FIRST BANCSHARES, INC.
P.O. Box 777
Mountain Grove, Missouri 65711
Telephone: (417) 926-5151
September 17, 2001
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of First Bancshares, Inc. to be held at the Days Inn Conference Room, 300 East 19th Street, Mountain Grove, Missouri, on Wednesday, October 17, 2001, at 2:00 p.m., Central Time.
The attached Notice of the Annual Meeting of Stockholders and Proxy Statement describe the formal business to be transacted at the meeting. During the meeting, we will also report on the operations of the Corporation. Directors and officers of the Corporation, as well as a representative of Kirkpatrick, Phillips & Miller, CPAs, P.C., the Corporation's independent auditors, will be present to respond to any appropriate questions stockholders may have.
To ensure proper representation of your shares at the meeting, please sign, date and return the enclosed proxy card in the enclosed postage-prepaid envelope as soon as possible even if you currently plan to attend the meeting. This will not prevent you from voting in person, but will assure that your vote is counted if you are unable to attend the meeting.
Sincerely,
Stephen H. Romines
President and Chief Executive Officer
FIRST BANCSHARES, INC.
142 EAST FIRST STREET
MOUNTAIN GROVE, MISSOURI 65711
(417) 926-5151
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 17, 2001
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders ("Meeting") of First Bancshares, Inc. ("Corporation") will be held at the Days Inn Conference Room, 300 East 19th Street, Mountain Grove, Missouri, on Wednesday, October 17, 2001, at 2:00 p.m., Central Time.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of two directors of the Corporation; and
2. Such other matters as may properly come before the Meeting or any adjournments thereof.
NOTE: The Board of Directors is not aware of any other business to come before the Meeting.
Any action may be taken on the foregoing proposal at the Meeting on the date specified above, or on any date or dates to which, by original or later adjournment, the Meeting may be adjourned. Pursuant to the Corporation's Bylaws, the Board of Directors has fixed the close of business on August 31, 2001 as the record date for the determination of the stockholders entitled to notice of and to vote at the Meeting and any adjournments thereof.
You are requested to complete and sign the enclosed form of Proxy which is solicited by the Board of Directors and mail it promptly in the enclosed envelope. The Proxy will not be used if you attend the Meeting and vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
GINA GUNNELS
SECRETARY
Mountain Grove, Missouri
September 17, 2001
IMPORTANT THE PROMPT RETURN OF THE PROXY CARD WILL SAVE THE CORPORATION THE EXPENSE OF FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
PROXY STATEMENT
OF
FIRST BANCSHARES, INC.
142 EAST FIRST STREET
MOUNTAIN GROVE, MISSOURI 65711
(417) 926-5151
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 17, 2001
This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of First Bancshares, Inc. ("Corporation") to be used at the Annual Meeting of Stockholders of the Corporation ("Meeting"). The Meeting will be held at the Days Inn Conference Room, 300 East 19th Street, Mountain Grove, Missouri, on Wednesday, October 17, 2001, at 2:00 p.m., Central Time. The accompanying Notice of Annual Meeting of Stockholders and this Proxy Statement are being mailed to stockholders on or about September 17, 2001. The Corporation is the holding company for First Home Savings Bank ("Savings Bank").
VOTING AND PROXY PROCEDURE
Stockholders Entitled to Vote. Stockholders of record as of the close of business on August 31, 2001, are entitled to one vote for each share of common stock of the Corporation ("Common Stock") then held. As of August 31, 2001, the Corporation had 1,784,047 shares of Common Stock issued and outstanding. As provided in the Corporation's Articles of Incorporation, record holders of the Corporation's Common Stock who beneficially own, either directly or indirectly, in excess of 10% of the Corporation's outstanding shares are not entitled to any vote in respect of the shares held in excess of the 10% limit.
If you are a beneficial owner of the Corporation's Common Stock held by a broker, bank or other nominee (i.e., in "street name"), you will need proof of ownership to be admitted to the Meeting. A recent brokerage statement or letter from a bank or broker are examples of proof of ownership. If you want to vote your shares of the Corporation's Common Stock held in street name in person at the Meeting, you will have to get a written proxy in your name from the broker, bank or other nominee who holds your shares.
Quorum. The presence, in person or by proxy, of at least a majority of the total number of outstanding shares of Common Stock entitled to vote is necessary to constitute a quorum at the Meeting. Abstentions will be counted as shares present and entitled to vote at the Meeting for purposes of determining the existence of a quorum. Broker non-votes will be considered shares present for purposes of determining a quorum.
Voting. The Board of Directors solicits proxies so that each stockholder has the opportunity to vote on the proposal to be considered at the Meeting. When a proxy card is returned properly signed and dated, the shares represented thereby will be voted in accordance with the instructions on the proxy card. Where no instructions are indicated, proxies will be voted FOR the election of the nominees for director set forth below. If a stockholder of record attends the Meeting, he or she may vote by ballot.
The directors to be elected at the Meeting will be elected by a plurality of the votes cast by stockholders present in person or by proxy and entitled to vote. Stockholders are not permitted to cumulate their votes for the election of directors. Votes may be cast for or withheld from each nominee. Votes that are withheld and broker non-votes will have no effect on the outcome of the election because the nominees receiving the greatest number of votes will be elected.
If a stockholder does not return a signed and dated proxy card, or does not attend the Meeting and vote in person, his or her shares will not be voted.
Revocation of a Proxy. Stockholders who execute proxies retain the right to revoke them at any time. Proxies may be revoked by written notice delivered in person or mailed to the Secretary of the Corporation or by filing a later dated and signed proxy prior to a vote being taken on a particular proposal at the Meeting. Attendance at the Meeting will not automatically revoke a proxy, but a stockholder of record in attendance may request a ballot and vote in person, thereby revoking a prior granted proxy.
If your Common Stock of the Corporation is held in street name, you will receive instructions from your broker, bank or other nominee that you must follow in order to have your shares voted. Your broker or bank may allow you to deliver your voting instructions via the telephone or the Internet. Please see the instruction form that accompanies this proxy statement. If you wish to change your voting instructions after you have returned your voting instruction form to your broker or bank, you must contact your broker or bank.
Participants in the First Home Savings Bank ESOP. If a stockholder is a participant in the First Home Savings Bank Employee Stock Ownership Plan (the "ESOP"), the proxy card represents a voting instruction to the trustees of the ESOP as to the number of shares in the participant's plan account. Each participant in the ESOP may direct the trustees as to the manner in which shares of Common Stock allocated to the participant's plan account are to be voted. Unallocated shares of Common Stock held by the ESOP and allocated shares for which no voting instructions are received will be voted by the trustees in the same proportion as shares for which the trustees have received voting instructions.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Persons and groups beneficially owning in excess of 5% of the Common Stock are required to file with the Securities and Exchange Commission ("SEC"), and furnish a copy to the Corporation, certain reports disclosing such ownership pursuant to the Securities Exchange Act of 1934, as amended ("Exchange Act"). Based upon such reports, the following table sets forth, as of the close of business on August 31, 2001, certain information as to those persons who were beneficial owners of more than 5% of the outstanding shares of Common Stock. Management knows of no persons other than those set forth below who owned more than 5% of the outstanding shares of Common Stock at the close of business on August 31, 2001. The table also sets forth, as of the close of business on August 31, 2001, certain information as to shares of Common Stock beneficially owned by the Corporation's directors and "named executive officer," and all directors and executive officers as a group.
Names and | Amount and Nature | Percent of |
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Addresses of | of Beneficial | Common Stock |
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Beneficial Owners | Ownership (1) | Outstanding |
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Beneficial Owners of More Than 5% |
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First Home Savings Bank | 269,001 | 15.08% |
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Employee Stock |
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Ownership Plan Trust(2) |
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142 East First Street |
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Mountain Grove, Missouri 65711 |
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Stephen H. Romines(3) | 89,806 | 5.01 |
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142 East First Street |
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Mountain Grove, Missouri 65711 |
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Directors and Nominees |
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Harold F. Glass | 47,749 | 2.65 |
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Dr. James F. Moore, Jr. | 17,250 | 0.96 |
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John G. Moody | 10,250 | 0.58 |
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Almeta Hardebeck | 3,751 | 0.21 |
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Charles W. Schumacher | 2,100 | 0.12 |
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Named Executive Officer(4) |
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Stephen H. Romines(5) | 89,806 | 5.01 |
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All Executive Officers and | 256,329 | 13.82 |
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Directors as a |
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Group (nine persons) |
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_____________________________
(1) In accordance with Rule 13d-3 under the Exchange Act, a person is deemed to be the beneficial owner, for purposes of this table, of any shares of Common Stock if he or she has voting and/or investment power with respect to such security. The table includes shares owned by spouses, other immediate family members in trust, shares held in retirement accounts or funds for the benefit of the named individuals, and other forms of ownership, over which shares the persons named in the table may possess voting and/or investment power. Shares held in accounts under the Savings Bank's ESOP as of August 31, 2001, as to which the holders have voting power but not investment power, are also included as follows: Mr. Romines, 27,264; Ms. Hardebeck, 1,751; all executive officers and directors as a group, 66,778 shares. This table also includes shares of Common Stock subject to outstanding options exercisable within 60 days of the close of business of August 31, 2001, pursuant to the 1993 Stock Option Plan ("Option Plan"). Shares of Common Stock subject to outstanding options exercisable within 60 days from August 31, 2001 are as follows: Mr. Romines, 9,000 shares; Mr. Glass, 18,000 shares; Dr. Moore, 12,000 shares; Mr. Schumacher, 2,000 shares. This table also includes shares of Common Stock awarded to participants' under the Savings Bank's Management Recognition and Development Plan ("MRDP") which became fully vested as of December 23, 1998.
(2) Under the terms of the ESOP, the trustees will vote unallocated shares and allocated shares for which no voting instructions are received in the same proportion as shares for which the trustees have received voting instructions from participants. As of the close of business on August 31, 2001, 247,325 shares have been allocated to participants' accounts, excluding allocations to individuals who no longer participate in the ESOP. The trustees of the ESOP are Directors Romines, Glass and Moody.
(3) Based on information disclosed in a Schedule 13D, dated June 12, 1997, filed with the SEC.
(4) SEC regulations define the term "named executive officer" to include the chief executive officer, regardless of compensation level, and the four most highly compensated executive officers, other than the chief executive officer, whose total annual salary and bonus for the last completed fiscal year exceeded $100,000. Mr. Romines is the Corporation's only "named executive officer" for the fiscal year ended June 30, 2001.
(5) Mr. Romines is also a director of the Corporation.
PROPOSAL I - ELECTION OF DIRECTORS
The Corporation's Board of Directors consists of five members. The Corporation's Bylaws provide that directors are elected for terms of three years, one-third of whom are elected annually. Two directors will be elected at the Meeting, who will serve for three year terms, or until their respective successors have been elected and qualified. The Board of Directors, acting in its capacity as the Nominating Committee, has nominated for election as directors John G. Moody and Charles W. Schumacher. Mr. Moody is currently a director of the Corporation and the Savings Bank. Mr. Schumacher is currently Senior Vice President of the Savings Bank. Almeta Hardebeck will be retiring as a director of the Corporation immediately following the meeting. Mr. Schumacher has been nominated to fill the vacancy.
It is intended that the proxies solicited by the Board of Directors will be voted for the election of the above named nominees. If any nominee is unable to serve, the shares represented by all valid proxies will be voted for the election of such substitute as the Board of Directors may recommend. At this time, the Board knows of no reason why any nominee might be unavailable to serve.
The Board of Directors recommends a vote "FOR" the election of Messrs. Moody and Schumacher.
The following table sets forth as to the nominees for election at the meeting and each director continuing in office, his name, age, and the year he first became a director. Unless otherwise indicated, the principal occupation listed for each person below has been his occupation for the past five years.
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| Year | Year | |
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| Elected | Term | |
Name | Age(1) | Principal Occupation | Director(2) | Expires | |
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BOARD NOMINEES |
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John G. Moody | 49 | Judge of the 44th Missouri | 1993 | 2004(3) | |
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| Judicial Circuit |
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Charles W. Schumacher | 49 | Senior Vice President of the | 2001(3) | 2004(3) | |
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| Savings Bank. Previously |
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| Executive Vice President and |
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| CEO of Northwoods State Bank |
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| From 1992-2000. |
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DIRECTORS CONTINUING IN OFFICE | |||||
Harold F. Glass | 60 | Self-employed attorney in | 1978 | 2003 | |
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| Springfield, Missouri |
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Dr. James F. Moore, Jr. | 62 | Administrator and Director of the | 1993 | 2003 | |
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| State Fruit Experiment Station of the |
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| Southwest Missouri State University, |
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| Springfield, Missouri |
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Stephen H. Romines | 59 | Chairman of the Board, President | 1973 | 2002 | |
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| and Chief Executive Officer of |
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| the Corporation and the Savings |
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| Bank |
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____________________________ |
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(1) At June 30, 2001.
(2) Includes prior service on the Board of Directors of the Savings Bank.
(3) Assuming election or re-election at the Meeting.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Boards of Directors of the Corporation and Savings Bank conduct their business through meetings and committees of the Boards. The Board of Directors of the Corporation and the Savings Bank meets monthly and holds additional special meetings as needed. During the fiscal year ended June 30, 2001, the Board of Directors of the Corporation held 12 meetings and the Board of Directors of the Savings Bank held 12 meetings. No director of the Corporation or the Savings Bank attended fewer than 75% of the total meetings of the Boards' and committee meetings on which such Board member served during this period.
The Board of Directors of the Corporation has an Executive Committee which consists of Messrs. Romines, Glass and Moore. The Executive Committee meets for the purpose of acting as a long range planning committee of the Corporation and to take any and all actions they deem necessary or appropriate between regular meetings of the Board. This Committee did not meet during fiscal 2001.
The Corporation's Audit Committee consists of Messrs. Moore, Moody and Glass. This Committee meets for the purpose of reviewing the audit procedures at the Corporation, the report and performance of the Corporation's independent auditing firm, and to take such other actions and responsibilities as shall from time to time be deemed necessary or appropriate. This Committee met four times during fiscal 2001.
Compensation Committee Interlocks and Insider Participation. There are no interlocks or insider participation with respect to the Compensation Committee of the Board of Directors of the Corporation.
The Board of Directors of the Corporation met once in its capacity as the Nominating Committee during the fiscal year ended June 30, 2001.
DIRECTORS' COMPENSATION
Members of the Board of Directors of the Savings Bank currently receive a fee of $300 per Board meeting, Director Glass receives $43 per meeting as travel allowance and the Chairman of the Board receives $175 per meeting. No fees are paid for committee meetings. No other fees were paid to members of the Corporation's Board of Directors for the year ended June 30, 2001. Total fees paid to directors of the Savings Bank during the fiscal year ended June 30, 2001 were $19,116.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following information is furnished for the Chief Executive Officer of the Corporation. No other executive officer of the Corporation or Savings Bank received salary and bonus in excess of $100,000 during the year ended June 30, 2001.
Annual Compensation(1) |
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Name and |
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| Other Annual |
Principal |
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Position | Year | ($)(2) | ($) | ($)(3) |
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Stephen H. |
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Romines | 2001 | $101,250 | -- | -- |
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President and | 2000 | 115,091 | -- | -- |
Chief Executive |
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Officer | 1999 | 110,450 | -- | -- |
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(1) All compensation, including fringe benefits, are paid by the Savings Bank.
(2) Includes director's fees of $3,600 for each of fiscal 2001, 2000 and 1999, and chairman of the board fees of $2,100 for each of fiscal 2001, 2000 and 1999.
(3) Does not include perquisites which did not exceed $50,000 or 10% of salary and bonus.
Option Exercise/Value Table
The following information with respect to options exercised during the fiscal year ended June 30, 2001 and remaining unexercised at the end of the fiscal year, is presented for Mr. Romines. No options were granted to Mr. Romines during the fiscal year.
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| Value of |
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| Number of | Unexercised |
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| Unexercised | In-the-Money |
| Shares |
| Options at | Options at |
| Acquired |
| FY-End(#) | FY-End ($) |
| on | Value |
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| Exercise | Realized | Exercisable/ | Exercisable/ |
Name | (#) | ($) | Unexercisable | Unexercisable |
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Stephen H. Romines | -0- | $-0- | 9,000/-0- | $94,500/$-0- |
Employment Agreement. The Corporation and the Savings Bank have entered into a three-year employment agreement with Stephen H. Romines who serves as President and Chief Executive Officer of the Corporation and the Savings Bank. The agreement, extended in 1999, established a salary of $108,940, for that year which was paid by the Savings Bank and which may be increased at the discretion of the Board of Directors or an authorized committee of the Board. Under the agreement, Mr. Romines' salary may not be decreased during the term of the employment agreement without his prior written consent. The agreement is terminable by the Savings Bank or the Corporation for just cause at any time or in certain events specified by Office of Thrift Supervision ("OTS") regulations. The employment agreement provides for severance payments and other benefits in the event of involuntary termination of employment in connection with any change in control of the Savings Bank and the Corporation. Severance payments also will be provided on a similar basis in connection with a voluntary termination of employment where, subsequent to a change in control, Mr. Romines is assigned duties inconsistent with his position, duties, responsibilities and status immediately prior to such change in control. The term "change in control" is defined in the agreement as, among other things, any time during the period of employment when a change of control is deemed to have occurred under regulations of the OTS or a change in the composition of more than a majority of the Board of Directors of the Corporation occurs.
In the event of a change in control, the severance payment pursuant to the agreement will equal two times Mr. Romines' base compensation, as defined in Section 280G of the Internal Revenue Code of 1986, as amended ("Code"), during the preceding five years. Such amount will be paid within ten days following the termination of employment. Assuming the compensation of Mr. Romines is not increased, Mr. Romines would be entitled to severance payments of approximately $218,000 in the event of a change in control of the Savings Bank and the Corporation. Section 280G of the Code, states that severance payments which equal or exceed three times the base compensation of the individual are deemed to be "excess parachute payments" if they are contingent upon a change in control. Individuals receiving excess parachute payments are subject to a 20% excise tax on the amount of such excess payments, and the Savings Bank and the Corporation are not entitled to deduct the amount of such excess payments.
The agreement restricts Mr. Romines' right to compete against the Savings Bank and the Corporation for one year from the date of termination of the agreement if he voluntarily terminates his employment, except in the event of a change in control, or if the Savings Bank or the Corporation terminate his employment for cause.
AUDIT COMMITTEE MATTERS
Audit Committee Charter. The Audit Committee operates pursuant to a Charter approved by the Corporation's Board of Directors. The Audit Committee reports to the Board of Directors and is responsible for overseeing and monitoring financial accounting and reporting, the system of internal controls established by management and the audit process of the Corporation. The Audit Committee Charter sets out the responsibilities, authority and specific duties of the Audit Committee. The Charter specifies, among other things, the structure and membership requirements of the Audit Committee, as well as the relationship of the Audit Committee to the independent accountants, the internal audit department, and management of the Corporation. A copy of the Audit Committee Charter is attached to this Proxy Statement as Exhibit A.
Audit Committee Report. The Corporation's Audit Committee has issued the following report with respect to the audited financial statements of the Corporation for the fiscal year ended June 30, 2001:
The Audit Committee has reviewed and discussed with the Corporation's management the Corporation's fiscal 2001 audited financial statements;
The Audit Committee has discussed with the Corporation's independent auditors (Kirkpatrick, Phillips & Miller, CPAs, P.C.) the matters required to be discussed by Statement on Auditing Standards No. 61;
The Audit Committee has received the written disclosures and letter from the independent auditors required by Independence Standards Board No. 1 (which relates to the auditors' independence from the Corporation and its related entities) and has discussed with the auditors their independence from the Corporation; and
Based on the review and discussions referred to in the three items above, the Audit Committee recommended to the Board of Directors that the fiscal 2001 audited financial statements be included in the Corporation's Annual Report on Form 10-KSB for the fiscal year ended June 30, 2001.
Submitted by the Audit Committee of the Corporation's Board of Directors:
Dr. James F. Moore, Jr.
John G. Moody
Harold F. Glass
Independence and Other Matters. Each member of the Audit and Finance Committee is "independent," as defined, in the case of the Corporation, under The Nasdaq Stock Market Rules. The Audit Committee members do not have any relationship to the Corporation that may interfere with the exercise of their independence from management and the Corporation. None of the Audit Committee members are current officers or employees of the Corporation or its affiliates.
TRANSACTIONS WITH MANAGEMENT
Mr. Stephen H. Romines, Chairman of the Board, President and Chief Executive Officer of the Savings Bank and the Corporation, is a practicing attorney and handles legal matters for the Savings Bank from time to time in this capacity without receiving any fees. Such activities include the drafting of legal documents, handling collection accounts and appearing in court on behalf of the Savings Bank.
In addition to performing legal services to the Savings Bank, Mr. Romines provides legal services, from time to time, for existing and potential customers of the Savings Bank. Such services are generally restricted to real estate transactions, such as the preparation of contracts, deeds, promissory notes, deeds of trust and examining abstracts of title, as well as a limited amount of estate planning and probate work. For the fiscal year ended June 30, 2001, Mr. Romines received approximately $3,500 in legal fees from customers of the Savings Bank.
Mr. Harold F. Glass, a director of the Savings Bank and the Corporation, is a partner with the law firm of Millington & Glass, which firm serves as legal counsel for the Corporation, the Savings Bank and its subsidiary. As counsel for the Corporation and the Savings Bank for the fiscal year ended June 30, 2001, Millington, Glass & Walters was paid $6,000 in fees and expense reimbursement, which amount did not exceed 5% of the law firm's annual gross revenues.
The above-described transactions were made on terms no less favorable to the Savings Bank and the Corporation than ones with unaffiliated third parties.
The Savings Bank, like many financial institutions, has followed the policy of granting loans to its officers, directors and employees on the security of their primary residences and also makes consumer loans to such persons. Loans to such persons are made in the ordinary course of business on substantially the same terms, including interest rate and collateral, as those prevailing at the time for comparable transactions with other persons. Management believes that these loans neither involve more than the normal risk of collectability nor present other unfavorable features. The Savings Bank has never granted loans to its directors and officers on preferred terms. In accordance with the requirements of applicable law, loans to executive officers and directors of the Corporation or the Savings Bank are made on substantially the same terms, including interest rates, fees and collateral, as those prevailing at the time for comparable transactions with other persons, and, in the opinion of management, do not involve more than the normal risk of collectability or present other unfavorable features. At June 30, 2001, loans to directors and executive officers, including immediate family members, totaled $1,929,149.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires certain officers of the Corporation and its directors, and persons who beneficially own more than 10% of any registered class of the Corporation's Common Stock, to file reports of ownership and changes in ownership with the SEC and the Corporation.
Based solely on a review of the report and written representations provided to the Corporation by the above referenced persons, the Corporation believes that during the fiscal year ended June 30, 2001 all filing requirements applicable to its reporting officers, directors and greater than ten percent beneficial owners were properly and timely complied.
AUDITORS
The Board of Directors has renewed the Corporation's arrangements with Kirkpatrick, Phillips & Miller, CPAs, P.C., independent public accountants, to be its auditors for the 2002 fiscal year. A representative of Kirkpatrick, Phillips & Miller, CPAs, P.C. is expected to be present at the Meeting to respond to appropriate questions of stockholders, and will have the opportunity to make a statement if he desires.
Audit Fees. The aggregate fees billed to the Corporation by Kirkpatrick, Phillips & Miller, CPAs, P.C. for professional services rendered for the audit of the Corporation's financial statements for fiscal 2001 and the reviews of the financial statements included in the Corporation Forms 10-QSB for that year were $59,705.
Financial Information Systems Design and Implementation Fees. Kirkpatrick, Phillips & Miller, CPAs, P.C. performed no financial information system design or implementation work for the Corporation during the fiscal year ended June 30, 2001.
All Other Fees. Other than audit fees, the aggregate fees billed to the Corporation by Kirkpatrick, Phillips & Miller, CPAs, P.C. for fiscal 2001, none of which were financial information systems design and implementation fees, were $11,436. The Audit Committee of the Board of Directors determined that the services performed by Kirkpatrick, Phillips & Miller, CPAs, P.C. other than audit services are not incompatible with Kirkpatrick, Phillips & Miller, CPAs, P.C. maintaining its independence.
OTHER MATTERS
The cost of solicitation of proxies will be borne by the Corporation. In addition to solicitations by mail, directors, officers and regular employees of the Corporation may solicit proxies personally or by telecopier or telephone without additional compensation.
The Board of Directors of the Corporation is not aware of any business to come before the Meeting other than those matters described above in this Proxy Statement. However, if any other matters should properly come before the Meeting, it is intended that proxies in the accompanying form will be voted in respect thereof in accordance with the judgment of the person or persons voting the proxies.
FINANCIAL STATEMENTS
The Corporation's Annual Report to Stockholders, including consolidated financial statements, has been mailed to all stockholders of record as of the close of business on August 31, 2001. Any stockholder who has not received a copy of such Annual Report may obtain a copy by writing to the Secretary of the Corporation. The Annual Report is not to be treated as part of the proxy solicitation material or as having been incorporated herein by reference.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Corporation's proxy solicitation materials for next year's Annual Meeting of Stockholders, any stockholder proposal to take action at such meeting must be received at the Corporation's main office at 142 East First Street, Mountain Grove, Missouri, no later than May 18, 2002. Any such proposals shall be subject to the requirements of the proxy solicitation rules adopted under the Exchange Act.
Article II, Section 2.16 of the Corporation's Bylaws provides that the Board of Directors of the Corporation shall act as a nominating committee for selecting nominees for election as directors. Article II, Section 2.17 also provides as follows: "At any annual meeting of the stockholders of the Corporation, only such business shall be conducted as shall have been brought before the meeting (I) by or at the direction of the Board of Directors or (ii) by any stockholder of the Corporation who complies with the procedures set forth in {this} Section 2.17 of Article II." Any new business to be taken up at the annual meeting shall be stated in writing and filed with the Secretary of the Corporation in accordance with the provisions of the Corporation's Articles of Incorporation. Article II, Section 2.16 of the Articles of Incorporation provides that notice of a stockholder's intent to make a nomination or present new business at the meeting must be given not less than 30 days nor more than 60 days prior to any such meeting. However, if less than 40 days' notice of the meeting is given to stockholders by the Corporation, a stockholder's notice shall be received no later than the close of the tenth day following the day on which notice of the meeting was mailed to stockholders. Based on the date of the Meeting, in order for a stockholder to make timely notice of a nomination or proposal for the Company's annual meeting next year, it is anticipated that such notice must be received by the Secretary of the Corporation by September 13, 2002. If properly made, such proposals shall be considered by stockholders at such meeting.
BY ORDER OF THE BOARD OF DIRECTORS
GINA GUNNELS
SECRETARY
Mountain Grove, Missouri
September 17, 2001
FORM 10-KSB
A COPY OF THE FORM 10-KSB AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE RECORD DATE UPON WRITTEN REQUEST TO GINA GUNNELS, SECRETARY, FIRST BANCSHARES, INC., P.O. BOX 777, MOUNTAIN GROVE, MISSOURI 65711.
THE CORPORATION'S FORMS 10-KSB, 10-QSB AND OTHER DISCLOSURE DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION CAN BE OBTAINED FROM THE SEC HOME PAGE ON THE WORLD WIDE WEB AT http://www.sec.gov.
Exhibit A
FIRST BANCSHARES, INC.
Audit Committee Charter
The Audit Committee ("the Committee"), of the Board of Drectors ("the Board") of First Bancshares, Inc. ("the Company"), will have the oversight responsibility, authority and specific duties as described below.
The Committee will be comprised of three or more directors as determined by the Board. The members of the Committee will meet the independence and experience requirements of the Nasdaq's Marketplace Rules. The members of the Committee will be elected annually at the organizational meeting of the full Board held in October and will be listed in the annual report to stockholders. One of the members of the Committee will be elected Committee Chair by the Board.
The Committee is part of the Board. It's primary function is to assist the Board in fulfilling its oversight responsibilities with respect to (i) the annual financial information to be provided to stockholders and the Securities and Exchange Commission (SEC); (ii) the system of internal controls that management has established; and (iii) the internal and external audit process. In addition, the Committee provides an avenue for communication between internal audit, the independent accountants, financial management and the Board. The Committee should have a clear understanding with the independent accountants that they must maintain an open and transparent relationship with the Committee, and that the ultimate accountability of the independent accountants is to the Board and the Committee. The Committee will make regular reports to the Board concerning its activities.
While the Audit Committee has the responsibilities and powers set forth in the Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company's financial statements are complete and accurate and are in accordance with generally accepted accounting principles. This is the responsibility of management and the independent auditor. Nor is it the duty of the Audit Committee to conduct investigations, to resolve disagreements, if any, between management and the independent auditor or to assure compliance with laws and regulations and the Company's business conduct guidelines.
Subject to the prior approval of the Board, the Committee is granted the authority to investigate any matter or activity involving financial accounting and financial reporting, as well as the internal controls of the Company. In that regard, the Committee will have the authority to approve the retention of external professionals to render advice and counsel in such matters. All employees will be directed to cooperate with respect thereto as requested by members of the Committee.
The Committee is to meet at least four times annually and as many additional times as the Committee deems necessary. Content of the agenda for each meeting should be cleared by the Committee Chair. The Committee is to meet in separate executive sessions with the chief financial officer, independent accountants and internal audit at least once each year and at other times when considered appropriate.
Committee members will strive to be present at all meetings. As necessary or desirable, the Committee Chair may request that members of management and representatives of the independent accountants and internal audit be present be Committee meetings.
In carrying out its oversight responsibilities, the Committee will:
1. Review and assess the adequacy of this charter annually and recommend any proposed changes to the Board for approval. This should be done in compliance with the applicable Nasdaq Marketplace Rules.
2. Review with the Company's management, internal audit and independent accountants the Company's accounting and financial reporting controls. Obtain annually in writing from the independent accountants their letter as to the adequacy of such controls.
3. Review with the Company's management, internal audit and independent accountants significant accounting and reporting principles, practices and procedures applied by the Company in preparing its financial statements. Discuss with the independent accountants their judgments about the quality, not just the acceptability, of the Company's accounting principles used in financial reporting.
4. Review the scope of the internal audit's work plan for the year and receive a summary report of major findings by internal auditors and how management is addressing the conditions reported.
5. Review the scope and general extent of the independent accounts' annual audit. The Committee's review should include an explanation from the independent accountants of the factors considered by the accountants in determining the audit scope, including the major risk factors. The independent accountants should confirm to the Committee that no limitations have been placed on the scope or nature of their audit procedures. The Committee will review annually with management the fee arrangement with the independent accountants.
6. Inquire as to the independence of the independent accountants and obtain from the independent accountants, at least annually, a formal written statement delineating all relationships between the independent accountants and the Company as contemplated by Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees.
7. Have a predetermined arrangement with the independent accountants that they will advise the Committee through its Chair and management of the Company of any matters identified through procedures followed for interim quarterly financial statements, and that such notification as required under standards for communication with Audit Committees is made prior to the related press release or, if not applicable, prior to filing Forms 10-Q. Also receive a written confirmation provided by the independent accountant at the end of each of the first three quarters of the year that they have nothing to report to the Committee, if that is the case, or the written enumeration of required reporting issues.
8. At the completion of the annual audit, review with management, internal audit and the independent accountants the following:
- The annual financial statements and related footnotes and financial information to be included in the Company's annual report to stockholders and on Form 10-K.
- Results of the audit of the financial statements and the related report thereon and, if applicable, a report on changes during the year in accounting principles and their application.
- Significant changes to the audit plan, if any, and any serious disputes or difficulties with management encountered during the audit. Inquire about the cooperation received by the independent accountants during their audit, including access to all requested records, data and information. Inquire of the independent accountants whether there have been any disagreements with management which, if not satisfactorily resolved, would have caused them to issue a nonstandard report on the Company's financial statements.
- Other communications as required to be communicated by the independent accountants by Statements of Auditing Standards (SAS) 61 as amended by SAS 90 relating to the conduct of the audit. Further, receive a written communication provided by the independent accountants concerning their judgment about the quality of the Company's accounting principles, as outlined in SAS 61 as amended by SAS 90, and that they concur with management's representation concerning audit adjustments.
If deemed appropriate after such review and discussion, recommend to the Board that the financial statements be included in the Company's annual report on Form 10-K.
9. After preparation by management and review by internal audit and independent accountants, approve the report required under SEC rules to be included in the Company's annual proxy statement. The charter is to be published as an appendix to the proxy statement every three years.
10. Discuss with the independent accountants the quality of the Company's financial and accounting personnel. Also, elicit the comments of management regarding the responsiveness of the independent accountants to the Company's needs.
11. Meet with management, internal audit and the independent accountants to discuss any relevant significant recommendations that the independent accountants may have, particularly those characterized as 'material' or 'serious'. Typically, such recommendations will be presented by the independent accountants in the form of a Letter of Comments and Recommendations to the Committee. The Committee should review responses of management to the Letter of Comments and Recommendations from the independent accountants and receive follow-up reports on action taken concerning the aforementioned recommendations.
12. Recommend to the Board the selection, retention or termination of the Company's independent accountants.
13. Review the appointment and replacement of the senior internal audit executive.
14. Review with management, internal audit and the independent accountants the methods used to establish and monitor the Company's policies with respect to unethical or illegal activities by Company employees that may have a material impact on the financial statements.
15. Generally as part of the review of the annual financial statements, receive an oral report(s), at least annually, from the Company's general counsel concerning legal and regulatory matters that may have a material impact on the financial statements.
16. As the Committee may deem appropriate, obtain weigh and consider expert advice as to Audit Committee related rules of Nasdaq, Statements on Auditing Standards and other accounting, legal and regulatory provisions.
| REVOCABLE PROXY FIRST BANCSHARES, INC. | ||
| X Please mark votes as in this example | 1. The election as directors of all nominees listed below (except as marked to the contrary below): For Withhold For All Except | |
| ANNUAL MEETING OF STOCKHOLDERS | John G. Moody Charles W. Schumacher | |
| OCTOBER 17, 2001 | INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For All Except" and write that nominee's name in the space provided below. | |
| The Board of Directors recommends a vote "FOR" to above proposal. | ||
| The undersigned hereby appoints Harold F. Glass and James F. Moore as the official Proxy Committee of the Board of Directors with wull powers of substitution, as attorneys and proxies for the undersigned, to vote all shares of common stock of First Bancshares, Inc. which the undersigned is entitled to vote at the Annual Meeting of Stockholders, to be held at the Days Inn Conference Room, 300 E. 19th Street, Mountain Grove, Missouri on Wednesday, October 17, 2001 at 2:00 p.m., Central Time, and any and all adjournments thereof, as follows: | THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BR VOTED BY THOSE NAMED IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING. | |
| THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. | ||
| Should the undersigned be present and elect to vote at the Annual Meeting or at any adjournment thereof and after notification to the Secretary of the Corporation at the Meeting of the stockholder's decision to terminate this proxy, then the power of said attorneys and proxies shall be deemed terminated and of no further force and effect. | ||
| Please be sure to sign and date this Proxy in the box below. | The undersigned acknowledges receipt from the Corporation prior to the execution of this proxy of notice of the Meeting, a proxy statement dated September 17, 2001 and the 2001 Annual Report to Stockholders. | |
| Date Stockholder sign above Co-holder (if any) sign above | Please sign exactly as your name apprears on this proxy card. When signing as attorney, executor, administrator, trustee or guardian, please give full title. If shares are held jointly, each holder should sign. | |
