DEF 14A 1 tm212623d1_def14a.htm DEF 14A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

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Preliminary Proxy Statement

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Definitive Proxy Statement

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Soliciting Material Pursuant to Rule 14a-12

THE FIRST BANCSHARES, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement if other than the Registrant)

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April 7, 2021

Dear Shareholder:

We cordially invite you to attend the 2021 Annual Meeting of Shareholders of The First Bancshares, Inc., the holding company for The First, A National Banking Association, which will be held on Thursday, May 20, 2021 at 4:00 p.m. Central Time. In light of the coronavirus (COVID-19) pandemic and health related concerns, the Company will hold the 2021 Annual Meeting of Shareholders (the “Annual Meeting”) in a virtual-only meeting format, via the internet at www.meetingcenter.io/220649698. The password for this meeting is FBMS2021. At the meeting, we will report on our performance in 2020. We are excited about our achievements in 2020 and our plans for the future and we look forward to discussing these with you. We hope that you can join the meeting.

The attached Notice of Annual Shareholders’ Meeting describes the formal business to be transacted at the Annual Meeting. Members of our Board of Directors and executive officer team will be present at the virtual meeting and available to answer questions regarding the Company.

It is important that your shares be represented at the Annual Meeting whether or not you are able to attend virtually. Even if you plan to attend the meeting virtually, after reading the accompanying proxy materials, the Company encourages you to promptly submit your proxy by Internet, telephone or mail as described in this proxy statement.

The Board of Directors and our employees thank you for your continued support.

	Sincerely,

	M. Ray (Hoppy) Cole, Jr.
	President and Chief Executive Officer

The First Bancshares, Inc.

Notice of Annual Meeting of Shareholders

to be held on May 20, 2021

This letter serves as your official notice that The First Bancshares, Inc. (the “Company”), the holding company for The First, A National Banking Association (the “Bank”), will hold its annual meeting of shareholders on Thursday, May 20, 2021, at 4:00 p.m. Central Time in a virtual-only meeting format, via the internet, for the following purposes:

To elect the four Class II director nominees named in the accompanying proxy statement.

To approve, on an advisory basis, the compensation of the named executive officers of the Company as described in the proxy statement.

To ratify the appointment of BKD, LLP as the Company’s independent registered public accounting firm for fiscal year 2021.

To vote on or transact any other business that may properly come before the meeting or any adjournment of the meeting.

Management currently knows of no other business to be presented at the meeting.

Due to the public health impact of COVID-19 and our continuing concern for the health and well-being of our employees and shareholders, the meeting will be held in an online-only virtual format. If you were a shareholder of record as of the close of business on March 26, 2021, the record date, or hold a legal proxy for the meeting provided by your bank, broker or agent, you are entitled to participate in the Annual Meeting by visiting www.meetingcenter.io/220649698 and clicking on “I have a control number”. If you join as a shareholder, you will be able to vote your shares, submit a question and view a complete list of shareholders and other materials customarily made available at in-person shareholder meetings by following the instructions that will be available on the meeting website. Shareholders may also join as a guest but you will not be able to vote your shares at the virtual meeting, submit questions, or view otherwise available materials.

The Board of Directors of the Company unanimously recommends that shareholders vote “FOR” the election of four Class II director nominees recommended by the Board of Directors in this proxy statement, “FOR” the approval, on an advisory basis, of the compensation of our named executive officers as described in the proxy statement, and “FOR” the ratification of the appointment of BKD, LLP as the Company’s independent registered public accounting firm for the fiscal year 2021.

The Securities and Exchange Commission (the “SEC”) allows issuers to furnish proxy materials to their shareholders over the Internet. You will not receive a printed copy of the proxy materials, unless specifically requested. The Notice of Internet Availability of Proxy Materials will instruct you as to how you may access and review all of the important information contained in the proxy materials. The Notice of Internet Availability of Proxy Materials also instructs you as to how you may submit your proxy on the Internet. You are cordially invited to attend the annual meeting virtually. However, to ensure that your vote is counted at the annual meeting, please vote your proxy as promptly as possible.

	By Order of the Board of Directors,


	M. Ray (Hoppy) Cole, Jr.	E. Ricky Gibson
	President and Chief	Chairman of the Board
	Executive Officer

April 7, 2021

Hattiesburg, Mississippi

IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 20, 2021

Proxy materials for the Annual Meeting of Shareholders of The First Bancshares, Inc., which include this Notice, the proxy statement, the proxy card and the Annual Report to Shareholders for the year ended December 31, 2020, are available at www.edocumentview.com/FBMS. If you would like to receive a printed or emailed copy of the proxy materials, please follow the instructions set forth in the notice that was mailed to you.

The First Bancshares, Inc.

6480 U.S. Highway 98 West

Hattiesburg, Mississippi 39402

Proxy Statement for Annual Meeting of

Shareholders to be Held on May 20, 2021

INTRODUCTION

Date, Time, and Place of Meeting

The Annual Meeting of Shareholders (the “Meeting”) of The First Bancshares, Inc. (the “Company”), the holding company for The First, A National Banking Association (the “Bank”) will be held in a virtual-only meeting format, via the internet, on Thursday, May 20, 2021 at 4:00 p.m. Central Time, or any adjournment(s) thereof, for the purpose of considering and voting upon the matters set out in the foregoing Notice of Annual Meeting of Shareholders. Due to the public health impact of COVID-19 and our continuing concern for the health and well-being of our employees and shareholders, the meeting will be held in an online-only virtual format. This proxy statement is furnished to the shareholders of the Company in connection with the solicitation by the Board of Directors of proxies to be voted at the Meeting. This proxy statement summarizes the information that you need to know in order to cast your vote at the Meeting. You do not need to attend the virtual Meeting to vote your shares of our common stock.

Attending the Virtual Meeting as a Shareholder of Record

If you were a shareholder of record at the close of business on March 26, 2021, you are eligible to attend the virtual meeting by accessing www.meetingcenter.io/220649698 and entering the control number found on the Proxy Card or Notice of Internet Availability of Proxy Materials and the meeting password, FBMS2021.

Registering to Attend the Virtual Meeting as a Beneficial Owner

If you were a beneficial owner of record (i.e., you hold your shares through a broker, bank or other agent) at the close of business on March 26, 2021, and you wish to attend the virtual Annual Meeting, you will need to obtain a legal proxy from your broker, bank or other agent. Once you have received a legal proxy, please email or scan an image of it to our transfer agent, Computershare Shareowner Services LLC, at legalproxy@computershare.com, with “Legal Proxy” noted in the subject line. Please note that the voting instruction form or Notice Regarding Availability of Proxy Materials you received with the Company’s proxy statement is not a legal proxy. If you do request a legal proxy from your broker, bank or other agent, the issuance of the legal proxy will invalidate any prior voting instructions you have given and will prevent you from giving any further voting instructions to your broker, bank or agent to vote on your behalf. You will only be able to vote at the Annual Meeting.

Requests for registration of shareholders who are beneficial owners of record must be received by Computershare no later than 4:00 p.m. Central Daylight Time, on May 17, 2021. You will then receive a confirmation of your registration, with a control number, by email from Computershare. At the time of the meeting, go to www.meetingcenter.io/220649698 and enter your control number and the meeting password, FBMS2021.

Asking Questions

Shareholders are invited to submit questions for consideration for the Annual Meeting by members of the Board of Directors and management. To facilitate the process, the Company asks shareholders to submit their questions on or before 4:00 p.m. Central Daylight Time on May 18, 2021 by accessing the virtual meeting website available at www.meetingcenter.io/220649698, password FBMS2021. Shareholders who participate in the meeting (by entering a control number and password as detailed above) may also submit questions regarding proposals during the meeting up until the time the relevant proposal is presented. Questions should relate to the official business of the meeting, and management and shareholders in particular.

In accordance with the rules of the U.S. Securities and Exchange Commission (the “SEC”), we are permitted to furnish proxy materials, including this proxy statement and our 2020 annual report, to shareholders by providing access to these documents online instead of mailing printed copies. Most shareholders will not receive printed copies of the proxy materials unless requested. Instead, most shareholders will only receive a notice that provides instructions on how to access and review our proxy materials online. If you would like to receive a printed or emailed copy of our proxy materials free of charge, please follow the instructions set forth in the notice that was mailed to you to request the materials. This proxy statement is available to you online at www.edocumentview.com/FBMS. If you receive more than one notice, it means that your shares are registered differently and are held in more than one account. To ensure that all shares are voted, please either vote each account over the Internet or by telephone or sign and return by mail all proxy cards.

The mailing address of the principal executive office of the Company is Post Office Box 15549, Hattiesburg, Mississippi, 39404-5549.

The approximate date on which this proxy statement and form of proxy are first being mailed or made available to shareholders is April 7, 2021

Record Date; Voting Rights; Quorum; Matters to Be Considered at the Meeting; Vote Required

The record date for determining holders of outstanding stock of the Company entitled to notice of and to attend and vote at the Meeting is March 26, 2021 (the “Record Date”). Only holders of our common stock at the close of business on the Record Date are entitled to notice of and to attend and vote at the Meeting or at any adjournment or postponement thereof. As of the Record Date, there were 21,018,319 shares of our common stock issued and outstanding, each of which is entitled to one vote on each matter presented. Shareholders do not have cumulative voting rights.

Under Mississippi law and our Amended and Restated Bylaws, as amended (the “Bylaws”), the holders of a majority of our common stock issued and outstanding and entitled to vote, present in person or represented by proxy, will constitute a quorum at the Meeting. In the event there are not sufficient votes for a quorum or to approve or ratify any proposal at the time of the Meeting, the Meeting may be adjourned or postponed to permit the further solicitation of proxies. The inspector of election will determine whether a quorum is present at the Meeting. If you are a beneficial owner (as defined below) of shares of our common stock and you do not instruct your bank, broker, trustee or other nominee how to vote your shares on any of the proposals, and your bank, broker, trustee or nominee submits a proxy with respect to your shares on a matter with respect to which discretionary voting is permitted, your shares will be counted as present at the Meeting for purposes of determining whether a quorum exists. In addition, shareholders of record who are present at the Meeting virtually or by proxy will be counted as present at the Meeting for purposes of determining whether a quorum exists, whether or not such holder abstains from voting on any or all of the proposals. Also, a “withhold” vote with respect to the election of a director nominee will be counted for purposes of determining whether there is a quorum at the Meeting, but will not be considered to have been voted for the director nominee.

At the Meeting, you will be asked to (1) elect four Class II director nominees; (2) approve, on an advisory basis, the compensation of our named executive officers; (3) ratify the appointment of BKD, LLP as the Company’s independent registered public accounting firm for fiscal year 2021; and (4) consider any other matter that properly comes before the Meeting. As of the date of this proxy statement, management currently knows of no other business to be presented at the meeting.

The Board of Directors recommends that you vote:

FOR the election of four Class II director nominees recommended by the Board of Directors in this proxy statement;

FOR the approval, on an advisory basis, of the compensation of our named executive officers as described in the proxy statement; and

FOR the ratification of the appointment of BKD, LLP as the Company’s independent registered public accounting firm for the fiscal year 2021.

By signing, dating and returning a proxy card or submitting your proxy and voting instructions via the Internet or telephone, you will give to the persons named as proxies discretionary voting authority with respect to any matter that may properly come before the Meeting, and they intend to vote on any such other matter in accordance with their best judgment. We do not expect any matters to be presented for action at the Meeting other than the matters described in this proxy statement. However, if any other matter does properly come before the Meeting, the proxy holders will vote any shares of our common stock, for which they hold a proxy to vote at the Meeting, in their discretion.

Proposal	Voting Options	Vote Required to Adopt the Proposal	Effect of Abstentions	Effect of Broker Non-Votes
No. 1: Election of four Class II director nominees	For or withhold on each director nominee	Plurality of votes cast	N/A	No effect

No. 2: Approval, on an advisory basis, of the compensation of our named executive officers	For, against or abstain	Votes cast in favor exceed votes cast against	No effect	No effect

No. 3: Ratification of the appointment of BKD, LLP as the independent registered public accounting firm of the Company for the fiscal year 2021	For, against or abstain	Votes cast in favor exceed votes cast against	No effect	N/A

Our directors are elected by a plurality of the votes cast. This means that the candidates receiving the highest number of “FOR” votes will be elected. Under our Bylaws, to decide any other matters that come before the Meeting, the votes cast in favor of the matter must exceed the votes cast against the matter, unless a different vote is required by law, our Amended and Restated Articles of Incorporation, as amended, or our Bylaws.

Submitting Proxies and Voting Instructions

If your shares of our common stock are registered directly in your name with our transfer agent, Computershare Shareowner Services LLC, you are the shareholder of record of those shares and you will receive proxy materials from the transfer agent. You may submit your proxy and voting instructions via the Internet, telephone or by mail as further described below. Your proxy, whether submitted via the Internet, telephone or by mail, is the person designated on the proxy card to act as your proxy at the Meeting to represent and vote your shares of our common stock as you directed, if applicable.

Holders of record may vote their shares as follows:

Submit Your Proxy and Voting Instructions via the Internet or over the telephone

You may submit your proxy and voting instructions via the Internet or telephone until 10:59 p.m. Central Time on May 19, 2021.

Please have your proxy card available and follow the instructions on the proxy card.

Submit Your Proxy and Voting Instructions by Mail

Complete, date and sign your proxy card and return it in the postage-paid envelope provided.

If you are signing in a representative capacity (for example as guardian, executor, trustee, custodian, attorney or officer of a corporation), you should indicate your name and your title or capacity.

Your proxy card must be received prior to May 20, 2021 in order for your shares to be voted.

If you submit your proxy and voting instructions via the Internet or telephone, you do not need to mail your proxy card. The proxies will vote your shares of our common stock at the Meeting as instructed by the latest dated proxy received from you, whether submitted via the Internet, telephone or by mail. You may also vote in person virtually at the Meeting.

If your shares of our common stock are held by a bank, broker, trustee or other nominee, you are considered the beneficial owner of shares held in street name and these proxy materials are being forwarded to you by your bank, broker, trustee or other nominee that is considered the shareholder of record of those shares. As the beneficial owner, you have the right to direct your bank, broker, trustee or other nominee on how to vote your shares of our common stock via the Internet or by telephone, if the bank, broker, trustee or other nominee offers these options or by completing, signing, dating and returning a voting instruction form. Your bank, broker, trustee or other nominee will send you instructions on how to submit your voting instructions for your shares of our common stock.

Shares of common stock represented by properly executed proxies, unless previously revoked, will be voted at the Meeting in accordance with the directions therein. If a properly executed proxy is submitted but no voting instruction are specified, such shares will be voted as the Board of Directors recommends, namely FOR each director nominee listed in this proxy statement, FOR the approval, on an advisory basis, of the compensation of our named executive officers, and FOR the ratification of the appointment of the independent registered public accounting firm, and in the discretion of the person named in the proxy with respect to any other business that may come before the Meeting.

Unless a new record date is fixed, your proxy will still be valid and may be used to vote shares of our common stock at the postponed or adjourned Meeting.

A proxy may be revoked by a shareholder at any time prior to the exercise thereof by filing with the Secretary of the Company a written revocation or a duly executed proxy bearing a later date at Post Office Box 15549, Hattiesburg, Mississippi, 39404 Attn: Corporate Secretary. A proxy may also be revoked if the shareholder attends the virtual Meeting and elects to vote in person virtually. Your attendance alone at the Meeting will not be enough to revoke your proxy.

Broker-Non-Votes

Rules of the New York Stock Exchange (“NYSE”) generally govern voting of shares by banks, brokers, trustees and other nominees who hold shares for beneficial owners. In making those determinations, the NYSE rules provide that the broker must first determine whether proposals presented at shareholder meetings are “discretionary” or “non-discretionary.” If you are a beneficial owner and a proposal is determined to be discretionary, then your bank, broker, trustee or other nominee is permitted under NYSE rules to vote on the proposal without receiving voting instructions from you. If you are a beneficial owner and a proposal is determined to be non-discretionary, then your bank, broker, trustee or other nominee is not permitted under NYSE rules to vote on the proposal without receiving voting instructions from you. A “broker non-vote” occurs when a bank, broker, trustee or other nominee holding shares for a beneficial owner returns a valid proxy, but does not vote on a particular proposal because it does not have discretionary authority to vote on the matter and has not received voting instructions from the shareholder for whom it is holding shares.

Under the NYSE rules, the proposal relating to the ratification of the appointment of the independent registered public accounting firm of the Company is a discretionary proposal. If you are a beneficial owner and you do not provide voting instructions to your bank, broker, trustee or other nominee holding shares for you, your bank, broker, trustee or other nominee may vote your shares with respect to the ratification of the appointment of the independent registered public accounting firm.

Under the rules of the NYSE, the proposals relating to the election of directors and the compensation of our named executive officers are non-discretionary proposals. Accordingly, if you are a beneficial owner and you do not provide voting instructions to your bank, broker, trustee or other nominee holding shares for you, your shares will not be voted with respect to these proposals. Without your voting instructions, a broker non-vote will occur with respect to your shares on each non-discretionary proposal for which you have not provided voting instructions.

Householding

We are permitted to send a single Notice of Annual Shareholders’ Meeting (“Notice”) and any other proxy materials we choose to mail to shareholders who share the same last name and address. This procedure is called “householding” and is intended to reduce our printing and postage costs. If you would like to receive a separate copy of a proxy statement or annual report, either now or in the future, or if you would like to request householding and are currently receiving multiple copies, please contact us in writing at the following address: Post Office Box 15549, Hattiesburg, Mississippi, 39404 Attn: Corporate Secretary. In addition, if you would like to receive a separate copy of a proxy statement in the future, you may also contact us at 601-268-8998. If you hold your shares through a bank, broker or trustee or other nominee and would like to receive additional copies of the Notice and any other proxy materials, or if multiple copies of the Notice or other proxy materials are being delivered to your address and you would like to request householding, please contact your nominee.

Voting Results

The Company will publish the voting results in a Current Report on Form 8-K, which will be filed with the SEC within four business days following the Annual Meeting.

Other Matters

Shareholders who have questions about the matters to be voted on at the Annual Meeting or how to submit a proxy should contact Chandra B. Kidd, Secretary, The First Bancshares, Inc., P.O. Box 15549, Hattiesburg, Mississippi, 39404 or by phone at (604) 268-8998 or by e-mail at ckidd@thefirstbank.com.

PROPOSAL 1 – Election of Directors

Current Membership on the Board of Directors

The Board of Directors is divided into three classes with staggered terms, so that the terms of only approximately one-third of the Board members expire at each annual meeting. The current terms of the Class II directors will expire at the Meeting. The term of each of the Class III directors will expire at the 2022 annual meeting of shareholders and the term of the Class I directors will expire at the 2023 annual meeting of shareholders. Our current directors and their classes as of March 26, 2021 are as follows:

Class I	Class II	Class III

Rodney D. Bennett, Ed.D (I)	Charles R. Lightsey (I)	David W. Bomboy, M.D. (I)
Renee Moore (I)	Fred A. McMurry (I)	M. Ray (Hoppy) Cole, Jr.
Ted E. Parker (I)	Thomas E. Mitchell (I)	E. Ricky Gibson (I)
J. Douglas Seidenburg (I)	Andrew D. Stetelman (I)

(I)

Indicates independent director under NASDAQ director independence standards.

There are no arrangements or understandings between any of the directors and any other person pursuant to which he or she was selected as a director. No current director has any family relationship, as defined in Item 401 of Regulation S-K, with any other director or with any of our executive officers. During the previous 10 years, no director, person nominated to become a director, or executive officer of the Company was the subject of any legal proceeding that is material to an evaluation of the ability or integrity of any such person.

Class II Director Nominees

At the Meeting, shareholders are being asked to elect Charles R. Lightsey, Fred A. McMurry, Thomas E. Mitchell and Andrew D. Stetelman as Class II director nominees each to serve a three-year term, expiring at the 2024 annual meeting of shareholders, or until their successors are duly elected and qualified. They all currently serve as Class II Directors. Information regarding the director nominees is provided below under “Information About Director Nominees.”

The person named as proxy on the proxy card intends to vote your shares of our common stock for the election of the four Class II director nominees, unless otherwise directed. Proxies cannot be voted for a greater number of persons than the number of nominees named in this proxy statement. If, contrary to our present expectations, any director nominee is unable to serve or for good cause will not serve, your proxy will be voted for a substitute nominee designated by the Board of Directors, unless otherwise directed.

Vote Required to Elect Director Nominees

Under our Bylaws, our directors are elected by a plurality of votes cast by the shares entitled to vote and present at the Meeting.

Recommendation of the Board of Directors

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE four CLASS II director nomineeS, MESSRS. Lightsey, McMurry, Mitchell and Stetelman.

Information about Director Nominees and Continuing Directors

The following provides relevant information regarding each director’s particular experience, qualifications, attributes, or skills that, when considered in the aggregate, led the Board of Directors to conclude that the person should serve as a director of the Company:

Information about Director Nominees

Class II Director Nominees

Charles R. Lightsey, 81, has been a director of the Company since 2003 and is also a director of the Bank.

Background: Mr. Lightsey has owned his own business, Charles R. Lightsey, Social Security Disability Representative, since January 2000. Mr. Lightsey worked with the Social Security Administration from 1961 to 2000, serving as District Manager of the Laurel Office from 1968 to 2000. He is a recipient of The Commissioner's Citation, the highest accolade accorded by the Social Security Administration. His community involvement includes serving as a former deacon of the First Baptist Church of Laurel, member and Board of Directors of the Laurel Kiwanis Club, president of the Laurel-Jones County Council on Aging, member of the Pine Belt Mental Health Association Council and Chairman of the Federal, State and Local Government United Way. He received his degree in Management and Real Estate from the University of Southern Mississippi in 1961. Mr. Lightsey served as director of the First National Bank of the Pine Belt in Laurel, Mississippi prior to its consolidation with The First.

Experience/Qualifications/Skills: Mr. Lightsey has served on the Company’s board since 2003. His background as a manager with the Social Security Administration and his business ownership experience provide the Board with a broad range of knowledge and business acumen. His business experience has equipped him with the skills necessary to be a leader on the Board and to serve as chairman of the corporate governance committee.

Fred A. McMurry, 56, has been a director of the Company since 1995 and is also a director of the Bank.

Background: Mr. McMurry is currently President and General Manager of Havard Pest Control, Inc. a family-owned business where he has served for over 33 years. He also serves on the board of the Bureau of Plant Industry of the Mississippi Department of Agriculture and Commerce and the Dixie National Junior Livestock Sales Committee. In addition, he is President of West Oaks, LLC and Vice President of Oak Grove Land Company, Inc.

Experience/Qualifications/Skills: Mr. McMurry has been a director of the Company since its inception in 1995. He contributes his extensive knowledge of the Lamar County area of Mississippi, which is one of the Company’s primary markets. His many years of experience of small business experience give him a broad understanding of the needs of the Company’s customers as well as insight into the economic trends in the area. He also has been involved in real estate development [through his participation in West Oaks, LLC and Oak Grove Land Company, Inc.], which adds value to loan discussions.

Thomas E. Mitchell, 73, has been a director of the Company since 2017 and is also a director of the Bank.

Background: Mr. Mitchell joined the Board of Directors of the Bank in July 2016. He serves as President of Stuart Contracting Co., Inc. a major area contractor known for large-scale school, government, industrial and commercial projects of all types located in Bay Minette, AL, a position he has held since 1975. Mr. Mitchell is involved in numerous other partnerships and companies and is a part owner in a number of shopping center projects and office parks and various other residential and commercial projects in Alabama. He is a member of First Baptist Church of Bay Minette, where he serves as a deacon.

Experience/Qualifications/Skills: Mr. Mitchell served on the Board of Directors of SouthTrust Corporation from 1996 until 2004 and has served as director for American Fidelity Insurance Company since 2014. Mr. Mitchell’s vast business experience as well as his knowledge of the Alabama and Florida markets is an asset to the Board. Mr. Mitchell’s experience provides the Board with valuable insight into the trends and risks of the market in which he lives and works.

Andrew D. Stetelman, 60, has been a director of the Company since 1995 and is also a director of the Bank.

Background: Mr. Stetelman has served as a realtor with London and Stetelman Realtors since 1981. He graduated from the University of Southern Mississippi in 1983. He has served in many capacities with the National, State, and Hattiesburg Board of Realtors, including serving as President from 1987 to date. He was selected as Realtor of the Year in 1992 of the Hattiesburg Board of Realtors and in 2001 he became the first Mississippi Commercial Realtor of the Year. He has served as the chairman of the Hattiesburg Convention Center since 1994, serves as a board member of the Area Development Partnership, and is a member of the Kiwanis International.

Experience/Qualifications/Skills: Mr. Stetelman has been a director of the Company since its inception in 1995. His experience in commercial real estate and real estate investments provides the Board with insight into the trends and risks associated with residential, rental, and commercial real estate within all of the Company’s markets. His broad insight and knowledge related to real estate is very valuable to the Board and its oversight of the Company’s loan portfolio.

Information about Continuing Directors

Rodney D. Bennett, Ed.D, 54, has been a director of the Company since 2017 and is also a director of the Bank.

Background: Since 2013, Dr. Bennett has served as the President of The University of Southern Mississippi in Hattiesburg, Mississippi. In this role, he is responsible for the management and administrative oversight of every facet of institutional operations on two campuses. He is affiliated with the American College Personnel Association, the New President’s Academy Advisory Committee, American Association of State Colleges and Universities, the NCAA/Conference USA, as well as numerous other organizations.

Experience/Qualifications/Skills: Dr. Bennett’s background and numerous affiliations provide the Board with a broad range of experience and knowledge of organizational management. His insight provides significant value to the Board.

David W. Bomboy, M.D., 75, has been a director of the Company since 1995 and is also a director of the Bank.

Background: Dr. Bomboy is a lifelong resident of Hattiesburg, Mississippi. He received a B.S. with honors in Pre-Medicine from the University of Mississippi in 1968 and earned an M.D. degree from the University of Mississippi Medical Center in 1971. Dr. Bomboy completed his orthopedic surgical training at the University of Mississippi in 1976. He is a board-certified orthopedic surgeon and has practiced orthopedics in southern Mississippi for 41 years. Dr. Bomboy is a member of the Mississippi State Medical Association, the American Medical Association, and the Mississippi Orthopedic Society. He also served as president of the Methodist Hospital Medical Staff.

Experience/Qualifications/Skills: Dr. Bomboy is the sole physician on the Company’s board which enables him to bring a different perspective to the challenges the board faces. His background, experience, and knowledge of the medical and business communities are important in the board’s oversight of management. His past involvement in real estate development adds additional insight to board oversight and review of the Bank’s loan portfolio.

M. Ray (Hoppy) Cole, Jr., 59, served as director of the Company from 1998 to 1999 and from 2001 through the present and is also a director of the Bank.

Background: Mr. Cole has served as President and CEO of the Company and the Bank since 2009 and has served as the Vice Chairman of the Company’s Board of Directors since 2010. Prior to joining the Bank in September 2002, Mr. Cole was Secretary/Treasurer and Chief Financial Officer of the Headrick Companies, Inc. for eleven years. Mr. Cole began his career with The First National Bank of Commerce in New Orleans, Louisiana and held the position of Corporate Banking Officer from 1985-1988. In December of 1988, Mr. Cole joined Sunburst Bank in Laurel, Mississippi serving as Senior Lender and later as President of the Laurel office. Mr. Cole graduated from the University of Mississippi where he earned a Bachelor's and Master's Degree in Business Administration. Mr. Cole attended the Stonier Graduate School of Banking at the University of Delaware. Mr. Cole also served as director of the First National Bank of the Pine Belt in Laurel, Mississippi prior to its consolidation with The First.

Experience/Qualifications/Skills: Mr. Cole has served on the board of the Company for more than fifteen years and has extensive knowledge of all aspects of the Company’s business. His many years of experience in banking and his leadership in building our Company make him well qualified to serve as a director. His insight is an essential part of formulating the Company’s policies, plans and strategies.

E. Ricky Gibson, 64, serves as Chairman of the Board and has been a director of the Company since 1995 and is also a director of the Bank.

Background: Mr. Gibson has been president and owner of N&H Electronics, Inc., a wholesale electronics distributor, since 1988 and of Mid South Electronics, a wholesale consumer electronics distributor, since 1993. He attended the University of Southern Mississippi. He is a member of Parkway Heights United Methodist Church.

Experience/Qualifications/Skills: Mr. Gibson has served on the board of the Company since its inception in 1995. As a business owner and distributor, Mr. Gibson is knowledgeable about all aspects of running a successful business and he understands the challenges business owners face. Also, he has developed an understanding of the Company’s bank and the banking industry in general, particularly in the area of audit and executive compensation. He serves as Chairman of the Board of both the Company and the Bank and has served as chairman of the audit committee of the Bank’s Board of Directors and is chairman of the compensation committee of the Company’s Board of Directors.

Renee Moore, 59, Hattiesburg, MS, has been a director of the Company since 2020 and is also a director of the Bank.

Background: Ms. Moore, CPA and partner in charge of tax services at Topp McWhorter Harvey, PLLC, is a resident of Hattiesburg, MS and has more than 30 years of public and private accounting experience. She is active in the community, serving on the Forrest General Foundation Planned Giving Committee, the 2019 Heart Walk Executive Leadership Team, and as an Ambassador for the Area Development Partnership of Greater Hattiesburg. She also served as team captain for the Leadership Division of the Area Development Partnership Forward Together Capital Campaign. Ms. Moore earned her Bachelor of Science degree in Accounting from the University of Arkansas at Little Rock.

Experience/Qualifications/Skills: Throughout Ms. Moore’s career, she has held numerous leadership positions. From CFO of a privately-held company to partner in charge of a major service division in the sixth largest firm in the state, her experience in both public accounting and industry, as well as experience gained when she and her husband owned and operated their own business, have given her a unique understanding and perspective. She also has experience as Audit Manager for a national bank. Her experience and skills are a valuable resource to the Board.

Ted E. Parker, 61, has been a director of the Company since 1995 and is also a director of the Bank.

Background: Mr. Parker has been in the stocker-grazer cattle business for more than 30 years as the owner and operator of Ted Parker Farms LLC. He attended the University of Southern Mississippi and served as a licensed commodity floor broker at the Chicago Mercantile Exchange from 1982 to 1983. He served on Bayer Animal Health Advisory Board from 2010 to 2016 and on the Marketing and International Trade Committee of the National Cattleman’s Beef Association from 2015 to 2017. He served as a board member of Farm Bureau Insurance from 1992 to 1994. He is a member of the National Cattlemen's Association, the Texas Cattle Feeders Association, Covington County Cattlemen’s Association, and Seminary Baptist Church.

Experience/Qualifications/Skills: Mr. Parker has served on the board of the Company since its inception in 1995. His experience in the cattle business provides the Board with insight into the needs of the agricultural community in the Company’s markets. His insight into the market in which he lives through his community involvement are important assets to the Board.

J. Douglas Seidenburg, 61, has been a director of the Company since 1998 and is also a director of the Bank.

Background: Mr. Seidenburg has served as the owner and President of Molloy-Seidenburg & Co., P.A., an accounting firm, since 1989. He has been a CPA since 1983. Mr. Seidenburg is involved in many civic, educational, and religious activities in the Jones County area. Past activities include serving as president of the Laurel Sertoma Club, president of the University of Southern Mississippi Alumni Association of Jones County, treasurer of St. John's Day School, director of Leadership Jones County and a member of Future Leaders of Jones County. He was also one of the founders of First Call for Help, a local United Way Agency started in 1990. Mr. Seidenburg is a 1981 graduate of the University of Southern Mississippi, where he earned a B.S. degree in Accounting. Mr. Seidenburg also served as director of the the First National Bank of the Pine Belt in Laurel, Mississippi prior to its consolidation with The First.

Experience/Qualifications/Skills: Mr. Seidenburg has served on the Board of the Company since 1998. He is Chairman of the Audit Committee and has been designated as a financial expert. His experience as a CPA and his knowledge of corporate governance provide the Board with an understanding of the financial and accounting issues that are faced by companies in today’s business environment.

PROPOSAL 2 – Advisory Vote on the Compensation of our Named Executive Officers

Pursuant to Section 14A of the Exchange Act, we provide our shareholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our named executive officers, as disclosed in this proxy statement in accordance with the rules of the SEC (the “say-on-pay proposal”). This vote does not address any specific item of compensation but rather the overall compensation of our named executive officers and our compensation philosophy and practices as disclosed in the section titled “Executive Officer Compensation.” This disclosure includes the “Compensation Discussion and Analysis” and the “Executive Compensation Tables” set forth below, including the accompanying narrative disclosures. At the 2020 annual meeting of shareholders, we provided our shareholders with the opportunity to cast a non-binding advisory vote regarding the compensation of our named executive officers as disclosed in our proxy statement for the 2020 annual meeting of shareholders. Our say-on-pay proposal was approved by approximately 74% of our shareholders whose shares were present in person or by proxy at the 2020 annual meeting and who voted or affirmatively abstained from voting (excluding broker non-votes). We are again asking our shareholders to vote on the following resolution:

RESOLVED, that the shareholders of The First Bancshares Inc. (the “Company”) approve, on an advisory basis, the compensation of the Company’s named executive officers as disclosed in the proxy statement for the Company’s 2021 Annual Meeting of Shareholders pursuant to Item 402 of Regulation S-K of the rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables and the narrative executive compensation disclosures to the compensation tables included in this proxy statement.

We understand that executive compensation is an important matter for our shareholders. Our core executive compensation philosophy and objectives continue to be designed to reward the achievement of specific annual, long-term and strategic goals by the Company, and which aligns the interests of the executive officers with the Company’s overall business strategy, values and management initiatives intended to reward executives for strategic management and the enhancement of shareholder value and support a performance-oriented environment that rewards achievement of internal goals. In considering how to vote on this proposal, we encourage you to review all the relevant information in this proxy statement, including the “Compensation Discussion and Analysis”, the “Executive Compensation Tables,” and the rest of the narrative disclosures regarding our executive compensation program in the section titled “Executive Officer Compensation”.

While this advisory vote is not binding, the Board of Directors and the Compensation Committee value the opinion of our shareholders and will consider the outcome of the vote when making future compensation decisions for our named executive officers.

Vote Required to Approve, on an Advisory Basis, the Compensation of Our Named Executive Officers:

Proposal No. 2 will be approved if votes cast in favor of the proposal exceed votes cast against it.

Recommendation of the Board of Directors

THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.

EXECUTIVE OFFICER COMPENSATION

Our named executive officers (“NEOs”) for 2020 and the positions held by them on December 31, 2020 are:

M. Ray (Hoppy) Cole, Jr., 59, CEO and President of the Company and the Bank, Vice Chair of the Company’s Board of Directors. Mr. Cole’s biography is provided above under “Information about Continuing Directors.”

Donna T. (Dee Dee) Lowery, CPA, 54, Executive Vice President and Chief Financial Officer of the Company and the Bank. Ms. Lowery has served as Executive Vice President and Chief Financial Officer of the Company and the Bank since she joined the Company in February 2005. Prior to joining the Company, Ms. Lowery was Vice President and Investment Portfolio Manager of Hancock Holding Company from 2001 to 2005. Ms. Lowery began her career in 1988 with McArthur, Thames, Slay and Dews, PLLC as a staff accountant. In June 1993, she joined Lamar Capital Corporation, and held several positions beginning with Internal Auditor from 1993 to 1995, Comptroller from 1995 to 1998 and then Chief Financial Officer and Treasurer from 1998 to 2001, until the merger in 2001 with Hancock Holding Company. Ms. Lowery graduated from the University of Southern Mississippi where she earned a Bachelor’s Degree in Business Administration with an emphasis in Accounting. Ms. Lowery serves on the Advisory Board for the Business School at the University of Southern Mississippi.

Compensation Discussion and Analysis

Overview of Compensation Program

The Compensation Committee (for purposes of this analysis, the “Committee”) of the Board of Directors has responsibility for establishing, implementing and monitoring adherence with the Company’s compensation philosophy. The Committee ensures that the total compensation paid to the named executive officers is fair, reasonable and competitive. Generally, the types of compensation and benefits provided to the named executive officers are similar to those provided to other executive officers in publicly traded financial institutions.

2020 Financial Highlights

	·	Net income of $52.5 million, increasing 20% from 2019;
	·	Net interest income of $152.7 million compared to $121.8 million in 2019, an increase of 20%; and
	·	On April 2, 2020, the Company closed its acquisition of SWG, parent company of Southwest Georgia Bank, headquartered in Moultrie, GA. The acquisition added 8 full service offices servicing the areas of Moultrie, Valdosta, Albany and Tifton, Georgia. Systems integration was completed during the second quarter of 2020.
	·	In year-over-year comparison, net income available to common shareholders increased $8.8 million, or 20.0%, from $43.7 million for the year ended December 31, 2019 to $52.5 million for the year ended December 31, 2020.

Excluding the bargain purchase and the sale of land gain of $8.3 million, net of tax, and the increased provision expense of $16.5 million, net of tax, net income available to common shareholders increased $17.0 million in year-over-year comparison.

Provision for loan losses totaled $25.2 million for the year ended December 31, 2020 as compared to $3.7 million for the year ended December 31, 2019, an increase of $21.4 million or 572.8%, primarily resulting from the economic effects of the COVID-19 pandemic.

On September 25, 2020, the Company announced the completion of a private placement of $65.0 million of its 4.25% fixed to floating rate subordinated notes due 2030 to certain qualified institutional buyers.

As of December 31, 2020, total COVID related modifications were $82.0 million, representing 2.6% of the loan portfolio and down from a peak of $672 million or 21% of the loan portfolio.

During the first quarter of 2020, the Company elected to delay the adoption of CECL afforded through the CARES Act. The Company currently anticipates CECL adoption to occur as of January 1, 2021.

Compensation Philosophy and Objectives

The Committee believes that the most effective executive compensation program is one that is designed to reward the achievement of specific short-term, long-term and strategic goals by the Company, and which aligns the interests of the executive officers with the Company’s overall business strategy, values and management initiatives. The Company’s compensation policies are intended to reward executives for strategic management and the enhancement of shareholder value and support a performance-oriented environment that rewards achievement of internal goals. The Company has also adopted a Compensation Philosophy that provides guidance to the Committee when making decisions surrounding the compensation of the NEOs. . Incentive compensation (cash and/or equity) will target cash and direct compensation at the 50^th percentile when target performance is achieved and between the 60^th and 75^th percentiles when annual/long-term goals are exceeded. The philosophy has a strong emphasis on incentive compensation programs that provide an alignment between pay and performance.

The Committee evaluates both performance and compensation to ensure that the Company maintains its ability to attract and retain superior employees in key positions and that compensation provided to key employees remains competitive relative to the compensation paid to similarly situated executives of peer companies.

Our executive compensation programs are designed to align the interests of our NEOs with those of our shareholders. Based on our performance, findings from the 2019 Executive Compensation Review (discussed later in the CD&A), and our commitment to linking pay and performance, the Committee made the following executive compensation decisions for fiscal year 2020. For more detail, please refer to the “2020 Executive Compensation Components” later in the CD&A:

Base Salaries: Base salaries were increased approximately 5% for each NEO, effective December 2019 .

2020 Short-Term Incentives/Cash Bonuses: Based on our 2020 financial performance and the NEOs’ individual performance, the NEOs earned their maximum short-term incentives equal to 30% to 60% of base salary. The maximum opportunity was set at 60% (for the CEO) and 30% (for the CFO) of base salary.

2020 Long-Term Incentives: The NEOs were eligible to receive up to 6,500 shares (CEO) and 3,300 shares (CFO) based on performance. The NEOs earned the maximum number of shares. In addition, both NEOs were granted a special restricted stock grant for the successful completion and integration of the acquisition of First Florida Bank and Southwest Georgia Bank.

Summary of Executive Compensation Practices

Our executive compensation program includes the following practices and policies, which we believe promote sound compensation governance and are in the best interests of our shareholders:

What We Do
·	Periodically, compare our NEO compensation levels to the market and take these results into consideration when making compensation related decisions.
·	Provide our NEOs with a performance-based cash incentive plan on an annual basis.
·	Grant full-value equity to each of our NEOs with multi-year vesting provisions.
·	Provide each of our NEOs with supplemental executive retirement plans to encourage retention and promote stability in our executive group.
·	Utilize the assistance of an outside independent compensation consultant to assist our Compensation Committee with gathering market data and best practices information.

Role of Executive Officers in Compensation Decisions

The Committee annually reviews, determines and recommends to the Board for approval the annual compensation, including salary, incentives (cash and/or equity) and other compensation of the Chief Executive Officer, including corporate goals and objectives relevant to compensation of the Chief Executive Officer, and evaluates performance in light of these goals and objectives.

The Committee and the Chief Executive Officer annually review the performance of each of the named executive officers (other than the Chief Executive Officer whose performance is reviewed by the Committee). The CEO recommends salary adjustments and annual award amounts based on these reviews, other than for himself, to the Committee. The Committee can exercise discretion in modifying or adjusting recommended compensation or awards to executives. The Committee then submits its recommendations on executive compensation to the full Board for approval.

Setting Executive Compensation

The Compensation Committee monitors the results of our annual advisory vote on executive compensation each year. Our advisory say-on-pay proposal at the 2020 annual meeting of shareholders received an affirmative vote of approximately 74% in favor of our 2019 executive compensation. As a result, the Compensation Committee did not implement any specific changes to our executive compensation programs based on the 2020 shareholder advisory vote. The Compensation Committee monitors the results of each year’s say-on-pay proposal vote and considers such results as one of many factors in connection with the discharge of its responsibilities. The Company maintains active engagement with our shareholders, communicating directly with the holders of our outstanding common stock each year regarding the Company’s performance and responding to any questions or issues they may raise. We encourage shareholders to communicate with us regarding our corporate governance and executive compensation. Communications from shareholders on these subjects are reported to the Compensation Committee or the Corporate Governance Committee, as appropriate.

Based on the foregoing objectives, the Committee has structured the Company’s annual and long-term incentive-based cash and non-cash executive compensation to motivate executives to achieve the business goals set by the Company and reward the executives for achieving such goals.

Independent Compensation Consultant

The Committee has retained Blanchard Consulting Group (“Blanchard”), an independent third party compensation consultant, to provide research for benchmarking purposes related to executive compensation. Blanchard is a national consulting firm with an exclusive focus on the banking and financial services industry. Blanchard does not provide any services to the Company besides compensation consulting services, and reports directly to the Compensation Committee. The Compensation Committee has evaluated Blanchard’s independence, including the factors relating to independence specified in Nasdaq Stock Market Listing Rules, and determined that Blanchard is independent and that their work with the Committee has not raised any conflict of interest.

Additionally, the Company participates in and utilizes the Mississippi Bankers Association (“MBA”) survey, which provides the Committee with comparative salary data from the Company’s market areas.. The Blanchard and MBA data is used by the Committee to ensure that it is providing competitive compensation comparable to its peer group, thereby allowing the Company to retain talented executive officers who contribute to the Company’s overall long-term success.

In 2019, the Committee utilized Blanchard assessed executive officer base salary and total compensation as compared to a peer group of sixteen publicly traded banks. The peer companies included the following:

1	Seacoast Banking Corporation of Florida	SBCF
2	First Bancorp	FBNC
3	Republic Bancorp, Inc.	RBCA.A
4	FB Financial Corporation	FBK
5	Origin Bancorp, Inc.	OBNK
6	Franklin Financial Network, Inc.	FSB
7	Community Trust Bancorp, Inc.	CTBI
8	Carolina Financial Corporation	CARO
9	Live Oak Bancshares, Inc.	LOB
10	HomeTrust Bancshares, Inc.	HTBI
11	Stock Yards Bancorp, Inc.	SYBT
12	Capital City Bank Group, Inc.	CCBG
13	Atlantic Capital Bancshares, Inc.	ACBI
14	SmartFinancial, Inc.	SMBK
15	Home Bancorp, Inc.	HBCP
16	Business First Bancshares, Inc.	BFST

For the 2019 review of executive compensation against benchmarking data, the Committee reviewed the following summary by Blanchard:

	·	Total Cash Compensation = Base Salary + Annual Cash Incentives / Bonus;
	·	Direct Compensation = Total Cash Compensation + Three-Year Average Equity Awards; and
	·	Total Compensation = Direct Compensation + Other Compensation + Retirement Benefits / Perquisites

Blanchard’s 2019 assessment of FBMS’ compensation practices and levels concluded that:

	·	FBMS’ financial performance was comparable versus peers; comparisons to the peer group/market 50^thpercentile were appropriate
	·	“Total Cash Compensation” of the NEOs was relatively conservative when compared to peer at a level that was below the peer group 25^th percentile in 2019;
	·	For “Direct Compensation,” FBMS had provided competitive equity awards but the below market salaries and cash incentives positioned direct compensation at or below the peer group 25^th percentile; and
	·	“Total Compensation” showed that FBMS had conservative executive benefits as total compensation for the NEOs remained below the peer group 25^th percentile (this was prior to the implementation of the Mr. Cole’s 2020 SERP and Ms. Lowery’s 2021 SERP).

The Compensation Committee used Blanchard’s reports and analysis to assist with decisions regarding NEO compensation during 2020 but did not solely rely on such reports and analysis. The ultimate decisions made by the Committee were a balance between the Committee’s compensation philosophy and strategy along with the outside perspective of its independent consultant.

FBMS Compensation Peer Group change from 2018 to 2019

The compensation peer group for The First Bancshares, Inc. (FBMS) changed from the 2018 to the 2019 study because of the Bank’s increase in asset size and acquisitions in the previous peer group. In 2018 we used an asset size range from $1.5B to $6B in the states of Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, and Tennessee. Because of FBMS’s asset growth in 2019 to over $3.4B in assets when the study was conducted, we increase the asset size range in the compensation peer group for 2019 to $2B to $7B, which is within ISS and Glass Lewis standards. We used the same states as the 2018 study which resulted in a peer group of 16 publicly traded banks (listed above).

Compensation Policies and Practices as They Relate to Risk Management

The Company’s compensation plans incorporate a balance of profitability and strategic goals, such as core deposit growth, asset quality, and audit/compliance ratings, to ensure the officers of the Company are focusing both on profits and strategic goals that are linked to the long-term viability of the organization.

The Compensation Committee has reviewed with the Bank’s Chief Risk Officer the employee incentive compensation arrangements and has determined that such arrangements do not encourage employees to take unnecessary and excessive risks that are reasonably likely to have a material adverse effect on the Company. The Compensation Committee has adopted the following market practices and policies to reduce risk:

We align NEO compensation with stockholder interests;

We tie the majority of NEO pay to objective, challenging financial goals and Company performance;

We avoid excessive risk while designing incentive programs;

We maintain stock ownership guidelines for all NEOs;

We do NOT provide for excise tax gross-up for “excess parachute payments” under Section 280G of the Internal Revenue Code of 1986, as amended (“Code”) in any new management agreements;

We maintain a clawback policy applicable to all NEOs;

We utilize an independent consultant to help the Committee understand compensation practices that impact NEO compensation; and

We provide for minimum required vesting periods for our equity awards.

2020 Executive Compensation Components

Historically, and for the fiscal year ended December 31, 2020, the principal components of compensation for named executive officers consisted of the following:

base salary;

performance-based cash incentive compensation;

equity incentive compensation based on achievement of performance targets;

retirement and other benefits; and

perquisites and other personal benefits.

Base Salary

The Company provides named executive officers and other employees with base salary to compensate them for services rendered during the fiscal year.

During its review of base salaries for executives, the Committee primarily considers: 1) performance of the Company; 2) market data as discussed above; 3) the level of the executive’s compensation, both individually and relative to other officers; and 4) individual performance of the executive. Salary levels are typically considered annually as part of the Company’s performance review process as well as upon a promotion or other change in job responsibility. When reviewing whether to award salary increases, the Committee determines a base salary range and targets the median of the range (50^th percentile) for executives that are meeting performance expectations and the upper quartile of the range (75^th percentile) for executives that are high performers or exceeding performance expectations. Base salary ranges for named executive officers are determined for each executive based on the Company’s peer group and the competitive market using market research and based on his or her position and responsibility. Merit based-increases to salaries of the named executive officers are based on the Committee’s assessment of the individual’s performance. Salary reviews are typically performed in the fourth quarter of the year for which the executive’s performance is evaluated, and corresponding salary adjustments are made during the same quarter of the fiscal year. The chart below shows salary adjustments in connection with performance reviews completed in fiscal year 2020.

In light of the performance of the Bank in fiscal year 2020, and the NEO’s contributions to the Bank’s strategy, including completion and negotiation of acquisitions during the fiscal year, the Committee recommended to the Board and the Board approved, the following base salary adjustments:

	2019 Base Salary		2020 Base Salary		% Increase
M. Ray (Hoppy) Cole, Jr.	$	490,640	$	520,078		6	%
Donna T. (Dee Dee) Lowery	$	281,040	$	295,000		5	%

Performance-Based Cash Incentive Compensation

The Company has established an incentive bonus compensation plan that is based upon individual performance as well as Company performance. Cash incentives on an annual basis during the year following the year in which the services were performed and are contingent upon such executive officer's continued employment with the Company through the date of payment.

During the first quarter of 2020, independent directors of the Board, upon the recommendation of the Compensation Committee, established short-term cash incentive awards for executive officers as percentages of their 2020 base salary, as reflected in the table below (as a percentage of base salary).

	Threshold			Target			Maximum
M. Ray (Hoppy) Cole, Jr.		15	%		30	%		60	%
Donna T. (Dee Dee) Lowery		7.5	%		15	%		30	%

Fiscal year 2020 performance goals for the NEOs for the cash-based incentive plan included Bank pre-tax net income, loan growth, and deposit growth. The metrics chosen represent company growth in earnings, assets, and deposits.

In addition to financial performance measures described above, each named executive officer was evaluated based upon unique individual performance goals in up to seven categories. The incentive plan provides each eligible officer with a “balanced scorecard” that establishes specific corporate and shareholder-related performance goals balanced by the officer’s area of responsibility, his or her business unit, and his or her expected individual level of contribution to the Company’s achievement of its corporate goals The particular individual performance measures were designed to reward the actions determined to be most important for that individual to achieve for the specified year. A rating of 1 through 4 was assigned for each NEO commensurate with performance. For fiscal year 2020, performance for each of the NEOs was measured in the following areas:

	·	Leadership;
	·	Strategic Planning;
	·	Financial Results;
	·	Succession Planning;
	·	Human Resources;
	·	Internal Communications;
	·	External Relations; and
	·	Board/CEO Communication.

The range of specific targets and relative weights for each performance metric were as follows:

	Threshold 25% of Incentive		Target 50% of Incentive		Maximum 100% of Incentive		Actual		Payout % Earned
Bank Pre-Tax Pre-Provision Income	$	78,162,557	$	86,847,285	$	91,189,649	$	92,537,897		100	%
Bank Total Loan Growth		3,165,603		3,171,654		3,186,782		2,969,015		0	%
Bank Total Deposit Growth		3,683,598		3,693,737		3,719,084		4,282,351		100	%
Individual Scorecard		3		3		4		4		100	%

Based on the achievement of the performance metrics described above, the following cash incentives were awarded for the year ended December 31, 2020:

M. Ray (Hoppy) Cole, Jr.:

	Potential Payout as a % of Salary			Payout % Earned			Payout as a % of Salary			Actual Incentive Earned
Bank Pre-Tax Pre-Provision Income		20	%		100	%		20	%	$	104,016
Bank Loan Growth		10	%		0	%		0	%	$	0
Bank Deposit Growth		10	%		100	%		10	%	$	52,007
Individual Scorecard		20	%		100	%		20	%	$	104,016
Total		60	%					50	%	$	260,039

Donna T. (Dee Dee) Lowery:

	Potential Payout as a % of Salary			Payout % Earned			Payout as a % of Salary			Actual Incentive Earned
Bank Pre-Tax Pre Provision Income		10	%		100	%		10	%	$	29,500
Bank Loan Growth		5	%		0	%		0	%	$	0
Bank Deposit Growth		5	%		100	%		5	%	$	14,750
Individual Scorecard		10	%		100	%		10	%	$	29,500
Total		30	%					25	%	$	73,750

Discretional Bonus Payments

No discretionary bonuses were paid to our NEOs in 2020.

Equity Incentive Compensation

The Company makes awards of restricted stock to the NEOs pursuant to the terms and conditions of The First Bancshares, Inc. 2007 Stock Incentive Plan, as amended (the “2007 Plan”), generally based on the achievement of identified performance metrics. The Committee utilizes restricted stock as a long-term retention vehicle for key officers. In 2020, the Board, upon the recommendation of the Compensation Committee, established target performance-based long-term equity incentive awards for executive officers using shares of restricted stock with maximum earning opportunities of up to 6,500 shares for Mr. Cole and up to 3,300 shares for Ms. Lowery. Similar to the cash-based annual incentive plan, a pay-for-performance approach is used to determine the number of shares of restricted stock granted to each plan participant. In February of 2020, the Board established performance goals to be achieved over a one-year performance period ending December 31, 2020. The actual number of shares of restricted stock granted was determined based on the achievement of the performance goals. The performance goals utilized in the long-term plan design are linked to both corporate and shareholder performance criteria. For 2020, the performance goals included bank pre-tax net income, asset growth and credit quality as determined by a bank-wide credit administration score, as described in more detail below. The number of shares of restricted stock earned and issued pursuant to the award is determined based on the Bank’s achievement of the performance goals, and once granted the award is subject to cliff vesting on the fifth anniversary of the vest date. The metrics chosen represent company growth in both income and assets while maintaining asset quality.

The range of specific targets and relative weights for each performance metric were as follows:

	Threshold – 25% of Shares Earned		Target – 50% of Shares Earned		Maximum – 100% of Shares Earned		Actual
Bank Pre-Tax Pre-Provision Income – 33% of Award	$	78,162,557	$	86,847,285	$	91,189,649	$	92,537,897
Total Bank Assets – 33% of Award		4,092,983,922		4,547,759,913		4,775,147,909		4,986,648,994
Bank-wide Credit Administration Score – 34% of Award		3		2		1		1

Results falling between the specified values reflected above result in proportional adjustment of the payout amounts.

Achievement of the performance measures set forth above for the year ended December 31, 2020 resulted in the following number of shares granted as restricted stock awards in March of 2021:

	Total Number of Shares at Maximum		Bank Pre-Tax Pre-Provision Income – 33% of Award		Total Assets – 33% of Award		Bank-wide Credit Administration Score – 34% of Award		Total Shares of Restricted Stock Awarded
M. Ray (Hoppy) Cole, Jr.		6,500		2,145		2,145		2,210		6,500
Donna T. (Dee Dee) Lowery		3,300		1,089		1,089		1,122		3,300

Special Equity Grants

On July 17, 2020, the Board of Directors awarded a special grant of restricted stock in the amount of 4,900 shares for Mr. Cole and 732 shares for Ms. Lowery for the successful completion and integration of the acquisition of First Florida Bank and Southwest Georgia Bank. The grants will cliff vest after five years from the grant date, subject to the executive’s continued employment on the vesting date.

Vesting and Retention Provisions Applicable to Equity Awards

The Company has implemented a policy that all shares granted through the 2007 Plan will include at least a three-year vesting schedule, unless extraordinary circumstances are determined by the Board. Beginning in 2014, the restricted stock awards earned based on the satisfaction of performance metrics will cliff vest on the fifth anniversary of the grant date, assuming the continued service of each of the holders through such vesting date. Vesting of such Awards will be accelerated in the event of the holder's death while in the service of the Company or upon such other event as determined by the Committee in its sole discretion. The 2007 Plan also contains a double trigger change-in-control provision pursuant to which unvested shares of stock granted through the plan will be accelerated upon a change in control if the executive is terminated without cause as a result of the transaction (as long as the shares granted remain part of the Company or are transferred into the shares of the new company). In October 2019, the Committee approved a modification to Mr. Cole’s and Ms. Lowery’s outstanding shares of restricted stock to provide that such shares will become fully-vested if (i) the Bank terminates his or her employment without cause; or (ii) he or she resigns for good reason within 24-months following a change in control, in the event that the outstanding restricted stock awards are not assumed by the acquiror in connection with such change in control. Unvested shares of restricted stock are subject to clawback and forfeiture provisions and may not be sold, pledged, or otherwise transferred or hedged during the vesting period.

Stock Ownership Guidelines

The Committee has established expectations for ownership of our common stock by our CEO and CFO. Under these guidelines, our CEO is expected to attain an investment position in our common shares equal to two times his or her base salary and our CFO is expected to attain an investment position in our common shares equal to one times his or her base salary. Exceptions to these ownership guidelines may be approved by Compensation Committee for good reason. At December 31, 2020, each of our NEOs was in compliance with the ownership guidelines.

Clawback, Repricing, Underwater Grant Buyback and Hedging Policies

As a matter of policy, the Committee believes that incentive compensation awards that are made on the basis of financial metrics should contain clawback provisions that would allow the Company to recoup awards under certain circumstances such as a material misstatement of financial results. The Committee implemented a clawback policy applicable to all short-term and long-term incentives beginning in 2018.

The Committee’s philosophy provides that the Company will not reprice options, stock appreciation rights, or other equity awards, or buy back “underwater” stock options from those who hold option grants for cash. The Company’s Board has approved an amendment to the 2007 Plan to prohibit repricing of equity awards granted under the plan and to prohibit the cash buyback or exchange for other stock awards of underwater options and stock appreciation rights.

Certain transactions in the Company’s equity securities, or which are linked to the value of the Company’s equity securities, may be considered short term or speculative in nature. The Board of Directors discourage directors and officers from engaging in derivative or speculative transactions involving unvested company stock, including hedging, holding unvested stock in a margin account, or pledging unvested stock as collateral for a loan. The Board of Directors has not yet implemented a policy that prohibits directors and officers from engaging in derivative or speculative transactions but plans to do so in 2021.

Retirement and Other Benefits

All employees of the Company, including named executive officers, are eligible to participate in The First Bancshares, Inc. 401(k) Plan and Trust (the “401(k) plan”). We adopted the 401(k) plan to enable employees to save for retirement through a tax-advantaged combination of employee and Company contributions and to provide employees the opportunity to directly manage their retirement plan assets through a variety of investment options. The 401(k) plan allows eligible employees to elect to contribute up to 100% of their eligible compensation, up to the annual IRS dollar limit. Eligible compensation generally means all wages, salaries and fees for services paid by us. We contribute 50% of the employee’s deferral (up to a maximum of 6%) for each eligible employee per year to their 401(k) plan. We may also elect to make a discretionary profit sharing contribution for each eligible employee. No discretionary contributions were made in 2020.

The Company sponsors an Employee Stock Ownership Plan (ESOP), which was established in 2006 for employees, including NEOs, who have completed one year of service for the Company and attained age 21. Employees become fully vested after five years of service. Contributions to the plan are made by the Company only and are at the discretion of the Board of Directors. At December 31, 2020, the ESOP held 5,728 shares of Company common stock and had no debt obligation. There were no Company contributions to the ESOP in 2020.

Supplemental Executive Retirement Plans

During 2020, the NEOs participated in supplemental executive retirement plans, the material terms of which are described below under “2020 Pension Benefits”.

Perquisites and Other Personal Benefits

The Company provides named executive officers with perquisites and other personal benefits that the Company and the Committee believe are reasonable and consistent with its overall compensation program to better enable the Company to attract and retain superior employees for key positions. The Committee periodically reviews the levels of perquisites and other personal benefits provided to named executive officers.

The named executive officers participate in the Company’s broad-based employee benefit plans, such as medical, dental, supplemental disability and term life insurance programs. Mr. Cole is provided use of a company automobile which is primarily used for business travel. Personal use is taxed through the Company’s payroll process. Mr. Cole and Ms. Lowery are entitled to receive a cash payment upon such executive’s death through the split dollar death benefit funded by bank owned life insurance.

Attributed costs of the personal benefits described above for the named executive officers for the fiscal year ended December 31, 2020, are included in the “All Other Compensation” column of the “Summary Compensation Table”.

Analysis of Total Mix of Compensation

The Board of Directors feels that the combination of making annual cash incentive/bonus payments based upon specific goals for each NEO and separate cash incentive/bonus payments tied to earnings goals for the Company provides the necessary incentives to reach the Company’s objectives. The cash bonus payments and the base salary together can provide the NEOs with a compensation package that is competitive with peers. Additionally, the 2007 Stock Incentive Plan provides the Company with the ability to better balance executive compensation between short-term components (base salary and annual cash incentives) and longer-term components (equity incentives) by providing the Committee with the ability to grant equity awards. In recent years, equity grants in the form of restricted shares have provided additional variable compensation that promotes retention and ties the NEOs interests to the shareholders of the Company. Another longer-term compensation program that is available to NEOs is the non-qualified deferred compensation benefit plan. We feel that our NEOs have valuable compensation components available at various levels that promote short-term, mid-term, and long-term achievement of goals and financially reward our NEOs for accomplishing the goals of the Company.

Employment Agreements with NEOs

We are party to an employment agreement with Mr. Cole since 2011. In 2019, we entered into an employment agreement with Ms. Lowery. The Committee believes that the employment agreements with our named executive officers provide a valuable retention tool, while also providing certain protections to the Bank (namely, restrictive covenants). In 2020, we amended the employment agreements with each of Mr. Cole and Ms. Lowery to address the application of Internal Revenue Code Section 280G and replace the current cut-back provision with a “compare and take better” provision, which requires a comparison of the after-tax benefit to the executive of (A) the total parachute payments after he or she pays the excise tax and income taxes thereon, to (B) a cut back of parachute payments to the extent necessary to avoid the imposition of the excise tax (i.e., limited to 2.999 times the executive’s base amount); the executive would be paid whichever amount yields the more favorable result to the executive. The amendment to Mr. Cole’s employment agreement also extends the application of the restrictive covenants in his employment agreement to a termination of employment for any reason.

Employment Agreement with Mr. Cole

In connection with his election as President and CEO of the Bank, the Bank and Mr. Cole entered into an employment agreement, effective May 31, 2011 (the “Agreement”). The Agreement provides for Mr. Cole to serve as President and CEO of the Bank for terms of three years beginning January 1, 2011, with automatic rolling three-year extensions, unless either the Bank or Mr. Cole provides 90 days’ notice of non-extension, in which case the Agreement would expire at the end of the then-current term. No prior notice is required in the case of termination for Cause.

Mr. Cole is paid a base salary subject to annual review as the Board of Directors may determine and is eligible to earn an annual cash bonus. Mr. Cole is also eligible to receive equity compensation awards on such basis as the Board of Directors determines and is eligible to participate in any benefit plans or programs that are offered to senior executives generally.

On any cessation of employment, Mr. Cole will be entitled to his earned but unpaid base salary. If Mr. Cole’s employment is terminated by the Bank without Cause, or if he voluntarily terminates his employment for Good Reason, each, as defined in his agreement, he will be entitled to a pro rata portion of the annual incentive payment for the year in which the termination occurs, and a lump sum payment in an amount equal to the greater of (i) the remaining salary due had Mr. Cole been employed through the end of the current term or (ii) eighteen months of his current salary, in addition to continued benefits through the end of the current term.

In the event there is a change in control, Mr. Cole will be entitled to (i) a lump sum payment equal to two times his base salary, (ii) all payments, benefits, bonuses or incentives, subject to their plan document, that would ordinarily be available to other employees, and (iii) accelerated vesting of any unvested deferred compensation. If Mr. Cole’s employment is terminated by the Bank without Cause or he resigns for Good Reason, he will be entitled to continuing medical, life and disability insurance coverage on the same basis as prior to termination for the remainder of the then current term.

If Mr. Cole’s employment is terminated due to disability, his salary would continue for six months or, if earlier, until the date payment begins under his disability policy, in addition to the earned compensation and bonus described below. If Mr. Cole dies during the term, he or his designated beneficiary, spouse or estate will be entitled to a lump sum payment of his earned compensation and pro-rata share of his annual bonus target amount for that year.

Under the Agreement, Mr. Cole is subject to standard confidentiality, non-solicitation and non-competition obligations during the term of the Agreement and for at least one year after his employment ends.

Employment Agreement with Ms. Lowery

On October 17, 2019, the Company entered into an Employment Agreement with Ms. Lowery which terminated and superseded in its entirety the Change in Control Agreement. The Agreement provides for Ms. Lowery to serve as the Executive Vice President and Chief Financial Officer of the Bank for terms of three years beginning October 19, 2019, with automatic rolling one year extensions, unless either the Bank or Ms. Lowery provides 60 days’ notice of non-extension, in which case the Agreement would expire at the end of the then current term.

Ms. Lowery is paid a base salary subject to annual review as the Board of Directors may determine and is eligible to receive an annual bonus up to a maximum of 30% of Base Salary. Ms. Lowery is also eligible to receive equity compensation awards on such basis as the Board of Directors determines and is eligible to participate in any benefit plans or programs that are offered to senior executives generally.

Ms. Lowery’s employment agreement provides for certain benefits upon a Change in Control. If, following a Change in Control, Ms. Lowery’s employment is involuntarily terminated other than for Cause or she resigns her position for Good Reason, she would be entitled to (i) a lump sum payment equal to two times her then-current base salary, (ii) continued benefits through the closing date of the Change in Control and for twenty-four months following the closing date, and (iii) immediate vesting of all cash-based and stock-based compensation, and any benefits under deferred compensation plans, subject to the achievement of performance-based conditions.

The amounts which would have been payable to Mr. Cole and Ms. Lowery, assuming a termination event on December 31, 2020, are provided in the Potential Payments Upon Termination or Change in Control Table beginning on page 34.

Compensation Committee Report

The Compensation Committee of the Company has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement.

This Report is submitted by the Compensation Committee of the Board of Directors of The First Bancshares, Inc.

	E. Ricky Gibson, Chairman
	David W. Bomboy
	Ted E. Parker
	Andrew D. Stetelman

Executive Compensation Tables

The First Bancshares, Inc.

Summary Compensation Table

For the Fiscal Years Ended December 31, 2020, December 31, 2019 and December 31, 2018

Name and Principal Position	Year		Salary($)		Non-Equity Incentive Plan Compensation ($)(1)		Stock Awards ($)(2)		Change in Pension Value and Non- qualified Deferred Compen- sation Earnings ($)(3)		All Other Compensation ($)(4)		Total($)
M. Ray (Hoppy) Cole, Jr., President and Chief Executive Officer		2020	$	522,566	$	260,039	$	284,750	$	500,755	$	17,925	$	1,586,035
		2019		468,856		245,320		313,415		61,425		15,339		1,104,355
		2018		413,063		132,473		274,928		58,145		14,994		893,603
Donna T. (Dee Dee) Lowery, Chief Financial Officer		2020		297,978		73,750		108,728		45,844		12,243		538,543
		2019		252,276		70,260		125,589		25,592		9,980		483,697
		2018		222,675		33,450		124,594		24,225		9,182		414,126

(1) Reflects annual incentive award payments pursuant to our incentive bonus compensation plan. See “Compensation Discussion and Analysis – 2020 Executive Compensation Components-Performance-Based Cash Incentive Compensation” beginning on page 19 for more information.

(2) Represents the grant date fair value of all time-based and performance-based restricted stock awards granted during the fiscal year. Performance-based awards were granted on February 20, 2020 and will be settled solely in shares of restricted stock at the end of a one-year performance period based on the satisfaction of the performance criteria. The shares of restricted stock will cliff vest five years from the date the shares are earned. The amounts presented for the performance-based restricted stock reflect the value of the award at maximum payout based on the probable outcome of the performance targets determined as of the grant date. For time-based and performance-based restricted stock awards, grant date fair value is calculated using the closing price of the Company’s common stock on the date of grant. Grant date fair value was based on $34.58, the closing share price on the grant date of February 20, 2020 for the performance-based awards, and $20.42, the closing share price on the grant date of July 17, 2020 for the time-based awards, in accordance with FASB Topic 718.

(3) Reflects changes in present value of Mr. Cole’s 2016 and 2020 SERP and Ms. Lowery’s 2016 SERP.

(4) Information regarding All Other Compensation for 2020 is reflected in the table below.

The First Bancshares, Inc.

All Other Compensation

For the Year Ended December 31, 2020

Name	Auto Allowance		401(k) Match		Group Term Life Insurance		Split Dollar Death Benefit BOLI		Additional Compensation (1)		Total All Other Compensation
M. Ray (Hoppy) Cole, Jr.	$	4,625	$	8,550	$	464	$	246	$	4,040	$	17,925
Donna T. (Dee Dee) Lowery		0		10,160		464		158		1,461		12,243

(1)

Represents reimbursement for club dues and cell phones for named executive officers.

The First Bancshares, Inc.

Grants of Plan Based Awards

As of December 31, 2020

		Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)						Estimated Future Payouts Under Equity Incentive Plan Awards(2)
Name	Grant Date	Threshold ($)		Target ($)		Maximum ($)		Threshold ($)		Target ($)		Maximum ($)		All Other Stock Awards: Number of Shares of Stock or Units (#)			Grant Date Fair Value of Stock and Option Awards ($)(4)
M. Ray (Hoppy) Cole, Jr.	2/20/20								1,625		3,250		6,500				$224,770
	2/20/20		78,012		156,023		312,047
	7/17/20														4,900	(3)	100,058
Donna T. (Dee Dee) Lowery	2/20/20								825		1,650		3,300				$114,114
	2/20/20		22,125		44,250		88,500
	7/17/20														732	(3)	14,947

(1) Amounts represent potential payments under our annual incentive program. The actual amount earned in 2020 was paid in March 2021 and is shown in the “Non-Equity Incentive Plan Compensation” column of the 2020 Summary Compensation Table. See “Compensation Discussion and Analysis — 2020 Executive Compensation Components – Performance-Based Cash Incentive Compensation,” for more information regarding our 2020 annual incentive program.

(2) Amounts represent awards of performance-based restricted stock that were granted under the 2007 Plan based upon the Company’s achievement of certain performance measures at the end of the one-year performance period. Based on the defined objectives of the awards, the NEO has the opportunity to earn shares of restricted stock (25% at threshold, 50% at target and 100% at maximum) following the one-year performance period, and any such earned shares will cliff vest five years from date earned. The amount shown reflects the value of the award at maximum based on the probable outcome of the performance measures determined as of the grant date in accordance with ASC 718. See “Compensation Discussion and Analysis — 2020 Executive Compensation Components – Equity Incentive Compensation” for more information on the grants of performance-based restricted stock.

(3) Represents special equity grants for completion of acquisition integrations. See “Compensation Discussion and Analysis — 2020 Executive Compensation Components – Special Equity Grants” for more information on these grants.

(4) Represents the aggregate grant date fair value of performance-based and time-based restricted stock awarded during the fiscal year, computed in accordance with FASB ASC Topic 718. Refer to footnote 2 of the 2020 Summary Compensation Table for additional information.

The First Bancshares, Inc.

Outstanding Equity Awards at 2020 Fiscal Year-End

As of December 31, 2020

	Stock Awards
Name	Number of Shares or Units of Stock That Have Not Vested (#)			Market Value of Shares or Units of Stock That Have Not Vested ($)		Vesting Date (1)
M. Ray (Hoppy) Cole, Jr.		10,106			173,318	02/01/2021
		575			10,350	03/01/2021
		10,717			296,325	02/01/2022
		3,584			99,994	06/13/2022
		5,829			185,071	03/01/2023
		1,682			68,878	08/16/2023
		6,500			213,395	03/01/2024
		3,334			100,320	07/18/2024
		5,341			175,345	03/01/2025
		4,900			100,058	07/17/2025
		6,500	(2)		208,455	03/01/2026
Donna T. (Dee Dee) Lowery		3,276			56,183	02/01/2021
		4,000			110,600	02/01/2022
		675			18,833	06/13/2022
		2,960			93,980	03/01/2023
		488			19,984	08/16/2023
		3,300			108,339	03/01/2024
		575			17,302	07/18/2024
		2,712			89,035	03/01/2025
		732			14,947	07/17/2025
		3,300	(2)		105,831	03/01/2026

(1)

Time-based awards cliff-vest five years following the grant date or, in the case of performance-based restricted stock, following the date the shares of restricted stock are earned and issued based on achievement of the applicable performance conditions.

(2)

Reflects performance-based restricted stock that was earned at 100% based on achievement of performance objectives over the one year period ending December 31, 2020.

The First Bancshares, Inc.

Stock Vested

For the Year Ended December 31, 2020

	Stock Awards
Name	Number of Shares Acquired on Vesting (#)(1)		Value Realized on Vesting ($)(2)
M. Ray (Hoppy) Cole, Jr.		8,814	$	303,378
Donna T. (Dee Dee) Lowery		4,000		137,680

(1)

The shares included in the table represent gross shares exercised or vested. No shares were forfeited for taxes.

(2)

The value realized by the NEO upon the vesting of restricted stock is calculated by multiplying the number of shares of stock vested by $34.42, the market value of the underlying shares on the vesting date, which is the amount that is taxable to the executive.

The First Bancshares, Inc.

Pension Benefits Table

For the Year Ended December 31, 2020

Name and Principal Position	Plan name (1)(2)(3)	Number of years of credited service		Present Value of Accumulated Benefit			Payments During Last Fiscal Year
M. Ray (Hoppy) Cole, Jr.,	2016 Plan		18	$	1,215,261	(1)	$	0
	2020 Plan		18		2,506,669	(2)		0
Donna T. (Dee Dee) Lowery	2016 Plan		16		506,315	(1)		0
	2021 Plan		16		0	(3)		0

(1) Supplemental Executive Retirement Plan (2016 SERP). Each of Mr. Cole and Ms. Lowery participate in a 2016 SERP. The 2016 SERP provides for an annual supplemental retirement benefit in the fixed amount of $164,110 for Mr. Cole and $89,140 for Ms. Lowery. Mr. Cole and Ms. Lowery vest 10% per year until full vesting occurs following ten years of service, and both are currently 60% vested in the benefit. Except as provided below, the benefit will commence on the first day of the month following their 65th birthday and will be paid in equal monthly installments over fifteen years. Amounts become payable upon their death, disability, termination of employment, change in control of the Company or retirement.

If Mr. Cole or Ms. Lowery separate from service prior to age 65, other than by reason of death, disability or a termination for cause other than in connection with a change in control, then they will receive a lump sum payment equal to the vested portion of the accrued liability balance of the SERP.

If Mr. Cole or Ms. Lowery becomes disabled, then they will receive a lump sum payment equal to the accrued liability balance portion of the SERP. The benefit is forfeited in the event of termination for "Cause" as defined in the agreement.

In the event of Mr. Cole’s or Ms. Lowery’s death prior to separation from service, their beneficiary will receive a lump sum payment equal to $2,961,650, in the case of Mr. Cole, and $1,337,100, in the case of Ms. Lowery. In the event of Mr. Cole’s or Ms. Lowery’s death following separation from service, their beneficiary will receive an amount equal to any remaining unpaid payments to be paid in equal monthly installments.

In the event of a change of control, Mr. Cole and Ms. Lowery will receive a lump sum payment equal to 100% of the present value of the full normal retirement benefit.

The present value of accumulated benefit is based on a 5.5% discount rate.

(2) Mr. Cole’s 2020 SERP. On January 16, 2020, the Bank entered into an additional Supplemental Executive Retirement Plan (2020 SERP) with Mr. Cole. The effective date of the 2020 SERP was January 1, 2020. The 2020 SERP provides for a lifetime annual payment of $208,695 per year, which will be payable in equal monthly installments upon Mr. Cole’s separation from service following attainment of age 65 while in the employment of the Bank (except in the case of Mr. Cole’s death, in which case the death benefit will be paid in a lump sum). Mr. Cole will vest as to 1.205% of such annual benefit on a monthly basis beginning January 1, 2020 through November 30, 2026. As a condition to receipt of the SERP benefits, Mr. Cole has agreed to a 2-year non-competition covenant following his separation from service with the Bank.

If Mr. Cole separates from service prior to age 65, other than by reason of his death or a termination for cause other than in connection with a change in control, then he will receive the vested portion of the annual benefit.

In the event of a change of control, Mr. Cole will receive 100% of the lifetime annual benefit.

If Mr. Cole separates from service involuntarily following a change in control prior to age 65, then he will receive 100% of the lifetime annual benefit.

In the event of Mr. Cole’s death, his beneficiary will receive a lump sum payment equal to $3,547,815.

The present value of accumulated benefit is based on a 2.47% discount rate.

(3) Ms. Lowery’s 2021 SERP. On December 14, 2020, the Bank entered into an additional supplemental executive retirement plan (2021 SERP) with Ms. Lowery. The effective date of the 2021 SERP is January 1, 2021. The 2021 SERP provides for a lifetime annual payment of $175,231 per year, which will be payable in equal monthly installments upon Ms. Lowery’s separation from service following attainment of age 65 while in the employment of the Bank (except in the case of Ms. Lowery’s death, in which case the death benefit will be paid in a lump sum). Ms. Lowery will vest as to 0.7752% of the annual benefit on a monthly basis beginning January 1, 2021 through September 1, 2031. As a condition to receipt of the 2021 SERP benefits, Ms. Lowery has agreed to a 2-year non-competition covenant following her separation from service with the Bank.

If Ms. Lowery separates from service prior to age 65, other than by reason of her death or a termination for cause and other than in connection with a change in control, then she will receive the vested portion of the annual benefit.

In the event of a change of control, Ms. Lowery will receive 100% of the lifetime annual benefit.

If Ms. Lowery separates from service involuntarily following a change in control prior to age 65, then she will receive 100% of the lifetime annual benefit.

In the event of Ms. Lowery’s death prior to her separation from service, her beneficiary will receive a lump sum payment equal to $3,679,851.

The present value of accumulated benefit is based on a 3.0% discount rate.

Amount related to Ms. Lowery’s 2021 SERP are not reflected in the table above because such plan was not effective until January 1, 2021.

The First Bancshares, Inc.

Potential Payments Upon Termination or Change-in-Control

As of December 31, 2020

The following table describes the potential payments and benefits that would have been payable to the NEOs under our existing plans and agreements, assuming (1) a termination of employment and/or (2) a change in control occurred, in each case, on December 31, 2020. The amounts shown in the table do not include payments and benefits to the extent they are provided generally to all salaried employees upon termination of employment and do not discriminate in scope, terms or operation in favor of the NEOs. Distributions pursuant to the 2016, 2020 and 2021 SERPs that would be made are set forth in the 2020 Pension Benefits table above.

Executive Benefits and Payments Upon Termination or Change-in-Control	Normal Retirement			Death			Disability			Termination without Cause or for Good Reason			Change in Control Only			Termination without Cause/Good Reason Following Change in Control
M. Ray (Hoppy) Cole, Jr.
Compensation:
Base Salary	$	-		$	-		$	260,039	(1)	$	1,271,713	(2)	$	1,664,250	(3)	$	2,935,963	(2)(3)
Benefits & Perquisites:
BOLI Death Benefit		-			200,000			-			-			-			-
Restricted Stock Awards		-	(4)		1,623,300	(4)		-			1,623,300	(4)		1,623,300	(5)		1,623,300	(7)

Total		-			1,823,300			260,039			2,895,013			3,287,550			4,559,263
Donna T. (Dee Dee) Lowery
Compensation:
Base Salary		-			-			-			-			-			775,356	(6)
Benefits & Perquisites:
BOLI Death Benefit		-			200,000			-			-			-			-
Restricted Stock Awards		-	(4)		578,012	(4)		-			578,012	(4)		578,012	(5)		578,012	(7)

Total		-			778,012			-			578,012			578,012			1,353,368

The First Bancshares, Inc.

Potential Payments upon Termination or Change-in-Control (Continued)

As of December 31, 2020

(1)	In the event of Mr. Cole’s disability, salary will continue for 6 months or, if earlier, until the date payments begin under disability insurance policy. Mr. Cole will also receive a pro rata bonus for the year of the disability.
(2)	In the event of termination without cause or a resignation for good reason (as such terms are defined in the employment agreement), Mr. Cole will receive a lump sum severance payment and continuation of health benefits in an amount equal to the greater of 18 months or through the end of the term. Amount shown includes salary of $1,256,855 plus health benefits of $14,854 through the end of the expiration of the contract term, 5-31-23.
(3)	In the event of a change in control, Mr. Cole will receive a lump sum payment in the amount of two times current annual salary, and bonuses accrued that would have been paid.
(4)	All unvested restricted stock awards will become fully vested in connection with the NEO’s retirement, death or termination of employment by the Company without cause. As of December 31, 2020, none of the NEOs have reached retirement age under the restricted stock award agreement, which is 65. Calculated based on 12-31-20 stock closing price of $30.88 per share.
(5)	All unvested restricted stock awards will become fully vested in the event of a change in control in which the acquirer does not assume the awards. Calculated based on 12-31-20 stock closing price of $30.88 per share.
(6)	In the event of a change in control and termination without cause or for good reason, Ms. Lowery will receive severance of two times then-current base salary in a lump sum and monthly payments equal to employer’s portion of COBRA for 18 months.
(7)	All unvested restricted stock awards will become fully vested if termination without cause or resignation for good reason occurs within 24 months of a change in control in which the Company is the survivor or the acquirer has assumed the restricted stock awards. Calculated based on 12-31-20 stock closing price of $30.88 per share.

For purposes of Mr. Cole’s employment agreement, “good reason” means (i) the failure to continue in effect any material benefit set forth in the employment agreement (unless done on a Bank-wide basis), (ii) a material breach of the agreement by the Bank, or (iii) a change in control.

For purposes of Mr. Cole’s employment agreement, “change in control” means (i) the acquisition by any person or group of the power to vote, or the acquisition of, more than 50% ownership of the Company’s voting stock, (ii) the acquisition by any person or group, during the twelve month period ending on the date of the most recent acquisition, of ownership of stock possessing fifty percent (50%) or more of the total voting power of the stock of the Company, (iii) the replacement during any twelve month period of a majority of the members of the Board of Directors of the Company by directors whose appointment or election is not endorsed by a majority of the members of the Board of Directors before the date of such appointment or election, or (iv) the acquisition by any person or group, during the twelve month period ending on the date of the most recent acquisition, of assets of the Bank having a total gross fair market value of more than eighty percent (80%) of the total gross fair market value of all of the assets of the Bank immediately prior to such acquisition.

For purposes of Ms. Lowery’s employment agreement, “good reason” means (i) a material diminution in title, authority, duties, or responsibilities; (ii) a material diminution in base salary; (iii) a 50-mile relocation of primary office; or (iv) a material breach of the terms of the employment agreement by the Bank.

For purposes of Ms. Lowery’s employment agreement, “change in control” means (i) a change in the ownership of the Bank within the meaning of Treasury Regulations § 1.409A-3(i)(5)(v); (ii) a change in the effective control of the Bank within the meaning of Treasury Regulations § 1.409A-3(i)(5)(vi); or (iii) a change in the ownership of a substantial portion of the Bank’s assets within the meaning of Treasury Regulations § 1.409A-3(i)(5)(vii).

CEO Pay Ratio

As required by Section 953(b) of the Dodd-Frank Act and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our median employee and the annual total compensation of our CEO. The pay ratio included in this information is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. Given the different methodologies that various public companies will use to determine an estimate of their pay ratio, the estimated ratio reported below should not be used as a basis for comparison between companies.

To identify the median employee, we conducted a full analysis of our employee population, other than the CEO, without the use of statistical sampling. We selected December 31, 2020 as the date upon which we would identify the “median employee”. We determined our median employee using Box 5 wages of the employee’s W-2 for the full year 2020. Using this methodology, we determined that the median employee was a Personal Banker. With respect to the annual total compensation of the median employee, we identified and calculated the elements of such employee’s compensation for 2020 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, which included base pay, bonuses, commissions, fringe benefits, incentives, severance, Company contributions to the employee’s 401(k) and any vacation payout. The median employee for 2020 is different from the median employee for 2019.

For 2020, our last completed fiscal year, the annual total compensation of our median employee was $44,920 and the annual total compensation of our CEO was $1,586,035. Based on this information, for 2020, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees was 35 to 1.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table provides information with respect to securities authorized for issuance under all of the Company’s equity compensation plans as of December 31, 2020.

Plan Category	Number of securities to be issued upon exercise of outstanding option, warrants and rights (a)		Weighted-average exercise price of outstanding options, warrants, and rights (b)		Number of securities remaining available to future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)(1)
Equity compensation plans approved by security holders		-0-		-0-		64,149 shares

Equity compensation plans not approved by security holders		-0-		-0-		-0-
Total		-0-		-0-		564,149 shares

(1)

All of such shares may be issued pursuant to grants of full-value stock awards.

Director Compensation

Fees Earned or Paid in Cash. Directors serving on the Company’s Board were paid an annual retainer of $5,000. In order to receive the retainer, directors of the Company must attend at least 75% of the scheduled board and committee meetings during the year. Company directors were paid an additional $750 per meeting, which consisted of four regularly scheduled meetings and six special meetings in 2020. Directors who served on the audit committee of the Company’s Board of Directors were paid $500 per meeting; directors who served on the compensation committee of the Company’s Board of Directors were paid $350 per meeting; directors who served on the corporate governance committee of the Company’s Board of Directors were paid $350 per meeting; and directors who served on the executive committee of the Company’s Board of Directors were paid $450 per meeting. The Chairman of the Board was paid a retainer of $7,000 per quarter. Each of the chairmen of the audit, compensation and corporate governance committees were paid an additional retainer of $750 per quarter.

Directors serving on the Bank’s Board were paid an annual retainer of $8,000. In order to receive the retainer, directors of the Bank must attend at least 75% of the scheduled Bank Board and committee meetings during the year. The Bank directors were paid an additional $700 per meeting which consisted of twelve regularly scheduled meetings in 2020. Directors who served on the risk and loan committees of the Bank’s Board of directors were paid $350 and $300 per meeting, respectively. The chairman of the risk committee of the Bank’s Board of directors was paid an additional retainer of $750 per quarter.

Stock Awards. Directors of the Boards of both the Company and the Bank receive 1,000 shares of restricted stock. The Chairman of the Board, who is a director of both the Company and Bank, receives 2,500 shares of restricted stock. Directors of the Bank who are not directors of the Company receive 250 shares of restricted stock, and directors of the Company who are not directors of the Bank receive 500 shares of restricted stock. Grants are made as of March 1^st each year and will vest on the fifth anniversary of the date of grant, with respect to restricted stock awards granted prior to 2021, and on the first anniversary of the date of grant, with respect to restricted stock awards granted in 2021 and forward.

The First Bancshares, Inc.

Director Compensation Table

For the Year Ended December 31, 2020

The table below summarizes the total compensation paid to or earned by our non-employee directors during 2020. M. Ray (Hoppy) Cole, Jr. did not receive director stock awards nor did he receive director fees for his service on the Board of Directors for the Company or the Bank.

	Fees Earned or Paid in Cash ($) (1)		Stock Awards ($)(2)(3)		Total ($)
Rodney D. Bennett, Ed.D	$	29,100	$	29,840	$	58,940
David W. Bomboy, M.D.		32,450		29,840		62,290
E. Ricky Gibson		83,150		74,600		157,750
Charles R. Lightsey		58,050		29,840		87,890
Fred A. McMurry		37,950		29,840		67,790
Thomas E. Mitchell		33,000		29,840		62,840
Renee Moore		26,867		7,460		34,327
Ted E. Parker		33,700		29,840		63,540
J. Douglas Seidenburg		46,800		29,840		76,640
Andrew D. Stetelman		37,550		29,840		67,390

(1)

Includes meeting fees and annual retainer paid to directors of the Bank.

(2)

Value based on value at grant date of $29.84 per share for 1,000 shares to each director serving on the Boards of both the Bank and the Company, 250 shares to the director serving on the board of the Bank, and 2,500 shares to the Chairman of the Board, and valued in accordance with FASB Topic 718.

(3)

Refer to the Beneficial Ownership Table, “Security Ownership of Directors and Executive Officers” for information on each director’s unvested shares of restricted stock.

SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information regarding the beneficial ownership of common stock in the Company owned by the directors, director nominees, and NEOs, as of March 26, 2021.

Name of	Amount and Nature			Percent of
Beneficial Owner	of Beneficial Ownership(1)			Class(2)
Rodney D. Bennett, Ed.D		6,250	(3)		*

David W. Bomboy, M.D.		130,080	(4)		*

M. Ray (Hoppy) Cole, Jr.		83,941	(5)		*

E. Ricky Gibson		103,918	(6)		*

Charles R. Lightsey		93,356	(7)		*

Fred A. McMurry		229,232	(8)(15)		1.09	%

Thomas E. Mitchell		12,250	(9)		*

Renee Moore		2,059	(10)		*

Ted E. Parker		86,672	(11)		*

J. Douglas Seidenburg		99,780	(12)		*

Andrew D. Stetelman		54,932	(13)		*

Donna T. (Dee Dee) Lowery		40,575	(14)(15)		*

Directors and Executive

Officers as a group		943,045			4.49	%

* Represents less than 1% of issued and outstanding common stock.

(1)

Includes shares for which the named person:

has sole voting and investment power,

has shared voting and investment power with a spouse, or

holds in an IRA or other retirement plan program, unless otherwise indicated in these footnotes.

(2)

Calculated based on 21,018,319 shares outstanding.

(3)

SEC Form DEF 14A filed by The First Bancshares, Inc.