TRUSTMARK CORPORATION

                   2005 STOCK AND INCENTIVE COMPENSATION PLAN

 

                                    ARTICLE I

                       Establishment, Purpose and Duration

 

1.1 Establishment of the Plan. Trustmark Corporation (hereinafter referred to as

the  "Company"),  a Mississippi  corporation,  hereby  establishes  an incentive

compensation  plan to be known as the  "2005  Stock and  Incentive  Compensation

Plan"  (hereinafter  referred to as the "Plan"),  as set forth in this document.

Unless otherwise  defined herein,  all capitalized terms shall have the meanings

set forth in Section 2.1 herein.  The Plan permits the grant of Incentive  Stock

Options,   Non-Qualified   Stock  Options  (including  Reload  Options),   Stock

Appreciation Rights, Restricted Stock, Restricted Stock Units and/or Performance

Units to Key Associates and Directors.

 

The Plan was adopted by the Board of  Directors of the Company on March 8, 2005,

to become effective (the "Effective Date") as of May 10, 2005 if approved at the

May  10,  2005  annual  meeting  of  the  Company's   shareholders  by  vote  of

shareholders  of  the  Company  in  accordance  with  applicable  laws  and  any

applicable  rules of any  national  securities  exchange  or system on which the

Stock is then listed or reported.  Except for  Performance  Unit Awards  payable

only in cash (with payment also  contingent on shareholder  approval of the 2005

Plan), Awards may not be granted under the Plan prior to shareholder approval of

the Plan.

 

1.2  Purpose of the Plan.  The  purpose of the Plan is to promote the success of

the Company and its  Subsidiaries by providing  incentives to Key Associates and

Directors that will promote the  identification  of their personal interest with

the long term  financial  success of the Company and with growth in  shareholder

value. The Plan is designed to provide flexibility to the Company in its ability

to motivate,  attract,  and retain the services of Key  Associates and Directors

upon whose judgment,  interest, and special effort the successful conduct of its

operation is largely dependent.

 

In addition,  the Plan permits the grant of a Reload  Option in order to restore

an Option  opportunity on the number of shares of Stock  surrendered to exercise

an Option to encourage a Participant  to maximize his ownership  interest in the

Company without reducing the percentage interests of shareholders.

 

1.3 Duration of the Plan.  The Plan shall  commence on the  Effective  Date,  as

described  in Section 1.1  herein,  and shall  remain in effect,  subject to the

right of the Board of Directors to  terminate  the Plan at any time  pursuant to

Article XII herein,  until May 9, 2015, at which time it shall terminate  except

with respect to Awards (including any outstanding Reload Option obligation) made

prior to, and  outstanding  on, that date which shall remain valid in accordance

with their terms.

 

                                   ARTICLE II

                                   Definitions

 

2.1  Definitions.  Except as otherwise  defined in the Plan, the following terms

shall have the meanings set forth below:

 

     (a)  "Agreement" means a written  agreement  implementing the grant of each

          Award  signed  by an  authorized  officer  of the  Company  and by the

          Participant.

 

     (b)  "Award" means, individually or collectively, a grant under the Plan of

          Incentive Stock Options, Non-Qualified Stock Options (including Reload

          Options),  Stock  Appreciation  Rights,  Restricted Stock,  Restricted

          Stock Units and/or Performance Units.

 

     (c)  "Award  Date" or "Grant Date" means the date on which an Award is made

          by the Committee under the Plan.

 

     (d)  "Board" or "Board of  Directors"  means the Board of  Directors of the

          Company.

 

     (e)  "Change in Control" shall be deemed to have occurred if the conditions

          set  forth in any one of the  following  paragraphs  shall  have  been

          satisfied:

 

          (i)  the  acquisition  of ownership of,  holding or power to vote more

               than 20% of the Company's voting stock; or

 

          (ii) the  acquisition  of the  ability to control  the  election  of a

               majority of the Company's Board; or

 

          (iii)the  acquisition  of a controlling  influence over the management

               or policies of the Company by any person or by persons  acting as

               a "group"  (within the meaning of Section  13(d) of the  Exchange

               Act); or

 

          (iv) during  any period of two  consecutive  years,  individuals  (the

               "Continuing  Directors")  who at the  beginning  of  such  period

               constitute the Board (the "Existing  Board") cease for any reason

               to  constitute  at least  two-thirds  thereof,  provided that any

               individual  whose election or nomination for election as a member

               of  the  Existing  Board  was  approved  by a  vote  of at  least

               two-thirds of the  Continuing  Directors  then in office shall be

               considered a Continuing Director.

 

          Notwithstanding  the  foregoing,  in the case of (i),  (ii) and  (iii)

          hereof,  ownership  or control of the  Company's  voting  stock by the

          Trustmark  National  Bank (the "Bank') or any  associate  benefit plan

          sponsored by the Company or the Bank shall not  constitute a Change in

          Control. For purposes of this paragraph only, the term "person" refers

          to an individual or a corporation,  partnership,  trust,  association,

          joint venture,  pool, syndicate,  sole proprietorship,  unincorporated

          organization  of any other  form of  entity  not  specifically  listed

          herein.

 

     (f)  "Code" means the Internal  Revenue Code of 1986,  as amended from time

          to time.

 

     (g)  "Committee"  means the committee of the Board  appointed to administer

          the Plan  pursuant to Article III herein,  all of the members of which

          shall  be  "non-employee  directors"  as  defined  in Rule  16b-3,  as

          amended, under the Exchange Act, or any similar or successor rule, and

          "outside  directors" within the meaning of Section  162(m)(4)(C)(i) of

          the  Code.  Unless  otherwise  determined  by  the  Board,  the  Human

          Resources   Committee  of  the  Board,  or  any  successor   committee

          responsible   for  executive   compensation,   shall   constitute  the

          Committee.

 

     (h)  "Company" means  Trustmark  Corporation,  or any successor  thereto as

          provided in Article XIV herein.

 

     (i)  "Director" means a director of the Company or any subsidiary  thereof,

          which term shall not include an advisory or honorary director.

 

     (j)  "Exchange Act" means the  Securities  Exchange Act of 1934, as amended

          from time to time.

 

     (k)  "Fair Market Value" of a Share means the mean between the high and low

          sales price of the Stock on the relevant date if it is a trading date,

          or if not, on the most recent date on which the Stock was traded prior

          to such date, as reported by the NASDAQ National Market System, or if,

          in the  opinion  of the  Committee,  this  method is  inapplicable  or

          inappropriate  for any  reason,  the fair market  value as  determined

          pursuant to a reasonable method adopted by the Committee in good faith

          for such purpose.

 

     (l)  "Incentive  Stock Option" or "ISO" means an option to purchase  Stock,

          granted under  Article VI herein,  which is designated as an incentive

          stock option and is intended to meet the  requirements  of Section 422

          of the Code.

 

     (m)  "Key Associate" means an officer or other key associate of the Company

          or  its  Subsidiaries  who,  in the  opinion  of  the  Committee,  can

          contribute  significantly  to the  growth  and  profitability  of,  or

          perform   services  of  major  importance  to,  the  Company  and  its

          Subsidiaries.   "Key  Associates"  includes  Directors  who  are  also

          associates of the Company or its Subsidiaries.

 

     (n)  "Non-Qualified  Stock  Option" or "NQSO"  means an option to  purchase

          Stock, granted under Article VI herein, which is not intended to be an

          Incentive Stock Option.

 

     (o)  "Option"  means an  Incentive  Stock Option or a  Non-Qualified  Stock

          Option.

 

     (p)  "Option  Price" means the exercise price per share of Stock covered by

          an Option.

 

     (q)  "Participant" means a Key Associate or a Director who has been granted

          an Award under the Plan and whose Award remains outstanding.

 

     (r)  "Performance-Based  Compensation  Award"  means  any  Award  for which

          exercise,  full  enjoyment or receipt  thereof by the  Participant  is

          contingent on  satisfaction  or  achievement of the  Performance  Goal

          applicable  thereto.  If a  Performance-Based  Compensation  Award  is

          intended to be "performance-based  compensation" within the meaning of

          Section  162(m)(4)(C)  of  the  Code,  the  grant  of the  Award,  the

          establishment of the Performance Goal, the making of any modifications

          or adjustments and the determination of satisfaction or achievement of

          the  Performance  Goal  shall be made  during  the  period or  periods

          required  under and in  conformity  with the  requirements  of Section

          162(m)  of the  Code  therefor.  The  terms  and  conditions  of  each

          Performance-Based  Compensation Award,  including the Performance Goal

          and  Performance  Period,  shall be set forth in an  Agreement or in a

          subplan  of the  Plan  which  is  incorporated  by  reference  into an

          Agreement.

 

     (s)  "Performance Goal" means one or more performance measures or goals set

          by  the   Committee   in  its   discretion   for   each   grant  of  a

          Performance-Based   Compensation  Award.  The  extent  to  which  such

          performance  measures  or goals are met will  determine  the amount or

          value  of  the   Performance-Based   Compensation  Award  to  which  a

          Participant  is entitled to exercise,  receive or retain.  Performance

          Goals  may  be  particular  to  a  Participant,   may  relate  to  the

          performance of the Subsidiary,  division,  strategic  business unit or

          line of business which employs him, or may be based on the performance

          of the  Company  generally.  Performance  Goals  may be based on Stock

          value or increases  therein,  earnings per share or earnings per share

          growth, net earnings, earnings or earnings growth (before or after one

          or  more  of  taxes,  interest,   depreciation  and/or  amortization),

          operating  profit,  operating cash flow,  operating or other expenses,

          operating efficiency, return on equity, assets, capital or investment,

          sales or  revenues or growth  thereof,  deposits,  loan and/or  equity

          levels or growth  thereof,  working  capital  targets or cost  control

          measures,  regulatory  compliance,  gross, operating or other margins,

          efficiency ratio (as generally  recognized and used for bank financial

          reporting and analysis),  interest income, non-interest income, credit

          quality, net charge-offs and/or  non-performing assets (excluding such

          loans  or  classes  of  loans  as may be  designated  for  exclusion),

          productivity, customer satisfaction, satisfactory internal or external

          audits, improvement of financial ratings, achievement of balance sheet

          or income statement objectives, quality measures, and any component or

          components   of  the   foregoing   (including,   without   limitation,

          determination  thereof  with or  without  the  effect of  discontinued

          operations and dispositions of business segments, non-recurring items,

          material  extraordinary  items that are both  unusual and  infrequent,

          special  charges,   and/or  accounting  changes),  or  implementation,

          management   or   completion   of  critical   projects  or  processes.

          Performance  Goals may include a threshold level of performance  below

          which no payment or vesting may occur,  levels of performance at which

          specified  payments or  specified  vesting  will occur,  and a maximum

          level of performance above which no additional payment or vesting will

          occur.  Performance  Goals may be  absolute in their terms or measured

          against  or in  relationship  to a  market  index,  a group  of  other

          companies   comparably,   similarly  or  otherwise   situated,   or  a

          combination  thereof.  The Committee  shall  determine the Performance

          Period during which the  Performance  Goal must be met; and attainment

          of  Performance  Goals  shall  be  subject  to  certification  by  the

          Committee.  Each of the Performance  Goals shall be determined,  where

          applicable and except as provided  above, in accordance with generally

          accepted accounting principles.

 

     (t)  "Performance   Period"   means  the  time  period   during  which  the

          Performance  Goal must be met in connection  with a  Performance-Based

          Compensation Award. Such time period shall be set by the Committee.

 

     (u)  "Performance  Unit" means an Award,  designated as a performance unit,

          granted to a Participant  pursuant to Article X herein and valued as a

          fixed dollar amount.

 

     (v)  "Period of Restriction"  means the period during which the transfer of

          Shares of  Restricted  Stock is  restricted,  pursuant to Article VIII

          herein.

 

     (w)  "Plan"  means the  Trustmark  Corporation  2005  Stock  and  Incentive

          Compensation  Plan, as herein  described and as hereafter from time to

          time amended.

 

     (x)  "Related  Option"  means  an  Option  with  respect  to  which a Stock

          Appreciation Right has been granted.

 

     (y)  "Reload Option" means a Non-Qualified Stock Option granted pursuant to

          Section 6.9 in the event the Participant exercises all or a part of an

          Option by paying the Option  Price  pursuant to Section 6.6 with Stock

          in order to restore an Option  opportunity  on the number of shares of

          Stock surrendered to exercise an Option.

 

     (z)  "Restricted  Stock" means an Award of Stock  granted to a  Participant

          pursuant to Article VIII herein which is subject to  restrictions  and

          forfeiture  until  the  designated  conditions  for the  lapse  of the

          restrictions are satisfied.

 

     (aa) "Restricted  Stock  Unit" or "RSU"  means an  Award,  designated  as a

          Restricted Stock Unit, granted to a Participant pursuant to Article IX

          herein  and  valued  by  reference  to  Stock,  which  is  subject  to

          restrictions  and forfeiture  until the designated  conditions for the

          lapse of the restrictions are satisfied.

 

     (bb) "Stock" or "Shares" means the common stock of the Company.

 

     (cc) "Stock  Appreciation  Right" or "SAR" means an Award,  designated as a

          stock appreciation right, granted to a Participant pursuant to Article

          VII herein.

 

     (dd) "Subsidiary"  means any  subsidiary  corporation of the Company within

          the meaning of Section 424(f) of the Code.

 

                                   ARTICLE III

                                 Administration

 

3.1 Administration of the Plan by the Committee.  The Plan shall be administered

by the  Committee  which shall have all powers  necessary or desirable  for such

administration.  The  express  grant  in the Plan of any  specific  power to the

Committee  shall not be  construed  as limiting  any power or  authority  of the

Committee. In addition to any other powers and, subject to the provisions of the

Plan, the Committee shall have the following  specific powers:  (i) to determine

the terms and conditions  upon which the Awards may be made and exercised;  (ii)

to  determine  all terms and  conditions  of each  Agreement,  which need not be

identical;  (iii) to construe and interpret the Agreements and the Plan; (iv) to

establish,  amend or waive rules or regulations  for the Plan's  administration;

(v) to  accelerate  the  exercisability  of any Award,  the end of a Performance

Period or termination of any Period of Restriction or other restrictions imposed

under the Plan;  and (vi) to make all  other  determinations  and take all other

actions necessary or advisable for the administration of the Plan.

 

The  Chairman of the  Committee  and such other  directors  and  officers of the

Company as shall be designated by the Committee are hereby authorized to execute

Agreements  on behalf of the  Company and to cause them to be  delivered  to the

recipients of Awards.

 

For  purposes  of  determining  the  applicability  of  Section  422 of the Code

(relating to  Incentive  Stock  Options),  or in the event that the terms of any

Award  provide that it may be  exercised  only during  employment  or service or

within a specified  period of time after  termination  of employment or service,

the Committee may decide to what extent  leaves of absence for  governmental  or

military service,  illness,  temporary disability, or other reasons shall not be

deemed  interruptions  of  employment  or service or  continuous  employment  or

service.

 

Subject to limitations  under applicable law, the Committee is authorized in its

discretion to issue Awards and/or accept  notices,  elections,  consents  and/or

other forms or  communications  by  Participants by electronic or similar means,

including,  without  limitation,   transmissions  through  e-mail,  voice  mail,

recorded  messages  on  electronic  telephone  systems,  and  other  permissible

methods, on such basis and for such purposes as it determines from time to time.

 

A majority of the entire Committee shall constitute a quorum and the action of a

majority of the members  present at any meeting at which a quorum is present (in

person or as otherwise permitted by applicable law), or acts approved in writing

by a majority of the Committee without a meeting,  shall be deemed the action of

the Committee.

 

3.2 Selection of  Participants.  The Committee shall have the authority to grant

Awards  under  the  Plan,  from  time to  time,  to such Key  Associates  and/or

Directors  as may be  selected  by it.  Each  Award  shall  be  evidenced  by an

Agreement.

 

3.3 Decisions Binding. All determinations and decisions made by the Board or the

Committee pursuant to the provisions of the Plan shall be final,  conclusive and

binding.

 

3.4  Requirements of Rule 16b-3 and Section 162(m) of the Code.  Notwithstanding

any other  provision  of the Plan,  the Board or the  Committee  may impose such

conditions  on any  Award,  and amend the Plan in any such  respects,  as may be

required to satisfy the requirements of Rule 16b-3, as amended (or any successor

or similar rule), under the Exchange Act.

 

Any  provision  of the Plan to the contrary  notwithstanding,  and except to the

extent that the Committee  determines  otherwise:  (i)  transactions by and with

respect to  officers  and  directors  of the  Company who are subject to Section

16(b) of the Exchange Act  (hereafter,  "Section 16 Persons")  shall comply with

any applicable  conditions of SEC Rule 16b-3;  (ii) transactions with respect to

persons whose remuneration is subject to the provisions of Section 162(m) of the

Code shall conform to the requirements of Section  162(m)(4)(C) of the Code; and

(iii)  every  provision  of the Plan  shall be  administered,  interpreted,  and

construed to carry out the foregoing provisions of this sentence.

 

Notwithstanding any provision of the Plan to the contrary,  the Plan is intended

to  give  the   Committee   the  authority  to  grant  Awards  that  qualify  as

performance-based compensation under Section 162(m)(4)(C) of the Code as well as

Awards  that  do  not  so  qualify.   Every  provision  of  the  Plan  shall  be

administered,  interpreted,  and construed to carry out such intention,  and any

provision that cannot be so  administered,  interpreted,  and construed shall to

that extent be disregarded;  and any provision of the Plan that would prevent an

Award that the Committee  intends to qualify as  performance-based  compensation

under Section 162(m)(4)(C) of the Code from so qualifying shall be administered,

interpreted,  and construed to carry out such intention,  and any provision that

cannot be so  administered,  interpreted,  and construed shall to that extent be

disregarded.

 

3.5  Indemnification  of  Committee.   In  addition  to  such  other  rights  of

indemnification  as they may have as directors  or as members of the  Committee,

the  members  of the  Committee  shall be  indemnified  by the  Company  against

reasonable expenses, including attorneys' fees, actually and reasonably incurred

in  connection  with  the  defense  of any  action,  suit or  proceeding,  or in

connection with any appeal therein,  to which they or any of them may be a party

by reason of any action taken or failure to act under or in connection  with the

Plan or any Award granted or made hereunder,  and against all amounts reasonably

paid by them in settlement thereof or paid by them in satisfaction of a judgment

in any such action, suit or proceeding,  if such members acted in good faith and

in a manner which they believed to be in, and not opposed to, the best interests

of the Company and its Subsidiaries.

 

                                   ARTICLE IV

                            Stock Subject to the Plan

 

4.1 Number of Shares.  Subject to  adjustment as provided in Section 4.4 herein,

the maximum  aggregate  number of Shares  that may be issued  pursuant to Awards

made under the Plan shall not  exceed  the sum of (i)  6,000,000  plus (ii) that

number of Shares  represented  by  options  under the Second  Amended  Trustmark

Corporation  1997  Long  Term  Incentive  Plan  which  expire  or are  otherwise

terminated or forfeited at any time after the Effective Date of the Plan. Except

as provided in Sections 4.2 and 4.3 herein, the issuance of Shares in connection

with the  exercise  of, or as other  payment  for  Awards,  under the Plan shall

reduce the number of Shares available for future Awards under the Plan.

 

Stock that may be issued  under the Plan may either be  authorized  but unissued

Shares,  Shares held in treasury,  or Shares held in a grantor  trust created by

the Company.

 

The Company,  during the term of the Plan and thereafter  during the term of any

outstanding  Award  which  may be  settled  in  Stock,  shall  reserve  and keep

available a number of Shares sufficient to satisfy the requirements of the Plan.

 

4.2 Lapsed  Awards or  Forfeited  Shares.  If any Award  granted  under the Plan

terminates,  expires,  or lapses for any reason other than by virtue of exercise

of the Award,  or if Shares issued  pursuant to Awards are forfeited,  any Stock

subject to such Award again shall be  available  for the grant of an Award under

the Plan, subject to Section 7.3.

 

4.3 Delivery of Shares as Payment.  In the event a  Participant  pays the Option

Price for Shares pursuant to the exercise of an Option with previously  acquired

Shares, the number of Shares available for future Awards under the Plan shall be

reduced  only by the net number of new Shares  issued  upon the  exercise of the

Option. In addition,  in determining the number of shares of Stock available for

Awards,  if Stock has been  delivered or exchanged by a  Participant  as full or

partial  payment to the  Company  for payment of  withholding  taxes,  or if the

number of shares of Stock otherwise  deliverable has been reduced for payment of

withholding  taxes,  the  number of  shares of Stock  exchanged  as  payment  in

connection  with the  withholding tax or so reduced shall again be available for

purpose of Awards under the Plan.

 

4.4  Capital  Adjustments.  The  number  and  class of  Shares  subject  to each

outstanding  Award,  the  Option  Price and the annual  limits on and  aggregate

number of Shares  for which  Awards  thereafter  may be made shall be subject to

such  adjustment,  if  any,  as the  Committee  in  its  sole  discretion  deems

appropriate   to  reflect  such  events  as  stock   dividends,   stock  splits,

recapitalizations,  mergers,  consolidations  or  reorganizations  of or by  the

Company.

 

                                    ARTICLE V

                                   Eligibility

 

Persons  eligible to  participate  in the Plan include (i) all associates of the

Company  and  its  Subsidiaries  (including  any  corporation  which  becomes  a

Subsidiary  after the  adoption of the Plan by the Board) who, in the opinion of

the Committee, are Key Associates and (ii) all Directors.

 

Multiple  grants of Awards under the Plan may be made in any calendar  year to a

Participant,  provided,  however,  that Awards of Options and SARs (disregarding

any Tandem SARs as defined in Section 7.1)  granted in any calendar  year to any

one Participant  shall not provide for the issuance of, and/or cash payment with

respect to, more than 90,000 Shares in the aggregate,  that Awards of Restricted

Stock  and  Restricted  Stock  Units  granted  in any  calendar  year to any one

Participant  shall not provide for the  issuance  of,  and/or cash  payment with

respect to, more than 50,000 Shares in the aggregate, and that Performance Units

granted in any calendar  year to any one  Participant  shall not provide for the

payment of more than $1,000,000 in the aggregate.

 

                                   ARTICLE VI

                                  Stock Options

 

6.1 Grant of Options.  Subject to the terms and conditions of the Plan,  Options

may be granted to Key Associates and Directors at any time and from time to time

as shall be  determined  by the  Committee.  The  Committee  shall have complete

discretion in  determining  the number of Shares  subject to Options  granted to

each Participant,  provided,  however, that (i) only Non-Qualified Stock Options

may be  granted  to  Directors  who  are  not  associates  of the  Company  or a

Subsidiary,  (ii) no Participant may be granted Options in any calendar year for

more than 90,000  Shares  (with  Options  cancelled  in the same year as granted

counted  against  this  limit and with  Options  for which the  Option  Price is

reduced  treated as cancelled  and reissued for this annual limit) and (iii) the

aggregate Fair Market Value (determined at the time the Award is made) of Shares

with respect to which any  Participant may first exercise ISOs granted under the

Plan during any calendar year may not exceed $100,000 or such amount as shall be

specified in Section 422 of the Code and rules and regulations thereunder.

 

6.2 Option Agreement.  Each Option grant shall be evidenced by an Agreement that

shall  specify  the type of Option  granted,  the Option  Price (as  hereinafter

defined),  the duration of the Option,  the number of Shares to which the Option

pertains, any conditions imposed upon the exercisability of Options in the event

of retirement,  death, disability or other termination of employment or service,

and such other provisions as the Committee shall determine.  The Agreement shall

specify  whether the Option is intended to be an Incentive  Stock Option  within

the  meaning of Section 422 of the Code,  or a  Non-Qualified  Stock  Option not

intended  to be within  the  provisions  of Section  422 of the Code,  provided,

however, that if an Option is intended to be an Incentive Stock Option but fails

to be such for any  reason,  it shall  continue  in full  force and  effect as a

Non-Qualified  Stock Option. If an Option is intended to be a  Performance-Based

Compensation Award, the terms and conditions thereof,  including the Performance

Goal and Performance Period,  shall be set forth in an Agreement or in a subplan

of the  Plan  which is  incorporated  by  reference  into an  Agreement  and the

requirements to satisfy or achieve the Performance  Goal as so provided  therein

shall be considered to be restrictions under the Plan.

 

6.3 Option  Price.  The Option  Price of an Option  shall be  determined  by the

Committee  subject to the following  limitations.  The Option Price shall not be

less than 100% of the Fair  Market  Value of such  Stock on the Grant  Date.  In

addition, an ISO granted to a Key Associate (including any Director who is a Key

Associate) who, at the time of grant, owns (within the meaning of Section 424(d)

of the Code) stock  possessing  more than 10% of the total combined voting power

of all classes of stock of the  Company,  shall have an Option Price which is at

least equal to 110% of the Fair Market Value of such Stock on the Grant Date.

 

6.4 Duration of Options.  Each Option shall expire at such time as the Committee

shall determine,  provided,  however,  that no Option shall be exercisable after

the expiration of ten years from its Award Date. In addition,  an ISO granted to

a Key Associate (including any Key Associate who is a Director) who, at the time

of grant,  owns  (within  the  meaning  of  Section  424(d)  of the Code)  stock

possessing  more than 10% of the total  combined  voting power of all classes of

stock of the Company,  shall not be  exercisable  after the  expiration  of five

years from its Award Date.

 

6.5 Exercisability.  Options granted under the Plan shall be exercisable at such

times and be subject to such  restrictions and conditions as the Committee shall

determine, which need not be the same for all Participants.

 

6.6 Method of Exercise.  Options shall be exercised by the delivery of a written

notice to the Company in the form prescribed by the Committee  setting forth the

number  of  Shares  with  respect  to  which  the  Option  is to  be  exercised,

accompanied  by full  payment for the Shares and  payment of (or an  arrangement

satisfactory  to the Company  for the  Participant  to pay) any tax  withholding

required  in  connection  with the Option  exercise.  The Option  Price shall be

payable to the  Company in full  either in cash,  by delivery of Shares of Stock

valued at Fair Market Value at the time of exercise or by a  combination  of the

foregoing.

 

To the  extent  permitted  under the  applicable  laws and  regulations,  at the

request of the  Participant  and with the consent of the Committee,  the Company

agrees to cooperate in a "cashless exercise" of an Option. The cashless exercise

shall  be  effected  by  the  Participant  delivering  to  a  securities  broker

instructions  to exercise all or part of the Option,  including  instructions to

sell a  sufficient  number of  shares  of Stock to cover the costs and  expenses

associated therewith.

 

As soon as  practicable,  after  receipt  of written  notice and  payment of the

Option Price and completion of payment of (or an arrangement satisfactory to the

Company for the Participant to pay) any tax  withholding  required in connection

with the Option exercise,  the Company shall deliver to the  Participant,  stock

certificates  in  an  appropriate  amount  based  upon  the  number  of  Options

exercised, issued in the Participant's name.

 

6.7  Restrictions  on Stock  Transferability.  The  Committee  shall impose such

restrictions on any Shares acquired  pursuant to the exercise of an Option under

the Plan as it may deem advisable,  including, without limitation,  restrictions

under applicable  Federal securities law, under the requirements of the National

Association  of Securities  Dealers,  Inc. or any stock exchange upon which such

Shares  are  then  listed  and  under  any blue  sky or  state  securities  laws

applicable to such Shares.  The Committee may specify in an Agreement that Stock

delivered  on exercise of an Option is  Restricted  Stock or Stock  subject to a

buyback  right by the  Company in the  amount of, or based on, the Option  Price

therefor in the event the  Participant  does not  complete a  specified  service

period after exercise.

 

6.8 Nontransferability of Options. No Option granted under the Plan may be sold,

transferred,  pledged,  assigned, or otherwise alienated or hypothecated,  other

than by will or by the laws of descent and  distribution.  Further,  all Options

granted to a Participant under the Plan shall be exercisable during his lifetime

only by such Participant or his guardian or legal representative.

 

Notwithstanding  the  foregoing  or  any  other  provision  of the  Plan  to the

contrary,  to the extent  permissible  under Rule 16b-3 of the  Exchange  Act, a

Participant who is granted  Non-Qualified Stock Options pursuant to the Plan may

transfer  such  Non-Qualified  Stock  Options  to  his  or  her  spouse,  lineal

ascendants,  lineal descendants,  or to trusts for their benefit,  provided that

the Non-Qualified Stock Option so transferred may not again be transferred other

than to the Participant  originally  receiving the grant of Non-Qualified  Stock

Options  or to an  individual  or  trust to whom  such  Participant  could  have

transferred   Non-Qualified   Stock  Options   pursuant  to  this  Section  6.8.

Non-Qualified  Stock Options which are transferred  pursuant to this Section 6.8

shall be exercisable by the transferee  subject to the same terms and conditions

as would have applied to such  Non-Qualified  Stock  Options in the hands of the

Participant originally receiving the grant of such Non-Qualified Stock Options.

 

6.9 Reload  Options.  The  Committee  shall have the authority to specify at the

Award  Date for an Option  that a  Participant  receiving  the  Option  shall be

granted the right to a further Non-Qualified Stock Option (a "Reload Option") in

the event the  Participant  exercises  all or a part of the Option,  including a

Reload Option (an "Original Option"), by surrendering in accordance with Section

6.6  hereof  already  owned  shares of Stock in full or  partial  payment of the

Option Price under such Original Option.  Each Reload Option shall be granted on

the date of exercise of the Original  Option,  shall cover a number of shares of

Stock not exceeding the whole number of shares of Stock  surrendered  in payment

of the Option Price under such Original Option, shall have an Option Price equal

to the Fair Market Value on the Award Date of such Reload  Option,  shall expire

on the stated  expiration  date of the  Original  Option and shall be subject to

such other terms and conditions as the Committee may determine.

 

                                   ARTICLE VII

                            Stock Appreciation Rights

 

7.1 Grant of Stock Appreciation  Rights.  Subject to the terms and conditions of

the Plan,  Stock  Appreciation  Rights  may be  granted  to Key  Associates  and

Directors,  at the discretion of the Committee,  in any of the following  forms,

provided,  however,  that no Participant may be granted more than 90,000 SARs in

any  calendar  year (with  SARs  cancelled  in the same year as granted  counted

against  this  limit and with  SARs for  which the base  amount on which the SAR

payment at exercise is calculated  is reduced  treated as cancelled and reissued

for this annual limit):

 

     (a)  Inconnection  with the  grant,  and  exercisable  in lieu of,  Options

          ("Tandem SARs");

 

     (b)  In connection with and exercisable in addition to the grant of Options

          ("Additive SARs");

 

     (c)  Independent of grant of the Options ("Freestanding SARs"); or

 

     (d)  In any combination of the foregoing.

 

7.2 SAR Agreement.  Each SAR grant shall be evidenced by an Agreement that shall

specify  its  type of SAR and its  terms  and  conditions.  If an SAR  grant  is

intended to be a Performance-Based  Compensation Award, the Performance Goal and

Performance  Period  shall be set forth in an  Agreement  or in a subplan of the

Plan which is incorporated  by reference into an Agreement and the  requirements

to satisfy or achieve  the  Performance  Goal as so  provided  therein  shall be

considered to be restrictions under the Plan.

 

7.3 Exercise of Tandem SARs. Tandem SARs may be exercised with respect to all or

part of the Shares  subject to the Related  Option.  The exercise of Tandem SARs

shall cause a reduction  in the number of Shares  subject to the Related  Option

equal to the number of Shares with respect to which the Tandem SAR is exercised.

Conversely,  the exercise,  in whole or part, of a Related Option, shall cause a

reduction  in the number of Shares  subject to the Related  Option  equal to the

number of Shares with respect to which the Related  Option is exercised.  Shares

with  respect  to which the  Tandem  SAR shall  have been  exercised  may not be

subject again to an Award under the Plan.

 

Notwithstanding  any other  provision of the Plan to the contrary,  a Tandem SAR

shall  expire no later  than the  expiration  of the  Related  Option,  shall be

transferable  only when and under the same  conditions as the Related Option and

shall be  exercisable  only when the Related Option is eligible to be exercised.

In  addition,  if the Related  Option is an ISO, a Tandem SAR shall be exercised

for no more than 100% of the difference  between the Option Price of the Related

Option and the Fair Market Value of Shares  subject to the Related Option at the

time the Tandem SAR is exercised.

 

7.4  Exercise of Additive  SARs.  Additive  SARs shall be deemed to be exercised

upon,  and in  addition  to, the  exercise of the  Related  Options.  The deemed

exercise of Additive  SARs shall not reduce the number of Shares with respect to

which the Related Options remains unexercised.

 

7.5 Exercise of  Freestanding  SARs.  Freestanding  SARs may be  exercised  upon

whatever terms and conditions the  Committee,  in its sole  discretion,  imposes

upon such SARs.

 

7.6 Other  Conditions  Applicable to SARs. In no event shall the term of any SAR

granted  under the Plan  exceed  ten years  from the  Grant  Date.  A SAR may be

exercised only when the Fair Market Value of a Share exceeds either (i) the Fair

Market  Value per Share on the Grant Date in the case of a  Freestanding  SAR or

(ii) the Option  Price of the  Related  Option in the case of either a Tandem or

Additive  SAR. A SAR shall be exercised by delivery to the Committee of a notice

of exercise in the form prescribed by the Committee.

 

7.7 Payment after Exercise of SARs.  Subject to the provisions of the Agreement,

upon the exercise of a SAR, the Participant is entitled to receive,  without any

payment to the Company (other than required tax withholding  amounts), an amount

equal (the "SAR Value") to the product of  multiplying  (i) the number of Shares

with respect to which the SAR is exercised by (ii) an amount equal to the excess

of (A) the Fair  Market  Value per Share on the date of exercise of the SAR over

(B) either (x) the Fair Market  Value per Share on the Award Date in the case of

a Freestanding  SAR or (y) the Option Price of the Related Option in the case of

either a Tandem or Additive  SAR. The  Agreement  may provide for payment of the

SAR Value at the time of exercise or, on an elective or non-elective  basis, for

payment  of the SAR  Value at a later  date,  adjusted  (if so  provided  in the

Agreement) from the date of exercise based on an interest,  dividend equivalent,

earnings,  or other  basis  (including  deemed  investment  of the SAR  Value in

Shares) set out in the Agreement  (the  "adjusted SAR Value").  The Committee is

expressly  authorized to grant SARs which are deferred  compensation  covered by

Section 409A of the Code,  as well as SARs which are not  deferred  compensation

covered by Section 409A of the Code.

 

Payment of the SAR Value or adjusted SAR Value to the Participant  shall be made

in Shares,  valued at the Fair Market  Value on the date of exercise in the case

of an immediate  payment after  exercise or at the Fair Market Value on the date

of settlement in the event of an elective or non-elective  delayed  payment,  in

cash or a combination thereof as determined by the Committee, either at the time

of the Award or thereafter, and as provided in the Agreement.

 

7.8  Nontransferability  of SARs. No SAR granted under the Plan, and no right to

receive  payment in connection  therewith,  may be sold,  transferred,  pledged,

assigned,  or otherwise alienated or hypothecated,  other than by will or by the

laws of descent and  distribution.  Further,  all SARs, and rights in connection

therewith,  granted to a Participant under the Plan shall be exercisable  during

his lifetime only by such Participant or his guardian or legal representative.

 

                                  ARTICLE VIII

                                Restricted Stock

 

8.1 Grant of Restricted Stock.  Subject to the terms and conditions of the Plan,

the Committee, at any time and from time to time, may grant Shares of Restricted

Stock under the Plan to such Key Associates and Directors and in such amounts as

it shall determine,  provided,  however, that no Participant may be granted more

than  50,000  Shares of  Restricted  Stock in any  calendar  year.  Participants

receiving  Restricted  Stock Awards are not required to pay the Company therefor

(except for applicable tax withholding) other than the rendering of services. If

determined  by the  Committee,  custody  of  Shares of  Restricted  Stock may be

retained  by the  Company  until the  termination  of the Period of  Restriction

pertaining thereto.

 

8.2 Restricted Stock  Agreement.  Each Restricted Stock Award shall be evidenced

by an  Agreement  that shall  specify the Period of  Restriction,  the number of

Restricted Stock Shares granted, and the applicable  restrictions and such other

provisions as the Committee shall determine.  If an Award of Restricted Stock is

intended to be a Performance-Based  Compensation Award, the terms and conditions

of such Award,  including the Performance Goal and Performance Period,  shall be

set forth in an Agreement or in a subplan of the Plan which is  incorporated  by

reference  into an  Agreement  and the  requirements  to satisfy or achieve  the

Performance  Goal as so provided  therein shall be considered to be restrictions

under the Plan.

 

8.3  Nontransferability  of Restricted Stock. Except as provided in this Article

VIII  and  subject  to the  limitation  in the  next  sentence,  the  Shares  of

Restricted  Stock  granted  hereunder  may not be  sold,  transferred,  pledged,

assigned,  or otherwise  alienated or hypothecated  until the termination of the

applicable  Period of  Restriction  or upon the  earlier  satisfaction  of other

conditions as specified by the Committee in its sole discretion and set forth in

the  Agreement.  All rights with respect to the  Restricted  Stock  granted to a

Participant under the Plan shall be exercisable during his lifetime only by such

Participant or his guardian or legal representative.

 

8.4 Other Restrictions.  The Committee may impose such other restrictions on any

Shares of Restricted Stock granted pursuant to the Plan as it may deem advisable

including,  without  limitation,  restrictions under applicable Federal or state

securities laws, and may legend the certificates  representing  Restricted Stock

to give appropriate notice of such restrictions.

 

8.5  Certificate  Legend.  In  addition to any  legends  placed on  certificates

pursuant  to  Section  8.4  herein,  each  certificate  representing  Shares  of

Restricted Stock granted pursuant to the Plan shall bear the following legend:

 

     The sale or other  transfer  of the  Shares  of Stock  represented  by this

     certificate,  whether  voluntary,  involuntary,  or by operation of law, is

     subject to certain  restrictions  on  transfer  set forth in the  Trustmark

     Corporation  2005 Stock and Incentive  Compensation  Plan, in the rules and

     administrative  procedures  adopted  pursuant  to  such  Plan,  and  in  an

     Agreement  dated  (date of  grant) . A copy of the  Plan,  such  rules  and

     procedures,  and such  Restricted  Stock Agreement may be obtained from the

     Secretary of Trustmark Corporation.

 

8.6 Removal of  Restrictions.  Except as  otherwise  provided  in this  Article,

Shares of Restricted Stock covered by each Restricted Stock Award made under the

Plan shall become freely  transferable by the Participant  after the last day of

the Period of Restriction  and, where  applicable,  after a determination of the

satisfaction or achievement on any applicable  Performance Goal. Once the Shares

are released from the  restrictions,  the Participant  shall be entitled to have

the legend required by Section 8.5 herein removed from his Stock certificate.

 

8.7 Voting Rights. During the Period of Restriction, Participants holding Shares

of  Restricted  Stock  granted  hereunder  may exercise  full voting rights with

respect to those Shares.

 

8.8  Dividends  and  Other  Distributions.  Unless  otherwise  provided  in  the

Agreement, during the Period of Restriction, Participants entitled to or holding

Shares of Restricted  Stock granted  hereunder  shall be entitled to receive all

dividends and other  distributions  paid with respect to those Shares while they

are so held.  If any such  dividends or  distributions  are paid in Shares,  the

Shares shall be subject to the same restrictions on transferability and the same

rules for custody as the Shares of  Restricted  Stock with respect to which they

were distributed.

 

8.9  Termination  of Employment  or Service.  Unless  otherwise  provided in the

Agreement,  in the event that a Participant terminates his employment or service

with the  Company  for any reason  during the  Period of  Restriction,  then any

Shares of Restricted  Stock still subject to restrictions as of the date of such

termination  shall  automatically be forfeited and returned to the Company.  The

Committee  may provide for vesting of Restricted  Stock in  connection  with the

termination of a  Participant's  employment or service on such basis as it deems

appropriate.

 

                                   ARTICLE IX

                             Restricted Stock Units

 

9.1 Grant of Restricted Stock Units.  Subject to the terms and conditions of the

Plan,  the Committee,  at any time and from time to time,  may grant  Restricted

Stock  Units under the Plan (with one Unit  representing  one Share) to such Key

Associates  and Directors and in such amounts as it shall  determine,  provided,

however,  that no Participant may be granted more than 50,000  Restricted  Stock

Units in any calendar year.  Participants receiving Restricted Stock Unit Awards

are  not  required  to pay the  Company  therefor  (except  for  applicable  tax

withholding) other than the rendering of services.

 

9.2 Restricted  Stock Unit Agreement.  Each Restricted Stock Unit Award shall be

evidenced  by an Agreement  that shall  specify the Period of  Restriction,  the

number of Restricted  Stock Units granted,  and the applicable  restrictions and

such  other  provisions  as  the  Committee  shall  determine.  If an  Award  of

Restricted Stock Units is intended to be a Performance-Based Compensation Award,

the terms and  conditions  of such Award,  including  the  Performance  Goal and

Performance  Period,  shall be set forth in an  Agreement or in a subplan of the

Plan which is incorporated  by reference into an Agreement and the  requirements

to satisfy or achieve  the  Performance  Goal as so  provided  therein  shall be

considered to be restrictions under the Plan.

 

Unless  otherwise  provided in the Agreement,  during the Period of Restriction,

Participants holding Restricted Stock Units shall have added to their rights all

dividends and other distributions which would have been paid with respect to the

Shares  represented  by  those  Restricted  Stock  Units  if  such  Shares  were

outstanding,  and such deemed dividends or distributions shall be subject to the

same  restrictions,  vesting and payment as the Restricted  Stock Units to which

they are attributable.  Unless otherwise  provided in the Agreement,  during the

Period of Restriction,  any such deemed dividends and other  distributions shall

be deemed  converted  to  additional  Restricted  Stock  Units based on the Fair

Market  Value of a Share on the date of  payment or  distribution  of the deemed

dividend or distribution.

 

9.3  Payment  after  Lapse of  Restrictions.  Subject to the  provisions  of the

Agreement,  upon the lapse exercise of restrictions with respect to a Restricted

Stock Unit, the  Participant is entitled to receive,  without any payment to the

Company (other than required tax withholding amounts), an amount equal (the "RSU

Value") to the product of  multiplying  (i) the number of Shares with respect to

which the restrictions lapse by (ii) the Fair Market Value per Share on the date

the restrictions lapse.

 

The  Agreement  may provide for payment of the RSU Value at the time of exercise

or, on an  elective  or  non-elective  basis,  for payment of the RSU Value at a

later date, adjusted (if so provided in the Agreement) from the date of exercise

based on an interest,  dividend equivalent,  earnings, or other basis (including

deemed  investment  of the RSU Value in Shares)  set out in the  Agreement  (the

"adjusted RSU Value"). The Committee is expressly authorized to grant Restricted

Stock Units which are deferred compensation covered by Section 409A of the Code,

as well as Restricted Stock Units which are not deferred compensation covered by

Section 409A of the Code.

 

Payment of the RSU Value or adjusted RSU Value to the Participant  shall be made

in Shares, valued at the Fair Market Value on the date the restrictions therefor

lapse in the case of an immediate  payment  after  vesting or at the Fair Market

Value on the date of  settlement  in the event of an  elective  or  non-elective

delayed  payment,  in  cash  or a  combination  thereof  as  determined  by  the

Committee, either at the time of the Award or thereafter, and as provided in the

Agreement.

 

9.4  Nontransferability  of Restricted  Stock Units.  No  Restricted  Stock Unit

granted under the Plan, and no right to receive payment in connection therewith,

may  be  sold,  transferred,   pledged,  assigned,  or  otherwise  alienated  or

hypothecated,  other  than by will or by the laws of descent  and  distribution.

Further, all Restricted Stock Units, and rights in connection therewith, granted

to a Participant under the Plan shall be exercisable during his lifetime only by

such Participant or his guardian or legal representative.

 

9.5  Termination  of Employment  or Service.  Unless  otherwise  provided in the

Agreement,  in the event that a Participant terminates his employment or service

with the  Company  for any reason  during the  Period of  Restriction,  then any

Restricted  Stock Units  still  subject to  restrictions  as of the date of such

termination  shall  automatically be forfeited and returned to the Company.  The

Committee may provide for vesting of Restricted  Stock Units in connection  with

the  termination  of a  Participant's  employment or service on such basis as it

deems appropriate.

 

                                    ARTICLE X

                                Performance Units

 

10.1 Grant of  Performance  Units.  Subject to the terms and  conditions  of the

Plan,  Performance  Units may be granted to Key  Associates and Directors at any

time and from time to time as shall be  determined by the  Committee,  provided,

however,  that no  Participant  may be granted  Performance  Units with a dollar

value in excess of $1,000,000  in any calendar  year.  Otherwise,  the Committee

shall have complete  discretion in determining  the number of Performance  Units

granted to each Participant. Participants receiving such Awards are not required

to pay the Company therefor  (except for applicable tax withholding)  other than

the rendering of services.

 

10.2  Performance  Unit  Agreement.  Each  Performance  Unit is intended to be a

Performance-Based  Compensation Award, and the terms and conditions of each such

Award, including the Performance Goal and Performance Period (which may be equal

to, less than or more than one year), shall be set forth in an Agreement or in a

subplan of the Plan which is  incorporated  by reference into an Agreement.  The

Committee shall set the Performance  Goal in its discretion for each Participant

who is granted a Performance Unit.

 

10.3 Settlement of Performance  Units. After a Performance Period has ended, the

holder of a  Performance  Unit shall be entitled  to receive  the value  thereof

based  on the  degree  to which  the  Performance  Goals  and  other  conditions

established  by the Committee and set forth in the Agreement (or in a subplan of

the Plan  which is  incorporated  by  reference  into an  Agreement)  have  been

satisfied.

 

10.4 Form of  Payment.  Payment  of the amount to which a  Participant  shall be

entitled upon the settlement of a Performance  Unit shall be made in cash, Stock

or a combination thereof as determined by the Committee.  Payment may be made in

a lump sum or installments as determined by the Committee.

 

10.5  Nontransferability of Performance Units. No Performance Unit granted under

the Plan may be sold, transferred,  pledged, assigned, or otherwise alienated or

hypothecated, otherwise than by will or by the laws of descent and distribution.

All rights with respect to Performance  Units granted to a Participant under the

Plan shall be  exercisable  during his lifetime only by such  Participant or his

guardian or legal representative.

 

                                   ARTICLE XI

                                Change in Control

 

In  the  event  of a  Change  in  Control  of the  Company,  the  Committee,  as

constituted before such Change in Control, in its sole discretion may, as to any

outstanding Award,  either at the time the Award is made or any time thereafter,

take any one or more of the following actions:  (i) provide for the acceleration

of any time periods relating to the exercise or realization of any such Award so

that  such  Award  may be  exercised  or  realized  in full on or  before a date

initially fixed by the Committee; (ii) provide for the purchase or settlement of

any such Award by the Company,  upon a Participant's  request,  for an amount of

cash equal to the amount  which could have been  obtained  upon the  exercise of

such  Award or  realization  of such  Participant's  rights  had such Award been

currently  exercisable or payable;  (iii) make such adjustment to any such Award

then  outstanding as the Committee  deems  appropriate to reflect such Change in

Control;  or (iv) cause any such Award then  outstanding  to be assumed,  or new

rights substituted  therefor,  by the acquiring or surviving corporation in such

Change in Control.

 

                                   ARTICLE XII

                  Modification, Extension and Renewal of Awards

 

Subject to the terms and conditions and within the  limitations of the Plan, the

Committee  may  modify,  extend or renew  outstanding  Awards and may modify the

terms of an outstanding Agreement, provided that the exercise price of any Award

may not be lowered other than pursuant to Section 4.4 herein.  In addition,  the

Committee may accept the surrender of outstanding  Awards (to the extent not yet

exercised)  granted under the Plan or outstanding awards granted under any other

equity compensation plan of the Company and authorize the granting of new Awards

pursuant to the Plan in substitution  therefor so long as the new or substituted

awards do not  specify a lower  exercise  price than the  surrendered  Awards or

awards,  and  otherwise  the new  Awards  may be of a  different  type  than the

surrendered  Awards or awards,  may specify a longer  term than the  surrendered

Awards or awards, may provide for more rapid vesting and exercisability than the

surrendered  Awards or awards,  and may  contain any other  provisions  that are

authorized by the Plan. Notwithstanding the foregoing,  however, no modification

of an Award, shall, without the consent of the Participant, adversely affect the

rights or obligations of the Participant.

 

                                  ARTICLE XIII

               Amendment, Modification and Termination of the Plan

 

13.1 Amendment, Modification and Termination. At any time and from time to time,

the  Board  may  terminate,  amend,  or  modify  the  Plan.  Such  amendment  or

modification may be without shareholder  approval except to the extent that such

approval is required by the Code,  pursuant to the rules under Section 16 of the

Exchange Act, by any national  securities  exchange or system on which the Stock

is then listed or reported,  by any  regulatory  body having  jurisdiction  with

respect thereto or under any other applicable laws, rules or regulations.

 

13.2 Awards Previously Granted. No termination, amendment or modification of the

Plan other than  pursuant  to Section 4.4 herein  shall in any manner  adversely

affect any Award theretofore granted under the Plan, without the written consent

of the Participant.

 

                                   ARTICLE XIV

                                   Withholding

 

14.1 Tax  Withholding.  The Company shall have the power and the right to deduct

or  withhold,  or  require  a  Participant  to remit to the  Company,  an amount

sufficient  to  satisfy   Federal,   State  and  local  taxes   (including   the

Participant's  FICA  obligation)  required by law to be withheld with respect to

any grant, exercise, or payment made under or as a result of the Plan.

 

14.2 Stock Withholding.  With respect to withholding  required upon the exercise

of Non-Qualified  Stock Options, or upon the lapse of restrictions on Restricted

Stock,  or upon the  occurrence  of any other  taxable event with respect to any

Award,  Participants may elect, subject to the approval of the Committee, or the

Committee may require  Participants to satisfy the withholding  requirement,  in

whole or in part, by having the Company  withhold  Shares of Stock having a Fair

Market  Value  equal to the amount  required  to be  withheld.  The value of the

Shares to be withheld  shall be based on Fair Market  Value of the Shares on the

date that the amount of tax to be withheld is to be determined. All elections by

Participants  shall be irrevocable  and be made in writing and in such manner as

determined by the Committee in advance of the day that the  transaction  becomes

taxable.

 

                                   ARTICLE XV

                                   Successors

 

All  obligations  of the Company under the Plan,  with respect to Awards granted

hereunder,  shall be  binding  on any  successor  to the  Company,  whether  the

existence  of such  successor  is the result of a direct or  indirect  purchase,

merger,  consolidation or otherwise, of all or substantially all of the business

and/or assets of the Company.

 

                                   ARTICLE XVI

                                     General

 

16.1  Requirements  of Law. The granting of Awards and the issuance of Shares of

Stock  under the Plan  shall be  subject  to all  applicable  laws,  rules,  and

regulations,  and  to  such  approvals  by any  governmental  agencies  or  self

regulatory organizations as may be required.

 

16.2 Effect of the Plan. The establishment of the Plan shall not confer upon any

Key Associate or Director any legal or equitable  right  against the Company,  a

Subsidiary or the Committee,  except as expressly provided in the Plan. The Plan

does not constitute an inducement or consideration for the employment or service

of any Key  Associate or Director,  nor is it a contract  between the Company or

any of its Subsidiaries and any Key Associate or Director.  Participation in the

Plan shall not give any Key  Associate  or Director  any right to be retained in

the  service of the  Company or any of its  Subsidiaries.  No Key  Associate  or

Director who receives an Award shall have rights as a shareholder of the Company

prior to the date Shares are issued to the Participant pursuant to the Plan.

 

16.3 Creditors. The interests of any Participant under the Plan or any Agreement

are not subject to the claims of creditors and may not, in any way, be assigned,

alienated or encumbered.

 

16.4 Governing Law. The Plan, and all Agreements  hereunder,  shall be governed,

construed and  administered  in accordance  with and governed by the laws of the

State of Mississippi and the intention of the Company is that ISOs granted under

the Plan qualify as such under Section 422 of the Code.

 

16.5 Severability.  In the event any provision of the Plan shall be held illegal

or invalid for any reason,  the  illegality or  invalidity  shall not affect the

remaining  parts of the Plan, and the Plan shall be construed and enforced as if

the illegal or invalid provision had not been included.

 

16.6 Unfunded  Status of Plan.  The Plan is intended to constitute an "unfunded"

plan for incentive and deferred compensation. With respect to any payments as to

which a Participant  has a fixed and vested  interest but which are not yet made

to a Participant by the Company,  nothing  contained  herein shall give any such

Participant  any  rights  that are  greater  than  those of a general  unsecured

creditor of the Company.

 

16.7 Nonqualified Deferred  Compensation Plan Omnibus Provision.  It is intended

that any compensation, benefits or other remuneration which is provided pursuant

to or in  connection  with  the  Plan  which is  considered  to be  nonqualified

deferred  compensation subject to Section 409A of the Code shall be provided and

paid in a  manner,  and at such  time and in such  form,  as  complies  with the

applicable requirements of Section 409A of the Code to avoid the unfavorable tax

consequences provided therein for non-compliance. The Committee is authorized to

amend  any  Award  Agreement  as  may be  determined  by it to be  necessary  or

appropriate to evidence or further evidence required compliance with IRC Section

409A.