Note 15 – Stock and Incentive Compensation Plans

Trustmark has granted and currently has outstanding, stock and incentive compensation awards subject to the provisions of the 1997 Long Term Incentive Plan (the 1997 Plan) and the 2005 Stock and Incentive Compensation Plan (the 2005 Plan). New awards have not been issued under the 1997 Plan since it was replaced by the 2005 Plan. The 2005 Plan is designed to provide flexibility to Trustmark regarding its ability to motivate, attract and retain the services of key associates and directors. The 2005 Plan allows Trustmark to make grants of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units and performance units to key associates and directors. At December 31, 2011, the maximum number of shares of Trustmark's common stock available for issuance under the 2005 Plan is 5,030,943 shares.

Stock Option Grants

Stock option awards under the 2005 Plan are granted with an exercise price equal to the market price of Trustmark's stock on the date of grant. Stock options granted under the 2005 Plan vest 20% per year and have a contractual term of seven years. Stock option awards, which were granted under the 1997 Plan, had an exercise price equal to the market price of Trustmark's stock on the date of grant, vested equally over four years with a contractual ten-year term. During the second quarter of 2011, compensation expense related to stock options had been fully recognized. Compensation expense for stock options granted under these plans was estimated using the fair value of each option granted using the Black-Scholes option-pricing model and was recognized on the straight-line method over the requisite service period. As reflected in the tables below, no stock options have been granted since 2006, when Trustmark began granting restricted stock awards exclusively.

The following table summarizes Trustmark's stock option activity for 2011, 2010, and 2009:

	2011					2010					2009
				Average					Average					Average
				Option					Option					Option
Options	Shares			Price		Shares			Price		Shares			Price
Outstanding, beginning of year		1,311,925		$	27.03		1,531,925		$	26.27		1,796,174		$	25.57
Granted		-			-		-			-		-			-
Exercised		(69,525	)		21.68		(188,550	)		20.65		(154,500	)		19.35
Expired		(36,000	)		27.71		(29,350	)		28.22		(98,749	)		23.75
Forfeited		(1,300	)		31.55		(2,100	)		31.55		(11,000	)		30.71
Outstanding, end of year		1,205,100			27.31		1,311,925			27.03		1,531,925			26.27

Exercisable, end of year		1,205,100			27.31		1,270,085			26.88		1,392,355			25.87

Aggregate Intrinsic Value
Outstanding, end of year	$	44,365				$	394,341				$	424,029
Exercisable, end of year	$	44,365				$	394,341				$	424,029

The total intrinsic value of options exercised was $144 thousand in 2011, $569 thousand in 2010 and $426 thousand in 2009.

The following table presents information on stock options by ranges of exercise prices at December 31, 2011:

Options Outstanding						Options Exercisable
			Weighted-	Weighted-				Weighted-	Weighted-
	Outstanding		Average	Average		Exercisable		Average	Average
Range of	December 31,		Remaining Years	Exercise		December 31,		Remaining Years	Exercise
Exercise Prices	2011		To Expiration	Price		2011		To Expiration	Price
$22.64 - $25.88		438,050	0.8	$	24.76		438,050	0.8	$	24.76
$25.88 - $29.11		553,900	1.4		27.72		553,900	1.4		27.72
$29.11 - $32.35		213,150	1.4		31.48		213,150	1.4		31.48
		1,205,100	1.2		27.31		1,205,100	1.2		27.31

Restricted Stock Grants

Performance Awards

Trustmark's performance awards are granted to Trustmark's executive and senior management team. Performance awards granted vest based on performance goals of return on average tangible equity (ROATE) or return on average equity (ROAE) and total shareholder return (TSR) compared to a defined peer group. Awards based on TSR are valued utilizing a Monte Carlo simulation to estimate fair value of the awards at the grant date, while ROATE and ROAE awards are valued utilizing the fair value of Trustmark's stock at the grant date based on the estimated number of shares expected to vest. The restriction period for performance awards covers a three-year vesting period. These awards are recognized on the straight-line method over the requisite service period. These awards provide for excess shares, if performance measures exceed 100%. Any excess shares granted are restricted for an additional three-year vesting period. The restricted share agreement provides for voting rights and dividend privileges.

The following table summarizes Trustmark's performance award activity during years ended December 31, 2011, 2010 and 2009:

	2011					2010					2009
				Weighted-					Weighted-					Weighted-
				Average					Average					Average
				Grant-Date					Grant-Date					Grant-Date
	Shares			Fair Value		Shares			Fair Value		Shares			Fair Value
Nonvested shares, beginning of year		210,797		$	20.30		229,227		$	25.52		212,464		$	27.60
Granted		53,863			25.40		55,787			23.05		79,631			17.75
Released from restriction		(84,338	)		20.00		(73,862	)		27.68		(62,038	)		26.39
Forfeited		(901	)		23.82		(355	)		25.30		(830	)		24.74
Nonvested shares, end of year		179,421			20.30		210,797			20.30		229,227			25.52

Time-Vested Awards

Trustmark's time-vested awards are granted to Trustmark's executive and senior management team in both employee recruitment and retention. These awards are also granted to Trustmark's Board of Directors and are restricted for thirty-six months from the award dates. Time-vested awards are valued utilizing the fair value of Trustmark's stock at the grant date. These awards are recognized on the straight-line method over the requisite service period.

The following table summarizes Trustmark's time-vested award activity during years ended December 31, 2011, 2010 and 2009:

	2011					2010					2009
				Weighted-					Weighted-					Weighted-
				Average					Average					Average
				Grant-Date					Grant-Date					Grant-Date
	Shares			Fair Value		Shares			Fair Value		Shares			Fair Value
Nonvested shares, beginning of year		343,469		$	20.33		291,999		$	25.50		139,943		$	27.58
Granted		157,178			24.15		146,605			22.44		187,196			19.36
Released from restriction		(160,447	)		20.46		(90,372	)		23.91		(29,516	)		28.56
Forfeited		(5,844	)		20.17		(4,763	)		20.52		(5,624	)		24.72
Nonvested shares, end of year		334,356			21.04		343,469			20.33		291,999			25.50

Performance-Based Restricted Stock Unit Award

During 2009, Trustmark's previous Chairman and CEO was granted a cash-settled performance-based restricted stock unit award (the RSU award) with each unit having the value of one share of Trustmark's common stock. The performance period covered a two-year period. This award was granted in connection with an employment agreement dated November 20, 2008, that provides for in lieu of receiving an equity compensation award in 2010 or 2011, the 2009 equity compensation award to be twice the amount of a normal award, with one-half of the award being performance-based and one-half service-based. The RSU award was granted outside of the 2005 Plan in lieu of granting shares of performance-based restricted stock that would exceed the annual limit permitted to be granted under the 2005 Plan, in order to satisfy the equity compensation provisions of the employment agreement. This award provided for excess shares, if performance goals of ROATE and TSR exceeded 100%. Both the performance awards and excess shares vested during the second quarter of 2011. Compensation expense for the RSU award was based on the approximate fair value of Trustmark's stock at the end of each of the reporting periods and was finalized on the vesting date at a share price of $23.65.

The following table presents information regarding compensation expense for all stock and incentive plans for the periods presented ($ in thousands):

									Weighted
									Average Life
	Recognized Compensation Expense						Unrecognized		of Unrecognized
	for Years Ended December 31,						Compensation		Compensation
	2011		2010		2009		Expense		Expense

Stock option-based awards	$	100	$	430	$	674	$	-		-
Performance awards		855		1,004		1,224		887		1.67
Time-vested awards		2,835		3,390		2,659		4,954		2.94
RSU award		184		696		376		-		-
Total stock and incentive plan compensation expense	$	3,974	$	5,520	$	4,933	$	5,841