UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
November
20, 2008
Date of
Report (Date of earliest event reported)
TRUSTMARK
CORPORATION
(Exact
name of registrant as specified in its charter)
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Mississippi
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000-03683
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64-0471500
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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248
East Capitol Street, Jackson, Mississippi
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39201
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(Address of
principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code:
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(601)
208-5111
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01. Entry
into a Material Definitive Agreement.
On
November 21, 2008, as part of the Capital Purchase Program established by the
U.S. Department of the Treasury (“Treasury”) under the Emergency Economic
Stabilization Act of 2008 (“EESA”), Trustmark Corporation (the “Company”)
entered into a Letter Agreement (including the Securities Purchase
Agreement ― Standard
Terms incorporated by reference therein, the “Purchase Agreement”) with Treasury
dated November 21, 2008 pursuant to which the Company issued and sold to
Treasury for an aggregate purchase price of $215 million in cash
(i) 215,000 shares of the Company’s Fixed Rate Cumulative Perpetual
Preferred Stock, Series A, no par value per share, having a liquidation
preference of $1,000 per share (the “Series A Preferred Stock”), and (ii) a
ten-year warrant to purchase up to 1,647,931 shares of the Company’s common
stock, no par value per share (“Common Stock”), at an initial exercise price of
$19.57 per share (the “Warrant”). The closing of this transaction
occurred on November 21, 2008.
Cumulative
dividends on the Series A Preferred Stock will accrue on the liquidation
preference at a rate of 5% per annum for the first five years, and at a rate of
9% per annum thereafter, but will be paid only if, as, and when declared by the
Company’s Board of Directors. The Series A Preferred Stock has
no maturity date and ranks senior to the Common Stock with respect to the
payment of dividends and distributions and amounts payable upon liquidation,
dissolution and winding up of the Company. The Series A
Preferred Stock generally is non-voting.
The
Company may redeem the Series A Preferred Stock in whole or in part at par
after February 15, 2012. Prior to this date, the Company may redeem
the Series A Preferred Stock in whole or in part at par if (i) the
Company has raised aggregate gross proceeds in one or more Qualified Equity
Offerings (as defined in the Purchase Agreement and set forth below) in excess
of $53.75 million, and (ii) the aggregate redemption price does not exceed
the aggregate net proceeds from such Qualified Equity Offerings. Any
redemption is subject to the consent of the Federal Reserve Bank of Atlanta,
which is the Company’s primary Federal banking regulator.
The
Purchase Agreement defines a “Qualified Equity Offering” to mean the sale and
issuance for cash by the Company, to persons other than the Company or any
Company subsidiary after the closing, of shares of perpetual Preferred Stock,
Common Stock or any combination of such stock, that, in each case, qualify as
and may be included in Tier 1 capital of the Company at the time of
issuance under the applicable risk-based capital guidelines of the Company’s
Federal banking regulator (other than any such sales and issuances made pursuant
to agreements or arrangements entered into, or pursuant to financing plans which
were publicly announced, on or prior to October 13, 2008).
The
Series A Preferred Stock and the Warrant were issued in a private placement
exempt from registration pursuant to Section 4(2) of the Securities Act of 1933,
as amended. The Company has agreed to register the resale of the
Series A Preferred Stock, the Warrant, and the issuance of shares of Common
Stock upon exercise of the Warrant (the “Warrant Shares”), as soon as
practicable after the date of issuance of the Series A Preferred Stock and
the Warrant. Neither the Series A Preferred Stock nor the
Warrant are subject to any contractual restrictions on transfer, except that
Treasury may only transfer and/or exercise the Warrant with respect to an
aggregate of one-half of the Warrant Shares prior to the earlier of (i) the
date on which the Company has received aggregate gross proceeds of not less than
$215 million from one or more Qualified Equity Offerings and (ii) December
31, 2009.
The
Warrant is immediately exercisable. In the event the Company
completes one or more Qualified Equity Offerings on or prior to December 31,
2009 that result in the Company receiving aggregate gross proceeds of not less
than $215 million, the number of the shares of Common Stock underlying the
portion of the Warrant then held by Treasury will be reduced by a number of
shares equal to the product of (i) the number of shares of Common Stock
initially covered by the Warrant (taking into account any adjustments pursuant
to the terms of the Warrant), and (ii) 0.5.
Copies of
the Purchase Agreement, the Warrant, the Certificate of Designations for the
Series A Preferred Stock and the form of Series A Preferred Stock
Certificate are included as Exhibits to this Current Report on Form 8-K and are
incorporated by reference into this Item 1.01. The foregoing summary of certain
provisions of these documents is qualified in its entirety by reference
thereto.
A copy of
the Company’s November 21, 2008 press release announcing entry into the Purchase
Agreement with Treasury and the closing of the transactions contemplated thereby
is attached hereto as Exhibit 99.1.
-2-
Item
3.02. Unregistered
Sales of Equity Securities.
The
information set forth under “Item 1.01 Entry into a Material Definitive
Agreement” is incorporated herein by reference.
Item
3.03. Material
Modification of the Rights of Security Holders.
The
information set forth under “Item 1.01 Entry into a Material Definitive
Agreement” is incorporated herein by reference.
Prior to
November 21, 2011, unless the Company has redeemed the Series A Preferred
Stock or Treasury has transferred the Series A Preferred Stock
to a third party, the consent of Treasury will be required for the Company to
(i) declare or pay any dividend or make any distribution on its common
stock (other than regular quarterly cash dividends of not more than $0.23 per
share of common stock) or (ii) redeem, purchase or acquire any shares of
its common stock or other equity or capital securities, other than in connection
with benefit plans consistent with past practice and certain other circumstances
specified in the Purchase Agreement.
Item
5.02. Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
In the
Purchase Agreement, the Company agreed that, until such time as Treasury ceases
to own shares of Series A Preferred Stock, any portion of the Warrant or any
Warrant Shares, the Company will take all necessary action to ensure that its
benefit plans with respect to its senior executive officers comply with Section
111(b) of EESA as implemented by any guidance or regulation under EESA and has
agreed to not adopt any benefit plans with respect to, or which covers, its
Senior Executive Officers that do not comply with EESA. Additionally,
each of the Company’s Senior Executive Officers, executed a waiver (the
“Waiver”) voluntarily waiving any claim against Treasury or the Company for any
changes to his compensation or benefits that are required to comply with the
regulation issued by Treasury under the Capital Purchase Program as published in
the Federal Register on October 20, 2008 and acknowledging that the regulation
may require modification of the compensation, bonus, incentive and other benefit
plans, arrangements and policies and agreements (collectively, “Benefit Plans”)
as they relate to the period Treasury holds shares of Series A Preferred Stock,
any portion of the Warrant or any Warrant Shares.
On
November 21, 2008, the Company executed a Capital Purchase Program Agreement
Regarding Executive Compensation Limitations (the “Omnibus Benefit Plan
Amendment”) to modify the Benefit Plans and its executive compensation
agreements as they relate to the period Treasury holds any securities of the
Company acquired through the Capital Purchase Program to comply with Section
111(b) of EESA.
Amended and Restated
Employment Agreement
On
November 20, 2008, the Company entered into an amended and restated employment
agreement (the “Employment Agreement”) with Richard G. Hickson, the Company’s
Chairman, President and Chief Executive Officer (“CEO”), amending and restating
Mr. Hickson’s prior employment agreement dated as of October 23,
2007. The primary purpose for entering into the Employment Agreement
was to extend Mr. Hickson’s employment term through the date of the
Company’s annual meeting of shareholders to be held in 2011 (currently scheduled
for May 10, 2011) and to provide for an orderly executive management
transition. The Employment Agreement provides for Mr. Hickson to
continue serving as Chairman, President and CEO of the Company and Chairman and
CEO of Trustmark National Bank (the “Bank”) through December 31,
2010. After December 31, 2010, the Employment Agreement provides that
Mr. Hickson will serve as an employee-Chairman of both the Company and the
Bank until his retirement.
The
Employment Agreement provides for Mr. Hickson to receive a base salary of not
less than $400,000 and to receive bonuses, stock options and other customary
benefits. Mr. Hickson’s base salary in effect on December 31,
2010 will continue in 2011. Mr. Hickson’s annual bonus may not exceed his
base salary in any year. Mr. Hickson will not participate in the Company’s
regular bonus plan for 2011, but may be awarded a bonus for the portion of the
year that he is employed, in the discretion of the Human Resources
Committee.
-3-
The
Employment Agreement provides for Mr. Hickson to be eligible to receive
equity compensation awards through 2009, but that he will not receive equity
awards in 2010 or 2011. His 2009 equity compensation award will be
twice the amount of the usual annual award, with one-half of the award being
performance-based and one-half service-based, and with all earned shares
normally vesting if and when Mr. Hickson’s employment continues through the date
of the Company’s annual meeting of shareholders to be held in 2011. If
Mr. Hickson’s employment ceases other than due to termination for Cause (as
defined in the Employment Agreement), all of his incentive stock options and
nonqualified stock options outstanding on the date of the Employment Agreement
will be amended to provide, and all of the stock options granted after the date
of the Employment Agreement will provide, that to the extent they are
outstanding at the time of Mr. Hickson’s cessation of employment, they will
continue to be exercisable for their original term. If
Mr. Hickson is terminated for Cause, his rights in his stock options will
be governed by the terms of the applicable stock option award agreements.
This
stock option exercise period extension was not provided in Mr. Hickson’s prior
employment agreement.
On any
cessation of employment, Mr. Hickson will be entitled to earned but unpaid
salary and bonus and accrued vacation.
If on or
before December 31, 2009, Mr. Hickson’s employment is terminated by the
Company (other than for Cause, death, disability or retirement), or in the event
he resigns for Good Reason (as defined in the Employment Agreement), following a
change in control and if he timely releases the Company from certain claims,
Mr. Hickson is entitled to a lump sum payment in 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, the Company is additionally obligated to pay Mr. Hickson
an amount equal to two times 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, payable in a lump sum where he terminates within two
years after a change in control covered by Section 409A of the Internal Revenue
Code or payable at regular pay intervals where he terminates within two years
after a non-409A-covered change in control or during the third year after a
409A-covered change in control. Mr. Hickson is entitled to receive
customary benefits for twelve months following his termination or resignation,
reduced by any benefits received from later employment, provided that the
Company will pay Mr. Hickson the after-tax cost of comparable coverage at
regular pay intervals for the twelve months where coverage cannot continue to be
provided. Any outstanding unvested stock options vest as of the change in
control. Finally, the Company 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. These
benefits upon termination following a change in control differ from those
provided in Mr. Hickson’s prior employment agreement in that the prior agreement
did not limit these benefits to a termination on or before December 31,
2009.
If,
without a change in control or at any time after December 31, 2009,
Mr. Hickson is terminated by the Company (other than for Cause, death,
disability or retirement) or if he resigns for Good Reason, in consideration of
his agreements relating to confidentiality, non-solicitation and non-competition
and his timely releasing the Company from certain claims, the Company is
obligated to pay Mr. Hickson an amount equal to two times 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, payable for twenty-four
months at regular pay intervals. The Company must also provide customary
benefits for a period of eighteen months following termination or resignation,
reduced by any benefits received from later employment, provided that the
Company will pay Mr. Hickson the after-tax cost of comparable coverage at
regular pay intervals for the eighteen months where coverage cannot continue to
be provided. Finally, but only in the case of termination on or before December
31, 2009, the Company is required 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 termination. These
benefits upon termination without a change in control (or after December 31,
2009) differ from those provided in Mr. Hickson’s prior employment agreement in
that the prior agreement did not limit Trustmark’s residence purchase obligation
to a termination on or before December 31, 2009.
If
Mr. Hickson becomes disabled while employed by the Company and if he timely
releases the Company from certain claims, he is entitled to a lump sum payment
of a time-weighted pro-rata share of his annual bonus target for the year of his
disability.
If
Mr. Hickson dies while employed by the Company, his spouse or designated
beneficiary is entitled to a lump sum payment of a time-weighted pro-rata share
of his annual bonus target for the year of his death.
If
Mr. Hickson is terminated for Cause or if he leaves the Company
voluntarily, he is not entitled to any payment other than earned but unpaid
salary and bonus and accrued vacation.
Upon his
retirement in 2011, Mr. Hickson will be provided office space and secretarial
support until he reaches age 68 in 2013. Mr.
Hickson’s prior employment agreement did not provide for this post-retirement
benefit.
-4-
Copies of
the Omnibus Benefit Plan Amendment, the form of Waiver executed by the Senior
Executive Officers and the Employment Agreement are included as Exhibits to this
Current Report on Form 8-K and are incorporated by reference into this Item
5.02. The foregoing summary of certain provisions of these documents is
qualified in its entirety by reference thereto.
Item
5.03. Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal Year.
(a) On
November 20, 2008, the Company filed with the Secretary of State of the State of
Mississippi Articles of Amendment to the Company’s Articles of Incorporation
that included a Certificate of Designations establishing the Series A
Preferred Stock. A copy of the Certificate of Designations is
included as an exhibit to this Report on Form 8-K and is incorporated by
reference into this Item 5.03.
(b) The
Board of Directors adopted as amendments to the Company’s Amended and Restated
Bylaws (the “Bylaws”) new bylaw Sections 2.12 and 3.17 effective upon the
closing of the transactions described herein. The effect of new Bylaw
sections is to insure that the Bylaws shall be consistent with the terms and
provisions of the Series A Preferred Stock that provide for the election,
in certain circumstances, of directors of the Company by the holders of
Series A Preferred Stock.
Copies of
the Certificate of Designations for the Series A Preferred Stock and the
Amended and Restated Bylaws, as amended through November 21, 2008, are included
as Exhibits to this Current Report on Form 8-K and are incorporated by reference
into this Item 5.03. The foregoing summary of certain provisions of these
documents is qualified in its entirety by reference thereto.
Item
9.01. Financial
Statements and Exhibits.
(d) Exhibits.
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3.1
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Certificate
of Designations for 215,000 shares of Fixed Rate Cumulative Perpetual
Preferred Stock, Series A, of the Company.
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3.2
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Amended
and Restated Bylaws of the Company as amended through November 21,
2008.
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4.1
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Warrant
to Purchase up to 1,647,931 shares of Common Stock.
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4.2
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Form
of Series A Preferred Stock Certificate.
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10.1
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Letter
Agreement, dated November 21, 2008, including Securities Purchase Agreement ―
Standard Terms, between the Company and the United States
Department of the Treasury.
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10.2
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Form
of Waiver.
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10.3
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Amended
and Restated Employment Agreement between the Company and Richard G.
Hickson, dated as of November 20, 2008.
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10.4
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Omnibus
Benefit Plan Amendment dated November 21, 2008.
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99.1
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Press
Release of the Company dated November 21,
2008.
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-5-
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
TRUSTMARK
CORPORATION
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BY:
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/s/
Louis E. Greer
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Louis
E. Greer
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Treasurer
and Principal Financial Officer
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DATE:
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November
21, 2008
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-6-
EXHIBIT
INDEX
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Exhibit Number
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Description of Exhibits
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3.1
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Certificate
of Designations for 215,000 shares of Fixed Rate Cumulative Perpetual
Preferred Stock, Series A, of the Company.
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3.2
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Amended
and Restated Bylaws of the Company as amended through November 21,
2008.
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4.1
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Warrant
to Purchase up to 1,647,931 shares of Common Stock.
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4.2
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Form
of Series A Preferred Stock Certificate.
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10.1
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Letter
Agreement, dated November 21, 2008, including Securities Purchase
Agreement ― Standard Terms, between the Company and the United States
Department of the Treasury.
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10.2
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Form
of Waiver.
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10.3
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Amended
and Restated Employment Agreement between the Company and Richard G.
Hickson, dated as of November 20, 2008.
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10.4
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Omnibus
Benefit Plan Amendment dated November 21, 2008.
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99.1
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Press
Release of the Company dated November 21,
2008.
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-7-