Form of Time-Based TARP-Compliant Restricted Stock Agreement for Executive (under the 2005 Stock and Incentive Compensation Plan)

 

(a)

“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.

 

(b)

“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.

 

(c)

“ARRA” means the American Recovery and Reinvestment Act of 2009, as amended from time to time.

 

(d)

“CPP” means the Troubled Asset Relief Program Capital Purchase Program created by the Treasury Department pursuant to authority granted under the EESA.

 

(e)

“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.

 

(f)

“EESA” means the Emergency Economic Stabilization Act of 2008, as amended from time to time.

 

(g)

“SEO” means a senior executive officer as defined in the CPP Requirements.

 

(h)

“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.

 

(i)

“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.

 

(j)

“Treasury Department” means the U.S. Department of the Treasury.

 

(a)

Subject to earlier vesting or forfeiture as provided below, the Associate’s interest in the Award Shares shall become non-forfeitable (“Vested” or “Vesting”) on <<vesting schedule>>, provided the Associate remains in employment with the Company or its Subsidiaries through such date (the “Vesting Date,” and the period from the Award Date through the Vesting Date being the “Vesting Period” with respect to the Award Shares).

 

(b)

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 Vesting Period, then Vesting in the Award Shares shall be provided for 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 <<beginning of period>> (counting the month of <<month, year>> as a complete calendar month) to and including the Vesting Acceleration Event, and the denominator of which is the number of whole and partial calendar months from <<beginning of period>> through the end of the Vesting Period).  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.

 

(c)

The following terms have the following meanings for purposes hereof:

 

(i)

“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.

 

(ii)

“Vesting Acceleration Event” means:

 

(A)

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);

 

(B)

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;

 

(C)

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;

 

(D)

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;

 

(E)

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;

 

(F)

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

 

(G)

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.

 

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.

4.

Transferability of Award Shares.

 

(a)

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):

 

(i)

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,

 

(ii)

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,

 

(iii)

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

 

(iv)

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.

 

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.

 

(b)

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.

 

(c)

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”).

 

(a)

The Company shall issue the Award Shares 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.

 

(b)

Any certificates representing the Award Shares shall be held by the Company until such time as the Non-Transferability Period with respect to the Award Shares lapses, or the Award Shares are forfeited hereunder.  Any Award Shares issued in book entry form shall be subject to the following legend, and any certificates representing the Award Shares shall bear the following legend, during the Non-Transferability Period:

 

(c)

Promptly after the Non-Transferability Period lapses with respect to any of the Award Shares, the Company shall, as applicable, either remove the notations on any of the Award 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 Award Shares as to which the Non-Transferability Period has lapsed.

 

(d)

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.  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 pursuant to Paragraph 14 or 15 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.

Trustmark Corporation

248 E. Capitol Street

P.O. Box 291

Jackson, MS  39201

Jackson, MS  39205

Attention:  Secretary

 

(a)

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 Vesting Date), 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 rule 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.

 

(b)

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.

 

(c)

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.

15.

CPP Limitations.

 

(a)

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.

 

(b)

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.

 

(c)

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.

 

(d)

Without any further action, this Agreement shall be automatically adjusted if necessary to reduce the number of Award 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 which are reduced shall be immediately forfeited and excluded from the definition of Award Shares, 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 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.

 

(e)

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.

By:

Its:

ASSOCIATE:

By: