<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
TRUSTMARK CORPORATION
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
---------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------
5) Total fee paid:
---------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] 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 which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
-------------------------------
2) Form, Schedule or Registration Statement No.:
-------------------------------
3) Filing Party:
-------------------------------
4) Date Filed:
-------------------------------
<PAGE>
TRUSTMARK CORPORATION
Post Office Box 291 Jackson, Mississippi 39205-0291
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 13, 1999
TO THE SHAREHOLDERS:
The annual meeting of the shareholders of Trustmark Corporation, a
Mississippi corporation, will be held in the Windsor III room of the Crowne
Plaza Hotel, located at 200 East Amite Street, Jackson, Mississippi 39201, on
Tuesday, April 13, 1999, at 10:00 A.M., local time, for the following purposes:
1. To elect a board of twenty-four directors to hold office for
the ensuing year and until their successors are elected and
qualified.
2. To transact such other business as may properly come before
the meeting.
The close of business on February 19, 1999, has been fixed as the
record date for the determination of the shareholders entitled to notice of and
to vote at the annual meeting or any adjournment thereof. The stock transfer
books will not close.
You are urged to sign and return the enclosed proxy as promptly as
possible, whether or not you plan to attend the meeting in person. If you do
attend the meeting, you may then revoke your proxy prior to the voting thereof.
The proxy also may be revoked at any time prior to its exercise by written
notice to the Secretary of Trustmark Corporation or by execution of a
subsequently dated proxy.
BY ORDER OF THE BOARD OF DIRECTORS.
/s/ Frank R. Day
----------------
Frank R. Day
Chairman
Enclosures: 1. Proxy
2. Business Reply Envelope
3. Annual Report
<PAGE>
TRUSTMARK CORPORATION
Post Office Box 291 Jackson, Mississippi 39205-0291
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
April 13, 1999
I. GENERAL
This proxy statement is being sent on or about March 15, 1999, in
connection with the solicitation by the Board of Directors of Trustmark
Corporation (Trustmark) of proxies for the annual meeting of shareholders to be
held in the Windsor III room of the Crowne Plaza Hotel, located at 200 East
Amite Street, Jackson, Mississippi 39201, on Tuesday, April 13, 1999, at 10:00
A.M., local time, and for any adjournment or adjournments thereof, for the
purposes set forth in the foregoing notice of annual meeting of shareholders.
Any shareholder giving a proxy has the right to revoke it at any time
prior to its exercise on the specific matter to be voted upon by written notice
to the Secretary, by revocation in person at the meeting, or by execution of a
subsequently dated proxy. 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 for the slate of directors proposed by the Board of Directors.
Shareholders of record at the close of business on February 19, 1999,
are entitled to notice of and to vote at the meeting in person or by proxy. A
majority of the shares outstanding constitute a quorum. On the record date,
Trustmark had outstanding 71,999,616 shares of common stock. Except in the
election of directors, each share is entitled to one vote, and action on a
matter is approved if the votes cast in favor of the action exceed the votes
cast opposing the action. Abstentions are counted for purposes of determining a
quorum, but are otherwise not counted.
Solicitation of proxies will be primarily by mail. Employees of
Trustmark and its subsidiaries may be used to solicit proxies by means of
telephone, telegraph, or personal contact, but at no additional compensation.
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.
<PAGE>
The Board of Directors is not aware of any matters other than as set
forth herein which are 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.
II. ELECTION OF DIRECTORS
The following slate of twenty-four nominees has been proposed by the
Board of Directors for election at the meeting. The shares represented by the
proxies will, unless authority to vote is withheld, be voted in favor of these
persons. Shareholders may make nominations at the meeting. 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 shall be 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 that nominee will be voted for such other persons as the
Board of Directors shall nominate. Each director is elected to hold office until
the next annual meeting of shareholders and until his successor is elected and
qualified. The persons who will be elected to the Board of Directors will be the
twenty-four nominees receiving the largest number of votes.
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR OF
BUSINESS EXPERIENCE TRUSTMARK DIRECTORSHIPS HELD
NAME AGE DURING THE LAST FIVE YEARS SINCE IN OTHER COMPANIES(1)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
J. Kelly Allgood 58 President, Mississippi 1991
BellSouth
Reuben V. Anderson 56 Partner, Phelps Dunbar, 1980 The Kroger Company
L.L.P. (Attorneys) BellSouth Corporation
Adolphus B. Baker 42 President and Chief Operating
Officer, Cal-Maine Foods, Inc.
since January 1997; Vice President,
Marketing from June 1989 to January
1997
John L. Black, Jr. 59 Chairman and Chief Executive 1990
Officer, The Waverley Group, Inc.
(Owns and Manages Nursing Home
Facilities)
Robert P. Cooke III 64 Manages Personal and Family 1991
Investments
William C. Deviney, Jr. 53 Chief Executive Officer, 1995
Deviney Construction Company,
Inc. (Telecommunications
Construction)
D. G. Fountain, Jr. 62 President, Fountain Construction 1980
Company, Inc. (Mechanical and
Electrical Contractors)
<PAGE>
C. Gerald Garnett 54 Chief Executive Officer, 1993
Southern Farm Bureau
Casualty Insurance Company and
Southern Farm Bureau Property
Insurance Company
Richard G. Hickson 54 President and Chief Executive 1997
Officer, Trustmark Corporation and
Vice Chairman and Chief Executive
Officer, Trustmark National Bank
since May 1997; President and Chief
Operating Officer, SouthTrust Bank
of Georgia, N.A. from 1995 to May
1997; President, Texas Commerce Bank,
Dallas from 1993 to 1995
Matthew L. Holleman III 47 President and Chief Executive 1994
Officer, Mississippi Valley Gas
Company (Natural Gas Distribution)
since October 1993
Gerard R. Host 44 Treasurer, Trustmark Corporation and
Executive Vice President and Chief
Financial Officer, Trustmark National
Bank since 1995; Executive Vice
President and Chief Investment Officer
from September 1994 to November 1995
Fred A. Jones 63 President, Columbus Manufacturers, 1994
Inc. (Mail Order Distributor);
President, Columbus Marble Works,
Inc. (Manufacturer of Marble and
Granite Monuments and License
Plates)
T. H. Kendall III 62 President and General Manager, 1971
The Gaddis Farms, Inc. (Farming,
Banking, Oil Production); Chairman
of the Board, Trustmark National
Bank since February 1999
<PAGE>
Larry L. Lambiotte 51 Co-Owner, Falco Lime, Inc. 1995
(Lime Sales)
Donald E. Meiners 63 President and Chief Executive 1994 Entergy Mississippi, Inc.
Officer, Entergy Mississippi
William Neville III 58 President, The Rogue, Ltd. 1980
(Men's Retailer)
Richard H. Puckett 44 President and Chief Executive 1995
Officer, Puckett Machinery
Company,(Distributor of Heavy
Earth Moving Equipment)
William K. Ray 62 President and Chief Executive 1998
Officer, Wesley Health System,
LLC (Hospital and Health Care
Holding Company)
Charles W. Renfrow 52 President, Renfrow Supply, LLC 1995
(Supplier of Commercial and Resi-
dential Construction Material);
President, Renfrow Insulation, LLC
(Commercial and Residential Insulation)
Harry M. Walker 48 Secretary, Trustmark Corporation 1992
since January 1995; President and
Chief Operating Officer, Trustmark
National Bank
LeRoy G. Walker, Jr. 49 President, LTM, Inc. 1995
(McDonald's Restaurant Franchises)
<PAGE>
Paul H. Watson, Jr. 60 President, Farmers Tractor 1989
Company, Inc.
Kenneth W. Williams 57 Secretary-Treasurer, Coca-Cola/ 1998
Dr Pepper Operations of Corinth/
Tupelo; President, Refreshments,
Inc.
Allen Wood, Jr. 55 President and Chief Executive 1993
Officer, Scientific Tele-
communications, Inc. (Tele-
communications Equipment Sales
and Service)
</TABLE>
(1) Indicates other directorships in companies with a class of securities
registered pursuant to Section 12 of the Securities Exchange Act of
1934 or subject to the requirements of Section 15(d) of that Act or any
company registered as an investment company under the Investment
Company Act of 1940.
<PAGE>
III. VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
On February 19, 1999, Trustmark had outstanding 71,999,616 shares of
common stock, no par value, owned by approximately 5,600 shareholders. The
following is certain information about shareholders beneficially owning more
than five percent of the outstanding common stock of Trustmark.
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
- ----------------------- -------------------- --------
Capitol Street 4,281,244 5.95%
Corporation
711 West Capitol Street
Jackson, MS 39207
Robert M. Hearin 7,863,494 10.92%
Foundation; Robert M.
Hearin Support
Foundation (1)
711 West Capitol Street
Jackson, MS 39207
Trustmark National 6,198,344 8.61%
Bank (2)
248 East Capitol Street
Jackson, MS 39201
(1) Includes 383,928 shares owned by the Robert M. Hearin Foundation, 2,920,322
shares owned by the Robert M. Hearin Support Foundation, 4,281,244 shares
owned by Capitol Street Corporation, 273,000 shares owned by Bay Street
Corporation and 5,000 shares owned by Mississippi Valley Gas Company.
Capitol Street Corporation is a 100 percent owned subsidiary of Galaxie
Corporation, which may be deemed to be controlled by the Robert M. Hearin
Support Foundation. Does not include 508,854 shares held in the Mississippi
Valley Gas Company pension plan, since Trustmark National Bank (the Bank)
has voting and investment power over these shares. 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.
(2) Includes 278,798 shares owned by the Bank's 401(k) Plan, 163,746 shares
held in the Bank's Pension Plan, 3,120,176 shares held in the Bank's
Employee Stock Ownership Plan (ESOP) and 3,078,168 shares held by the
Bank's Trust Department in various capacities in which the Bank has
investment or voting discretion. Although the Bank's Trust Department has
voting and investment discretion with respect to the 3,078,168 shares held
in trust, it has declined to exercise this authority as a matter of policy.
<PAGE>
IV. OWNERSHIP OF EQUITY SECURITIES BY MANAGEMENT
The following table sets forth the beneficial ownership of Trustmark's
common shares as of February 19, 1999, by persons who are currently serving as
directors, persons nominated for election at the annual meeting and each of the
executive officers named in Section V hereof. Also shown is ownership by all
directors and executive officers of Trustmark as a group. The persons listed
have sole voting and investment power as to all shares except as indicated.
Percent of outstanding shares of common stock owned is not shown where less than
one percent.
Amount and Percent of
Nature of Outstanding
Beneficial Shares of
Ownership of Common Stock
Name Common Stock Owned
- ---------------- ------------- ------------
J. Kelly Allgood 27,658
Reuben V. Anderson 19,686 (1)
Adolphus B. Baker 500
John L. Black, Jr. 549,500 (1)(2)
Robert P. Cooke III 140,060 (3)
Frank R. Day 3,506,637 (4) 4.87%
William C. Deviney, Jr. 11,619
D. G. Fountain, Jr. 228,800 (5)
C. Gerald Garnett 1,436,242 (6) 1.99%
Richard G. Hickson 40,399 (7)
Matthew L. Holleman III 7,904,972 (8) 10.98%
Gerard R. Host 40,974 (1)(9)
Fred A. Jones 446,718 (1)(10)
T. H. Kendall III 347,582 (1)(11)
Larry L. Lambiotte 108,800 (12)
Robert V. Massengill 80,194
Donald E. Meiners 52,900 (1)
William Neville III 188,200 (13)
Richard H. Puckett 250,261 (1)(14)
William O. Rainey 25,493 (15)
William K. Ray 7,500
Charles W. Renfrow 315,800 (1)(16)
Harry M. Walker 87,515 (1)(9)
LeRoy G. Walker, Jr. 1,004
Paul H. Watson, Jr. 6,392 (1)(17)
John C. Wheeless, Jr. 1,124
Kenneth W. Williams 9,149
Allen Wood, Jr. 27,589 (1)
Above named persons and
executive officers of
Trustmark as a group 15,863,268 22.03%
(1) Includes shares owned by spouse and/or minor children.
<PAGE>
(2) Includes 28,600 shares held in a private foundation for which nominee has
voting and investment authority.
(3) Includes 78,060 shares held as trustee for which nominee has voting and
investment authority.
(4) Includes 59,000 shares which the named individual has the right to acquire
through the exercise of options granted under Trustmark's Long Term
Incentive Plan and 296,272 shares held by a charitable foundation for which
the named individual serves as trustee and has shared voting and investment
authority.
(5) Includes 193,200 shares held in a charitable foundation for which nominee
has shared voting and investment authority.
(6) Includes 1,355,102 shares owned by Southern Farm Bureau Casualty Insurance
Company and 72,000 shares owned by Southern Farm Bureau Casualty Insurance
Company Employee Retirement Plan and Trust for which nominee has shared
voting and investment authority.
(7) Includes 36,392 shares which the nominee has the right to acquire through
the exercise of options granted under Trustmark's Long Term Incentive Plan.
(8) Includes 41,478 shares owned by nominee and immediate family members and
7,863,494 shares as to 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 director 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 under Section III.
(9) Includes 17,642 shares which the nominee has the right to acquire through
the exercise of options granted under Trustmark's Long Term Incentive
Plan.
(10) Includes 34,722 shares owned by Columbus Manufacturers, Inc. and 9,336
shares owned by Quality Products, Inc., for which nominee has voting and
investment authority. Also includes 149,136 shares owned in trusts for
family members for which nominee's wife has voting and investment
authority.
<PAGE>
(11) Includes 87,136 shares held as trustee for which nominee has shared voting
and/or investment authority. Also includes 112,056 shares owned by The
Gaddis Farms, Inc. and 77,642 shares owned by Gaddis & McLaurin, Inc. for
which nominee has voting authority.
(12) Includes 8,400 shares owned by Falco Lime, Inc. for which nominee has
voting and/or investment authority.
(13) Includes 27,000 shares held by a corporation controlled by the nominee.
(14) Includes 90,000 shares owned by Puckett Machinery Company and 60,360
shares held by Puckett Machinery Company Profit Sharing Plan for which
nominee has either sole or shared voting and investment authority.
(15) Includes 1,250 shares which the named individual has the right to acquire
through the exercise of options granted under Trustmark's Long Term
Incentive Plan.
(16) Includes 4,000 shares held by Renfrow Supply Company Profit Sharing Plan
for which nominee has either sole or shared voting and investment
authority.
(17) Includes 2,000 shares held in an estate for which nominee has voting and/or
investment authority.
<PAGE>
V. COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Executive Compensation
The following table shows the aggregate compensation for the last three
fiscal years paid by Trustmark and the Bank to Trustmark's Chief Executive
Officer and to the Bank's four highest compensated executive officers where
compensation in the form of salaries and bonuses exceeded $100,000 in 1998.
Deferred compensation is included as salary in the year earned.
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
------------------------------------- ------------
Securities
Name and Underlying All Other
Principal Position Year Salary Bonus (1) Options Compensation (2)
- ---------------------- ---- -------- ----------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Richard G. Hickson 1998 $440,000 $350,000 38,000 $ 2,376
President and Chief 1997 256,154 275,000 56,000 213,000
Executive Officer, 1996 N/A N/A N/A N/A
Trustmark Corporation;
Vice Chairman of the
Board and Chief Executive
Officer, Trustmark National
Bank
Frank Day 1998 250,000 N/A 12,000 6,669
Chairman of the Board, 1997 500,000 225,000 56,000 6,159
Trustmark Corporation 1996 450,000 450,000 N/A 6,304
Harry M. Walker 1998 205,000 130,000 15,000 6,669
Secretary, Trustmark 1997 197,000 110,000 30,000 6,159
Corporation; President 1996 190,000 100,000 N/A 6,271
and Chief Operating
Officer, Trustmark
National Bank
Gerard R. Host 1998 192,000 125,000 15,000 6,669
Treasurer, Trustmark 1997 182,000 105,000 30,000 6,159
Corporation; Executive 1996 175,000 90,000 N/A 6,222
Vice President and
Chief Financial Officer,
Trustmark National Bank
William O. Rainey 1998 147,500 50,000 5,000 6,669
Executive Vice 1997 142,660 42,500 N/A 6,159
President and Chief 1996 138,500 40,000 N/A 5,516
Banking Officer,
Trustmark National Bank
</TABLE>
(1) Includes Business Development Incentive which was awarded in
recognition of special new business development achievements. Amounts
paid did not exceed $500 for any named individual in any year.
(2) All other compensation represents contributions to the Bank's ESOP
except for $213,000 paid to Richard G.Hickson in 1997 for forfeited
benefits of prior employment.
<PAGE>
Option Grants During 1998 and Potential Realizable Values
The following table sets forth as to each named executive officer,
information with respect to option grants during 1998 and the potential
realizable value of such option grants. The table also sets forth a hypothetical
potential realizable value during a corresponding 10-year term, assuming a 5%
and 10% compounded annual rate of appreciation in the value of Trustmark's
shares. The 5% and 10% assumed rates of growth are for illustrative purposes
only. They are not intended to predict future stock prices, which will depend on
market conditions and other factors such as Trustmark's performance. Options
granted during 1998 vest in four annual installments.
<TABLE>
<CAPTION>
Individual Option Grants in the Last Fiscal Year
- -------------------------------------------------------------------------------------------------------------
Potential Realizable
Value at Assumed Annual
% of (1) Rate of Appreciation
Options Options Exercise for Option Term
Granted Granted Price Per Expiration -----------------------
Name in 1998 in 1998 Share ($) Date 5.0% 10.0%
- ------------------ ------- --------- --------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard G. Hickson 38,000 18.23% $22.5625 5/12/08 $539,199 $1,366,435
Frank R. Day 12,000 5.76% 22.5625 5/12/08 170,273 431,506
Harry M. Walker 15,000 7.19% 22.5625 5/12/08 212,842 539,382
Gerard R. Host 15,000 7.19% 22.5625 5/12/08 212,842 539,382
William O. Rainey 5,000 2.40% 22.5625 5/12/08 70,947 179,794
</TABLE>
(1) On the date of the grant, the exercise price of all stock options was
equal to the closing price on the NASDAQ market.
Option Exercises and Holdings
The following table provides information concerning the exercise of stock
options during 1998 by the named executive officers and the unexercised stock
options held by them at December 31, 1998.
<TABLE>
<CAPTION>
Aggregated Options/Exercises in Last Fiscal Year and Fiscal Year End Option Values
- ----------------------------------------------------------------------------------
In-the-Money
Shares Options at Options at
Acquired on Value Fiscal Year End Fiscal Year End
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
- ------------------ ----------- --------- --------------- -----------------
<S> <C> <C> <C> <C>
Richard G. Hickson - - 14,000/80,000 $127,382/$384,710
Frank R. Day - - 56,000/12,000 $570,808/$810
Harry M. Walker - - 7,500/37,500 $68,240/$205,733
Gerard R. Host - - 7,500/37,500 $68,240/$205,733
William O. Rainey - - 0/5,000 $0/$337
</TABLE>
<PAGE>
Pension Plan
Trustmark maintains a noncontributory pension plan (the Plan) for
employees who are 21 years 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 benefits payable upon retirement under the Plan to
persons in the following remuneration and years of service classifications:
10 Year Average YEARS OF CREDITED SERVICE
Annual Earnings 15 20 25 30 35 40 45
- --------------- ------- ------- ------- ------- ------- ------- --------
$ 50,000 $11,250 $15,000 $18,750 $22,500 $26,250 $30,000 $ 33,750
75,000 17,519 23,358 29,198 35,037 40,877 46,502 52,127
100,000 25,581 34,108 42,635 51,162 59,689 67,189 74,689
125,000 33,644 44,858 56,073 67,287 78,502 87,877 97,252
150,000 41,706 55,608 69,510 83,412 97,314 108,564 119,814
200,000 44,931 59,908 74,885 89,862 104,839 116,839 128,839
Years of credited service for the highest paid executives are: Richard
G. Hickson - 1 year, Frank R. Day - 41 years, Harry M. Walker - 27 years, Gerard
R. Host - 15 years, William O. Rainey - 17 years.
Benefits payable under the Plan are based on a formula that takes into
account the individual's average compensation over the highest consecutive
ten-year period and the number of years of credited service. Average
compensation can be defined as W-2 taxable income adjusted for employee
contributions to 401(k) and cafeteria plans, as well as excess group term life
insurance, automobile allowance, moving expenses and severance pay. The table
reflects the benefit ($130,000) and compensation ($160,000) limits under federal
law in effect for 1998 and assumes that the entire service period was completed
under the new benefit formula that is effective for service on or after January
1, 1989.
Deferred Compensation Plan
The Bank provides executive officers with the right to participate in a
defined benefit deferred compensation plan pursuant to which the Bank is
obligated to provide participants certain retirement and death benefits.
Participants are required to defer 2% of salary. Benefits following normal
retirement equal 50% of final salary payable for life, but not less than 10
years. The beneficiary of a participant who dies prior to normal retirement age
receives a death benefit equal to specified percentages of final salary for a
period of up to 10 years. Life insurance contracts have been purchased which may
be used to fund payments under the plan.
<PAGE>
Employment and Termination of Employment Agreements
Mr. Hickson entered into an employment agreement effective May 13, 1997
(the Commencement Date), which provides for his employment as President and
Chief Executive Officer of Trustmark. Trustmark is obligated to make certain
payments to Mr. Hickson in the event his contract is terminated or in the event
he resigns for "Good Reason", within three years after a change in control of
Trustmark. The amount payable is the sum of his salary immediately prior to the
change and the highest annual bonus earned in any of the three years preceding
the change, multiplied by 3.5 if within 24 months of the Commencement Date, and
3.0 if termination occurs during any successive twelve month period during the
term thereafter. In addition, Trustmark is required to provide certain employee
benefits for a period of years equal to the severance multiple shown above,
reduced by any employee benefits received from later employment. Previously
granted stock options which have not vested, shall vest immediately.
If, without a change in control, Trustmark terminates Mr. Hickson for a
reason other than for cause, death, disability or retirement, Trustmark is
obligated to pay Mr. Hickson an amount equal to the product of 1.5 times the sum
of his annual salary and "Target Bonus" of 50 % of annual compensation for the
year in which the termination occurs. Mr. Hickson will also be entitled to
certain employee benefits for a period of 18 months following the termination,
reduced by any employee benefits received from later employment.
In December 1997, Trustmark entered into agreements with Harry M.
Walker and Gerard R. Host which provide certain benefits in the event of a
change in control of Trustmark. Pursuant to these agreements, Trustmark is
obligated to make certain payments to these individuals in the event their
employment is terminated or if they resign for "Good Reason" within two years
after a change in control of Trustmark. The amount payable is the sum of the
product of the individual's salary immediately prior to the change in control
and the highest annual bonus earned in the two years preceding the change in
control, multiplied by 2.0. Trustmark is required to continue certain employee
benefits for the two year period following termination, reduced by any employee
benefits received from later employment. Any previously granted unvested stock
options vest as of the date of termination.
Compensation Committee Report on Executive Compensation
Trustmark's Executive Compensation Committee determines the
compensation of Trustmark's executive officers. In establishing that
compensation, the committee considers a number of factors including levels of
compensation at comparable financial institutions, contributions of the
individuals to Trustmark, the financial performance of Trustmark and other
relevant factors. Compensation is not directly related to the market price of
Trustmark's shares since those prices are not necessarily indicative of the
performance of Trustmark's executives.
In establishing the salaries of Trustmark's executive officers, the
committee principally considers compensation levels at comparable financial
institutions and the recommendation of Mr. Hickson.
Bonuses given to executive officers in 1998 were allocated from a total
bonus pool of $3.225 million awarded to all bank personnel. The bonus pool was
established by the committee based on the financial performance of Trustmark in
<PAGE>
1998 compared to prior years. Bonuses were awarded to executive officers, except
for Mr. Hickson, based upon Mr. Hickson's recommendation and the performance
appraisal process which has been used for a number of years. Factors considered
in this process include personal development, level of job responsibility,
achievement of work goals and management skills. During 1998, Trustmark adopted
a new, performance-based bonus program. The framework of the new bonus program,
which emphasizes performance goals tailored to the individual employee's
position, was also considered, although the new bonus program will not be fully
implemented until 1999.
In 1998, the committee awarded a total of 208,500 stock options
pursuant to Trustmark's Long Term Incentive Plan. Options are designed to
provide additional, incentive oriented, compensation to Trustmark's executives.
The number of options granted is generally designed to comprise specified
percentages of the executives' base salaries. The percentage varies with levels
of job responsibility.
In establishing Mr. Hickson's salary, the committee principally
considered the salaries of chief executive officers in comparable financial
institutions. The committee also considered Mr. Hickson's past performance and
contributions to Trustmark. No prescribed quantitative measures of Mr. Hickson's
or Trustmark's performance were used. In awarding this bonus, the committee
considered compensation levels of chief executive officers of comparable
financial institutions and Mr. Hickson's performance based on various factors
principally including traditional financial results and indicators such as
earnings and qualitative ratios. In addition, the committee considered
regulatory compliance, competitive position and similar factors in the context
of Trustmark's historical performance and the performance of comparable
institutions. These factors were not assigned specific weights, and no specific
quantitative measures of performance were employed. In particular,the market
price of Trustmark's shares during 1998 was not considered as a significant
factor.
In 1998, Mr. Hickson was awarded options to purchase 38,000 shares of
Trustmark's stock at $22.5625 per share, which was the market price of such
shares on the date awarded. The number of options granted was designed to
provide Mr. Hickson with additional, incentive-based compensation equal to 60
percent of Mr. Hickson's base salary.
Executive Compensation Committee
--------------------------------
C. Gerald Garnett, Chairman
D.G. Fountain, Jr.
William F. Goodman, Jr.
Matthew L. Holleman III
T.H. Kendall III
William Neville III
Ben Puckett
<PAGE>
Compensation Committee Interlocks and Insider Participation in
Compensation Decisions
The Executive Compensation Committee is composed of the persons
identified above. Mr. Goodman is a partner in a law firm which was retained by
Trustmark and the Bank during 1998 and which is anticipated to be retained
during 1999. During 1998, no executive officer of Trustmark or any of its
subsidiaries served as a member of the compensation committee (or other board or
committee performing similar functions) or the board of directors of another
entity, one of whose executive officers served on the Executive Committee or the
Board of Directors of Trustmark.
Compensation of Directors
Directors' meetings of Trustmark are held in conjunction with meetings
of the Board of Directors of the Bank. During 1998, members of the Executive
Committee were paid $1,875 per month. All other directors and each committee
chairman received $750 and $1,000, respectively, for each board meeting
attended. Trustmark provides nonemployee directors the opportunity to
participate in a deferred fee plan pursuant to which participants may elect to
defer up to 100% of fees earned. The plan provides specified death and
retirement benefits in accordance with the plan agreement. Members of the Board
of Directors who are salaried officers of Trustmark or the Bank are not paid
directors' fees.
Performance Graph
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 KBW 50 Total Return Index. The KBW 50 is an industry index prepared by
Keefe, Bruyette and Woods, Inc. and consists of 50 bank holding companies,
including all money-center and most major regional bank holding companies.
This presentation assumes that $100 was invested in shares of the
relevant issuers on December 31, 1993, and that dividends received were
immediately invested in additional shares. The graph plots the value of the
initial $100 investment at one-year intervals.
FIVE YEAR CUMULATIVE TOTAL RETURN
----------------------FISCAL YEAR ENDING---------------------------
COMPANY 1993 1994 1995 1996 1997 1998
-------------------------------------------------------------------
Trustmark Corp. 100 123.54 164.75 188.75 349.33 347.64
KBW 50 100 94.90 152.00 215.01 314.32 340.34
NASDAQ Market 100 104.99 136.18 169.23 207.00 291.96
VI. TRANSACTIONS WITH MANAGEMENT
No executive officer, director, nominee, their related entities or their
immediate family members have been indebted to Trustmark, or any subsidiaries,
other than the Bank, at any time since January 1, 1998. In the ordinary course
of business, the Bank and its subsidiaries have had, and expects to have in the
future, banking and securities brokerage transactions (including loans,
repurchase transactions, reverse repurchase transactions and other routine
transactions) in excess of $60,000 with executive officers, directors, nominees,
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.
For the year 1998, Scientific Telecommunications, Inc., a company
controlled by Director Allen Wood, Jr., was paid $787,887 for telecommunications
equipment and services. Reuben V. Anderson is a partner in the law firm of
Phelps Dunbar, L.L.P. This firm was retained by Trustmark or the Bank on various
legal matters during 1998 and it is anticipated that this firm will be retained
during 1999.
During 1998, the Bank 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 the Bank or
such entity.
<PAGE>
VII. OTHER INFORMATION CONCERNING DIRECTORS
During 1998, Trustmark had an Audit Committee composed of J.Kelly
Allgood, Chairman, Fred A. Jones, Richard H. Puckett, William K. Ray, Paul H.
Watson, Jr., Allen Wood, Jr. and Advisory Director Harry H. Bush. This
committee, which conducts the usual and necessary activities in connection with
the audit functions of Trustmark, held eight meetings during 1998.
Trustmark's Executive Compensation Committee, which was composed of C.
Gerald Garnett, Chairman, D.G. Fountain, Jr., William F. Goodman, Jr., Matthew
L. Holleman III, T.H. Kendall III, William Neville III and Ben Puckett, held
five meetings during 1998.
There were eleven meetings of the Board of Directors held during 1998.
Of those directors serving during 1998, none attended fewer than 75% of the
Board meetings and meetings of those committees of which they were members,
except for John C. Wheeless, Jr.
VIII. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Directors, certain officers of Trustmark and its subsidiaries and
holders of more than 10% of Trustmark's outstanding shares are required to file
reports under Section 16 of the Securities Exchange Act of 1934. Federal
regulations require disclosure of any failures to file these reports on a
timely basis. Trustmark believes that during 1998, its officers, directors and
greater than 10% beneficial owners complied with all filing requirements except
Director William K. Ray, who filed one late report covering one transaction.
IX. PROPOSALS OF SHAREHOLDERS
In order for a shareholder proposal to be included in a proxy
statement and form of proxy prepared by the Board of Directors, it must meet
the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 and be
received at the principal executive offices of Trustmark not less than 120
days in advance of the date the previous year's proxy statement and form of
proxy were mailed to shareholders. Thus, a shareholder proposal must be
received before November 15, 1999, in order to be included in the proxy
statement and form of proxy for the 2000 annual meeting.
BY ORDER OF THE BOARD OF DIRECTORS.
/s/ Frank R. Day
----------------
Frank R. Day
Chairman
<PAGE>
APPENDIX I
PROXY CARD
TRUSTMARK CORPORATION
POST OFFICE BOX 291
JACKSON, MISSISSIPPI 39205-0291
This Proxy is Solicited on Behalf of the Board of Directors for the Annual
Meeting of Shareholders on April 13, 1999.
The undersigned, having received Notice of Meeting and Proxy Statement dated
March 15, 1999, appoint D. G. Fountain, Jr., T. H. Kendall III and William
Neville III and each or any of them as proxies, with full power of substitution
and revocation, to represent the undersigned and to vote all shares of the
Common Stock of Trustmark Corporation which the undersigned is entitled to vote
at the Annual Meeting of the Shareholders of the Corporation to be held on April
13, 1999, in the Windsor III room of the Crowne Plaza Hotel, located at 200 East
Amite Street, Jackson, Mississippi, at 10:00 A.M., local time, and any
adjournment thereof, as follows:
1. Election of Directors
J. Kelly Allgood, Reuben V. Anderson, Adolphus B. Baker, John L. Black,
Jr., Robert P. Cooke III, William C. Deviney, Jr., D.G. Fountain, Jr., C.
Gerald Garnett, Richard G. Hickson, Matthew L. Holleman III, Gerard R.
Host, Fred A. Jones, T.H. Kendall III, Larry L. Lambiotte, Donald E.
Meiners, William Neville III, Richard H. Puckett, William K. Ray, Charles
W. Renfrow, Harry M. Walker, LeRoy G. Walker, Jr., Paul H. Watson, Jr.,
Kenneth W. Williams, and Allen Wood, Jr.
Management knows of no other matters that may properly be, or which are likely
to be, brought before the meeting. In their discretion, the Proxies are
authorized to vote upon such other business as may properly come before the
meeting in accordance with the decision of the Board of Directors.
SEE REVERSE SIDE
<PAGE>
(X) Please mark your vote as in this example
When properly executed, this proxy will be voted in the manner directed by the
undersigned shareholder. If no direction is made, or if any other matter
properly comes before the meeting for which no choice has been specified, the
shares will be voted in accordance with the recommendation of the Board of
Directors. Unless authority is withheld as to a particular nominee, the proxy
will be voted for each nominee listed. The undersigned hereby authorizes the
proxies, in their discretion, to vote the undersigned's shares cumulatively.
1. Election of Directors (see reverse)
( ) FOR all nominees
( ) WITHHOLD all nominees
( ) FOR, EXCEPT vote withheld from the following nominee(s):
--------------------------------------------------------
Please sign exactly as name appears. When shares are held as joint tenants, both
are requested to sign. Trustees, attorneys, executors, administrators,
guardians, and others signing in a representative capacity should indicate the
capacity in which they sign. If a corporation, please sign in full corporate
name by President or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
Signature Date
-------------------------------------- ------------------
Signature Date
-------------------------------------- ------------------
Please mark, sign, date and return proxy card promptly using the enclosed
envelope.
