from the beginning of the Performance Period through <<Excess Share
vesting date>> (the “Excess Share Regular Vesting Date,” and the
period from the last day of the Performance Period through the Excess
Share Regular Vesting Date being the “Excess Share Vesting Period” with
respect to the Excess Shares), then the Excess Shares shall become
non-forfeitable (i.e., Vested) on the Excess Share Regular Vesting
Date.
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(iv)
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Notwithstanding
Paragraph 13(b)(iii) above, but subject to earlier forfeiture as provided
below, in the event a Vesting Acceleration Event occurs while the
Associate is employed by the Company or one of its Subsidiaries and on or
after the last day of the Performance Period, but prior to the Excess
Share Regular Vesting Date, then the Excess Shares shall be Vested as of
the date the Vesting Acceleration Event
occurs.
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(v)
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If
the Associate’s employment with the Company and its Subsidiaries ceases
prior to the Excess Share Regular Vesting Date and Vesting pursuant to a
Vesting Acceleration Event in Paragraph 13(b)(iv) does not apply, then the
Excess Shares that are not considered Vested by or at the cessation of the
Associate’s employment with the Company and its Subsidiaries shall be
automatically forfeited to the
Company.
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(vi)
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Transferability
of Vested Excess Shares shall be determined pursuant to Paragraph
13(c).
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(c)
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In
addition, transferability of the Excess Shares, if any, shall be subject
to the following terms and
conditions:
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(i)
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If
the Vesting of any Excess Shares occurs before the end of the TARP Period,
such Vested Excess Shares shall not become freely transferable until the
first day after the TARP Period ends, subject however, to the following
accelerated transferability (determined on a cumulative basis for Vested
Excess Shares):
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(A)
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25%
of the Excess Shares (rounded down to the next whole share if a fractional
share would otherwise become transferable) may become freely transferable
at the time of the Company’s repayment of 25% of the Aggregate TARP
Financial Assistance,
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(B)
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An
additional 25% of the Excess Shares (rounded down to the next whole share
if a fractional share would otherwise become transferable) may become
freely transferable (for an aggregate total of 50% of the Award Shares) at
the time of the Company’s repayment of 50% of the Aggregate TARP Financial
Assistance,
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(C)
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An
additional 25% of the Excess Shares (rounded down to the next whole share
if a fractional share would otherwise become transferable) may become
freely transferable (for an aggregate total of 75% of the Award Shares) at
the time of the Company’s repayment of 75% of the Aggregate TARP Financial
Assistance, and
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(D)
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The
remainder of the Excess Shares may become freely transferable at the time
of the Company’s repayment of 100% of the Aggregate TARP Financial
Assistance.
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Notwithstanding
the foregoing, where the Associate does not make an election with respect
to the Excess Shares under Section 83(b) of the Internal Revenue Code, at
any time beginning with the date upon which the Excess Shares become
substantially vested (as defined in 26 CFR 1.83-3(b)) and ending on
December 31 of the calendar year including that date, a portion of
the Vested Excess Shares (rounded down to the next whole share if a
fractional share would otherwise become transferable) shall be made freely
transferable as may reasonably be required to pay the federal, state,
local, or foreign taxes that are anticipated to apply to the income
recognized due to such Vesting, and the number of such Vested Excess
Shares made freely transferable for this purpose shall not count toward
the percentages in the schedule ((A) through (D))
above.
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(ii)
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If
the Vesting of any Excess Shares occurs after the end of the TARP Period,
such Vested Excess Shares shall also become freely transferable at the
same time as Vesting occurs.
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(iii)
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Except
as contemplated in Paragraph 13(c)(i) and/or 13(c)(ii), the Excess Shares,
and the rights and privileges conferred hereby, shall not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated in
any way, otherwise than by will or by the laws of descent and
distribution, and shall not be subject to execution, attachment or similar
process, prior to the later of their Vesting or the end of the TARP Period
(the period from the last day of the Performance Period through such
latter date being the “Non-Transferability Period” with respect to the
Excess Shares).
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14. Construction and Capitalized
Terms. This Agreement shall be administered, interpreted and
construed in accordance with the applicable provisions of the Plan and in
accordance with both the Award Shares and the Excess Shares being a
Performance-Based Compensation Award (as defined in the Plan), but, due to
timing of the Award in relation to the beginning of the Performance Period, not
with their being “performance-based compensation” within the meaning of Section
162(m)(4)(C) of the Internal Revenue Code. Capitalized terms in this
Agreement have the meaning assigned to them in the Plan, unless this Agreement
provides, or the context requires, otherwise.
15. Compliance with Section 409A
of the Internal Revenue Code.
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(a)
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It
is intended that any right or benefit which is provided pursuant to or in
connection with this Award which is considered to be nonqualified deferred
compensation subject to Section 409A (“Section 409A”) of the Internal
Revenue Code (a “409A benefit”) shall be provided and paid in a manner,
and at such time (i.e., at the applicable event described herein if a
Section 409A payment event or otherwise at the first Section 409A payment
event thereafter consisting of a fixed time (here, the 2-1/2 month period
from <<vesting determination period>> for Award Shares and
<<Excess Share vesting date>> for Excess Shares), a Section
409A disability, a Section 409A separation from service (as described
below), or a Section 409A change with respect to the Associate in the
ownership or effective control of the Company or in the ownership of a
substantial portion of its assets of the Company and including, in the
discretion of the Committee or its delegate, any applicable Section 409A
de minimis limited cashout payment permitted under Treasury Reg. Section
1.409A-3(j)(4)(v)) and in such form, as complies with the applicable
requirements of Section 409A to avoid the unfavorable tax consequences
provided therein for non-compliance. Consequently, this
Agreement is intended to be administered, interpreted and construed in
accordance with the applicable requirements of Section
409A. Notwithstanding the foregoing, the Associate and his or
her successor in interest shall be solely responsible and liable for the
satisfaction of all taxes and penalties that may be imposed on the
Associate or his or her successor in interest in connection with this
Agreement (including any taxes and penalties under Section 409A); and
neither the Company nor any of its affiliates shall have any obligation to
indemnify or otherwise hold the Associate or his or her successor in
interest harmless from any or all of such taxes or
penalties.
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(b)
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Except
as permitted under Section 409A, any 409A benefit payable to the Associate
or for his or her benefit with respect to the Award may not be reduced by,
or offset against, any amount owing by the Associate to the Company or any
of its affiliates.
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(c)
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To
the extent that entitlement to payment of any 409A benefit occurs due to
termination or cessation of employment, termination or cessation of
employment shall be read to mean “separation from service” (within the
meaning of Section 409A and as applicable to the Company and its
affiliates). Where entitlement to payment occurs by reason of
such termination or cessation of employment and the Associate is a
“specified employee” (within the meaning of Section 409A, as applicable to
the Company and its affiliates and using the identification methodology
selected by the Company from time to time in accordance with Section 409A)
on the date of his or her “separation from service”, then payment of such
409A benefit shall be delayed (without interest) until the first business
day after the end of the six month delay period required under Section
409A or, if earlier, after the Associate’s death. In
determining separation from service, separation from service is determined
based on the “Separation from Service” definition in the Trustmark
Corporation Deferred Compensation Plan (as in effect on
<<date>>), which provides, in part, that in determining
separation from service as an employee, separation from service occurs
when it is reasonably anticipated that no further services would be
performed after that date or that the level of services the Associate
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
<<months>> month
period.
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16.
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CPP
Limitations.
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(a)
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The
Company has participated in the CPP, and the Company is required to comply
with the requirements of Section 111(b) of the EESA, in accordance with
the CPP Requirements.
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(b)
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Notwithstanding
any other provision of this Agreement to the contrary, the Associate
acknowledges and understands that this Agreement shall be administered,
interpreted and construed and, if and where applicable, benefits provided
hereunder, including where applicable vesting and/or transferability,
shall be limited, deferred, forfeited and/or subject to repayment to the
Company in accordance with the CPP Requirements and Section 111(b) of the
EESA, as amended from time to time, to the extent legally applicable with
respect to the Associate, as determined by the Committee in its
discretion, including without limitation the clawback, the bonus
prohibition and the golden parachute prohibitions
thereof.
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(c)
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This
Award is intended to provide a grant of TARP-compliant long-term
restricted stock and shall be administered and interpreted in accordance
with that intent and purpose.
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(d)
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Without
any further action, this Agreement shall be automatically adjusted if
necessary to reduce the number of Award Shares or Excess Shares to the
maximum number permitted for this Award, together with other awards
granted to the Associate in calendar year <<year of grant>>
that are taken into account in determining compliance with the
TARP-compliant long-term restricted stock exception to the bonus
prohibition in the CPP Requirements (i.e., if the aggregate of such awards
has a value in excess of the 1/3rd
of annual compensation limit for TARP-compliant long-term restricted
stock), to constitute TARP-compliant long-term restricted stock; and in
such event the number of Award Shares or Excess Shares which are reduced
shall be immediately forfeited and excluded from the definition of Award
Shares or Excess Shares, as applicable, ab initio, for all
purposes of this Agreement. If the Associate receives or has
received in calendar year <<year of grant>> other awards of
restricted stock and/or restricted stock units also intending to
constitute TARP-compliant long-term restricted stock, the reduction in
Award Shares or Excess Shares required by this Paragraph shall be applied
as follows: (i) any later grant of restricted stock or restricted stock
units to the Associate in calendar year <<year of grant>>
shall be reduced before any earlier award granted to the Associate in
calendar year <<year of grant>>; and (ii) if multiple
awards of restricted stock and/or restricted stock units that must be
taken into account in determining compliance with the TARP-compliant
long-term restricted stock exception are granted to the Associate on the
same day, (A) where such awards are “Time-Based” (i.e., those vesting
solely on the basis of time) awards and “Performance-Based” awards (i.e.,
those vesting, in whole or in part, on the basis of performance metrics),
the number of Award Shares shall be reduced pro rata in each award,
(B) where “Performance-Based” awards contain both Award Shares and
Excess Shares in one award agreement (as this Agreement does), the maximum
number of Excess Shares shall automatically be reduced by the same number
as the reduction in the Award Shares before application of any of the
Vesting or Excess Share issuance provisions of this Agreement (i.e., if
there is a one share reduction in Award Shares, there will also be a one
share reduction in the maximum number of Excess Shares that could be
issued), and (C) lastly all other awards shall be reduced on a pro
rata basis.
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(e)
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The
Committee shall have the right unilaterally to amend this Agreement to
effect or document any changes or additions which in its view are
necessary or appropriate to comply with the CPP Requirements and Section
111 of the EESA, as amended from time to time, including any changes or
additions which in its view are necessary or appropriate to ensure that
this Award constitutes TARP-compliant long-term restricted stock for
purposes of the CPP
Requirements.
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9
To
evidence their agreement to the terms, conditions and restrictions hereof, the
Company and the Associate have signed this Agreement as of the date first above
written.
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COMPANY:
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TRUSTMARK
CORPORATION
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By:
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Its:
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ASSOCIATE:
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By:
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| <<name>> | ||
10
Attachment
A
Listing of Peer
Group
<<list
of peer financial institutions>>
11
