SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2002
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to _______
Commission File Number 0-3683
Full title of the Plan and the address of the Plan, if different from that of
the issuer named below:
Trustmark 401(k) Plan
(Full Title of the Plan)
Name of issuer of the securities held pursuant to the Plan and the address of
its principal executive office:
Trustmark Corporation
248 E. Capitol Street
Jackson, Mississippi 39201
(Name of Issuer of Securities and address of Principal Executive Office)
TRUSTMARK 401(K) PLAN
Financial Statements and Schedule
December 31, 2002 and 2001
(With Independent Auditors' Report Thereon)
TRUSTMARK 401(K) PLAN
Index to Financial Statements and Schedule
Independent Auditors' Report
Statements of Net Assets Available for Benefits as of December 31, 2002 and 2001
Statement of Changes in Net Assets Available for Benefits for the year ended
December 31, 2002
Notes to Financial Statements
Supplemental Schedule:
Schedule H, Line 4i - Schedule of Assets (Held at End of Year) as of December
31, 2002
All other schedules are omitted because there is no information to report.
Independent Auditors' Report
The Plan Administrator
Trustmark 401(k) Plan:
We have audited the accompanying statements of net assets available for benefits
of Trustmark 401(k) Plan (the Plan) as of December 31, 2002 and 2001, and the
related statement of changes in net assets available for benefits for the year
ended December 31, 2002. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2002 and 2001, and the changes in net assets available for benefits
for the year ended December 31, 2002 in conformity with accounting principles
generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) is not a required part of the basic financial statements but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ KPMG LLP
Jackson, Mississippi
June 6, 2003
TRUSTMARK 401(K) PLAN
Statements of Net Assets Available for Benefits
December 31, 2002 and 2001
2002 2001
------------ ------------
Receivables:
Sponsor contributions $ 123,895 $ 2,650,000
Participant contributions 193,956 124,809
------------ ------------
Total receivables 317,851 2,774,809
Investments, at fair value:
Money market accounts 14,377,264 9,956,151
Fixed income mutual funds 6,094,106 4,747,472
Common stock of Trustmark Corporation 53,648,075 62,084,423
Equity mutual funds 23,135,259 22,760,031
------------ ------------
Total investments 97,254,704 99,548,077
------------ ------------
Net assets available for benefits $ 97,572,555 $102,322,886
============ ============
See accompanying notes to financial statements.
TRUSTMARK 401(K) PLAN
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2002
Contributions:
Sponsor $ 2,870,482
Participant 4,935,396
------------
Total contributions 7,805,878
------------
Net investment loss:
Net depreciation in fair value of investments (5,022,263)
Interest income 540,317
Dividend income 1,715,667
------------
Net investment loss (2,766,279)
------------
Benefits paid to participants (9,609,509)
Administrative fees (180,421)
------------
Net decrease in net assets available for benefits (4,750,331)
Net assets available for benefits:
Beginning of year 102,322,886
------------
End of year $ 97,572,555
============
See accompanying notes to financial statements.
TRUSTMARK 401(K) PLAN
Notes to Financial Statements
December 31, 2002 and 2001
(1) Plan Description
The following description of Trustmark 401(k) Plan (the Plan) provides
only general information. Participants should refer to the Plan agreement
for a more complete description of the Plan's provisions.
(a) General
The Plan is a defined contribution plan established for the
employees of Trustmark Corporation (the Company) and certain other
associated companies. The Plan provides eligibility for
participation on the first day of the month following the
completion of at least 1,000 hours of service during the
twelve-month period ending on the anniversary of a person's
employment commencement date.
(b) Plan Administration
The Plan's record keeping functions are handled by Nationwide Life
Insurance Company and Nationwide Trust Company. Trustmark National
Bank serves as the Plan's trustee. The plan administrator and
sponsor is Trustmark Corporation, parent company of Trustmark
National Bank. Prior to January 31, 2002, Bysis Plan Services and
Frontier and Reliance Trusts served as record keeper and trustee,
respectively.
(c) Employee Contributions
The Plan allows participants to make voluntary before-tax salary
deferral contributions, through payroll deductions, to separately
invested funds in accordance with Section 401(k) of the Internal
Revenue Code. If certain requirements of Internal Revenue Code
Section 401(k) are not met in Plan operation, the salary deferral
agreements of participants may, on a nondiscriminatory and uniform
basis, be amended or revoked to preserve the qualified status of
the Plan. Voluntary after-tax contributions by participants are
not allowed. Participants may direct investment of their voluntary
contributions among several investment options.
Effective January 1, 2002, the Plan was amended, whereby,
participants may elect to contribute up to 25% of eligible
compensation each period, subject to regulatory limitations. Prior
to 2002, employee contributions were limited to 15% of eligible
compensation. Any excess contributions must be returned to the
applicable participant by April 15 of the calendar year following
the year of excess contributions. The Plan was amended in the
current year whereby rollover contributions from individual
retirement accounts or other qualified plans are allowed.
In 2002, the Plan was amended whereby participants who were age 50
years or older by the end of calendar year were able to make
catch-up contributions to the Plan. Catch-up contributions
represent employee compensation deferrals in excess of IRS annual
deferral limits. The IRS annual deferral limits and annual
catch-up contribution limits are indicated in the following
schedule:
Catch-up
Calendar year Deferral limit contribution limit
------------- --------------- ------------------
2002 $11,000 $1,000
2003 12,000 2,000
2004 13,000 3,000
2005 14,000 4,000
2006 15,000 5,000
Thereafter Indexed in $500 Indexed in $500
increments increments
TRUSTMARK 401(K) PLAN
Notes to Financial Statements
December 31, 2002 and 2001
(d) Employer Contributions
Effective January 1, 2002, the Plan was amended whereby all
employee contributions are matched by the employer at a rate of
100% of the first 3% and 50% of the next 3% of covered
compensation. Prior to January 1, 2002, employee contributions
were not matched by the employer. The Company contributed
$2,870,482 and $2,671,871 to the Plan in 2002 and 2001. Under the
amended provisions of the Plan, the employer may make
discretionary contributions.
(e) Allocations
Employee and employer contributions are allocated directly to each
participant's account in accordance with the individual
participant's elections. Participant accounts are valued daily.
(f) Vesting
On the first day of the month coincident with or following a
participant's sixty-fifth birthday, such participant is entitled
to retire from active service with the employer, and 100% of the
value of the participant's share of the Plan becomes fully vested.
A participant also vests 100% upon death or termination of
employment due to permanent disability.
Participants are immediately vested in their voluntary
contributions and employer matching contributions and the
investment earnings and losses thereon. Participants vest in the
employer discretionary contributions as shown in the following
schedule:
Years vesting service Vested percentage
--------------------- -----------------
Less than 5 0%
5 or more 100%
Forfeitures of nonvested employer discretionary accounts are used
to reduce the employer match contribution.
In case of termination of the Plan, the value of each
participant's share of the Plan becomes fully vested as of the
date of such termination.
(g) Payment of Benefits
On retirement, death, disability, or termination of service, a
participant may elect to receive a lump-sum distribution equal to
his or her vested account balance or a life annuity. In addition,
hardship distributions are permitted if certain criteria are met.
(h) Plan Termination
Although it has not expressed any intent to do so, the Company has
the right under the Plan to discontinue its contributions at any
time and to terminate the Plan subject to the provisions of ERISA.
However, no such action may deprive any participant or beneficiary
under the Plan of any vested benefit.
(2) Significant Accounting Policies
(a) Basis of Presentation
The Plan's financial statements are prepared using the accrual
basis of accounting, with the exception of the payment of
benefits, which are recognized as a reduction in the net assets
available for benefits of the Plan as they are disbursed to
participants. Purchases and sales of securities are recorded on a
trade-date basis.
TRUSTMARK 401(K) PLAN
Notes to Financial Statements
December 31, 2002 and 2001
(b) Use of Estimates
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that
affect the reported amounts of net assets and changes therein, and
disclosure of contingent assets and liabilities. Actual results
could differ from those estimates.
(c) Valuation of Investments
Investments are stated at fair value. Cash equivalents are stated
at cost which approximates fair value. The fair value of mutual
funds and other securities traded on a national securities
exchange are valued at the closing quoted market price on the last
business day of the year.
(d) Net Depreciation in Fair Value of Investments
Net depreciation in fair value of investments, as recorded in the
accompanying statement of changes in net assets available for
benefits, includes changes in fair value of investments acquired,
sold, or held during the year.
(e) Administrative Fees
Administrative fees are paid by the Plan. All other fees,
including professional fees, are paid by the Company.
(3) Investments
The fair value of individual investments that represent 5% or more of the
Plan's net assets as of December 31, 2002 and 2001 are as follows:
December 31,
--------------------------
2002 2001
----------- -----------
Investments at fair value as determined by quoted market price:
Common stock of Trustmark Corporation $53,648,075 $62,084,423
Performance Funds Trust Mutual Funds:
Large-Cap Equity Fund 6,047,890 10,571,905
Mid-Cap Equity Fund 5,484,933 7,555,686
Federated Capital Preservation Fund 13,768,069 9,729,922
During 2002, the Plan's investments (including investments bought and
sold, as well as held during the year) appreciated (depreciated) in value
as follows:
Investments at fair value as determined by quoted market price:
Trustmark Corporation Stock Fund $ 1,419,642
Mutual Funds (6,441,905)
-----------
Net depreciation in fair value of investments $(5,022,263)
===========
(4) Income Tax Status
The Internal Revenue Service has determined and informed the Company by a
letter dated June 1, 1998, that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code
(IRC). The Plan has been amended since receiving the determination
letter. However, the plan administrator and the Plan's tax counsel
believe that the Plan is designed and is currently being operated in
compliance with the applicable requirements of the IRC.
TRUSTMARK 401(K) PLAN
Notes to Financial Statements
December 31, 2002 and 2001
(5) Related Parties
Trustmark National Bank serves as the investment advisor for the
Performance Funds Trust Mutual Funds. Trustmark Corporation is the parent
company of Trustmark National Bank. Trustmark National Bank also serves
as the Plan's trustee.
(6) Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of benefits paid to participants per
the accompanying financial statements to the Form 5500 as filed by the
Company for the year ended December 31, 2002:
Benefits
paid
----------
Per accompanying financial statements $9,609,509
2001 amounts pending distribution to participants (72,000)
2002 amounts pending distribution to participants -
----------
Per Form 5500 $9,537,509
==========
The following table is a reconciliation of benefits payable and net
assets available for benefits per the accompanying financial statements
to the Form 5500 as filed by the Company for the year ended December 31,
2001:
Net assets
Benefit available for
payable plan benefits
-------- -------------
Per accompanying financial statements $ - $ 102,322,886
2001 amounts pending distribution to
participants 72,000 (72,000)
-------- -------------
Per Form 5500 $ 72,000 $ 102,250,886
======== =============
(7) Contingencies
The Company and its subsidiaries are parties to lawsuits and other claims
that arise in the ordinary course of business. Some of the lawsuits
assert claims related to various business activities; and some of the
lawsuits allege substantial claims for damages. The cases are being
vigorously contested. In the regular course of business, management
evaluates estimated losses or costs related to litigation, and provision
is made for anticipated losses whenever management believes that such
losses are probable and can be reasonably estimated. At the present time,
management believes, based on the advice of legal counsel, that the final
resolution of pending legal proceedings will not have a material impact
on the financial position or results of operations of either the Company
or the Plan.
TRUSTMARK 401(K) PLAN
Plan Sponsor: Trustmark Corporation
Plan Sponsor: EIN 64-0471500
Plan Number: 002
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2002
Current
Identity of issuer Description value
--------------------------- -------------------------------------- -----------
Money market account:
Federated Capital Preservation Fund $13,768,069
Gartmore Money Market Inst'l Fund 609,195
-----------
14,377,264
-----------
Fixed income mutual funds:
* Performance Funds Trust Short Term Govt. Inst. Fund 2,509,420
* Performance Funds Trust Intermediate Term Govt. Inst. Fund 2,382,564
Dreyfus GNMA Fund 546,169
PIMCO Total Return Fund 655,953
-----------
6,094,106
-----------
Common stock fund:
* Trustmark Corporation Common Stock Fund 53,648,075
-----------
Equity mutual funds:
* Performance Funds Trust Leader's Equity Fund 314,819
* Performance Funds Trust Large-Cap Equity Fund 6,047,890
* Performance Funds Trust Mid-Cap Equity Fund 5,484,933
Dreyfus Mid-Cap Value Fund 1,284,770
Franklin Balance Sheet Investment Fund 1,271,616
Franklin Mutual Discovery Fund 415,623
Gartmore Inv. Destinations Aggr. Svc. Fund 95,369
Gartmore Inv. Destinations Cons. Svc. Fund 61,344
Gartmore Inv. Destinations Mod. Svc. Fund 174,943
Gartmore Inv. Destinations Mod. Aggr. Svc. Fund 245,923
Gartmore Inv. Destinations Mod. Cons. Svc. Fund 75,711
Goldman Sachs CORE Small Cap. Equity Fund 2,126,435
INVESCO Dynamics Inv. Fund 191,478
Neuberger Neuberger Berman Genesis Trust 1,215,309
Oppenheimer Global Fund 353,952
Van Kampen Equity & Income Fund 1,670,395
Van Kampen Emerging Growth Fund 1,024,942
Templeton Foreign Fund 1,079,807
-----------
23,135,259
-----------
$97,254,704
===========
* Denotes related party based on the following relationships:
Trustmark National Bank serves as investment advisor for Performance
Funds Trusts; Trustmark Corporation is the parent company of Trustmark
National Bank.
See accompanying independent auditors' report.
Pursuant to the requirements of the Securities Act of 1934, the Plan
Administrator has duly caused this Annual Report to be signed on its behalf by
the undersigned thereunto duly authorized.
Trustmark 401(k) Plan
Trustmark Corporation, Plan Administrator
By: /s/ Louis E. Greer
------------------
Louis E. Greer
Chief Accounting Officer
June 30, 2003