Document:

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                                                                    EXHIBIT 10.2

                           MEMORANDUM OF UNDERSTANDING

         WHEREAS, certain actions have been filed in the Shelby County Chancery
Court, State of Tennessee or have been transferred to such court, and such
actions have been consolidated under the caption In re Storage USA, Inc.
Shareholder Litigation (the "Consolidated Action");

         WHEREAS, the Consolidated Action was filed as a putative class actions
on behalf of public shareholders of Storage USA, Inc. ("Storage") naming as
defendants Storage, the members of the board of directors of Storage; Storage
USA Trust; SUSA Partnership; and Security Capital Group Incorporated ("Security
Capital") (collectively "Defendants"); and

         WHEREAS, the Consolidated Action seeks injunctive relief, monetary
damages and/or rescission on the alleged ground that the conduct of the
defendants in connection with a proposal and agreement by Security Capital for a
transaction in which all of the public outstanding shares of Storage will be
converted into the right to receive $42 per share in cash from Security Capital
(the "Transaction") constitutes a breach of fiduciary duties to the public
shareholders of Storage by the defendants, in that, among other things, the
consideration offered for the shares by Security Capital is inadequate and
unfair and the Transaction is a result of conflict of interest; the directors of
Storage allegedly breached their fiduciary duties by structuring the agreement
with Security Capital so as to deprive themselves of the ability to consider
hypothetical competing proposals, thereby allegedly depriving the public
shareholders of Storage of the true value of their investment in Storage; and

         WHEREAS, following negotiations between the parties, counsel for the
parties have reached an agreement in principle providing for the settlement of
the Consolidated Action on the terms and conditions set forth below; and

         WHEREAS, counsel for the parties believe that the proposed settlement
(the "Settlement") is in the best interests of the parties and of Storage and
its public shareholders;

         IT IS HEREBY AGREED IN PRINCIPLE AS FOLLOWS:

         1. Defendants acknowledge that Security Capital will increase the
consideration to be paid in the Transaction from $42 per share to $42.50 per
share in exchange for plaintiffs' agreement to settle the Consolidated Action.

         2. The parties to the Consolidated Action will attempt in good faith as
soon as practicable to use their best efforts to agree upon and execute an
appropriate Stipulation of Settlement (the "Stipulation") and such other
documentation as may be required in order to obtain final court approval of the
Settlement and the dismissal of the Consolidated Action upon the terms set forth
in this Memorandum of Understanding (collectively, the "Settlement Documents").
The Stipulation will expressly provide, inter alia, for certification of a
non-opt-out class for settlement purposes (consisting of all Storage
shareholders during the period beginning on September 10, 2001 through and
including the date of the consummation of the Transaction, other than defendants
and their affiliates), entry of a judgment of dismissal and for a

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complete release and settlement of all claims against Defendants and their
predecessors, partners, successors, heirs, assigns, administrators, members,
parents, subsidiaries, affiliates and agents (including, without limitation, any
investment bankers, accountants or attorneys and any past or present officers,
directors, trustees, partners, and employees of defendants and their
predecessors, successors, parents, subsidiaries, affiliates and agents) which
have been or could have been asserted relating to the Transaction (the "Released
Claims"). The Released Claims will include all claims, whether based on federal,
state or common law, based in any way upon, or arising out of, the Transaction,
including any claims based upon or arising out of the actions of Storage,
Storage USA Trust, SUSA Partnership, Security Capital (including the officers,
directors, trustees, general partners and limited partners of Storage, Storage
USA Trust and SUSA Partnership, and Security Capital), the individual
defendants, and any claims relating to any of the negotiations, transactions,
agreements, disclosures, omissions, facts and allegations that are or could be
the subject of the Consolidated Action; the stipulation will further provide
that defendants have denied and continue to deny that they have committed or
attempted to commit any violations of law or breaches of duty to Storage or its
shareholders or otherwise; and that defendants are entering into the Stipulation
solely because the proposed Settlement as described above would eliminate the
burden, risk, and expense of further litigation. If any claims which are or
would be subject to the release and dismissal contemplated by the Settlement are
asserted against any person in any court prior to final approval of the
Settlement, Plaintiffs shall join, where possible, in any motion to dismiss or
stay such proceedings.

         3. Upon execution of this memorandum, plaintiffs agree to stay all
prosecution of the Consolidated Action except for the implementation of the
Settlement. The parties to the Consolidated Action will present the Settlement
Documents to the Chancery Court of Shelby County, TN, for final approval as soon
as practicable following appropriate notice of the proposed Settlement to the
proposed class of shareholders of Storage and will use their best efforts to
obtain final court approval of the Settlement and the dismissal of the
Consolidated Action with prejudice as to all claims asserted or which could have
been asserted against defendants in the Consolidated Action and without costs to
any party (other than counsel fees and expenses as provided in paragraph 5
below). As used herein "final court approval" of the Settlement means that the
Court has entered an order approving the Settlement and that such order is
finally affirmed on appeal or by lapse of time or otherwise is no longer subject
to appeal.

         4. The consummation of the Settlement (including the payment of
attorneys' fees and expenses awarded by the court to plaintiffs' counsel) is
subject to: (a) the drafting and execution of mutually acceptable Settlement
Documents; (b) the completion by plaintiffs of confirmatory discovery (including
document discovery and depositions) in the Consolidated Action reasonably
satisfactory to plaintiffs' counsel; (c) final court approval (as defined in
paragraph 3 above) of the Settlement and dismissal of the Consolidated Action
with prejudice and without awarding fees or costs to any party (except as
provided in paragraph 5 below); and (d) consummation of the Transaction. This
Memorandum of Understanding shall be voidable by any party hereto should any of
these conditions not be met. Should plaintiffs' counsel in the Consolidated
Action determine that the Settlement is not fair and reasonable, or should the
Court not approve the Settlement, or should the Settlement not be consummated
for failure of any of its conditions, then this Memorandum of Understanding
shall not be admissible for any purpose in any proceeding and it shall neither
be deemed to prejudice in any way the positions of the parties with respect to
the Consolidated Action nor entitle any party to recover any costs or expenses

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incurred in connection with the implementation of this Memorandum of
Understanding. Defendants will provide copies of the draft public disclosure
documents concerning the Transaction to plaintiffs' counsel prior to
dissemination.

         5. Plaintiffs' counsel intends to apply to the Court for an award of
attorneys' fees and disbursements in an aggregate amount of no more than
$2,750,000. Storage, or its successor on behalf of defendants, agrees to pay
attorneys' fees and expenses as awarded by the Court in an aggregate amount not
exceeding $2,750,000 to Schiffrin & Barroway, LLP, as receiving agent for
plaintiffs' counsel, within five (5) business days of final court approval of
the Settlement as defined in Paragraph 3 (assuming the conditions set forth in
paragraph 4 hereof have been met) and the entry of an order awarding fees and
expenses by the court. Security shall be responsible for payment of the
reasonable costs and expenses of providing notice of the Settlement to the
Class.

         6. Miscellaneous: (a) This Memorandum of Understanding may be executed
in counterparts by any of the signatories hereto, including by fax or telecopy,
and as so executed shall constitute one agreement; (b) this Memorandum of
Understanding and the Settlement contemplated by it shall be governed by and
construed in accordance with the laws of the State of Tennessee without regard
to Tennessee conflict of laws rules; (c) this Memorandum of Understanding shall
be binding upon and inure to the benefit of the parties and their respective
agents, executors, heirs, successors and assigns, subject to the conditions set
forth herein; (d) each of the attorneys executing this Memorandum of
Understanding has been duly empowered and authorized by his/her respective
client(s) to do so; (e) plaintiffs and their counsel represent and warrant that
none of the claims or causes of action asserted in the Consolidated Action has
been assigned, encumbered or in any manner transferred in whole or in part; (f)
except as provided herein, defendants shall bear no expenses, costs, damages or
fees alleged or incurred by any named plaintiff, any member of the Class or
their respective attorneys, experts, advisors, agents or representatives; (g)
the provisions contained in this Memorandum of Understanding shall not be deemed
a presumption, concession or admission by any defendant of any breach of duty,
liability, default or wrongdoing as to any facts or claims alleged or asserted
in the Consolidated Action, or in any other actions or proceedings, and shall
not be interpreted, construed, deemed, invoked, offered or received in evidence
or otherwise used by any person in the Consolidated Action or in any other
action or proceeding of any nature whatsoever; and (h) this Memorandum of
Understanding may be modified or amended only by a writing signed by the
signatories hereto.

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Dated: January 17, 2002

                         WACHTELL, LIPTON, ROSEN & KATZ

                         /s/ Paul K. Rowe
                         ----------------------------------------------------
                         Paul K. Rowe
                         51 West 52nd Street
                         New York, New York  10019
                         (212) 403-1210

                         Attorneys for Defendants Security Capital Group,
                         Blankenship, Sanders and McBride

                         HUNTON & WILLIAMS

                         /s/ Edward J. Fuhr
                         ----------------------------------------------------
                         Edward J. Fuhr
                         Riverfront Plaza, East Tower
                         951 East Byrd Street
                         Richmond, Virginia  23212
                         (804) 788-8201

                         Attorneys for Defendants Storage USA, Inc., Storage USA
                         Trust, SUSA Partnership, Jernigan, Colhoun, Coret,
                         Jorgensen, McCann and Thie

                         GOODWIN PROCTER, LLP

                         /s/ Stephen D. Poss
                         ----------------------------------------------------
                         Stephen D. Poss
                         Exchange Place
                         53 State Street
                         Boston, Massachusetts  02109
                         (617) 570-1886

                         Attorneys for Defendants Colhoun, Graf, Jorgensen,
                         McCann and Thie

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                         SCHIFFRIN & BARROWAY, LLP

                         By:  /s/ Marc A. Topaz
                            ----------------------------------------------------
                              Marc A. Topaz
                              Three Bala Plaza East
                              Suite 400
                              Bala Cynwyd, Pennsylvania  19004
                              (610) 667-7706

                              Plaintiffs Co-Lead Counsel

                         BERNSTEIN, LIEBHARD & LIFSHITZ, LLP

                         By:   /s/ Stanley D. Bernstein
                            ----------------------------------------------------
                               Stanley D. Bernstein
                               10 East 40th Street
                               New York, New York  10016
                               (212) 779-1414

                               Plaintiffs Co-Lead Counsel<PAGE>
                                                                    EXHIBIT 10.1

                      MUTUAL TERMINATION OF TO BE ASSUMED
                     PRIOR AGREEMENT, RETENTION INCENTIVE,
                NON-COMPETITION/NON-SOLICITATION/ANTI-PIRACY AND
                              EMPLOYMENT AGREEMENT

         This Mutual Termination of to be Assumed Prior Employment Agreement,
Retention Incentive, Non-Competition/Non-Solicitation/Anti-Piracy and Employment
Agreement (hereinafter "Agreement"), is entered into by and between BANCORPSOUTH
BANK, a Mississippi banking corporation, (hereinafter "BXS") and Executive of
Pinnacle Bank, ROBERT M. ALTHOFF, (hereinafter "Officer").

         WHEREAS, pursuant to that certain Agreement and Plan of Merger
(hereinafter the "Merger Agreement"), by and between BancorpSouth, Inc. and
Pinnacle BancShares, Inc. and their respective bank subsidiaries, BXS and
Pinnacle Bank, (Pinnacle BancShares, Inc. and Pinnacle Bank hereinafter
collectively referred to as "Pinnacle"), Pinnacle will be merged with and into
BancorpSouth, Inc. and BXS respectively (the "Merger"); and

         WHEREAS, Officer is currently the PRESIDENT AND CHIEF EXECUTIVE OFFICER
of Pinnacle and a DIRECTOR of Pinnacle; and

         WHEREAS, Pinnacle and Officer have previously entered into an Executive
Services Agreement, dated the 18th day of December, 1997 hereafter (the "Prior
Agreement"); and

         WHEREAS, Officer was one of the Pinnacle Executives, Pinnacle
Shareholders, and Pinnacle Directors who played a major role in inducing BXS to
enter into the Merger Agreement, in material part by execution of this
Agreement, which will enable Officer to personally receive benefits thereunder
and hereunder; and

         WHEREAS, BXS desires to retain the full-time dedicated services of
Officer after the Merger as a significant officer of BXS associated with what
will become the BancorpSouth, Little Rock, Arkansas community bank, or as such
other assigned position in and around Little Rock, Pulaski County, Arkansas, or
otherwise in the State of Arkansas, or in such other analogous capacity and
officer position as may be assigned by BXS after the Merger; and

         WHEREAS, Officer possesses the requisite skills, knowledge, background
and experience to fulfill all of BXS' requirements in such regard, and Officer
desires to provide services to BXS in such capacity or capacities, and, in
consideration of (a) partial recognition of the considerations under the
aforementioned Prior Agreement, (b) additional and valuable considerations
arising out of the Merger, and (c) additional and valuable considerations
arising and to arise in the future under this Agreement, BXS desires to retain
the services of Officer for a period of years with Officer agreeing to waive and
release his rights under the Prior Agreement, with this Agreement superceding
same; and

         WHEREAS, effective upon the Effective Time (as defined in the Merger
Agreement, hereinafter the "Effective Time") of the Merger and in consideration
of BXS entering into this Agreement and the Merger Agreement, Officer is
available and willing to provide such services upon the terms and conditions
hereinafter set forth, with the in effect partial waivers, plus additional
benefits provided hereunder; and

         WHEREAS, Officer acknowledges that BXS is entering into this Agreement
and offering Officer employment in reliance upon (a) Officer's execution of this
Agreement, (b) Officer as a

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Shareholder voting in favor of the Merger Agreement, and (c) Officer's agreement
to be bound by the provisions of this Agreement, with Officer expressly
acknowledging that but for Officer's willingness to enter into this Agreement,
including the anti-piracy/non-solicitation/non-competition covenants, all
incident to the Merger, BXS would not have merged with Pinnacle; and

         WHEREAS, by virtue of the considerations paid under the Merger
Agreement, which to a material extent, will personally inure to the benefit,
both financially, vocationally, and otherwise, of Officer, BXS believes and
Officer acknowledges that further additional value is rendered pursuant to and
under the Merger Agreement with its condition precedent, and to and under this
Agreement, by virtue of BXS making available and to make available further and
additional resources, methods and processes, and potential financial services,
contacts, and customers for the benefit of both BXS and Officer; that Officer
will receive opportunities to come in contact and service potential business and
customers of BXS that likely will generate good will for BXS and Officer alike;;
and

         WHEREAS, because of the opportunities afforded as a consequence and
result of continued employment, without termination or discharge, constructive
or otherwise, made available hereunder solely by virtue of the contemporaneously
entered into Merger Agreement, Officer will be enabled to generate additional
contacts as a result of which existing, new, or potential business, contacts, or
customers of both BXS and the former Pinnacle will or may likely have contact
only with Officer; and

         WHEREAS, Officer acknowledges that it is appropriate that this
Agreement be more restrictive as to non-solicitation, anti-piracy, and
non-competition than the Prior Agreement and Officer 's continued employment
under this Agreement incident to the Merger; and

         WHEREAS, both BXS and Officer have had the benefit of legal counsel
concerning the entry and effect of this Agreement, resulting in an
acknowledgment of legality, reasonableness under applicable law, and
enforceability; and

         WHEREAS, BXS, through the undersigned, has authority to enter into the
provisions of this Agreement, including the grant of Shares hereunder; and

         WHEREAS, the parties desire by this writing to set forth the continuing
employment relationship for a specified term;

         NOW, THEREFORE, in consideration of the foregoing and other valuable
consideration, including the substantial considerations flowing from and
pursuant to this Agreement being incident to the Merger and Merger Agreement,
the receipt and sufficiency of which is hereby expressly acknowledged, it is

         AGREED as follows:

         1.       Term. Effective upon and following the Effective Time of the
                  Merger, BXS employs Officer from and after said date through
                  and until December 31, 2004, (the "Expiration Date"). However,
                  in the event the Merger Agreement is terminated, this
                  Agreement shall be void ab initio, cancelled and of no effect,
                  and the Officer's rights under the Prior Agreement shall
                  remain unaffected.

         2.       Compensation. Salary per annum for Officer shall be
                  $162,000.00. Officer will also be given performance objectives
                  pursuant to applicable BXS bonus plan(s) available for
                  similarly situated BXS Officers, which may allow Officer to
                  earn additional bonus compensation. In addition to the salary
                  and benefits specified herein, Officer will also be eligible
                  for salary increases, bonus payments, and other benefit
                  programs available to other similarly situated BXS officers.

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         3.       Performance Based Retention Bonus; Restricted Stock.

                  (A) Upon, and only upon, consummation, if any, of the Merger
                  Agreement at the Effective Time and only upon such Effective
                  Time, BXS shall award to Officer, immediately after the
                  Effective Time 20,000 shares of the Common Stock of
                  BancorpSouth, Inc., (the "Shares"), in consideration for the
                  successful performance of services to BXS, provided that such
                  Shares shall be subject to the formula, restrictions, and
                  risks of forfeiture described herein. Upon issuance, such
                  Shares shall be held by BXS and may be either authorized but
                  unissued shares held in the treasury of BancorpSouth, Inc. or
                  repurchased on the open market or in privately negotiated
                  transactions. Until awarded pursuant to the formula detailed
                  hereafter, Officer shall have no right to transfer the Shares
                  or any other right to the Shares, except that Officer shall
                  have the right to vote the Shares, and the right to receive
                  dividends which may be paid with respect thereto, if any.

                  (B) The Shares shall become non-forfeitable and shall be
                  released to Officer each December 31 after the Effective Time
                  at the rate of 1/3 of the Shares granted pursuant to this
                  Agreement until exhausted, or, in other words, 1/3 OR 6667
                  shares on 12/31/02, 1/3 OR 6667 shares on 12/31/03, and 1/3 OR
                  6666 shares on 12/31/04; PROVIDED and on the condition of,
                  thus non-forfeitable and to be released only upon the BXS
                  Little Rock community bank (or such other community bank
                  wherein Officer performs services for BXS) achieving at least
                  80% of the Performance Goal and a "yes" for its Customer
                  Service Goal under the BXS Employee Bonus Plan (the
                  "Performance Criteria"). If such performance incentives are
                  not achieved for any such year, the Shares that would have
                  been released shall be carried over to a subsequent calendar
                  year and thereafter become non-forfeitable and subject to
                  release to Officer in any such subsequent calendar year, if
                  any, during which the Performance Criteria are attained. At
                  the Expiration Date, any Shares which have not become
                  non-forfeitable and released pursuant to this Section 3(B)
                  shall, without regard to whether the Performance Criteria have
                  been attained in any prior year or the year in which the
                  Expiration Date occurs, become non-forfeitable and be released
                  to Officer. In addition, in the event Officer's employment is
                  terminated for any of the reasons as hereinafter detailed and
                  defined in Section 7, at any time prior to the Expiration
                  Date, BXS' obligation to release the Shares shall be governed
                  by said part 7 hereof. All Shares issued to Officer pursuant
                  to this Section 3 shall be registered by BancorpSouth, Inc.
                  under the Securities Act of 1933, as amended.

                  (C) Whenever Officer shall recognize compensation income as a
                  result of the receipt of Shares, Officer shall remit to BXS at
                  least the minimum amount of federal and state income and
                  employment tax withholding which BXS is required to remit to
                  the Internal Revenue Service and/or applicable state taxing
                  entity.

         4.       Loyalty, Duties and Services. Upon and only upon the Effective
                  Time, Officer shall be named and shall perform as a Vice
                  President of BXS, and as PRESIDENT OF THE LITTLE ROCK,
                  ARKANSAS COMMUNITY BANK OF BXS, or in any comparable level
                  officer capacity assigned by BXS. Upon and only upon the
                  Effective Time, Officer shall accept employment hereunder and
                  agree to devote his full business time, skill, energies,
                  business judgment, knowledge, and best efforts to the
                  advancement of the best interests of BXS. The performance of
                  such duties on behalf of BXS will be consistent with the
                  standard of performance appropriately expected of other
                  employees of BXS in similar positions. Officer shall not,
                  without the prior written consent of BXS, directly or
                  indirectly, during the term of this Agreement, render

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                  services of any type or nature to or for any other person or
                  firm except on behalf of BXS, or engage in any activity which
                  Officer knows or reasonably should know to be competitive with
                  or adverse to BXS or any of its parent organizations or
                  Affiliates, whether alone, as a partner, or as an officer,
                  director, employee, or shareholder, provided, however, that
                  nothing in this Agreement shall preclude (and to the contrary
                  Officer may be so encouraged) Officer from devoting time
                  during reasonable periods required for: (i) serving, not in
                  contravention with BXS's policies, as a director or member of
                  a committee of any company or organization involving no
                  conflict of interest with BXS or any of its subsidiaries or
                  affiliates, (ii) delivering lectures and fulfilling speaking
                  engagements; (iii) engaging in charitable and community
                  activities; (iv) investing his personal assets; and (v) other
                  activities that do not otherwise conflict with the provisions
                  of this Agreement.

         5.       Confidentiality. Officer will not disclose at any time the
                  existence or terms of this Agreement, or any secret or
                  proprietary information or any other confidential information
                  concerning the business, affairs or operations of BXS,
                  BancorpSouth, Inc. or any of its or their Affiliates.

         6.       (A) Reasonable and Reasons for Restrictions. In addition to
                  the acknowledgments, considerations, and understandings
                  elsewhere contained and made herein, Officer acknowledges that
                  his ability to manage, supervise, service, and maintain past,
                  present and future relationships of BXS, loans of BXS,
                  customers of BXS, officers and directors of BXS, supervisors
                  of BXS, and other employees of BXS, and any and all other
                  matters associated with the management and business of BXS,
                  (with the potential of receiving bonus compensation), is made
                  possible through the facilities of and opportunities presented
                  by BXS, which have, and will continue to enable Officer to
                  further Officer's own career. Thus, Officer acknowledges that
                  Officer is being fully and fairly compensated by BXS for
                  Officer's services hereunder. Because of the foregoing,
                  Officer understands that the hereinafter restrictions and the
                  time frames for same are reasonable and necessary, and but for
                  these restrictions, BXS would not have entered into this
                  Agreement and BXS would not devote its time, resources and
                  services to and with Officer, and would not have so made its
                  material investment in Officer, of and from which Officer has
                  and will directly benefit, in advancement, skills,
                  compensation, bonuses, and benefits. BXS and Officer mutually
                  acknowledge that it is appropriate to restrict Officer from
                  competing with BXS as hereinafter provided for a specific and
                  limited territory and for the herein stated time frames,
                  restrictions which are reasonable and necessary.

                  (B) ANTI-PIRACY. OFFICER THEREFORE EXPRESSLY AGREES THAT
                  DURING THE TERM HEREOF AND UPON OFFICER'S TERMINATION OF
                  EMPLOYMENT PURSUANT TO SECTIONS 7(A) OR (G) FOR A PERIOD
                  COMMENCING ON THE DATE OF SUCH TERMINATION UNTIL THE
                  EXPIRATION DATE, OFFICER WILL NOT, DIRECTLY OR INDIRECTLY, FOR
                  HIMSELF OR FOR ANOTHER, IN ANY MANNER WHATSOEVER, SOLICIT,
                  UTILIZE, OR AID ANOTHER IN THE SOLICITATION, OR UTILIZATION OF
                  BXS ACCOUNTS, INFORMATION, CUSTOMERS, OR ANY OTHER DATA OR
                  INFORMATION OF WHATSOEVER KIND OR NATURE; PROVIDED, HOWEVER,
                  THAT THIS SECTION 6(B) SHALL NOT PROHIBIT OFFICER FROM
                  SOLICITING OR CONTACTING CUSTOMERS OR RELATIONSHIPS OF OFFICER
                  IN AN INDUSTRY OR BUSINESS OTHER THAN THAT OF A COMPETING
                  BUSINESS (AS DEFINED BELOW). PROVIDED, FURTHER, THAT IN THE
                  EVENT THIS AGREEMENT TERMINATES (AND IS NOT RENEWED OR
                  EXTENDED) AS A RESULT OF THE OCCURRENCE OF THE EXPIRATION

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                  DATE OR PURSUANT TO SECTION 7(B), THE RESTRICTIONS SET FORTH
                  IN THIS SECTION 6(B) SHALL BE TERMINATED AND OF NO FURTHER
                  FORCE AND EFFECT.

                  (C) NON-SOLICITATION. IN LIKE MANNER, DURING THE TERM HEREOF
                  AND UPON OFFICER'S TERMINATION OF EMPLOYMENT PURSUANT TO
                  SECTIONS 7(A), (B) OR (G) FOR A PERIOD COMMENCING ON THE DATE
                  OF SUCH TERMINATION UNTIL THE EXPIRATION DATE, OFFICER WILL
                  NOT INDUCE OR ATTEMPT TO INDUCE ANY OTHER EMPLOYEE OF BXS OR
                  ANY OF ITS AFFILIATES OR ITS PARENT TO TERMINATE THEIR
                  EMPLOYMENT OR TO VIOLATE ANY COVENANT THAT ANY SUCH OTHER
                  EMPLOYEE MAY HAVE WITH BXS, ITS PARENT OR AFFILIATES;
                  PROVIDED, HOWEVER, THAT IN THE EVENT THIS AGREEMENT TERMINATES
                  (AND IS NOT RENEWED OR EXTENDED) AS A RESULT OF THE OCCURRENCE
                  OF THE EXPIRATION DATE, THE RESTRICTIONS SET FORTH IN THIS
                  SECTION 6(C) SHALL BE TERMINATED AND OF NO FURTHER FORCE AND
                  EFFECT.

                  (D) NON-COMPETITION. OFFICER COVENANTS AND AGREES WITH BXS
                  THAT DURING THE TERM HEREOF AND UPON OFFICER'S TERMINATION OF
                  EMPLOYMENT PURSUANT TO SECTIONS 7(A) OR (G) FOR A PERIOD
                  COMMENCING ON THE DATE OF SUCH TERMINATION UNTIL THE
                  EXPIRATION DATE, OFFICER WILL NOT DIRECTLY OR INDIRECTLY OR IN
                  ANY FASHION WHATSOEVER, FOR HIMSELF OR FOR ANY OTHER PERSON,
                  FIRM, CORPORATION, ASSOCIATION OR OTHER ENTITY, AS A PARTNER,
                  STOCKHOLDER, OR OTHERWISE, (A) OPERATE, DEVELOP OR OWN ANY
                  INTEREST IN ANY COMPETING BUSINESS WITH BXS WITHIN THE
                  TERRITORY; (B) COMPETE WITH BXS, ITS PARENT OR ITS AFFILIATES
                  IN THE OPERATION OR DEVELOPMENT OF ANY COMPETING BUSINESS
                  WITHIN THE TERRITORY; (C) BE EMPLOYED BY OR CONSULT WITH ANY
                  COMPETING BUSINESS WITHIN THE TERRITORY; (D) ENGAGE IN ANY
                  COMPETING BUSINESS WITHIN THE TERRITORY OR ACT AS A BANK OR
                  FINANCIAL SERVICES EMPLOYEE, REPRESENTATIVE, MANAGER,
                  SUPERVISOR, OFFICER, CUSTOMER SERVICE REPRESENTATIVE,
                  CONSULTANT OR LOAN OFFICER ON BEHALF OF ANY COMPETING BUSINESS
                  WITHIN THE TERRITORY; OR (E) CALL UPON, COMMUNICATE WITH, OR
                  OTHERWISE ATTEMPT TO INDUCE, SERVICE, SOLICIT, SECURE, OR
                  MAINTAIN ANY FINANCIAL SERVICES ACCOUNT, LOAN, OR RELATED
                  PRODUCT ON BEHALF OF A COMPETING BUSINESS, IN THE TERRITORY;
                  PROVIDED, HOWEVER, THAT NOTHING IN THIS SECTION SHALL BE
                  CONSTRUED SO AS TO PRECLUDE OFFICER FROM INVESTING IN ANY
                  PUBLICLY OR PRIVATELY HELD COMPANY, PROVIDED EXECUTIVE'S
                  BENEFICIAL OWNERSHIP OF ANY CLASS OF SUCH COMPANY'S SECURITIES
                  DOES NOT EXCEED 5% OF THE OUTSTANDING SECURITIES OF SUCH
                  CLASS, PROVIDED, FURTHER, THAT IN THE EVENT THIS AGREEMENT
                  TERMINATES (AND IS NOT RENEWED OR EXTENDED) AS A RESULT OF THE
                  OCCURRENCE OF THE EXPIRATION DATE OR PURSUANT TO SECTION 7(B),
                  THE RESTRICTIONS SET FORTH IN THIS SECTION 6(D) SHALL LIKEWISE
                  TERMINATE AND BE OF NO FURTHER FORCE AND EFFECT. AS USED
                  HEREIN, THE TERM "TERRITORY" SHALL MEAN PULASKI COUNTY,
                  ARKANSAS AND SHALL MEAN SUCH OTHER COUNTY OR PARISH WHEREIN
                  OFFICER MAY THEN BE PHYSICALLY LOCATED AS HIS PRINCIPAL BXS
                  OFFICE FOR THE PERFORMING OF SERVICES FOR BXS HEREUNDER.

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                  (E) FOR PURPOSES OF THIS SECTION 6, THE TERM COMPETING
                  BUSINESS SHALL BE DEFINED AS AN FDIC INSURED INSTITUTION.

                  (F) Remedies. Officer hereby acknowledges that in the event he
                  violates, threatens to violate, or attempts to violate any of
                  the foregoing, money damages shall be an inadequate remedy for
                  BXS, and Officer agrees that BXS shall be entitled to obtain,
                  in addition to any other remedy provided by law or in equity,
                  an injunction against his actual, threatened, or attempted
                  violation of these obligations to BXS.

         7.       Termination. This Agreement may or shall be terminated upon
                  any of the following occurrences:

                  A.       BXS may terminate Officer's employment for Just
                           Cause. As used herein, termination for "Just Cause"
                           shall include termination due to

                           An act by Officer in the good faith judgment of the
                           Board of Directors of BXS of dishonesty, embezzlement
                           or fraud against BXS, its parent and/or an Affiliate,
                           Officer's conviction of a misdemeanor involving
                           dishonesty or breach of trust; Officer's conviction
                           of a felony; or the issuance of any order for
                           Officer's removal as an employee of BXS, its parent
                           Affiliate by any state or federal regulatory agency
                           or court of competent jurisdiction.

                           In the event of Officer's termination of employment
                           for Just Cause, (subject to the right of offset by
                           BXS for the actual economic damages associated with
                           the Just Cause) Officer shall only be entitled to the
                           then accrued and earned portion of compensation due
                           to Officer hereunder, as of the date of termination
                           of employment for Just Cause and Officer shall have
                           no right to receive any compensation or other
                           benefits for any period after termination of
                           employment for Just Cause.

                  B.       BXS may terminate Officer 's employment without Just
                           Cause at any time, upon thirty (30) days prior
                           written Notice of Termination. In the event Officer's
                           employment under this Agreement is so terminated
                           without Just Cause, Officer shall only be entitled to
                           then accrued and earned portion of compensation due
                           to Officer hereunder, as of the date of termination
                           of employment without Just Cause, and (except as
                           provided in Section 7(H) below) Officer shall have no
                           right to receive any compensation or other benefits
                           for any period after termination of employment
                           without Just Cause.

                  C.       By mutual agreement of BXS and Officer in writing and
                           signed by each such party. Said agreement shall
                           specify the compensation and benefits due to Officer
                           in the event of mutual agreement of termination.

                  D.       The death of Officer. In such event, the estate of
                           Officer shall be entitled to a claim for Officer's
                           accrued and earned portion of compensation described
                           herein as of the date of death plus the balance of
                           any compensation due through the calendar year of the
                           date of Officer's death.

                  E.       Upon Disability of Officer. In the event of
                           disability, Officer shall be credited with up to 500
                           hours in sick time in order to cover any short term
                           illness or disability and bridge the gap until such
                           time as Officer begins receiving disability payments
                           pursuant to the applicable BXS's disability plan
                           under

                                       6

<PAGE>

                           which Officer will be an eligible participant in
                           accordance with the applicable terms thereof.
                           "Disability" shall mean Officer is unable to perform
                           his duties under this Agreement for a period of
                           greater than ninety (90) consecutive days as a result
                           of Officer's incapacity due to physical or mental
                           illness as defined in the aforesaid plan.

                  F.       Expiration of the term of this Agreement, that is, on
                           the Expiration Date, in which event Officer shall
                           have no right to receive any compensation or other
                           benefits, unless then accrued and earned as of the
                           Expiration Date.

                  G.       Voluntarily by Officer at any time. In the event of
                           voluntary termination by Officer, Officer shall be
                           entitled to receive only his then accrued and earned
                           portion of compensation described herein.

                  H.       In the event of a termination of Officer's employment
                           pursuant to Section 7(B) above or upon the occurrence
                           of a "Change of Control", all Shares awarded to
                           Officer pursuant to Section 3 of this Agreement shall
                           become immediately released and non-forfeitable.
                           Additionally, upon the termination of Officer's
                           employment pursuant to this Section 7, Officer shall
                           be entitled to all other accrued or vested benefits
                           under all benefit plans in which Officer is
                           participating in accordance with the terms therein.

                           "Change of Control" shall be defined as an occurrence
                           where (i) any acquiring entity acquires in a
                           transaction or in a series of transactions fifty
                           (50%) percent or more of the voting securities of BXS
                           or BancorpSouth, Inc.; or (ii) an Acquiring Entity
                           acquired in a transaction or in a series of
                           transactions more than either (A) assets representing
                           fifty (50%) percent or more of the book value of BXS
                           or BancorpSouth, Inc.; (B) assets generating fifty
                           (50%) percent or more of the net revenues of BXS or
                           BancorpSouth, Inc.; or (C) assets representing
                           substantially all of BXS's or BancorpSouth, Inc.'s
                           tangible and intangible assets used in the conduct of
                           its business. For purposes of the foregoing: (i) the
                           book value of such assets shall be determined as of
                           the end of the fiscal year of BXS or BancorpSouth,
                           Inc., as applicable preceding the year in which the
                           Change of Control occurs; and (ii) net revenues shall
                           be the net revenues of BXS or BancorpSouth, Inc., as
                           applicable for the fiscal year prior to the year in
                           which the Change of Control occurs. Book value and
                           net revenues shall be determined in accordance with
                           generally accepted accounting principles.

         8.       Termination of Prior Agreement. Officer hereby agrees that
                  this Agreement supercedes and replaces the Prior Agreement,
                  and that the Prior Agreement is therefore modified by this
                  Agreement by being terminated, void, and without effect.
                  Officer hereby waives, relinquishes, discharges and releases
                  all rights to any payments or other benefits he now has or may
                  ever have under the Prior Agreement or any other bonus
                  payments, performance reward payments, severance payments,
                  change of control payments or similar payments or compensation
                  to which he may otherwise be or become entitled arising out of
                  his employment relationship as an Executive or otherwise with
                  Pinnacle. Further, Officer releases BancorpSouth, Inc., BXS,
                  Pinnacle, and all their respective subsidiaries and Affiliates
                  and their respective successors, predecessors, and assigns,
                  from any and all claims, actions, or liabilities related to,
                  or arising from, the Prior Agreement or otherwise. Provided
                  however, in the event this Agreement is voided ab initio by
                  virtue of termination of

                                       7

<PAGE>

                  the Merger Agreement, then the Prior Agreement and all of
                  Officer's rights and obligations thereunder shall be
                  reinstated ab initio as if this Agreement never arose.

         9.       Covenants of Officer. Officer covenants that, as of the date
                  of this Agreement, that Officer is not in violation of any
                  agreement, covenant, or other commitment of Officer to do, or
                  refrain from doing, any act, and that by entering into this
                  Agreement, Officer will not thereby violate any such
                  agreement, covenant, or other binding commitment, if any.
                  Officer further represents and acknowledges that (except as
                  disclosed in the Disclosure Schedules of the Merger Agreement)
                  Officer, as of the Effective Date, has not received any
                  payment whatsoever pursuant to the Prior Agreement, or other
                  severance or change in control payments from Pinnacle or
                  otherwise.

         10.      Affiliates. For purposes of this Agreement, parent or
                  affiliate shall mean any entity which controls, is controlled
                  by, or is under common control with BancorpSouth, Inc. or BXS,
                  including but not limited to, BancorpSouth Insurance Services,
                  Inc., Personal Finance Corporation, BancorpSouth Investment
                  Services, Inc., and Century Credit Life Insurance Company; and
                  as to Pinnacle, Pinnacle Capital Resources, Inc. and Pinnacle
                  Bank Home Loan Company, Inc.

         11.      Successors and Assigns.

                  1.       This Agreement shall inure to the benefit of and be
                           binding upon any corporate or other successor of BXS,
                           which may acquire, directly or indirectly, by merger,
                           consolidation, purchase or otherwise, all or
                           substantially all of the assets or stock of BXS.

                  2.       Since BXS is contracting for the unique and personal
                           skills of Officer, Officer shall be precluded from
                           assigning or delegating his rights or duties
                           hereunder.

         12.      Amendments. No amendments or additions to this Agreement shall
                  be binding upon the parties hereto unless made in writing and
                  signed by both parties.

         13.      Applicable Law. Notwithstanding the place of performance of
                  the services hereunder or Officer's residence, this Agreement
                  shall be governed by in all respects whether as to validity,
                  construction, capacity, performance or otherwise, by the laws
                  of the State of Arkansas applicable to contracts, excluding
                  its conflicts of laws.

         14.      Entire Agreement. This Agreement, together with the exhibits
                  or modifications hereof as agreed to in writing by the
                  parties, shall constitute the entire agreement between the
                  parties hereto.

         THIS the 14th day of November, 2001.

BANCORPSOUTH BANK

BY: /s/ James V. Kelley                           /s/ Robert M. Althoff
    --------------------------------              ------------------------------
       JAMES V. KELLEY                               ROBERT M. ALTHOFF

                                       8

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