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Exhibit 10-ab
 
Summary of the Trustmark Corporation
Management Incentive Plan

(as it applies to Trustmark Corporation’s executive officers,
including the named executive officers)

Purpose of the Plan.  Trustmark Corporation maintains the Management Incentive
Plan (“MIP”) for the purpose of awarding annual cash bonuses to certain
employees of Trustmark and its subsidiaries (collectively, “Trustmark”) based
upon the achievement of performance objectives established each year under the
plan.   The goal of the MIP is to motivate participants to maximize shareholder
value by achieving performance while limiting risk appropriately and maintaining
the safety and soundness of Trustmark.
The MIP is designed to award cash bonuses based upon achievement of Trustmark’s
corporate goals and objectives, as well as the achievement of business unit
goals and objectives within the framework of Trustmark’s multi-year strategic
goals.  Successful performance determines whether or not a participant will
receive an annual cash bonus for a particular performance year.

Administration.  The MIP is an annual incentive plan that is approved each year
with a performance year running from January 1 through December 31.  The Human
Resources Committee (the “Committee”) of the Board of Directors of Trustmark
Corporation oversees the administration of the MIP, making recommendations to
the Board of Directors of Trustmark Corporation (with respect to the CEO and
CFO) or Trustmark National Bank (for all other executive officer participants)
for approval with respect to plan design, performance objectives and targets and
award payouts, based on input from the CEO and executive management.

Eligibility (Participation).  In addition to other specified employees, all of
Trustmark’s executive officers (as defined by Rule 3b-7 of the Securities
Exchange Act of 1934) are eligible to participate in the MIP.  Employees who are
hired or promoted to an MIP participant level during the first quarter of a
performance year are eligible to participate in the MIP for that entire year,
while employees hired or promoted during the second and third quarters are
eligible to participate in the MIP for that year on a prorated basis.

Plan Elements.   At the beginning of each year, Trustmark develops a bonus
template for each MIP participant. The primary elements of each template are:
 
·
Target payout opportunity,

 
·
Threshold and maximum payout opportunity,

 
·
Target performance measures selected from Trustmark’s approved profit plan for
the year or other financial/statistical measurement, along with ranges that
determine threshold and maximum levels of performance, and

 
·
Weightings assigned to the selected performance measures.

Payout Opportunity -- Threshold, Target and Maximum.  Annual bonuses under the
MIP are designed to reward achievement of Trustmark’s corporate goals and
objectives and, where applicable, line of business goals and objectives. Based
on the performance level achieved, the MIP provides three primary payout
opportunity levels for each participant: threshold, target and maximum. The
target payout opportunity, which equates to achievement of 100% of the target
performance measures, is stated as a percentage of the participant’s base salary
in March of the performance year and is determined each year by the
participant’s job grade and job title (except where the target payout
opportunity is established by the participant’s employment agreement).  The
threshold and maximum payout opportunities, which allow for a prorated payout
for performance below or above the target level, are stated as a percentage of
the target opportunity.

The threshold (or minimum) payout opportunity is 50% of the target payout
opportunity, and the maximum payout opportunity is 200% (for members of the
Executive Committee) and 150% (for other participants) of the target payout
opportunity.  Overall performance at the threshold level (see discussion below)
would result in a bonus payment of 50% of the target payout opportunity, while
performance below the threshold level would not qualify for any bonus payment,
absent exercise of discretion.  Overall performance at the maximum level would
result in a bonus payment of 200% or 150%, respectively, of the target payout
opportunity, but performance above the maximum level would not result in any
additional payment, absent exercise of discretion.

Overall performance between the threshold and maximum levels would result in a
prorated bonus payment relative to the target payout opportunity.

Performance Measures and Achievement Levels-- Threshold, Target and
Maximum.  Performance measures under the MIP are determined each year, with a
primary emphasis on corporate/financial performance (“corporate drivers”) and
quantitative assessment of strategic achievements in individual areas of
management (“corporate operational drivers” and for participants working in
specific lines of business, “areas of responsibility drivers”).  Performance
measures are selected based on a participant’s job grade and title and may
include, but are not limited to, the following:
 
 
 

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Corporate Drivers
Corporate Operational Drivers
    Area of Responsibility
·    Earnings Per Common Share
·    Total Revenue including:
·    Total Line of Business Revenue
·    Return on Average Tangible Common Equity
o    Net Interest Income
·    Non-Interest Expense
·    Net Income to Common Shareholders
o    Noninterest Income
·    Non-Performing Assets (Excluding accruing loans past due 90 days)
 
·    Total Noninterest Expense
·    Net Charge-offs
 
·    Efficiency Ratio
·    Provision for Loan Losses
 
·    Non-Performing Assets (Excluding accruing loans past due 90 days)
·    Net Income to Common Shareholder
 
·    Net Charge-Offs
   
·    Provision for Loan Losses
   
·    Net Income to Common Shareholders
       

 
The MIP’s three primary payout opportunity levels are linked to three levels of
performance with respect to the performance measures selected for each
participant: threshold, target and maximum.  The target performance levels are
generally keyed to Trustmark’s profit plan for the applicable performance year,
or other relevant financial/statistical measurements.

Subject to certain exceptions established by the Committee, the threshold (or
minimum) performance level is generally 80% of the target performance level and
the maximum performance level is generally 120% of the target performance
level.  The threshold performance level represents the minimum performance that
justifies a modest bonus payment (50% of the target payout opportunity), while
performance below the threshold level would not qualify for any bonus payment,
absent exercise of discretion.  Overall performance at the maximum level would
result in a bonus payment of 200% (or 150%) of the target payout opportunity,
but performance above the maximum level would not result in any additional
payment, absent exercise of discretion.

Overall performance between the threshold and maximum levels would result in a
prorated bonus payment relative to the target payout opportunity.

Weightings. The performance measures selected for each MIP participant are
typically categorized as corporate drivers, corporate operational drivers and
area of responsibility drivers, with each category assigned a weighting for the
participant.  Within these categories, which add up to 100%, individual
performance measures are further assigned weightings based on the job
responsibilities of the participant.  The individual weightings of the various
performance measures within each category for a participant add up to 100%,
generally with no individual performance measure representing less than 10% of
the total for each category.

Determination of Bonus Payment.  Following the end of a performance year,
Trustmark’s actual business results are compared to individual performance
measures and weightings for each participant to determine the participant’s
achieved performance factor, which is then applied to the participant’s target
payout opportunity to determine the participant’s bonus payment for the
performance year.

Committee Discretion.   In determining the performance measures at the beginning
of a performance year, the Committee may recommend excluding the effect of
certain events it expects to be outside the influence or control of the MIP
participants.  Additionally, after the performance measures, threshold, target
and maximum performance levels and individual weightings have been approved for
the year, the Committee retains the discretion to recommend adjustments for such
items during or after the performance year, on an individual or group basis, if
the Committee determines additional adjustments are appropriate.  The Committee
also has discretion to recommend an increase or decrease the amount of an award
earned under the MIP, including an increase above the maximum or a decrease
below the threshold and including approving an award when the minimum
performance level is not achieved or to reflect individual contributions to the
strategic company results that were not represented in the participant’s
established performance measures.

Bonus Payments.  Bonus awards under the MIP are paid in cash on the March 15th
payroll following the performance year (which will be payable no later than
March 15).  Eligibility for a bonus payment requires satisfactory performance by
the participant, active employment with Trustmark on the day of payment (unless
a specifically identified exception has been approved, such as certain
retirement events), and attainment by Trustmark of at least the threshold
performance level with respect to the corporate drivers for the performance
year.
 
 
 

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Safety and Soundness.  No bonus payment will be made under the MIP that
executive management or the Committee believes would encourage or reward
imprudent risk-taking or practices that are inconsistent with the safety and
soundness of Trustmark.

Clawback. Any bonus payment made under the MIP is subject to clawback by
Trustmark as required by applicable federal law and on such basis as the Board
of Directors of Trustmark Corporation determines.
 
 

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