UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
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Filed
by the Registrant
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Filed
by a Party other than the Registrant
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to §240.14a-12
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Trustmark
Corporation
(Name
of
Registrant as Specified in Its Charter)
_____________________________________________
(Name
of
Person(s) Filing Proxy Statement, if other than Registrant)
Payment
of Filing Fee (Check the appropriate box):
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No
fee required.
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$125
per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item
22(a)(2) of Schedule 14A.
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
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1) Title of each class of securities to which transaction
applies:
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2) Aggregate
number of securities to which transaction applies:
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3) Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11 (Set
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forth the amount on which the filing fee is calculated and state
how it
was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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Fee
paid previously with preliminary materials
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Check
box if any part of the fee is offset as provided by Exchange Act
Rule
0-11(a)(2) and identify the filing for
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which
the offsetting fee was paid previously. Identify the previous filing
by
registration statement number, or the
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Form
or Schedule and the date of its filing.
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1) Amount Previously Paid:
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2) Form, Schedule or Registration No.:
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3) Filing Party:
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4) Date Filed:
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April
7,
2006
Dear
Shareholder:
You
are
cordially invited to attend Trustmark Corporation’s annual meeting of
shareholders. This meeting will be held in the Grand Ballroom at the Hilton
Hotel, located at 1001 East County Line Road, Jackson, Mississippi, on Tuesday,
May 9, 2006, at 10:00 a.m.
At
the
meeting, shareholders will elect a board of directors and transact such other
business as may properly come before the meeting. Prior to the meeting, please
carefully read the accompanying proxy statement.
Thank
you
for your support of Trustmark.
Sincerely,
Richard
G. Hickson
Chairman
and Chief Executive Officer
Trustmark
Corporation
248
East Capitol Street
Jackson,
MS 39201
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
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DATE
AND TIME………………………...
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Tuesday,
May 9, 2006, at 10:00 a.m.
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LOCATION………………………………..
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Grand
Ballroom
Hilton
Hotel
1001
East County Line Road
Jackson,
Mississippi 39211
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ITEMS
OF BUSINESS……………………
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(1)
To elect a board of eleven directors to hold office for
the ensuing year or until their successors are elected and
qualified. (2)
To transact such other business as may properly come
before the meeting.
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RECORD
DATE…………………………..
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Shareholders
of record on March 13, 2006, are eligible to vote at the meeting
in person
or by proxy.
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PROXY
VOTING/REVOCATION………
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You
are urged to sign and return the enclosed proxy promptly, whether
or not
you plan to attend the meeting. If you do attend the meeting, you
may
revoke your proxy prior to the voting thereof. You may also revoke
your
proxy at any time before it is voted by written notice to the Secretary
of
Trustmark Corporation or by delivery to the Secretary of a subsequently
dated proxy.
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T.
Harris
Collier III
Secretary
to the Board
TABLE
OF CONTENTS
This
proxy statement is being sent on
or about April 7, 2006, in connection with the solicitation by the Board
of
Directors of Trustmark Corporation (Trustmark) of proxies to be voted at
the
2006 Annual Meeting of Shareholders and at any adjournment or postponement
thereof for the purposes set forth in the foregoing Notice of Annual Meeting
of
Shareholders.
Meeting
Location, Date and Time
The
Annual Meeting of Shareholders will
be held in the Grand Ballroom of the Hilton Hotel, located at 1001 East County
Line Road, Jackson, Mississippi 39211, on Tuesday, May 9, 2006, at 10:00
a.m.
Shareholders
Entitled to Vote
Shareholders
of record at the close of
business on March 13, 2006, are entitled to notice of and to vote at the
meeting
in person or by proxy. On the record date, Trustmark had outstanding 55,772,059
shares of common stock.
Required
Vote
A
majority of the shares outstanding
constitutes a quorum. The eleven candidates for election as directors who
receive the highest number of affirmative votes will be elected. In the election
of directors, each shareholder may vote his shares cumulatively by multiplying
the number of shares he is entitled to vote by the number of directors to
be
elected. This product constitutes the number of votes the shareholder may
cast
for one nominee or by distributing this number of votes among any number
of
nominees. Each share is entitled to one vote on other issues, and the issue
will
be approved if the votes cast in favor of the action exceed the votes cast
opposing the action. While abstentions and broker non-votes (shares held
by
brokerage customers that may not be voted on certain matters because the
broker
has not received specific instructions from the customers) are counted for
purposes of determining a quorum, they are not otherwise counted and, therefore,
will have no effect on the outcome of any issue.
All
valid proxies received by Trustmark
will be voted in accordance with the instructions indicated in such proxies.
If
no instructions are indicated in an otherwise properly executed proxy, it
will
be voted in accordance with the recommendations of the Board of Directors
of
Trustmark.
How
to Vote
Shareholders
of record can vote in
person at the annual meeting or by proxy without attending the annual meeting.
To
vote by proxy, either:
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1.
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Complete
the enclosed proxy card, sign, date and return it in the enclosed
postage-paid envelope,
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2.
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Vote
by telephone (instructions are on the proxy card) or
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3.
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Vote
by Internet (instructions are on the proxy
card).
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Revocation
of Proxies
Any
shareholder may
revoke a proxy at any time before it is voted by written notice to
the
Secretary, by revocation at the meeting or by delivery to the Secretary
of a
subsequently dated proxy.
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1 -
Voting
on Other Matters
The
Board of Directors is not aware of
any additional matters likely to be brought before the meeting. If other matters
do come before the meeting, the persons named in the accompanying proxy or
their
substitutes will vote the shares represented by such proxies in accordance
with
the recommendations of the Board of Directors of Trustmark.
Cost
of Proxy Solicitation
Solicitation
of proxies will be
primarily by mail. Associates of Trustmark and its subsidiaries may be used
to
solicit proxies by means of telephone or personal contact but will not receive
any additional compensation for doing so. Banks, brokers, trustees and nominees
will be reimbursed for reasonable expenses incurred in sending proxy materials
to the beneficial owners of such shares. The total cost of the solicitation
will
be borne by Trustmark.
CORPORATE
GOVERNANCE
Trustmark
implemented an enhanced
governance structure in April 2002. The effectiveness and efficiency of
Trustmark’s corporate decision-making processes were improved through the
implementation of a committee structure and revised director accountabilities
that best enable the Board to address issues such as business growth, human
capital and technology.
Provisions
of Trustmark’s governance
structure include, among other things, required notification of changes in
professional responsibilities and residence, a director’s attendance policy, as
well as the authority to seek advice or counsel from external advisers on an
as-needed basis. Effective October 18, 2005, the Board amended the Corporation’s
bylaws to increase the retirement age of directors to 68.
Board
Mission
The
role of the Board is to foster
Trustmark’s long-term success consistent with its fiduciary responsibilities to
shareholders. As part of this role, Trustmark’s Board is responsible
for:
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• Providing
strategic guidance and oversight,
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• Acting
as a resource on strategic issues and in matters of planning and
policymaking,
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• Ensuring
that management’s operations contribute to Trustmark’s financial
soundness,
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• Promoting
social responsibility and ethical business conduct,
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• Providing
insight and guidance on complex business issues and problems in
the
banking and financial services industries,
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• Ensuring
that an effective system is in place to facilitate selection, succession
planning and compensation of the Chief
Executive
Officer, and
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• Ensuring
Trustmark’s compliance with all relevant legal and regulatory
requirements.
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The
Board has adopted, and annually
reviews, formal mission statements for the Board and its committees to address
the governance guidelines and responsibilities of each. Likewise, the Board
has
adopted codes of conduct for directors, senior financial officers and
associates. These materials are available on Trustmark’s website at
www.trustmark.com or may be obtained by written request addressed to the
Secretary of the Board, Trustmark Corporation, Post Office Box 291,
Jackson, MS 39205-0291.
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2 -
Meetings
of the Board of Directors
The
Board of Directors met six times in
2005. Each director attended at least 75 percent of the total number of meetings
of the Board of Directors and board committees of which he was a member in
2005.
Director
Attendance
at Annual
Meeting
Directors
are expected to attend the
Annual Meeting of Shareholders, and in 2005, all directors were
present.
The
Board has affirmatively determined
that all directors, with the exception of the Chairman and CEO, Richard G.
Hickson, meet the requirements of independence under NASDAQ Rule
4200.
Trustmark’s
Chairman of the Board also
serves as CEO. Therefore, under the governance guidelines set forth in
Trustmark’s Board Mission Statement, the Chairman of the Executive Committee,
Matthew L. Holleman III, serves as the Board’s Lead Director. The primary
responsibility of the Lead Director is to chair meetings of the non-management
directors, and in 2005, the Board held six such independent sessions. The
Lead
Director also refers to the appropriate board committees any issue brought
to
his attention by shareholders, directors or others.
Committees
of the Board of
Directors
There
are five committees that
collectively provide guidance on strategic issues, planning and policymaking:
Audit and Finance, Executive, Human Resources, Nominating and Strategic
Planning. The committees are comprised solely of independent directors, with
the
exception of the Executive Committee.
Audit
and Finance
Committee
Under
the terms of its Charter, the
Audit and Finance Committee meets at least five times a year and is responsible
for, among other things, annual approval of the independent auditors, oversight
of audit activities, financial reporting and regulatory compliance, as well
as
review and approval of Trustmark’s profit plan.
The
Committee meets with the
independent and internal auditors without management present on a regular
basis.
The
Executive Committee acts on behalf
of the Board if a matter requires Board action before a meeting of the full
Board can be held. The Committee is responsible for reviewing the corporate
governance structure and annually evaluating each director’s performance against
specific performance criteria.
The
role
of the Human Resources Committee is to ensure that appropriate policies
and
practices are in place to facilitate the development of management talent,
orderly CEO succession planning, corporate social responsibility and the
setting
of management compensation.
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3 -
Nominating
Committee
The Nominating Committee is charged with the responsibility of seeking,
interviewing and recommending to the Board of Directors qualified candidates
for
Board and committee membership.
The Nominating Committee Mission Statement is posted on Trustmark’s website at
www.trustmark.com.
Strategic
Planning Committee
The Strategic Planning Committee provides guidance to management on the
strategic planning process and issues of strategic importance including business
growth and expansion, material transactions and technology. The Committee
is
also responsible for monitoring progress with Trustmark’s long-term strategic
and financial objectives.
The following table shows the current membership of each committee and the
number of meetings held by each committee during 2005:
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Director
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Audit
and Finance
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Executive
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Human
Resources
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Nominating
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Strategic
Planning
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J.
Kelly Allgood
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Chair
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X
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X
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X
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Reuben
V. Anderson
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X
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Chair
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X
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William
C. Deviney, Jr.
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X
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C.
Gerald Garnett
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X
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X
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X
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X
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Richard
G. Hickson
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X
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Matthew
L. Holleman III
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Chair
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Chair
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Chair
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John
M. McCullouch
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Richard
H. Puckett
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X
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R.
Michael Summerford
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X
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X
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Kenneth
W. Williams
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X
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William
G. Yates, Jr.
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X
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2005
Meetings
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5
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6
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9
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1
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2
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During 2005, directors received an annual retainer of $12,000 plus $1,000 for
each Board meeting attended. The Executive Committee Chairman received an
additional retainer of $6,000 per year. All other Executive Committee members
received an additional retainer of $3,000 per year. All committee chairs and
committee members received $750 and $500, respectively, for each committee
meeting attended.
Based
on
a study of compensation paid to directors of comparable financial institutions,
the Board has approved changes to the Trustmark Director Compensation schedule,
which will become effective as of May 9, 2006. The changes to the schedule
will
increase the fees paid to $1,500 for each Board meeting attended, as well as
to
$1,250 and $1,000 for committee chairs and committee members, respectively,
for
each committee meeting attended. Additionally, the Audit and Finance Committee
Chair will receive an annual retainer of $12,000. The CEO receives no
compensation for Board or committee service.
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4 -
Trustmark provides non-employee directors who became directors prior to
2003 the
opportunity to participate in a contributory defined benefit deferred fee
plan.
Under the plan, participating directors may defer up to $12,000 of fees
annually
to fund a portion of the cost of their defined retirement benefits and
death
benefits. The amount of the retirement benefit and death benefit is determined
based upon the participant’s annual contribution amount, the length of Board
service (with accrual and vesting occurring prorata assuming Board service
to
age 65) and the age of the director at date of entry into the plan. Depending
on
a number of factors, the projected annual benefit at retirement is payable
for
the longer of life or 25 years and ranges from $20,000 to $133,000 for
current
directors electing to participate in the plan. The vested annual benefit
as of
December 31, 2005, payable at retirement to current directors electing to
participate in the plan ranges from $16,000 to $71,000. If a participating
director dies prior to retirement, his beneficiary will receive a scheduled
death benefit for ten years. If the plan is terminated, or a director’s Board
service is terminated, within three years after a change in control of
Trustmark
(as defined in the plan), affected directors will be credited with up to
an
additional five years of Board service for purposes of determining retirement
benefits at age 65. Trustmark has purchased life insurance policies on
participating directors to fund this plan.
Non-employee
directors are eligible to receive stock option awards under the Trustmark
Corporation 2005 Stock and Incentive Compensation Plan. On May 10, 2005,
each
non-employee director received an option grant of 2,000 shares pursuant
to the
plan. These options vest in equal installments over a five-year period
and
expire in 2012. Accelerated vesting and exercisability of these options
is
provided upon a change in control of Trustmark (as defined in the
plan).
Non-employee directors may defer all or a part of their annual
retainer and meeting fees (excluding any contribution to the deferred fee
plan
described above) pursuant to a voluntary non-qualified deferred compensation
plan. The compensation deferred is credited to a liability account, which
is
deemed invested in and mirrors the performance of one or more designated
investment funds available under the plan and selected at the option of
the
director. The deferred compensation account will be paid in a lump sum
or in
annual installments at a designated time upon the occurrence of an unforeseen
emergency or upon a director’s cessation of service on the
Board.
Communications
with
Directors
Shareholders
desiring to contact
Trustmark’s Board of Directors may do so by sending written correspondence to
Board of Directors, Trustmark Corporation, Post Office Box 291, Jackson, MS
39205-0291 or by e-mail to boardofdirectors@trustmark.com.
Communications
will be referred to the
Chairman of the Executive Committee, who will determine the appropriate
committee to receive the communication and take any action deemed necessary
by
that committee.
Complaints
relating to Trustmark’s
accounting, internal accounting controls or auditing matters should be directed
to Trustmark’s General Counsel/Secretary to the Board, Trustmark Corporation,
Post Office Box 291, Jackson, MS 39205-0291 or by calling 1-800-844-2000
(extension 5088) or 1-601-208-5088.
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5 -
Nomination
of
Directors
Nominations
for election to the Board of Directors may be made by the Board of Directors
or
by any shareholder of any outstanding class of capital stock of Trustmark
entitled to vote for the election of directors. Nominations other than those
made by or on behalf of the existing management of Trustmark shall be made
in
writing and shall be delivered or mailed to Trustmark’s Chairman of the Board
not less than fourteen (14) days nor more than fifty (50) days prior to any
meeting of shareholders called for the election of directors; provided, however,
that if less than twenty-one (21) days’ notice of the meeting is given to
shareholders, such nomination shall be mailed or delivered to the Chairman
of
the Board not later than the close of business on the seventh (7th) day
following the day on which the notice of the meeting was mailed. Such
notification shall contain the following information to the extent known
to the
notifying shareholder: (a) the name and address of each proposed nominee;
(b)
the principal occupation of each proposed nominee; (c) the total number of
shares of capital stock of Trustmark that will be voted for each proposed
nominee; (d) the name and residence address of the notifying shareholder;
and
(e) the number of shares of capital stock of Trustmark owned by the notifying
shareholder.
Nominations
not made in accordance with the above procedure may be disregarded by the
chairman of the meeting at his discretion, and upon his instructions, all
votes
cast for each such nominee may be disregarded.
Trustmark’s
bylaws permit direct nominations by shareholders. Therefore, the Nominating
Committee does not have a policy for considering nominees recommended by
shareholders through the process outlined above. However, if a shareholder
wishes to recommend an individual for Board service, rather than directly
nominate the individual as set forth above, the shareholder may submit the
individual’s name to the Nominating Committee in writing addressed to Trustmark
Corporation Nominating Committee, Post Office Box 291, Jackson, MS 39205-0291
or
by e-mail to boardofdirectors@trustmark.com. In order to give the Nominating
Committee adequate time to consider any such individual for nomination as
a
director at the 2007 Annual Meeting of Shareholders, such recommendations
should
be delivered no later than October 1, 2006. In considering an individual
recommended by a shareholder but not directly nominated, the Nominating
Committee will use the same guidelines as set forth in the Director
Qualifications.
When
identifying potential candidates for director nominees, the Committee may
solicit suggestions from incumbent directors, management or others. With
regard
to the proposed nominees for 2006, all nominees have previously served as
a
director.
The
Board believes that in order to appropriately carry out their roles, directors
must demonstrate a variety of personal traits, leadership qualities and
competencies. In considering nominees submitted by the Board or management,
the
Nominating Committee will use these traits, leadership qualities and individual
competencies to assess future director nominees’ suitability for Board
service.
Board
service is an extremely important, high profile role and carries with it
significant responsibility. For that reason, it is important that all directors
possess a certain set of personal traits, including:
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Personal
and Professional Integrity
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Accountability
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Informed
Business Judgment
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•
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Mature
Confidence
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High
Performance Standards
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Initiative
and Responsiveness
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Business
Credibility
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6 -
When seeking individuals to fill leadership roles, the following skill
sets are
required:
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Communication
Skills
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Crisis
Management Skills
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•
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Facilitation
Skills
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•
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Relationship
Building/Networking
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There
are certain competencies that
must be represented collectively by the directors on each Board committee,
but
each individual director need not necessarily possess all of them.
The specific
competencies vary by committee, as illustrated in the chart below:
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Board
Committees
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Individual
Director Competencies
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Audit
& Finance
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Executive
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Human
Resources
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Nominating
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Strategic
Planning
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1.
Financial Acumen
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Accounting
& finance knowledge
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ü
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ü
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ü
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ü
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Financial
statement analysis
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ü
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Knowledge
of capital markets
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ü
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ü
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Financial
planning
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ü
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Ability
to communicate financial concepts in
lay
terms
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ü
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ü
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2.
Organizational Effectiveness
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Talent
management
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ü
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Understanding
of compensation issues
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ü
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Ability
to discern candidate qualifications
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ü
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3.
Strategic Direction
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Vision
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ü
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ü
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ü
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Strategic
perspective
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ü
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ü
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ü
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Technology
knowledge
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ü
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Industry
knowledge
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ü
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ü
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ü
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ü
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7 -
PROPOSAL
1: Election of
Directors
The
Board
of Directors has fixed the number of directors for the coming year
at eleven.
The nominees listed herein have been proposed by the Board of Directors
for
election at the meeting.
Shares
represented by the proxies will, unless authority to vote is withheld,
be voted
in favor of the proposed slate of eleven nominees. In the election
of directors,
each shareholder may vote his shares cumulatively by multiplying the
number of
shares he is entitled
to vote by the number of directors to be elected. This product constitutes
the
number of votes the shareholder may cast for one nominee or by distributing
this
number of votes among any number of nominees. The proxies reserve the
right, in
their discretion, to vote cumulatively. If a shareholder withholds
authority for
one or more nominees and does not direct otherwise, the total number of
votes the shareholder is entitled to cast will be distributed among
the
remaining nominees.
Should
any of these nominees be unable to accept the nomination, the votes
which
otherwise would have been cast for the nominee(s) will be voted for
such other
person(s) as the Board of Directors shall nominate. Each director is
elected to
hold office until the next annual meeting of shareholders or until
a successor
is elected and qualified. The persons who will be elected to the Board
of
Directors will be the eleven nominees receiving the largest number
of
votes.
The Board of Directors recommends that shareholders vote “for” the proposed
nominees.
| Name and Age at Record Date | Position, Principal Occupation and Directorships |
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J.
Kelly Allgood............................65
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•Retired
President, BellSouth Mississippi
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•Director
of Trustmark since 1991
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•Trustmark
Corporation Committees:
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Audit
and Finance (Chair)
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Executive
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Nominating
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Strategic
Planning
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•Other
Directorships: Trustmark National Bank
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Reuben
V. Anderson.....................63
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• Partner,
Phelps Dunbar, L.L.P. (Attorneys)
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• Director
of Trustmark since 1980
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• Trustmark
Corporation Committees
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Executive
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Human
Resources (Chair)
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Nominating
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|
|
• Other
Directorships: Trustmark National Bank,
|
|
|
BellSouth
Corporation, The Kroger Company
|
-
8 -
| Name and Age at Record Date | Position, Principal Occupation and Directorships |
|
William
C. Deviney, Jr.................60
|
|
 |
• CEO,
Deviney Construction Company, Inc.
|
|
(Telecommunications Construction)
|
|
|
• Director
of Trustmark since 1995
|
|
|
• Trustmark
Corporation Committees:
|
|
|
Human
Resources
|
|
|
• Other
Directorships: Trustmark National Bank
|
|
C.
Gerald Garnett.........................61
|
|
 |
• Retired CEO,
Southern Farm Bureau Casualty
|
|
Insurance
Company and Southern Farm Bureau
|
|
|
Property Insurance Company
|
|
|
• Director
of Trustmark since 1993
|
|
|
• Trustmark
Corporation Committees:
|
|
|
Executive
|
|
|
Human
Resources
|
|
|
Nominating
|
|
|
Strategic
Planning
|
|
|
• Other
Directorships: Trustmark National
Bank
|
|
Richard
G. Hickson......................61
|
|
 |
• Chairman,
President and CEO, Trustmark Corporation;
|
|
Chairman and CEO, Trustmark National Bank
|
|
|
• Director
of Trustmark since 1997
|
|
|
• Trustmark
Corporation Committees:
|
|
|
Executive
|
|
|
• Other
Directorships: Trustmark National Bank
|
-
9 -
| Name and Age at Record Date | Position, Principal Occupation and Directorships |
|
Matthew
L. Holleman III.............54
|
|
 |
• President
and CEO, Galaxie Corporation; President,
|
|
Capitol
Street Corporation, H.H. Corporation and
|
|
|
Bay Street Corporation (Investment
Management);
|
|
|
President and CEO, Mississippi Valley Gas Company (1987-2002)
|
|
|
(Natural Gas Distribution)
|
|
|
• Director
of Trustmark since 1994
|
|
|
• Trustmark
Corporation Committees:
|
|
|
Executive
(Chair)
|
|
|
Nominating
(Chair)
|
|
|
Strategic
Planning (Chair)
|
|
|
•
Other
Directorships: Trustmark National Bank
|
|
John
M. McCullouch...................58
|
|
 |
•
President,
BellSouth Mississippi
|
|
•
Director
of Trustmark since 2005
|
|
|
•
Other
Directorships: Trustmark National Bank
|
|
Richard
H. Puckett......................51
|
|
 |
•
President
and CEO, Puckett Machinery Company
|
|
(Distributor of Heavy Earth Moving Equipment)
|
|
|
•Director
of Trustmark since 1995
|
|
|
•Trustmark
Corporation Committees:
|
|
|
Audit
and Finance
|
|
|
•Other
Directorships: Trustmark National Bank
|
-
10 -
| Name and Age at Record Date | Position, Principal Occupation and Directorships |
|
R.
Michael Summerford............57
|
|
 |
•
Former
President and COO, ChemFirst, Inc.
|
|
(Manufacturer of Electronic and Specialty Chemicals)
|
|
|
•
Director
of Trustmark since 2005
|
|
|
•
Trustmark
Corporation Committees:
|
|
|
Audit
and Finance
|
|
|
Human
Resources
|
|
|
•
Other
Directorships: Trustmark National Bank
|
|
Kenneth
W. Williams.................64
|
|
 |
•
President,
Corinth Coca-Cola Bottling Works;
|
|
President, Refreshments, Inc., and Refreshments
|
|
|
of Tennessee, Inc.; Secretary/Treasurer,
|
|
|
Weaver Consolidated Group, Inc. (Soft
Drink Bottler)
|
|
|
•
Director
of Trustmark since 1998
|
|
|
•
Trustmark
Corporation Committees:
|
|
|
Audit
and Finance
|
|
|
•
Other
Directorships: Trustmark National Bank
|
|
William
G. Yates, Jr...................64
|
|
 |
•
President
and CEO, The Yates Companies, Inc.
|
|
(Construction)
|
|
|
•
Director
of Trustmark since 2001
|
|
|
•
Trustmark
Corporation Committees:
|
|
|
Strategic
Planning
|
|
|
•
Other
Directorships: Trustmark National Bank
|
-
11 -
The following graph compares Trustmark’s annual percentage change in cumulative
total return on common shares over the past five years with the cumulative
total
return of companies comprising the NASDAQ market value index and the Hemscott
Industry Group 413. The Hemscott Industry Group 413 is an industry index
published by Hemscott, Inc. and consists of 73 bank holding companies located
in
the southeastern United States.
This presentation assumes that $100 was invested in shares of the relevant
issuers on December 31, 2000, and that dividends received were immediately
invested in additional shares. The graph plots the value of the initial $100
investment at one-year intervals for the fiscal years shown.
Five
Year Cumulative Total Return
|
Company
|
2000
|
2001
|
2002
|
2003
|
2004
|
2005
|
|
Trustmark
(♦)
|
100
|
118.26
|
119.12
|
150.38
|
163.83
|
149.07
|
|
Hemscott
Industry Group 413 (■)
|
100
|
125.76
|
134.60
|
171.85
|
197.60
|
200.09
|
|
NASDAQ
Market (▲)
|
100
|
79.71
|
55.60
|
83.60
|
90.63
|
92.62
|
Securities
Ownership by Certain Beneficial Owners and
Management
The
following table reflects the number
of Trustmark common shares beneficially owned by (a) persons known by Trustmark
to be the beneficial owners of more than five percent of its outstanding
shares,
(b) directors and nominees, (c) each of the executive officers named within
the
Executive Compensation section and (d) directors and executive officers of
Trustmark as a group. The persons listed below have sole voting and investment
authority for all shares except as indicated. Unless otherwise noted, beneficial
ownership for each outside director and nominee includes 6,500 shares, which
the
individual has the right to acquire through the exercise of options granted
under Trustmark’s stock compensation and incentive plans (1). The percentage of
outstanding shares of common stock owned is not shown where less than one
percent.
-
12 -
|
Shares
Beneficially
|
Percent
of
|
|||||
|
Owned
|
Outstanding
|
|||||
|
Name
|
as
of 03/01/06 (1)
|
Shares
|
||||
|
Robert
M. Hearin Foundation;
|
7,895,034
|
(2)
|
14.16%
|
|||
|
Robert
M. Hearin Support Foundation
|
||||||
|
Post
Office Box 16505
|
||||||
|
Jackson,
MS 39236
|
||||||
|
J.
Kelly Allgood
|
|
62,377
|
|
|
|
|
|
Reuben
V. Anderson
|
|
29,959
|
(3)
|
|
|
|
|
William
C. Deviney, Jr.
|
|
21,166
|
|
|
|
|
|
Duane
A. Dewey
|
19,487
|
(4)
|
||||
|
C.
Gerald Garnett
|
16,989
|
|||||
|
Richard
G. Hickson
|
358,101
|
(3)(5)
|
||||
|
Matthew
L. Holleman III
|
7,946,349
|
(6)
|
14.25%
|
|||
|
Gerard
R. Host
|
170,955
|
(3)(7)
|
||||
|
John
M. McCullouch
|
1,200
|
(8)
|
||||
|
Richard
H. Puckett
|
|
87,842
|
(3)
|
|
|
|
|
R.
Michael Summerford
|
2,000
|
(8)
|
|
|
|
|
|
Harry
M. Walker
|
175,546
|
(3)(9)
|
||||
|
Zach
L. Wasson
|
47,088
|
(10)
|
||||
|
Kenneth
W. Williams
|
18,502
|
|||||
|
Williams
G. Yates, Jr.
|
27,212
|
(11)(12)
|
||||
|
Directors
and executive officers of Trustmark as
a group
|
|
9,215,718
|
(13)
|
16.52 %
|
||
| (1) |
Includes
options exercisable within 60 days of March 1,
2006.
|
| (2) |
Includes
383,928 shares owned by the Robert M. Hearin Foundation, 2,956,862
shares
owned by the Robert M. Hearin Support Foundation, 4,281,244 shares
owned
by Capitol Street Corporation, and 273,000 shares owned by Bay Street
Corporation. Capitol Street Corporation is a 100% owned subsidiary
of
Galaxie Corporation, which may be deemed to be controlled by the
Robert M.
Hearin Support Foundation. Voting and investment decisions concerning
shares beneficially owned by the Robert M. Hearin Foundation and
the
Robert M. Hearin Support Foundation are made by the Foundations'
trustees:
Robert M. Hearin, Jr., Matthew L. Holleman III, Daisy S. Blackwell,
E.E.
Laird, Jr., Laurie H. McRee and Alan W.
Perry.
|
| (3) |
Includes
shares owned by spouse and/or minor
children.
|
| (4) |
Includes
15,000 shares that the named individual has the right to acquire
through
the exercise of options and 3,000 shares of performance-based restricted
stock with respect to which the nominee has sole voting power but
which
cannot be transferred prior to vesting.
|
| (5) |
Includes
285,076 shares that the nominee has the right to acquire through
the
exercise of options and 34,923 shares of performance-based restricted
stock with respect to which the nominee has sole voting power but
which
cannot be transferred prior to vesting.
|
| (6) |
Includes
51,315 shares owned by nominee and immediate family members and 7,895,034
shares for which nominee has shared voting and investment authority
as a
result of serving as one of six trustees of the Robert M. Hearin
Foundation and the Robert M. Hearin Support Foundation, president
and
chairman of the board of Galaxie Corporation, president and director
of
Capitol Street Corporation and president and director of Bay Street
Corporation. These shares are reported as beneficially owned by the
Robert
M. Hearin Foundation and the Robert M. Hearin Support
Foundation.
|
| (7) |
Includes
106,255 shares that the named individual has the right to acquire
through
the exercise of options and 17,902 shares of performance-based restricted
stock with respect to which the named individual has sole voting
power but
which cannot be transferred prior to
vesting.
|
| (8) |
Includes
1,000 shares that the named individual has the right to acquire through
the exercise of options.
|
| (9) |
Includes
98,144 shares that the named individual has the right to acquire
through
the exercise of options and 3,000 shares of performance-based restricted
stock with respect to which the nominee has sole voting power but
which
cannot be transferred prior to vesting.
|
| (10) |
Includes
35,625 shares that the named individual has the right to acquire
through
the exercise of options and 3,000 shares of performance-based restricted
stock with respect to which the nominee has sole voting power but
which
cannot be transferred prior to vesting.
|
| (11) |
Includes
5,500 shares that the named individual has the right to acquire through
the exercise of options.
|
| (12) |
Includes
9,436 shares held by a corporation controlled by the
nominee.
|
| (13) | Includes shares held directly or indirectly by 22 individuals: the persons listed herein, as well as Trustmark’s other remaining executive officers, the Chief Accounting Officer and the General Counsel/Secretary. |
-
13 -
Section
16(a) Beneficial Ownership Reporting
Compliance
During
2005, there was one late filing reported that related to the sale of Trustmark
shares owned indirectly by Richard H. Puckett. Trustmark reviewed Mr. Puckett’s
transaction and determined there were no short-swing liabilities
owed.
EXECUTIVE
COMPENSATION
Compensation
Table
The following table sets forth the aggregate compensation for the last
three
fiscal years paid to Trustmark's Chief Executive Officer and the next
four
highest compensated executive officers:
|
|
|
Long-Term
|
All
Other
|
||||||
|
|
|
Annual
Compensation
|
Compensation
|
Compensation
(3)
|
|||||
|
|
|
|
Restricted
Stock Awards
($)(2)
|
Securities
Underlying Stock Options (# of Shares)
|
|||||
|
|
|
Other
Annual
|
|||||||
|
Name
and Principal Position
|
Year
|
|
Salary
|
Bonus
|
Compensation
(1)
|
|
|||
|
Richard
G. Hickson
|
2005
|
$680,022
|
$409,773
|
$22,214
|
$487,844
|
n/a
|
$9,450
|
||
|
Chairman,
President and CEO,
|
2004
|
646,667
|
406,310
|
34,623
|
n/a
|
45,000
|
9,225
|
||
|
Trustmark
Corporation;
|
2003
|
596,458
|
549,959
|
29,523
|
n/a
|
45,000
|
9,000
|
||
|
Chairman
and CEO,
|
|
||||||||
|
Trustmark
National Bank
|
|
||||||||
|
Gerard
R. Host
|
2005
|
|
$345,844
|
$189,663
|
$5,347
|
$249,256
|
n/a
|
$9,450
|
|
|
President
|
2004
|
|
321,667
|
195,419
|
5,040
|
n/a
|
25,000
|
9,225
|
|
|
General
Banking,
|
2003
|
|
296,791
|
210,107
|
4,884
|
n/a
|
25,000
|
9,000
|
|
|
Trustmark
National Bank
|
|
|
|
|
|
|
|
|
|
|
Harry
M. Walker
|
2005
|
|
$272,759
|
$110,000
|
$5,293
|
n/a
|
15,000
|
$9,450
|
|
|
President
|
2004
|
|
265,417
|
124,415
|
5,040
|
n/a
|
15,000
|
9,225
|
|
|
Jackson
Metro,
|
2003
|
|
257,624
|
129,939
|
4,884
|
n/a
|
15,000
|
9,000
|
|
|
Trustmark
National Bank
|
|
|
|
|
|
|
|
|
|
|
Duane
A. Dewey
|
2005
|
|
$264,175
|
$138,698
|
$5,254
|
n/a
|
15,000
|
$9,450
|
|
|
President
|
2004
|
|
256,250
|
163,698
|
4,695
|
n/a
|
15,000
|
2,446
|
|
|
Wealth
Management,
|
2003
|
|
88,141
|
167,000
|
1,328
|
n/a
|
10,000
|
n/a
|
|
|
Trustmark
National Bank
|
|
|
|
|
|
|
|
|
|
|
Zach
L. Wasson
|
2005
|
|
$198,340
|
$76,000
|
$5,268
|
n/a
|
7,500
|
$8,689
|
|
|
Executive
Vice President and
|
2004
|
|
188,333
|
76,570
|
5,040
|
n/a
|
7,500
|
9,103
|
|
|
Chief
Financial Officer,
|
2003
|
|
176,042
|
74,253
|
4,884
|
n/a
|
6,500
|
8,715
|
|
|
Trustmark
National Bank
|
|
|
|
|
|
|
|
|
|
|
(1)
|
None
of the named executive officers received perquisites or other
personal
benefits in excess of $50,000 or 10% of their total cash compensation
in
any of the years presented. Perquisites or other personal benefits
received by the named executive officers consist primarily of
club dues,
and for Mr. Hickson, an annual allowance (up to 20 hours) for
personal use
of Trustmark’s airplane.
|
|
(2)
|
Represents
the market value on the date of grant of performance-based restricted
stock awards (17,423 shares for Richard G. Hickson and 8,902
shares for
Gerard R. Host) granted on May 10, 2005 under the 2005 Stock
and Incentive
Compensation Plan based on the closing price of Trustmark’s common shares
on May 10, 2005 $28.00) and may not reflect the value of the
awards at
vesting and payment. The awards best based on achievement of
return on
average equity (ROAE) targets, with the vesting up to and including
100%
based on ROAE, and total shareholder return (TSR) targets, with
vesting up
to and including 100% based on TSR, compared to a group of peer
financial
institutions over an April 1, 2005 through December 31, 2007
performance
period provided the awardee remains employed through the end
of the
performance period. Partial time-weighted performance vesting
occurs based
on ROAE and TSR through the end of the calendar quarter prior
to an
employee’s death, disability, termination by Trustmark without cause or
termination by the employee for good reason or the occurrence
of a change
in control.
|
-
14 -
|
|
If
a greater than 100% vesting level with respect to the ROAE and
TSR targets
is achieved in the aggregate (with the maximum being 200%) for
a person
who remains employed for the entire performance period, then
an additional
award of service-based restricted stock (“excess shares”) will be issued
in the first 2-1/2 months after the end of the performance period
equal to
the number of shares awarded initially to that employee multiplied
by the
vesting over 100%. Any such awarded excess shares will vest at
the earlier
of Trustmark’s 2010 annual meeting of shareholders or May 31, 2010.
Accelerated vesting of these excess shares may also occur based
on an
employee’s death, disability, termination by Trustmark without cause or
termination by the employee for good reason or the occurrence
of a change
in control. The amounts shown in this column do not reflect the
market
value of any excess shares that may be awarded in the
future.
|
|
Dividends
on the initial performance-based restricted stock awards are
accumulated
and will vest and be paid when and to the extent the initial
performance-based restricted stock vests. Dividends on any excess
shares
issued will be accumulated and will vest and be paid when and
to the
extent the excess shares vest. At December 31, 2005, Messrs.
Hickson and
Host held 17,423 and 8.902 shares of restricted stock having
an aggregate
value of $478,610 and $244,538, respectively, based on a closing
price of
$27.47 per share.
|
|
|
(3)
|
All
other compensation represents Trustmark contributions to the
401(k)
plan.
|
Option
Grants in 2005
The following table sets forth, as to each named executive officer, information
with respect to options granted during 2005 and the potential realizable
value
of such options assuming a 5% and 10% compounded annual rate of appreciation
in
the value of Trustmark’s shares. The 5% and 10% assumed rates of growth are
required by SEC rules for illustrative purposes only. Options granted during
2005 vest in five annual installments.
|
|
|
Potential
Realizable Value at
|
||||||||||||
|
Assumed
Annual Rates of
|
||||||||||||||
|
Individual
Grants
|
|
Appreciation
for Option Term
|
||||||||||||
|
Number
of
Shares
Underlying
Options
Granted
|
%
of Total
Options
Granted
to
Associates
|
Exercise
Price
Per
|
Expiration
|
|
||||||||||
|
Name
|
in
2005
|
in
2005
|
Share
(1)
|
Date
|
|
5%
|
10%
|
|||||||
|
Richard
G. Hickson
|
none
|
n/a
|
n/a
|
n/a
|
|
n/a
|
n/a
|
|||||||
|
Gerard
R. Host
|
none
|
n/a
|
n/a
|
n/a
|
|
n/a
|
n/a
|
|||||||
|
Harry
M. Walker
|
15,000
|
4.99%
|
$28.28
|
5/10/2012
|
|
$
172,692
|
$
402,446
|
|||||||
|
Duane
A. Dewey
|
15,000
|
4.99
|
28.28
|
5/10/2012
|
|
172,692
|
402,446
|
|||||||
|
Zach
L. Wasson
|
7,500
|
|
2.50
|
28.28
|
5/10/2012
|
|
86,346
|
201,223
|
||||||
(1) The exercise price of all options was equal to the average
market
price of Trustmark's common shares on the grant date.
Option
Exercises and Year-End Option
Values
The
table
below reflects information regarding the number and value of the options
held by
the named executive officers in at December 31, 2005. None of the named
executive officers exercised stock options during 2005.
-
15 -
|
Value
of Unexercised
|
||||||||||||||||
|
|
Options
at
|
|
In-the-Money
Options
|
|||||||||||||
|
Shares
|
|
Fiscal
Year-End
|
|
at
Fiscal Year-End
|
||||||||||||
|
Acquired
|
Value
|
|
|
|||||||||||||
|
Name
|
on
Exercise
|
Realized
|
|
Exercisable
|
Unexercisable
|
|
Exercisable
|
Unexercisable
|
||||||||
|
Richard
G. Hickson
|
n/a
|
n/a
|
|
259,686
|
62,254
|
|
$
1,446,146
|
$
103,560
|
||||||||
|
Gerard
R. Host
|
n/a
|
n/a
|
|
90,865
|
37,254
|
|
474,300
|
64,460
|
||||||||
|
Harry
M. Walker
|
n/a
|
n/a
|
|
87,754
|
39,754
|
|
477,212
|
44,910
|
||||||||
|
Duane
A. Dewey
|
n/a
|
n/a
|
|
8,750
|
31,250
|
|
6,375
|
8,475
|
||||||||
|
Zach
L. Wasson
|
n/a
|
n/a
|
|
32,125
|
16,375
|
|
156,648
|
12,917
|
||||||||
Trustmark maintains a noncontributory pension plan for associates who are 21
years of age or older and who have completed one year of service with a
prescribed number of hours of credited service. The following table specifies
the estimated annual benefits payable upon retirement at age 65 under the plan
to persons in the following remuneration and years of service classifications:
|
Five-Year
Average
Annual
|
Years
of Credited Service
|
|||||||
|
Compensation
|
15
|
20
|
25
|
30
|
35
|
45
|
||
|
$50,000
|
$6,092
|
$7,203
|
$8,031
|
$8,648
|
$9,106
|
$9,811
|
||
|
75,000
|
9,138
|
10,804
|
12,047
|
12,973
|
13,659
|
14,716
|
||
|
100,000
|
12,185
|
14,405
|
16,062
|
17,297
|
18,213
|
19,621
|
||
|
125,000
|
15,231
|
18,006
|
20,078
|
21,621
|
22,766
|
24,526
|
||
|
150,000
|
18,277
|
21,608
|
24,094
|
25,945
|
27,319
|
29,432
|
||
|
200,000
|
24,369
|
28,810
|
32,125
|
34,594
|
36,425
|
39,242
|
||
|
210,000 and above
|
25,587
|
30,251
|
33,731
|
36,324
|
38,246
|
41,204
|
||
Years
of credited service for the highest paid executives are: Richard G. Hickson
- 9
years, Gerard R. Host - 22 years, Harry M. Walker - 35 years, Duane A. Dewey
- 2
years, Zach L. Wasson - 16 years.
Benefits
payable under the plan are
based on a formula that takes into account the participant’s compensation
averaged over the highest consecutive five-year period out of the most recent
seven-year period and the number of years of credited service. Compensation
consists of W-2 taxable income adjusted for associate contributions to 401(k),
qualified transportation fringe benefits and cafeteria plans. Compensation
does
not include group term life insurance, automobile allowance, moving expenses,
severance pay or income from stock options after 2002. After 2003, compensation
also excludes all incentive compensation, bonuses and commissions. For 2005,
the
maximum benefit allowable by the Internal Revenue Service was $170,000 and
the
maximum covered compensation was $210,000.
The
table assumes the entire service
period was completed under the benefit formula that is effective for service
on
or after January 1, 2004. Amounts payable pursuant to the plan are not subject
to deduction for social security.
-
16 -
Supplemental
Retirement
Plan
Trustmark
provides executive officers
with a non-qualified defined benefit plan, which provides a supplemental
retirement benefit to executive officers selected or plan participation by
the
Human Resources Committee. The retirement benefit is payable for life, but
not
less than ten years, and normally commences at normal retirement age (65).
Benefits payable pursuant to the plan are not subject to deduction for social
security.
The
plan provides retirement and death
benefits based upon a retirement benefit amount for each participant established
by the Human Resources Committee. The retirement benefit amount is based
on the
executive officer’s level of responsibilities and, in part, on specified salary.
The following table sets forth, as to each named executive officer, retirement
benefits currently anticipated to be paid at normal retirement (the anticipated
normal retirement benefit):
|
Annual
|
||||
|
Name
|
Benefit
|
|||
|
Richard
G. Hickson
|
$
|
300,000
|
||
|
Gerard
R. Host
|
150,000
|
|||
|
Harry
M. Walker
|
125,000
|
|||
|
Duane
A. Dewey
|
100,000
|
|||
|
Zach
L. Wasson
|
75,000
|
|||
The
plan permits early retirement, with
Human Resources Committee consent, at or after age 55 with five years of
plan
participation. Benefits at early retirement are actuarially
reduced.
The
plan also provides a deferred
vested benefit payable at normal retirement age to a participant terminating
for
reasons other than retirement with at least one year of plan participation.
The
deferred benefit is accrued and vests at the rate of 1/10th of the
anticipated normal retirement benefit for each year of plan participation
not
over ten.
If
a participant does not complete at
least one year of plan participation, plan benefits are forfeited (except
where
the cessation of employment is due to death, retirement, total disability
or
just cause as defined in the plan).
Should
a participant die prior to
retirement, the participant’s beneficiary will receive a death benefit equal to
a percentage (100% for the first year and 75% for the remaining years) of
a
specified covered salary amount (which amount is twice the anticipated normal
retirement benefit) for ten years or until the participant would have reached
normal retirement age, whichever is later. Life insurance contracts have
been
purchased to fund payments under the plan.
Years
of plan participation credited to
the above participants as of December 31, 2005, are: Richard G. Hickson -
8
years, Gerard R. Host - more than 10 years, Harry M. Walker - more than 10
years, Duane A. Dewey - 2 years, Zach L. Wasson - 7 years.
Mr.
Hickson entered into an amended and
restated employment agreement with Trustmark effective March 12, 2002, which
provides for his employment as Chairman and Chief Executive Officer. The
agreement provides for the Human Resources Committee to approve a base salary
of
not less than $400,000 and award bonuses, stock options and other customary
benefits. Bonus payments must not exceed current base salary.
-
17 -
If Mr. Hickson’s employment is terminated (other than for Cause, death,
disability or retirement) or in the event he resigns for Good Reason within
three years after a change in control of Trustmark, Mr. Hickson is entitled
to an amount equal to the sum of his salary immediately prior to the change
in
control and the highest annual bonus earned in any of the preceding three
years.
In consideration of Mr. Hickson’s agreements relating to confidentiality,
non-solicitation and non-competition, Trustmark is additionally obligated
to pay
Mr. Hickson an amount equal to the sum of his salary immediately prior
to the
termination or resignation and the highest annual bonus earned in any of
the
preceding three years, multiplied by two. Mr. Hickson is entitled to receive
customary benefits for twelve months following his termination, reduced
by any
benefits received from later employment. Any outstanding unvested stock
options
vest as of the change in control. Finally, Trustmark is obligated to purchase
Mr. Hickson’s residence for the lesser of appraised value or $900,000 if he is
unable to sell it within four months following his
termination.
If,
without a change in control, Mr.
Hickson is terminated (other than for Cause, death, disability or retirement)
or
if he resigns for Good Reason, in consideration of Mr. Hickson’s agreements
relating to confidentiality, non-solicitation and non-competition, Trustmark
is
obligated to pay Mr. Hickson an amount equal to the sum of his salary
immediately prior to the termination or resignation and the highest annual
bonus
earned in any of the preceding three years, multiplied by two. Trustmark
must
also provide customary benefits for a period of eighteen months following
termination, reduced by any benefits received from later employment, and
purchase Mr. Hickson’s residence for the lesser of appraised value or $900,000
if he is unable to sell it within four months.
If
Mr. Hickson is terminated for Cause
or if he leaves Trustmark voluntarily, he is not entitled to any payment
other
than earned salary and bonus.
Effective
March 12, 2002, Trustmark
entered into amended and restated employment agreements with Gerard R. Host
and
Harry M. Walker.
Under
these agreements, if Mr. Host’s
or Mr. Walker’s employment is terminated (other than for Cause, death,
disability or retirement) or if either resigns for Good Reason within two
years
after a change in control of Trustmark, the executive is entitled to payments
equal to the sum of his base salary immediately prior to the change in control
and the highest annual bonus earned in any of the preceding two years. Trustmark
is required to continue certain benefits for twelve months following termination
or resignation, reduced by any benefits received from later employment. Any
outstanding unvested stock options vest as of the date of termination or
resignation. Additionally, Trustmark is obligated to make certain payments
in
consideration of the executive’s covenants relating to confidentiality,
non-solicitation and non-competition. The amount payable is the sum of the
executive’s base salary and the highest annual bonus earned in any of the
preceding three years.
If,
without a change in control, either
executive is terminated without Cause or if either resigns for Good Reason,
Trustmark is obligated to make certain payments in consideration of the
executive’s covenants relating to confidentiality, non-solicitation and
non-competition. The amount payable is the sum of the executive’s base salary
and the highest annual bonus earned in any of the preceding three
years.
If
Mr. Host or Mr. Walker is terminated
for Cause or leaves Trustmark voluntarily, they are not entitled to any payment
other than earned salary and bonus.
For
purposes of these agreements,
“Cause” means (i) commission of an act of personal dishonesty, embezzlement or
fraud; (ii) misuse of alcohol or drugs; (iii) failure to pay any obligation
owed
to Trustmark or any affiliate; (iv) breach of a fiduciary duty or deliberate
disregard of any rule of Trustmark or any affiliate; (v) commission of an
act of
willful misconduct or the intentional failure to perform stated duties; (vi)
willful violation of any law, rule or regulation (other than misdemeanors,
traffic violations or similar offenses) or any final cease-and-desist order;
(vii) unauthorized disclosure of any confidential information of Trustmark
or
any affiliate or engaging in any conduct constituting unfair competition
or
inducing any customer of Trustmark or any affiliate to breach a contract
with
Trustmark or any affiliate.
“Good
Reason” means (i) a demotion in
status, title or position or the assignment of the person to duties or
responsibilities which are materially inconsistent with such status, title
or
position; (ii) a material breach of the applicable agreement by Trustmark;
(iii)
a relocation of the person to a location more than fifty miles outside of
Jackson, Mississippi, without the person’s consent or, (iv) in the case of Mr.
Hickson, his not being named as the Chief Executive Officer of any successor
by
merger to Trustmark. In the case of Mr. Hickson’s agreement, any good faith
determination of “Good Reason” made by him shall be conclusive.
-
18 -
Human
Resources Committee Report on Executive
Compensation
Trustmark’s
Human Resources Committee, which held nine meetings in 2005, recommends
to the
Board the compensation of Trustmark’s Chief Executive Officer and other
executive officers and oversees the administration of all executive
compensation, including salary, cash bonuses awarded under the management
incentive program and equity-based awards under Trustmark’s stock and incentive
compensation plans. The Committee is comprised entirely of independent
directors. Committee recommendations with respect to compensation of
executive
officers other than the CEO take into account compensation recommendations
made
by the CEO.
Trustmark’s
executive compensation policy is designed to attract and retain highly
qualified
executives and to motivate them to maximize shareholder value by achieving
performance goals. Each executive officer’s compensation is dependent upon
achieving business and financial goals and realizing individual performance
objectives. The Committee also intends that incentive compensation paid
to the
named executive officers normally will be deductible for federal income
tax
purposes, but the Committee recognizes that there are circumstances where
deductibility is secondary and may not be obtained.
The
Committee retained an independent consulting firm to evaluate competitive
compensation levels and make recommendations for Mr. Hickson’s compensation for
2005. In establishing Mr. Hickson’s salary, the Committee principally considered
the independent consultant’s compensation analyses of salaries paid to chief
executive officers within a group of peer financial institutions. The
Committee
also considered Mr. Hickson’s individual performance and contributions relative
to Trustmark’s corporate goals in 2004. Although the Committee considered a
number of corporate goals in this context, the Committee gave the greatest
weight to Trustmark’s financial performance.
Mr.
Hickson’s cash bonus for 2005 was determined based upon Trustmark’s management
incentive plan and was measured in a manner similar to that used for
other
executive officers. In measuring corporate performance, actual performance
was
measured against profit plan performance targets established at the beginning
of
2005. Under the plan, Mr. Hickson’s target incentive was set at 70% of base
compensation with a potential maximum of 100% of base compensation. Mr.
Hickson’s incentive award was weighted at 75% on corporate performance,
measuring actual results for earnings per share and return on equity
compared to
Trustmark’s profit plan performance targets. The remaining 25% was weighted on
actual results for specific strategic operational drivers including operating
efficiency, revenue growth, credit quality and net income after taxes
compared
to Trustmark’s profit plan.
Pursuant
to the same methodology used to grant equity-based awards to other executive
officers under Trustmark’s 2005 Stock and Incentive Compensation Plan, Mr.
Hickson was granted 17,423 shares of performance-based restricted stock,
with
the right to receive an additional award of service-based restricted
stock, as
described in note (2) to the compensation table on page 11 of this proxy
statement. The Committee valued this grant of restricted stock as equaling
70% of Mr. Hickson’s base salary for 2005. The Committee determined to
grant Mr. Hickson performance-based restricted stock instead of stock
options
based on the advice of the independent consulting firm, in recognition
of the
trend among financial institutions toward performance-based equity compensation,
and to provide a stronger correlation between performance and incentive-based
compensation. The number of restricted shares granted was designed to
provide
Mr. Hickson with additional incentive-based compensation.
Executive
Officers’ Compensation -
2005
Salary. In establishing the salaries of Trustmark’s executive
officers for 2005, the Committee considered the recommendations of
the CEO,
which were principally based on the individual performance, skills
and
experience of each executive officer.
Cash Bonuses. Cash bonuses awarded to executive officers
for 2005 were made pursuant to Trustmark’s management incentive plan. Under the
plan, the CEO recommends annual incentive targets for executive officers
stated
as a percentage of base salary, which are then reviewed by the Committee
and
approved by the Board of Directors of Trustmark National Bank (TNB).
The
incentive awards for executive officers are based on measured weightings
with
respect to corporate performance, strategic operational drivers and
business
unit goals.
-
19 -
Equity-based
Awards. Equity-based awards, designed to provide additional
incentive-based compensation, are made to executive officers pursuant
to
Trustmark’s 2005 Stock and Incentive Compensation Plan. Although the Committee
can exercise discretion in making awards under the plan, for 2005, the
Committee
awarded executive officers, other than Mr. Host, non-qualified stock
options
based on each executive’s position and responsibilities. Mr. Host was
granted an amount of performance-based restricted stock (described in
note (2)
to the compensation table on page 11 of this proxy statement) valued
at 70% of
his base salary for 2005.
Human
Resources Committee Interlocks and Insider
Participation
No current or former executive officer of Trustmark or any of its subsidiaries
serves or, during 2005, served as a member of the Human Resources Committee.
The
Committee, which has submitted the foregoing Report on Executive Compensation,
is composed of the following persons:
Reuben V. Anderson - Chair
William
C. Deviney, Jr.
C. Gerald Garnett
R. Michael Summerford
TRANSACTIONS
WITH MANAGEMENT
No directors, executive officers, nominees, five percent shareholders,
their
related entities or their immediate family members have been indebted
to
Trustmark, or any subsidiaries other than TNB, at any time since January
1,
2005. In the ordinary course of business, TNB and its subsidiaries
have provided
and expect to provide in the future, banking, investment and insurance
services
in excess of $60,000 with directors, executive officers, nominees,
five percent
shareholders, related entities and immediate family members. Such transactions
are made on substantially the same terms including, in the case of loans,
interest rates and collateral, as those prevailing at the time for
comparable
transactions with other persons. None of the loans involved more than
the normal
risks of collectibility and presented no other unfavorable
features.
During
2005, TNB engaged in business relationships with various entities in
which
members of the Board of Directors have direct and indirect interests.
None of
these relationships were considered material to TNB or such entity.
AUDIT
AND FINANCE COMMITTEE
REPORT
Trustmark’s Audit and Finance Committee, which conducts the usual and necessary
activities in connection with the audit functions of Trustmark, held
five
meetings during 2005.
Independent
Public Accountants
The
Board
of Directors, based on the recommendation of the Audit and Finance
Committee,
has engaged KPMG LLP (KPMG) as Trustmark’s independent accountants since April
29, 2002.
Representatives
of KPMG are expected to be present at the annual meeting with the opportunity
to
make a statement, if they desire to do so, and to be available to respond
to
appropriate questions during the period generally allotted for questions
at the
meeting.
The
Committee has reaffirmed KPMG’s engagement as the independent accountants for
2006.
-
20 -
Committee
Review and Discussion
The
Committee reviewed and discussed with management and KPMG the consolidated
audited financial statements as of and for the three years ended December
31,
2005. The Committee also discussed with KPMG the matters required by
Statement
on Auditing Standards No. 61, Communication with
Audit Committees, as amended. The Committee received the
written disclosures and the letter from KPMG required by Independence
Standards
Board Standard No. 1, Independence Discussions with Audit Committees,
as amended, and discussed the independence of KPMG. Based on this review,
the
Committee recommended to the Board of Directors that the consolidated
audited
financial statements be included in Trustmark’s Annual Report on Form 10-K for
the year ended December 31, 2005.
None
of
the members of Trustmark’s Audit and Finance Committee serve on the audit
committee of another company, and all are independent directors as
defined by
NASDAQ rules:
J. Kelly Allgood - Chair
Richard
H. Puckett
R.
Michael Summerford
Kenneth
W. Williams
The
Securities and Exchange Commission (SEC) requires that at least
one member of
the audit committee qualify as a financial expert. The Board has
determined that
R. Michael Summerford meets this requirement.
The
following aggregate fees were billed to Trustmark during 2005 and
2004 by KPMG
for services rendered:
|
1.
|
Audit
Fees - Audit fees include fees for professional
services
in connection with the audit of Trustmark’s consolidated financial
statements, review of internal controls, review of the
interim
consolidated financial statements included in quarterly
reports and
services provided by KPMG in connection with statutory
and regulatory
filings. Audit fees for 2005 and 2004 were $642,760 and
$1,006,082
respectively. Fees for 2004 were substantially higher
due to the initial
implementation of Sarbanes - Oxley
compliance.
|
|
2.
|
Audit-Related
Fees - Audit-related fees include fees for
professional
services in connection with audits of benefit plans and
acquisition
consultation. Audit-related fees for 2005 and 2004 were
$19,000 and
$29,203, respectively.
|
|
3.
|
Tax
Fees - Tax fees include fees for professional services
rendered in
connection with tax compliance. KPMG did not provide
any tax services
during 2005. Tax fees billed during 2004 were
$4,128.
|
|
4.
|
All
Other Fees - All other fees include fees for professional
services
rendered in connection with consulting services provided.
KPMG did not
bill Trustmark for other fees during 2005 or
2004.
|
The
Audit
and Finance Committee has adopted a policy that sets forth guidelines
and
procedures for the pre-approval of services to be performed by
the independent
accountants, as well as the fees associated with those services.
Annually, the
Committee reviews and establishes the types of services and fee
levels to be
provided by the independent accountants. Any additional services
or fees in
excess of the approved amount require specific pre-approval by
the Committee.
The Committee has delegated to its Chairman the authority to evaluate
and
approve services and fees in the event that pre-approval is required
between
meetings. If the Chairman grants such approval, he will report
that approval to
the full Committee at its next meeting. Non-audit services, as
prohibited by the
SEC, are likewise prohibited under the Committee’s pre-approval
policy.
-
21 -
Audit
and Finance Committee
Charter
The Audit and Finance Committee reviews and reassesses the adequacy
of the
Committee’s Charter on an annual basis. During 2005, no changes were made
to the
charter filed as an exhibit to the proxy statement dated April
8, 2005.
PROPOSALS
OF
SHAREHOLDERS
Shareholders may submit proposals to be considered at the 2007
Annual Meeting of
Shareholders if they do so in accordance with applicable regulations
of the
SEC.
Any
shareholder intending to propose a matter for consideration at
Trustmark’s 2007
Annual Meeting of Shareholders must submit such proposal in writing
to the
Secretary of Trustmark no later than February 21, 2007. In order
to be
considered for inclusion in Trustmark’s proxy statement for the 2007 Annual
Meeting of Shareholders, the proposal must be in proper form and
submitted to
the Secretary no later than December 8, 2006. In addition, the
proxy solicited
by the Board of Directors for the 2007 Annual Meeting of Shareholders
will
confer discretionary authority to vote on any shareholder proposal
presented at
the meeting if Trustmark has not received notice of such proposal
by February
21, 2007.
-
22 -
TRUSTMARK
CORPORATION
THIS
PROXY IS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL
MEETING OF
SHAREHOLDERS
MAY
9,
2006
The shareholder(s) hereby appoints Matthew L. Holleman III and J. Kelly Allgood,
or either of them, as proxies, each with the power to appoint his substitute,
and hereby authorizes them to represent and to vote, as designated on the
reverse side of this ballot, all of the shares of Common Stock of Trustmark
Corporation that the shareholder(s) are entitled to vote at the annual meeting
of shareholders to be held in the Grand Ballroom at the Hilton Hotel, located
at
1001 East County Line Road, Jackson, Mississippi, on Tuesday, May 9, 2006,
at
10:00 a.m., Central Time.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE
SHAREHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED
"FOR"
THE ELECTION OF THE NOMINEES FOR THE BOARD OF DIRECTORS LISTED ON THE REVERSE
SIDE AND "FOR" THE TRUSTMARK CORPORATION 2005 STOCK INCENTIVE COMPENSATION
PLAN.
|
Comments:
|
(If
you noted any
Comments above, please mark the corresponding box on the reverse
side.)
PLEASE
MARK, SIGN,
DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY
ENVELOPE OR
YOU MAY VOTE BY INTERNET OR TELEPHONE (SEE REVERSE SIDE FOR MORE
INFORMATION).
CONTINUED
AND TO BE SIGNED ON REVERSE SIDE
| |
VOTE
BY INTERNET
-www.proxyvote.com
Shareholders
may use the Internet to transmit their voting instructionsand for
electronic delivery of information up until 11:59 P.M. EasternTime
the day
before the meeting date. To vote on-line, have the proxycard in hand,
access the website above, and follow the instructions given.
|
|
|
TMK CORP
P.O. BOX 291
Jackson, MS 39205-0291
|
ELECTRONIC
DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS
If
you would
like to reduce the costs incurred by Trustmark Corporationin mailing
proxy
materials, you can consent to receive all future proxystatements,
proxy
cards and annual reports electronically via e-mail orthe Internet.
To sign
up for electronic delivery, please follow the instructionsabove to
vote
using the Internet and, when prompted, indicate that youagree to
receive
or access shareholder communications electronicallyin future years.
|
|
VOTE
BY PHONE - 1-800-690-6903
Shareholders
may use any touch-tone telephone to transmit theirvoting instructions
up
until 11:59 P.M. Eastern Time the day before themeeting date. To
vote by
telephone, have the proxy card in hand, callthe toll-free number
above,
and follow the instructions given.
|
||
| VOTE
BY MAIL
Shareholders
should mark, sign, and date their proxy card and return itin the
postage-paid envelope provided or return it to TrustmarkCorporation,
c/o
ADP, 51 Mercedes Way, Edgewood, NY 11717.
|
| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
TRUST1
KEEP THIS PORTION FOR YOUR RECORDS
|
|
DETACH
AND
RETURN THIS PORTION ONLY
|
THIS
PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
TRUSTMARK
CORPORATION
Items
of
Business
|
1.
|
Election
of
Directors - To elect a board of twelve directors to hold office for
the
ensuing year or until their successors are elected and qualified.
Nominees:
01)
J. Kelly
Allgood
02)
Reuben V.
Anderson
03)
William
C. Deviney, Jr.
04)
C. Gerald
Garnett
05)
Richard
G. Hickson
06)
Matthew
L. Holleman III
|
07)
John M.
McCullouch
08)
Richard
H. Puckett
09)
R.
Michael Summerford
10)
Kenneth
W. Williams
11)
William
G. Yates, Jr.
|
For
All o Withhold
All o For All
Except o
|
To
withhold
authority to vote for any individual nominee, mark "For All Except"
and
write the nominee's name on the line below.
____________________________
|
|
2.
|
To
transact
such other business as may properly come before the meeting.
|
|||
|
If
you wish
to cumulate votes for Directors, do NOT mark "For All", "Withold
All" or
"For All Except" above, but check this box and write your voting
insturctions on the back of this card.
|
o
|
|||
| Please indicate if you plan to attend this meeting | Yes o No o | |||