pre14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES
EXCHANGE ACT OF 1934, as amended
Filed by the Registrant þ
Filed by a Party other than the
Registrant o
Check the appropriate box:
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þ Preliminary
Proxy Statement
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o Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
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o Definitive
Proxy Statement
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o Definitive
Additional Materials
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o Soliciting
Material under ss. 240.14a-12
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FIRST COMMUNITY BANCSHARES, INC.
(Name of Registrant as Specified in Its Charter)
Not Applicable
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(1) and 0-11. |
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Title of each class of securities to which transaction applies: |
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Aggregate number of securities to which transaction applies: |
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Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was
determined): |
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The filing fee was determined based on |
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Proposed maximum aggregate value of transaction: |
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing. |
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Amount Previously Paid: |
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Form, Schedule or Registration Statement No.: |
First
Community Bancshares, Inc.
One Community Place
P. O. Box 989
Bluefield, Virginia
24605-0989
March 15,
2010
Dear Stockholder,
You are invited to attend the 2010 Annual Meeting of
Stockholders to be held on Tuesday, April 27, 2010 at
Fincastle Country Club, 1000 Country Club Drive, Bluefield,
Virginia.
The annual meeting will begin with a report of our operations.
This report will be followed by discussion and voting on the
matters set forth in the accompanying notice of annual meeting
and proxy statement and discussion of other business matters
properly brought before the meeting.
If you plan to attend the meeting, please follow the
registration instructions on the last page of this proxy
statement. An admission ticket, which is required for admission
to the meeting, is included as part of your proxy form.
Whether or not you plan to attend, please ensure that your
shares are represented at the meeting by promptly voting and
submitting your proxy by telephone, by internet, or by
completing, signing, dating and returning your proxy form in the
enclosed envelope. All persons attending the 2010 Annual Meeting
must present an admission ticket and picture identification.
Please follow the advance registration instructions on the back
cover of this proxy statement regarding details for use of the
admission ticket.
Very truly yours,
William P. Stafford
Chairman of the Board
Table of
Contents
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A-1
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Notice of
2010
Annual Meeting of Stockholders
April 27, 2010 at
11:30 a.m.
Fincastle Country Club
1000 Country Club Drive
Bluefield, Virginia 24605
March 15,
2010
To the Stockholders:
First Community Bancshares, Inc.s Annual Meeting of
Stockholders will be held at Fincastle Country Club, located at
1000 Country Club Drive, Bluefield, Virginia 24605 at
11:30 a.m. local time on Tuesday, April 27, 2010.
Following a report of the Corporations banking and related
business operations, stockholders will:
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Vote on the election of three directors to serve as members of
the Board of Directors, Class of 2013;
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Vote on an amendment to the Articles of Incorporation of the
Corporation to increase the number of authorized common shares;
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Vote on ratification of the selection of the independent auditor
for 2010;
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Vote on advisory approval of the Corporations executive
compensation; and
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Transact other business that may properly come before the
meeting.
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Stockholders of record at the close of business on March 1,
2010 will be entitled to vote at the Annual Meeting and any
adjournments.
Robert L. Buzzo, Secretary
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 27,
2010.
The proxy materials for this Annual Meeting of Stockholders of
First Community Bancshares, Inc., including the proxy statement
and annual report, are available over the Internet at http:
www.fcb.com/proxy.
All persons attending the 2010 Annual Meeting must present an
admission ticket and picture identification. Please follow the
advance registration instructions on the back cover of this
proxy statement regarding details for use of the admission
ticket.
WHETHER OR NOT YOU ATTEND THE ANNUAL MEETING, YOUR VOTE IS
IMPORTANT TO US. YOU MAY VOTE BY THE FOLLOWING METHODS:
1. By telephone:
(800) 690-6903
until 11:59 p.m. eastern daylight time on April 26,
2010; or
2. On the internet at
http://www.proxyvote.com
until 11:59 p.m. eastern daylight time on April 26,
2010; or
3. Complete, sign and return the enclosed proxy as promptly
as possible whether or not you plan to attend the meeting. An
addressed return envelope is enclosed for your convenience. YOU
MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE TIME IT IS VOTED.
PROXY
STATEMENT
First Community Bancshares,
Inc.
One
Community Place
P.O. Box 989
Bluefield, Virginia 24605
The Board of Directors of First Community Bancshares, Inc. (the
Corporation, FCBI, First
Community, we, us, and
our) solicits the enclosed proxy for use at the
Annual Meeting of Stockholders of the Corporation (the
Annual Meeting), which will be held on Tuesday,
April 27, 2010, at 11:30 a.m. local time at Fincastle
Country Club, 1000 Country Club Drive, Bluefield, Virginia and
at any adjournment thereof.
The expenses of the solicitation of the proxies for the Annual
Meeting, including the cost of preparing, assembling and mailing
the notice, Proxy Statement and return envelopes, the handling
and tabulation of proxies received, and charges of brokerage
houses and other institutions, nominees or fiduciaries for
forwarding such documents to beneficial owners, will be paid by
the Corporation. In addition to the mailing of the proxy
material, solicitation may be made in person, by telephone or by
other means by officers, directors or regular employees of the
Corporation.
This Proxy Statement and the proxies solicited hereby are being
first sent or delivered to stockholders of the Corporation on or
about March 15, 2010.
Voting
Shares of common stock (par value $1.00 per share) (Common
Stock) represented by proxies in the accompanying form,
which are properly executed and returned to the Corporation,
will be voted at the Annual Meeting in accordance with the
stockholders instructions contained therein. In the
absence of contrary instructions, shares represented by such
proxies will be voted FOR ratification of Dixon Hughes PLLC as
the Corporations independent registered public
accountants, and FOR approval, on a non-binding advisory basis,
of the Corporations named executive officer compensation.
Any stockholder has the power to revoke his proxy at any time
before it is voted. A proxy may be revoked at any time prior to
its exercise by the filing of written notice of revocation with
the Secretary of the Corporation, by delivering to the
Corporation a duly executed proxy bearing a later date, or by
attending the Annual Meeting and voting in person. However, if
you are a stockholder whose shares are not registered in your
own name, you will need additional documentation from your
record holder to vote personally at the Annual Meeting.
The Board of Directors has fixed March 1, 2010 as the
record date for stockholders entitled to notice of and to vote
at the Annual Meeting. Shares of Common Stock outstanding on the
record date are entitled to be voted at the Annual Meeting and
the holders of record will have one vote for each share so held
in the matters to be voted upon by the stockholders. Each share
of Common Stock outstanding as of the record date will be
entitled to one vote on each of the proposals set forth in this
proxy statement. Treasury shares are not voted. Individual votes
of stockholders are kept private, except as appropriate to meet
legal requirements. Access to proxies and other individual
stockholder voting records is limited to certain employees of
First Community and its agents who acknowledge their
responsibility to comply with this policy. Stockholders of the
Corporation do not have cumulative voting rights. As of the
close of business on March 1, 2010, the outstanding shares
of the Corporation consisted of 17,765,164 shares of Common
Stock and no shares of Preferred Stock.
The presence in person or by proxy of a majority of the shares
of the Common Stock entitled to vote is necessary to constitute
a quorum at the Annual Meeting. Abstentions are considered in
determining the presence of a quorum. Directors are elected by a
plurality of the votes cast at a stockholders meeting with
a quorum present. The three persons who receive the greatest
number of votes of the holders of Common Stock represented in
person or by proxy at the Annual Meeting will be elected
directors of the Corporation. Approval of the amendment to the
Articles of Incorporation to increase the authorized common
stock requires a majority of the outstanding voting capital
stock approve the amendment. Approval of the ratification of the
independent registered public accountants requires that the
number of votes cast in favor of the proposal exceeds the number
of votes cast against. Advisory approval of the
Corporations executive compensation program requires that
the number of votes cast in favor of the
proposal exceeds the number of votes cast against. If the shares
you own are held in street name by a brokerage firm,
your brokerage firm, as the record holder of your shares, is
required to vote your shares according to your instructions. In
order to vote your shares, you will need to follow the
directions your brokerage firm provides you. Many brokers also
offer the option of voting over the Internet or by telephone,
instructions for which would be provided by your brokerage firm
on your vote instruction form. Under the current rules of the
New York Stock Exchange, or NYSE, if you do not give
instructions to your brokerage firm, it will still be able to
vote your shares with respect to only the
discretionary items discussed above, including the
ratification of the independent registered public accountants
and the advisory approval of the Corporations named
executive officer compensation. Abstentions and broker non-votes
will have no effect on the ratification of the independent
registered public accountants or the advisory approval of the
Corporations named executive officer (NEO or
named executives) compensation. A broker
non-vote occurs when a bank, broker or other nominee
holding shares for a beneficial owner does not vote on a
particular proposal because it does not have discretionary
voting power with respect to that item and has not received
voting instructions from the beneficial owner.
Starting this year, the election of directors is a
non-discretionary item. If you do not instruct your
broker how to vote with respect to this item, your broker may
not vote with respect to this proposal and those votes will be
counted as broker non-votes.
You can ensure that your shares are voted at the meeting by
submitting your instructions by telephone, by internet, or by
completing, signing, dating and returning the enclosed proxy
form in the envelope provided. Submitting your proxy by any of
these methods will not affect your right to attend and vote in
person at the meeting. We encourage stockholders to submit their
proxies in advance of the meeting. A Stockholder who gives a
proxy may revoke it at any time before it is exercised by voting
in person at the annual meeting, by submitting a subsequent
proxy or by notifying the Corporation in writing of such
revocation. If your FCBI shares are held for you in a brokerage,
bank or other institutional account, you must obtain a proxy
from that entity and bring it with you to submit it with your
ballot in order to be able to vote your shares at the meeting.
PROPOSAL 1:
ELECTION OF DIRECTORS
The Board of Directors is comprised of nine directors, including
eight non-management directors, currently divided into three
classes with staggered terms. All directors have been determined
to be independent by the Board of Directors except
Mr. Mendez, who is employed by FCBI as President and Chief
Executive Officer.
At the 2010 Annual Meeting, the current class of directors is
nominated to be elected to office until the 2013 Annual Meeting.
All nominees are currently serving on the Corporations
Board of Directors. In the event any nominee is unable or
declines to serve as a director at the time of the Annual
Meeting, the proxies will be voted for any nominee who shall be
designated by the present Board of Directors to fill the
vacancy. In the event that additional persons are nominated for
election as directors, the proxy holders intend to vote all
proxies received by them for the nominees listed below. All
nominees named herein have consented to be named and to serve as
directors if elected.
No director or executive officer of the Corporation is related
to any other director or executive officer of the Corporation by
blood, or marriage or adoption, except for Mr. Stafford who
is the father of Mr. Stafford, II.
A table of each director and nominee, including his age, term of
service, and title, is set forth below. A biography describing
each directors and nominees qualifications and
business background is set forth below the table. Each nominee
has consented to be named to, and to serve as, a director if
elected. We do not know of any reason why any nominee would be
unable to serve as a director. If any nominee is unable to
serve, the shares represented by all valid proxies will be voted
for the election of such other person as the Board may nominate.
Members of the Board of Directors of First Community Bancshares,
Inc. are expected to have the appropriate skills and
characteristics necessary to function in the Corporations
current operating environment and contribute to its future
direction and strategies. These include legal, financial,
management and other relevant skills. In addition,
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the Corporation looks to achieve a diversified Board, including
members with varying experience, age, perspective, residence and
background.
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Director of
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Corporation
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Class of
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Name and Title
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Age
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Since
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Directors
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Franklin P. Hall, Director
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2007
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2011
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Allen T. Hamner, Director Nominee
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1994
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2010
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Richard S. Johnson, Director Nominee
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2008
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2010
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I. Norris Kantor, Director
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1989
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2012
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John M. Mendez, President, CEO and Director Nominee
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1994
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2010
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A. A. Modena, Director
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1989
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2012
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Robert E. Perkinson, Jr., Director
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1994
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2011
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William P. Stafford, Chairman of the Board
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1989
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2011
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William P. Stafford, II, Director
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1994
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2012
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NOMINEES
FOR THE CLASS OF 2013
Allen T.
Hamner, Professor Emeritus of Chemistry at West Virginia
Wesleyan College, Buckhannon, West Virginia.
Mr. Hamner is a 1963 graduate of West Virginia Wesleyan
College, Buckhannon, West Virginia and a 1969 graduate of
Cornell University. Mr. Hamner joined the faculty of West
Virginia Wesleyan College in 1969 and retired in 2008.
Mr. Hamners relevant experience qualifying him for
service as a director includes: twenty-two combined years of
service on this Board and on a predecessor bank board and
committees thereof; the ability to understand and discuss
complex financial issues; ten years of service as a member of
the Corporations audit committee; former treasurer of two
private companies; and valuable business acumen and experience
as a general contractor in the development of retail spaces.
Richard
S. Johnson, President and Chief Executive Officer, The Wilton
Companies, Richmond, Virginia.
Mr. Johnson earned a BS BA degree from the University of
Richmond, Richmond, Virginia in 1973, with a concentration in
economics and finance, and graduated with a MS degree from
Virginia Commonwealth University, Richmond, Virginia in 1977,
with a concentration in real estate and urban land development.
Mr. Johnson has been the President and Chief Executive
Officer of The Wilton Companies, a real estate investment,
development, brokerage and management group of companies, since
2002. Prior to joining The Wilton Companies, Mr. Johnson
served as President of Southern Financial Corp. of Virginia from
1985 to 2002 and Chairman of the Board of Southern
Title Insurance Corporation from 1980 to 1985.
Mr. Johnson currently serves as a director of the
University of Richmond, Fidelity Group, LLC, City of Richmond
Economic Development Authority, the State Fair of Virginia and
Grubb & Ellis Apartment REIT. Mr. Johnson
previously served as a director of the Childrens Museum of
Richmond, Ducks Unlimited, Inc., and Ducks Unlimited Canada.
Mr. Johnsons relevant experience qualifying him for
service as a director includes: long-range planning, various
aspects of mortgage underwriting, marketing and mortgage
portfolio servicing; chairing the Economic Development Authority
of the City of Richmond, Virginia; past service as a director
and finance committee member of Ducks Unlimited, Inc. and Ducks
Unlimited Canada; state and national offices with Ducks
Unlimited, Inc. as assistant treasurer and as a member of the
audit subcommittee; Vice Chairman of the State Fair of Virginia
and Chairman of the Finance Committee. In addition,
Mr. Johnson has extensive experience in real estate
acquisition, development, finance and management through his
executive experience as President of The Wilton Companies.
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John M.
Mendez, President and Chief Executive Officer, First Community
Bancshares, Inc., Bluefield, Virginia.
Mr. Mendez attended Marshall University from 1973 to 1975
and graduated from Concord University in May 1978 with a BS in
Business Administration with a concentration in Accounting.
Mr. Mendez earned his certification as a Certified Public
Accountant in 1981. Mr. Mendez joined First Community Bank,
N.A. in 1985. Prior to serving as President and Chief Executive
Officer of First Community Bancshares, Inc., Mr. Mendez
served in the positions of Chief Financial Officer and Chief
Administrative Officer. Mr. Mendez served as Audit Manager
of Brown, Edwards & Co., CPAs from 1978 to 1985.
Mr. Mendez serves on the Concord University Board of
Governors. He previously served as a director for the Community
Foundation of the Virginias, the West Virginia Bankers
Association, Virginia Bankers Association, and Princeton
Community Hospital.
Mr. Mendez relevant experience qualifying him for
service as a director includes: history as a practicing CPA at
regional public accounting firm; external audit experience for a
variety of businesses with emphasis in the banking sector while
engaged in public accounting; familiarity with bank regulations
and bank and parent regulatory examination process; writing,
communicating and enforcing company, bank and subsidiary
policies; success in negotiating and integrating acquired
businesses in the execution of a variety of mergers and
acquisitions; past service on a variety of boards and audit
committees including a 211-bed community hospital; long term
service as CFO of a publicly-traded company; and the variety of
offices held with increasing management responsibilities during
twenty-five years in management of a publicly-traded financial
services company.
Your
Board recommends a vote FOR the nominees set forth
above.
CONTINUING
INCUMBENT DIRECTORS
Franklin
P. Hall, Retired Commissioner, Virginia Department of Alcoholic
Beverage Control, Senior Partner, Hall & Hall, PLC,
Richmond, Virginia.
Mr. Hall is a 1961 graduate of Lynchburg College,
Lynchburg, Virginia, with a BS degree in Mathematics and
Business Administration. Mr. Hall also graduated from The
American University, Washington, DC, with an MBA degree in 1964
and The American University Law School with a Juris Doctorate
degree in 1966. Mr. Hall currently serves as Senior Partner
in the Hall and Hall Family Law Firm in Midlothian, Virginia
where he has practiced law since 1969. He served as a Delegate
in the Virginia General Assembly from 1976 to 2009, and Minority
Leader, Virginia House of Delegates from 2002 to 2008. He is a
former Chairman of the Board of the Commonwealth Bank in
Richmond, Virginia. Mr. Hall has served on the Greater
Richmond Chamber of Commerce Foundation Board since 2004. He
also has served as a Commissioner for the Virginia Alcohol
Beverage Commission.
Mr. Halls relevant experience qualifying him for
service as a director includes: a wide range of business and
legal knowledge gained during an active forty-one year law
practice; his MBA degree; twenty-five years of service on boards
of financial service organizations; thirty years of overseeing
the budget for the Common Wealth of Virginia; service as senior
member of the Joint Legislative Audit and Review Commission for
the Virginia General Assembly; and service as Chair of the House
Appropriations Subcommittee on Compensation.
I. Norris
Kantor, Of Counsel, Katz, Kantor & Perkins, Bluefield,
West Virginia.
Mr. Kantor received a BA degree in 1953 from the Virginia
Military Institute and received a Juris Doctor degree in 1956
from the College of Law at West Virginia University.
Mr. Kantor has practiced law for more than fifty years and
is currently Of Counsel with the law firm of Katz,
Kantor & Perkins,
Attorneys-at-Law.
He served as a Judge Advocate USAF from 1956 to 1958.
Mr. Kantor is a director of Mercer Realty Inc., a real
estate management company, and Gomolco, Inc., a real estate
holding company. Mr. Kantor currently serves as a member of
the board of directors of the following organizations: Bluefield
State College Foundation, Secretary of Bluefield State College
Research and Development Corp., past President of New River
Parkway Authority, the Bluefield Development Authority, and
President and Board Member of the Downtown Health and Wellness
Center, Inc.
Mr. Kantors relevant experience qualifying him for
service as a director include: a wide range of legal and
business experience gained during his more than fifty years as a
practicing attorney; his legal work in issuing
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numerous utility bonds and refunding of utility bond issues; his
ability to understand complex business, legal and financial
topics; and twenty years of service as a board member of
financial service organizations.
A. A.
Modena, Retired Executive Vice President and Secretary of First
Community Bancshares, Inc.
Mr. Modena received a BS degree in Business Administration
from Virginia Tech in 1949, a LLB degree from W & L
University Law School in 1954, and is a 1961 graduate of the
Stonier Graduate School of Banking at Rutgers University.
Mr. Modena has been a member of the Virginia State Bar
since 1954. Mr. Modena was previously employed by The Flat
Top National Bank of Bluefield serving as Vice
President & Trust Officer from 1960 to 1969,
Senior Vice President & Trust Officer from 1969
to 1976, Executive Vice President and Trust Officer from
1976 to 1993, and President and Chief Executive Officer from
1993 to his retirement in 1994. Mr. Modena served as
Executive Vice President of Flat Top Bankshares, Inc. from 1983
to 1990 and Executive Vice President and Secretary of FCFT, Inc.
from 1990 to 1994. Mr. Modenas past banking
activities with the West Virginia Bankers Association included
serving as Chairman and Member of the Board of Directors, Past
Chairman of Group V and Past President of the
Trust Division. In the past five years, Mr. Modena has
served as a Member of the Faculty Merit Foundation of West
Virginia, Inc., Trustee of United Company Investment Fund,
Bristol, Virginia, Board of Trustees of Bluefield College, and
Board of Directors of Mission West Virginia.
Mr. Modenas relevant experience qualifying him for
service as a director includes: a broad range of management and
customer service experience in trust and commercial banking for
more than fifty years; his legal education; investment
experience including formation, management and liquidation of
common trust funds; longstanding service as a member of a
variety of boards of directors for banks, this Corporation,
health service organizations, churches, a wealth management firm
and statewide bankers association; and his knowledge of
bank operations and other financial regulations.
Robert E.
Perkinson, Jr., Former Vice President-Operations of MAPCO Coal
and Alliance Coal Co., Inc., Bluefield, Virginia.
Mr. Perkinson received a BS degree in Civil
Engineering Construction Option in 1969 and a
Professional degree in Soil Mechanics and Foundation Energy in
1970 from North Carolina State University. Prior to
Mr. Perkinsons employment with MAPCO Coal, he was
employed as Vice President Operations of South
Atlantic Coal Co. and worked for J. A. Jones Construction in
Charlotte, North Carolina. Upon leaving the employment of MAPCO
Coal, Mr. Perkinson served as Acting Executive Director of
the Bluefield Sanitary Board for the City of Bluefield from 2007
to 2009 and Mayor of the City of Bluefield, West Virginia.
Mr. Perkinson currently serves as Chairman of the Board of
Bluefield Regional Medical Center and serves as a member of the
Board of Governors of Bluefield State College.
Mr. Perkinsons relevant experience qualifying him for
service as a director includes: previous service as member of
senior management for various companies in the coal industry;
experience in municipal government, including service as
executive director of a municipal sanitary board; and service as
board chairman for a non-profit regional medical center coupled
with approximately twenty years of bank board service.
William
P. Stafford, President, Princeton Machinery Service, Inc., a
machinery manufacturing and repair company.
Mr. Stafford is a graduate of the United States Naval
Ordinance Laboratory and U.S. Naval Gun Factory. He
currently serves as the Chairman of the Board of First Community
Bancshares, Inc., and Vice Chairman of the Board of First
Community Bank, N. A. He serves as President and Director of the
H. P. and Anne S. Hunnicutt Foundation, Inc., and Melrose
Enterprises, Ltd., and as a Member of Stafford Farms, LLC. In
addition to his current service as President of Princeton
Machinery Service, Inc., a machinery manufacturing and repair
company, Mr. Stafford previously served as its General
Manager. Mr. Stafford also previously served as Member of
the West Virginia Legislature, a Director of the West Virginia
Division of Natural Resources, a Member of the Mercer County
West Virginia Economic Development Authority, and a Member of
the Mercer County West Virginia Airport Authority.
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Mr. Staffords relevant experience qualifying him for
service as a director includes: owner and president of a
successful machinery manufacturing and repair business; owner
and president of several other successful businesses; a director
and president of a charitable foundation; extensive familiarity
with the history and operation of the Corporation and its
predecessor banks; participation and leadership in a wide
variety of community and civic organizations; previous
experience in elected state and local government offices, and
more than twenty years of board service for a publicly traded
financial services company.
William
P. Stafford, II, Attorney, Brewster, Morhous, Cameron,
Caruth, Moore, Kersey & Stafford, PLLC.
Mr. Stafford is a graduate of Virginia Polytechnic
Institute State University, Blacksburg, Virginia, and holds a
Bachelor of Science degree in Mechanical Engineering. He
received his Juris Doctorate, cum laude, from the
Washington & Lee University School of Law, Lexington,
Virginia. Mr. Stafford practices as a member of his firm
primarily in the areas of commercial transactions, banking,
creditors rights, creditor bankruptcy, and trusts and
estates. Mr. Stafford serves as Director and Corporate
Secretary of the H. P. and Anne S. Hunnicutt Foundation, Inc.,
Princeton Machinery Service, Inc., and Melrose Enterprises, Ltd.
He is a member of Stafford Farms, LLC, Vermillion Development,
LLC, and Walnut Hill, LLC. Mr. Stafford is a partner in
Legal Realty, A Partnership. Mr. Stafford previously served
as a member of the West Virginia Infrastructure and Jobs
Development Council. Mr. Stafford previously served as a
council member and Mayor of the City of Princeton, West
Virginia. Mr. Stafford has served, and continues to serve,
on numerous civic and community service boards and commissions.
Mr. Staffords relevant experience qualifying him for
service as a director includes: a broad range of regulatory,
business, legal and banking related issues encountered in the
practice of law; extensive state and municipal government
service; extensive civic and community service; and more than
fifteen years of board service for the Corporation.
6
Director Qualifications and Experience. The
following table identifies the experience, qualifications,
attributes and skills that the Board considered in making its
decision to appoint and nominate directors to the Board. This
information supplements the biographical information provided
above. The vertical axis displays the primary factors reviewed
by the Governance and Nominating Committee in evaluating a board
candidate.
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Hall
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Hamner
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Kantor
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Johnson
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Mendez
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Modena
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Perkinson, Jr.
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Stafford
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Stafford, II
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Experience, Qualifications, Skill or Attribute
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Professional standing in chosen field
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X
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X
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X
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X
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X
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X
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X
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X
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X
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Expertise in financial services or related industry
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X
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X
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X
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X
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X
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X
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X
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X
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X
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Audit Committee Financial Expert (actual or potential)
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X
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X
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X
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Civic and community involvement
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X
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X
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X
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X
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X
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X
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X
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X
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X
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Other public company experience (current or past)
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X
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X
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Leadership and team building skills
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X
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X
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X
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X
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X
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X
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X
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X
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X
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Diversity of experience, professions, skills, geographic
representation and backgrounds
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X
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X
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X
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X
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X
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X
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X
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X
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X
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Specific skills/knowledge:
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- finance
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X
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X
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X
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X
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X
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X
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X
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X
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X
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- technology
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X
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X
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X
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X
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- marketing
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X
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X
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- public affairs
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X
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X
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X
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X
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X
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X
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X
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X
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X
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- HR
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X
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X
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X
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X
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X
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X
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- governance
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X
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X
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X
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X
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X
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X
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X
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X
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X
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NON-DIRECTOR
EXECUTIVE OFFICERS
Executive officers who are not directors of the Corporation,
including their title, age and date they became an officer of
the Corporation is set forth in the chart below, which is
followed by a brief biography describing each executive
officers business experience.
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Executive of
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Name and Title
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Age
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Corporation Since
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David. D. Brown, V., Chief Financial Officer
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35
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2006
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Robert L. Buzzo, Vice-President and Secretary, President and
Director of First Community Bank, N.A.
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59
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2000
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E. Stephen Lilly, Chief Operating Officer
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51
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2000
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Gary R. Mills, Chief Credit Officer
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42
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2007
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7
Robert L.
Buzzo, Vice President and Secretary of the Corporation,
President and Director of First Community Bank, N.A., a
wholly-owned subsidiary of the Corporation.
Mr. Buzzo had been President and a Director of First
Community Bank, N. A. since June 2000, and Vice- President and
Secretary of the Corporation since June 2000. From October 1994
until June 2000, Mr. Buzzo was the Chief Executive Officer
of First Community Bank Bluefield, a division of
First Community Bank, N. A. Prior to 1994, Mr. Buzzo held
other leadership positions within the Corporation since he
joined the bank in 1973.
Stephen
Lilly, Chief Operating Officer
Mr. Lilly has been Chief Operating Officer of the
Corporation and Senior Vice President and Chief Operating
Officer of First Community Bank, N. A. since June 2000.
Mr. Lilly has been employed by the Corporation since 1997.
David D.
Brown, V, Chief Financial Officer
Mr. Brown has been Chief Financial Officer of the
Corporation and Senior Vice President Finance of
First Community Bank, N.A. since May 2006. Mr. Brown served
as Financial Reporting Coordinator of the Corporation from April
2005 to May 2006. Prior to joining the Corporation,
Mr. Brown was a Corporate Auditor and Audit Manager of
United Bankshares, Inc. from September 1999 to April 2005.
Gary R.
Mills, Chief Credit Officer
Mr. Mills has been Chief Credit Officer of the Corporation
since 2007, and has worked in Credit Administration since 2005.
Mr. Mills has been employed by the Corporation since 1998.
CORPORATE
GOVERNANCE
Corporate Governance Guidelines. The
Board of Directors Governance and Nominating Committee has
enacted guidelines to determine director independence and
qualifications for directors. The Governance and Nominating
Committee Charter is published at the Corporations website
under the Governance Documents tab of the
Corporate Profile at
www.fcbresource.com. This section of the website makes
available all of First Communitys governance materials,
including various Board committee charters, which are available
in print to any Stockholder upon request. The Board regularly
reviews corporate governance developments and considers
modifications to its governance charter to clarify and augment
the Boards processes, including those relating to risk
oversight.
The Boards Role in Risk
Oversight. We believe that each member of our
Board of Directors in his or her fiduciary capacity has a
responsibility to monitor and manage risks faced by the
Corporation. At a minimum, this requires the members of our
Board of Directors to be actively engaged in board discussions,
review materials provided to them, and know when it is
appropriate to request further information from management
and/or
engage the assistance of outside advisors. Furthermore, because
the banking industry is highly regulated, certain risks to the
Corporation are monitored by the Board of Directors and the
Audit Committee through its review of the Corporations
compliance with regulations set forth by its regulatory
authorities, including the FDIC and recommendations contained in
regulatory examinations.
Because we believe risk oversight is a responsibility for each
member of the Board of Directors, we do not concentrate the
Boards responsibility for risk oversight in a single
committee. Instead, each of our committees concentrates on
specific risks for which they have an expertise, and each
committee is required to regularly report to the Board of
Directors on its findings. For example, the audit committee
regularly monitors the Corporations exposure to certain
investment risks, such as the effect of interest rate or
liquidity changes, the Corporations exposure to certain
reputational risks by establishing and evaluating the
effectiveness of company programs to report and monitor fraud
and by monitoring the Corporations internal controls over
financial reporting. Our compensation committees role in
monitoring the risks related to our compensation structure is
discussed in further detail below.
8
Director Independence. First Community
currently has eight independent directors out of nine. The Board
has satisfied, and expects to continue to satisfy, its objective
that at least a majority of the Board should consist of
independent directors. For a director to be considered
independent, the Board must determine that the director does not
have any direct or indirect material relationship with First
Community. The Board has established guidelines to assist it in
determining director independence (see Appendix A to this
Proxy Statement), which conform to the independence requirements
of the NASDAQ Stock Exchange listing standards. In addition to
applying these guidelines, the Board will consider all relevant
facts and circumstances in making an independence determination.
In the course of the Boards determination regarding
independence, it considers any transactions, relationships and
arrangements as required by the corporations independence
guidelines. In addition, with respect to all directors, the
Board considered the amount of First Communitys
discretionary charitable contributions to charitable
organizations where any of the directors serves as an officer,
director or trustee, and determined that First Communitys
contributions to each of the charitable organizations
constituted less than the greater of $200,000 or five percent of
the charitable organizations annual consolidated gross
revenues during the applicable organizations last
completed fiscal year.
All members of the Audit Committee, Compensation and Retirement
Committee, and Governance and Nominating Committee must be
independent directors as defined by NASDAQ. Members of the Audit
Committee also must satisfy a separate Securities and Exchange
Commission (SEC) independence requirement, which
provides that they may not accept directly or indirectly any
consulting, advisory or other compensatory fee from First
Community or its subsidiaries other than their directors
compensation.
Director Candidates, Qualifications and
Diversity. In considering whether to
recommend any candidate for inclusion in the Boards slate
of recommended director nominees, including candidates
recommended by stockholders, the Governance and Nominating
Committee will consider a number of criteria, including, without
limitation, the candidates integrity, business acumen,
age, experience, commitment, diligence, conflicts of interest
and the ability to act in the interests of all stockholders. The
Governance and Nominating Committee believes diversity should be
considered in the director identification and nomination
process. The Governance and Nominating Committee seeks nominees
with a broad diversity of experience, professions, skills,
geographic representation and backgrounds. The Committee does
not assign specific weights to particular criteria and no
particular criterion is necessarily applicable to all
prospective nominees. The Corporation believes that the
backgrounds and qualifications of the directors, considered as a
group, should provide a significant composite mix of experience,
knowledge and abilities that will allow the Board to fulfill its
responsibilities. Nominees are not discriminated against on the
basis of race, religion, national origin, sexual orientation,
disability or any other basis proscribed by law.
Board Leadership Structure. We separate
the roles of CEO and Chairman of the Board in recognition of the
differences between the two roles. The CEO is responsible for
setting the strategic direction for the Corporation and the day
to day leadership and performance of the Corporation, while the
Chairman of the Board provides guidance to the CEO and sets the
agenda for Board meetings and presides over meetings of the full
Board.
Standards of Conduct. All directors,
officers and employees of First Community must act ethically at
all times and in accordance with the policies comprising First
Communitys Standards of Conduct (Code), which
is published at First Communitys website
www.fcbresource.com and available in print to any
Stockholder upon request. A waiver of any Standard of Conduct
can only be considered by the Board of Directors and may be
granted only for just cause in an instance where the underlying
ethical objective will not be violated. No waivers were granted
to any director or officer during 2009. Amendments to the code
will be published on the Corporations website, as required
by SEC rules. If an actual or potential conflict of interest
arises for a director, the director must promptly inform the
Board.
Communicating Concerns to
Directors. The Audit Committee and the
non-management directors have established procedures to enable
any employee who has a concern about First Communitys
conduct, policies, accounting, internal accounting controls or
auditing matters, to communicate that concern directly to the
Board through an email or written notification directed to the
Chairman of the Audit Committee. Such communications may be
confidential or anonymous. A notification explaining how to
submit any such communications is provided to all employees at
each location of the Corporation and its affiliated businesses
and is provided to employees in the employee handbook. The
status of any outstanding concern is reported to the
non-management directors of the Board periodically by the
Chairman of the Audit Committee.
9
Stockholder
Communications. Stockholders may communicate
with all or any member of the Board of Directors by addressing
correspondence to the Board of Directors or to the
individual director and addressing such communication to Robert
L. Buzzo, Secretary, First Community Bancshares, Inc., P. O. Box
989, Bluefield, Virginia
24605-0989.
All communications so addressed will be forwarded to the
Chairman of the Board of Directors (in case of correspondence
addressed to the Board of Directors) or to the
individual director without exception.
The Board
of Directors and Board Meetings
The Board held nine (9) regular meetings and four
(4) special meetings in 2009. No member attended fewer than
75% of the Board meetings and committee meetings on which the
member sits. Each director is expected to devote sufficient
time, energy and attention to ensure diligent performance of the
directors duties and to attend all regularly scheduled
Board, committee, and Stockholder meetings. It is the
Boards policy that the directors should attend our Annual
Meeting of Stockholders absent exceptional circumstances. All
current directors attended the 2009 Annual Meeting except
Chairman Stafford, who was excused for medical reasons.
Board
Committees
The Board of Directors has adopted written charters for its four
standing committees: the Audit Committee, the Executive
Committee, the Governance and Nominating Committee, and the
Compensation and Retirement Committee (the CRC).
Except for the Executive Committee charter, a current copy of
each of the committee charters is available for review and print
on our website at www.fcbresource.com.
Audit
Committee.
The members of the Audit Committee are directors Perkinson, who
chairs the committee, Hall, Hamner and Johnson. The Board has
determined that Mr. Johnson is the audit committee
financial expert. The Audit Committee is primarily
concerned with the integrity of the Corporations financial
statements, the Corporations compliance with legal and
regulatory requirements, the independence and qualifications of
the independent auditor and the performance of the
Corporations internal audit function and independent
auditor. Its duties include: (1) selection and oversight of
the independent auditor; (2) review of the scope of the
audit to be conducted by them, as well as the results of their
audit; (3) oversight of our financial reporting activities,
including our annual report, and the accounting standards and
principles followed; (4) discussion with management of its
risk assessment and management policies, including risk relating
to the financial statements and financial reporting process and
key credit risks, liquidity risks, market risks and the steps
taken by management to monitor and mitigate such risks;
(5) approval of audit and non-audit services provided to
the corporation by the independent auditor; (6) review of
the organization and scope of our internal audit function and
our disclosure and internal controls; and (7) oversight of
the Corporations compliance program. The Audit Committee
held eleven (11) meetings during 2009. The committees
report is on page 29.
Executive
Committee.
The members of the Executive Committee are directors Stafford,
who chairs the committee, Hamner, Kantor, Mendez, Modena,
Perkinson and Stafford, II. Except for Mr. Mendez,
each member of the Executive Committee is independent. The
Executive Committee held one (1) meeting during 2009. The
committee, subject to the supervision and control of the Board
of Directors, has been delegated substantially all of the powers
of the Board to act between meetings of the Board, except for
certain matters reserved to the full Board by law.
Compensation
and Retirement Committee.
The members of the CRC are directors Stafford, II, who
chairs the committee, Hamner and Modena. This committees
primary responsibilities include: (1) establishing,
reviewing and providing recommendations to the full Board
regarding CEO compensation and reviewing and overseeing other
senior executive compensation, (2) monitoring management
resources, structure, succession planning, development and
selection processes and the performance of key executives,
(3) reviewing incentive compensation arrangements to ensure
that incentive pay
10
does not encourage unnecessary risk, (4) reviewing and
discussing, at least annually, the relationship between risk
management policies and practices, corporate strategy and senior
executive compensation, and (5) reviewing director
compensation and
benefits.
This committee also administers all incentive and stock option
plans for the benefit of such officers and directors eligible to
participate in such plans. The Compensation and Retirement
Committee held four (4) meetings in 2009. The
committees report is on page 18.
Compensation
and Retirement Committee Interlocks and Insider
Participation.
None of the members of the Compensation and Retirement Committee
is or was formerly an officer or employee of our Corporation or
any of its subsidiaries, nor did any members have a relationship
with us that is disclosable as a Related-Person
Transaction as defined by the SEC. In addition, none of
our executive officers served on any compensation committee or
any board of directors of another company, of which any of our
Board members was also an executive officer.
Governance
and Nominating Committee.
The members of the Governance and Nominating Committee are
directors Modena, who chairs the committee, Hamner and Kantor.
The committees responsibilities include the selection of
director nominees for Board service and the development and
review of Governance Guidelines. The committee also
(1) oversees the annual self-evaluations of the Board, as
well as director performance and Board dynamics; (2) makes
recommendations to the Board concerning the structure and
membership of the Board committees; and (3) reviews,
approves and ratifies transactions with related persons required
to be disclosed under SEC rules. This committee held two
(2) meetings in 2009.
The committee will consider all Stockholder recommendations for
candidates for the Board, which should be sent to the Governance
and Nominating Committee,
c/o Robert
L. Buzzo, Secretary of First Community Bancshares, Inc., P. O.
Box 989, Bluefield, Virginia
24605-0989.
We believe that directors should possess the highest personal
and professional ethics, integrity and values, and be committed
to representing the long term interests of the stockholders. We
strive to have a Board representing diverse experience with
respect to policy making decisions in business, government,
education and technology, and in areas that are relevant to the
corporations overall business activities.
The committee also considers candidates recommended by current
directors, company officers, employees and others. The committee
evaluates all nominees for directors in the same manner and
typically bases its initial review on any written materials
submitted with respect to the candidate.
Meetings
of Non-management Directors.
The non-management directors met without any management
directors or employees present two times last year.
Mr. Stafford served as chair of these meetings.
COMPENSATION
DISCUSSION AND ANALYSIS
This section provides an overview and explanation of the
material information relevant to understanding the objectives,
policies and philosophy underlying the Corporations
compensation programs for executives and of the general design
philosophy of the Corporations compensation policies and
practices for employees included in any incentive compensation
program. To assist you in understanding certain disclosures that
we are required to provide in this section, which we refer to as
the CD&A, we provide information relating to
executive and director compensation in a series of tables and
accompanying narrative.
2009
Compensation of Executive Officers
We believe it is in the Corporations best interests to
maintain consistency in our compensation philosophy and
implementation, but we also believe discretion should be used in
times of prosperity as well as times when either the Corporation
or the overall economy, or both, are performing below
expectations. With this in mind, we believe it is appropriate
for some components of compensation to remain level or decline
during periods of economic downturn, including periods of
reduced earnings and declining stock prices, as was the case in
2008 and 2009.
11
The CRC and management evaluated and established 2009 executive
compensation in the context of the Corporations 2008
performance and the current economy coupled with a universal
awareness of the current focus placed on executive compensation.
While we believe that the compensation of our executive officers
has consistently been balanced and fair, we felt the need to
take a conservative approach in 2009 and refrained from payment
of increases in executive base salary, with one exception, and
awarded neither short nor long term incentives to the executives
during 2009.
Specifically, we decided to compensate the named executives for
2009 as follows:
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Mr. Mendez proposed, and the CRC agreed, that the executive
officers would receive no salary adjustments and no bonuses for
2009, with the exception of a salary adjustment for the CFO. The
CRC accepted Mr. Mendez proposal as appropriate,
acknowledging that while the Corporation continued to show
strong core operational performance, this performance was
negated by an underperforming investment portfolio, which
negatively impacted the Corporations stock price. The
result of these actions maintained the cash compensation paid to
Mr. Mendez for 2009 equal to that of 2008.
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Messrs. Buzzo, Lilly and Mills also received neither salary
adjustments nor bonuses. As noted above, Mr. Brown received
a salary adjustment, but no bonus.
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|
No long term incentive awards were granted to any of the named
executives or to any other executive officer employed by the
Corporation in 2009 and, other than to Mr. Brown, no such
awards have been made to any of the other named executives since
2003.
|
Consistent with past practice, going forward we will continue to
use discretion coupled with a goals-driven formula to compensate
executives. We will not adopt incentives that promote risky
behavior for near term rewards. Although we made no incentive
awards in 2009, ordinarily, we attempt to use the equity portion
of our compensation program to reward behavior that produces
steady, long term performance. We believe executive compensation
should reflect and be driven by the Corporations long-
term operating performance and relative stock value compared
with similarly situated publicly traded, regional financial
services companies.
Considerations
Used to Determine Chief Executive Officer Compensation for
2009
At the beginning of each year, Mr. Mendez develops
objectives necessary for the Corporation to be successful.
Mr. Mendez presents these objectives to the CRC for its
consideration in determining how Mr. Mendez
performance will be evaluated. These objectives are determined
in most part from the Corporations annual financial and
budget planning sessions, during which the Corporations
growth opportunities are analyzed and goals and objectives are
established for the upcoming year. These goals and objectives
include both objective financial metrics and qualitative
strategic and operational considerations that are evaluated
subjectively, without any formal weighting assigned. The CRC and
Mr. Mendez use this process to focus on factors they
believe create long term stockholder value. The CRC discusses
with Mr. Mendez its considerations regarding
Mr. Mendez own compensation. During this process,
Mr. Mendez solicits input from our Vice President of Human
Resources. Mr. Mendez does not participate in the final
determination of his own compensation.
In determining Mr. Mendez compensation for 2009, the
CRC considered the Corporation performance and also considered
Mr. Mendez individual performance in 2008.
Although Mr. Mendez did not meet all of the goals and
objectives established by the CRC for 2008, the CRC believes
that he performed well given the challenging circumstances of
the overall economy, particularly in the financial services
sector. Financial goals were set before the bulk of the decline
in the Corporations investment portfolio, which was
attributed in large part to significant declines in market
values in pooled trust preferred and collateralized mortgage
obligations (CMOs). The decline in the pooled trust
preferred securities was associated with the underperformance
and in some cases the failure of underlying banks, which had
originally issued into these investment grade securities. Whole
loan CMOs also experienced market value diminution due to
homeowners inability to pay their mortgages as a result of
the effects of the recession. Both the pooled trust preferred
and the whole loan CMOs were rated as investment
grade at the time of investment. The Corporations
banking subsidiary produced continued positive, although
decreased, core earnings, and the insurance agency and wealth
management subsidiaries performed at or beyond expectations for
2009. Unlike other regional banks, the
12
Corporation was able to continue to pay cash dividends. Net
interest margin and efficiency continue to compare favorably to
those of other financial services companies.
Beyond financial goals, the CRC expected Mr. Mendez to
continue to search for suitable candidates for banking mergers
and acquisitions within the Corporations footprint; to
lead the Corporations strategic planning process; and to
retain the Corporations management team. These goals were
all satisfactorily met during 2008.
Through the Corporations public offering, Mr. Mendez
was instrumental in helping the Corporation maintain its
well-capitalized balance sheet while attracting additional,
respected institutional investors. The public offering made
possible the accelerated repayment of TARP funds in less than
eight months from issue, plus provided funding for continued
expansion of the corporation. Mr. Mendez also successfully
completed a desired acquisition to supplement the
Corporations banking presence in the Winston-Salem, North
Carolina market, in line with the Corporations strategic
plan. In addition, Mr. Mendez led the management team and
the Board through an update of the Corporations strategic
plan.
Mr. Mendez has been the Corporations CEO since 2000
and has been employed by the Corporation since 1985. He also
serves on the Corporations Board of Directors. Under his
leadership, the Corporation has transformed itself from a
community bank into a regional financial services company. The
Corporations income has been diversified through its
acquisition of and continued additions to its insurance agency,
Greenpoint Insurance. Despite the difficult economic times in
2009, the Corporation was able to return $4.6 million to
common stockholders through dividends and repurchased $167,000
in Treasury shares. As an indication of his alignment with
stockholders, Mr. Mendez is the direct and indirect owner
of 22,686 shares of the Corporations common stock.
Mr. Mendez proposed and the CRC agreed that he would
receive no bonus or salary increase in 2009. Mr. Mendez
proposed these actions because he believed they were appropriate
in the current environment. Mr. Mendez was not granted any
long term non-cash compensation in 2009 and has received no long
term stock based compensation since 2003. His base salary was
last increased in 2008.
Determining
Compensation for Our Other Named Executives in 2009
The CRC works in conjunction with Mr. Mendez to establish
the base and incentive compensation of other named executive
officers. Our goal is to achieve a balance of incentives that
retain a qualified group of senior managers and ensure that the
Corporation remains competitive over the long term.
Each of the other named executives is a leader of an individual
business or function of the Corporation. As part of the
executive management team, they report directly to
Mr. Mendez, who develops the objectives that each
individual is expected to achieve, and against which their
performance is assessed. Similar to Mr. Mendez, these
objectives are reviewed with the CRC and are derived largely
from the Corporations financial, budget and strategic
planning processes.
Like Mr. Mendez, the other executives have objectives that
include both quantitative financial measurements and qualitative
strategic and operational considerations affecting the
Corporation and the businesses or function that the named
executives lead. Mr. Mendez assesses each named executive
officers individual performance against the objectives,
the Corporations overall performance and the performance
of the executives business or function. Mr. Mendez
then makes a compensation recommendation to the CRC for each
named executive. The named executives do not play a role in the
determination of their compensation except for their discussion
with Mr. Mendez regarding their individual performance
against predetermined objectives.
David D. Brown, V. Mr. Brown has
served as our Chief Financial Officer since 2006. Since he
joined the Corporation in 2005, he has assumed increased
responsibilities within the accounting and finance function. As
the leader of the Corporations finance function,
Mr. Browns financial objectives, focused on the
overall performance of the Corporation similar to
Mr. Mendez. Mr. Browns strategic and
operational goals included organizing the Corporations
public offering, providing operational support to achieve
financial goals and to strengthen the finance function, while
maintaining a strong controllership function and improving
regulatory relationships.
During a very challenging economic environment,
Mr. Browns leadership was crucial to strengthening
the Corporations liquidity position. He led new and
returning staff to enhance the budgeting process and
strengthened the finance function. Based upon
Mr. Mendez recommendation and the assessment of the
CRC, Mr. Brown
13
received a salary increase of $10,000 and was awarded a long
term non-cash incentive of 500 shares of common stock in
2009. Mr. Brown received a similar increase in base salary
and long term equity incentive in 2008.
Robert L. Buzzo. Mr. Buzzo
has been President and a member of the bank executive team since
2000 and has held other leadership positions since he joined the
bank in 1973. Mr. Buzzos goals and objectives for
2008 included both bank as well as company goals and objectives,
including increasing bank assets, non-interest income, net
income and earnings per share, increasing revenues of non-bank
affiliates, plus an ongoing focus on managing risk and improving
customer service.
Although Mr. Buzzo did not meet all of the financial goals
established for him for 2008, he adapted to the increasingly
negative economic conditions that emerged after establishment of
his goals. In spite of the dire national economic trends and
material losses realized in the investment portfolio, the core
bank earnings (exclusive of securities impairments) and
insurance subsidiarys earnings totaled $16.9 million
for 2009 or $1.14 per diluted common share. Mr. Mendez
proposed and the CRC approved that Mr. Buzzo receive no
bonus or salary adjustment in 2009. Mr. Mendez proposed
these actions because he believed they were appropriate in the
current environment.
E. Stephen Lilly. Mr. Lilly has
served as our Chief Operating Officer since 2000 and has been
employed by the Corporation since 1997. His direct reports
include the Chief Risk Officer, the Director of Information
Technology, the Marketing Director, Vice-President of Cash
Management and Treasury Services, Vice-President of Operations,
the officer in charge of secondary market lending, and the
Vice-President of Branch Administration. Mr. Lillys
operational goals and objectives for the bank and the
Corporation included analysis of the core operating system,
improvement of the banks array of treasury services,
upgrading the banks internet banking service, and
integration of acquired businesses.
Mr. Lillys leadership was important in helping the
Corporation through the current financial downturn. He provided
viable solutions to operational issues and his guidance was
critical in helping the Corporation continue its operations in a
safe and efficient manner. Consistent with Mr. Mendez
recommendation and CRCs approval, Mr. Lillys
base salary remained unchanged and received no bonus or salary
increase in 2009.
Gary R. Mills. Mr. Mills has
served as our Chief Credit Officer since 2007 and has been
employed by the Corporation since 1998. He is responsible for
overseeing and maintaining the Corporations
$1.3 billion loan portfolio, including maintaining an
adequate loan loss reserve, compliance with federal and state
lending regulations, managing a staff of forty with seven direct
reports, working with regulators and internal and external
auditors and participation in presentations to analysts and
investors.
Mr. Mills strategic and operational goals in 2008
included preservation of high credit quality in the loan
portfolio, amending and restating loan policy, managing large
loan workouts and performing loan portfolio due diligence
associated with bank mergers and acquisitions. Although
Mr. Mills was unable to meet all of the objectives
established for 2008, his diligent efforts allowed the
Corporation to maintain its exceptional credit quality,
especially when compared to peers, despite serious challenges
faced by financial services companies. Mr. Mendez proposed
and CRC approved that Mr. Mills receive no bonus or salary
increase in 2009.
FCBI
Compensation Philosophy
The goal of our executive compensation program is to retain and
reward officers who create long term value for our stockholders.
This overriding objective affects all elements of our
compensation program. Our compensation program rewards continued
financial and operating performance coupled with strong
leadership. Our intent is to align the executives long
term interests with those of our stockholders and to motivate
the executive team to continue with the Corporation for long
productive careers.
Considerations
Used to Determine Compensation Program
Below is a summary of important considerations by the CRC
affecting compensation for the named executives. For 2009, the
CRC performed its evaluation of compensation in light of the
Corporations performance, the current economic recession,
and the prevailing public sentiments and concern regarding
executive compensation.
14
Emphasis on Reliable and Relative
Performance. Our compensation program
provides pay opportunities for those executives demonstrating
superior performance for sustained periods of time. Each of our
named executives has served the Corporation for many years and
each has held diverse positions with growing levels of
responsibility. Relative compensation reflects previous
contributions and anticipated future contributions to the
Corporations long term success. In evaluating sustained
performance, we also give weight to the relative performance of
each executive in his particular industry segment or function.
Emphasizing consistent, long term performance impacts annual
discretionary cash bonus and any equity incentive compensation.
After assessing each named executives past performance,
and expected future contribution, as well as the performance of
the business or function the executive leads, the CRC uses its
judgment in determining the amount of bonus or equity award, if
any. We consider the current year as well as past and expected
performance in our compensation decisions. This long term view
has the effect of moderating compensation levels and annual
adjustments and awards.
Importance of Corporation Results. CRC
places substantial weight on the named executives
contribution to the Corporations overall financial
success, as opposed to limiting its focus strictly to an
individual business or function. The CRC is of the opinion that
the named executives share the responsibility of supporting the
Corporations overriding goals and objectives as part of
the management team.
Judgment versus Formula Driven. The CRC
does not use formulas in determining the level or mix of
compensation. We evaluate a wide range of quantitative and
qualitative factors, which include consistency in reaching
financial and growth targets, the ability to perform in both
good and challenging economic times, a history of integrity,
evidence that the executive uses good judgment and his ability
to lead and create future value for the Corporation.
Risk Considerations in Our Compensation
Program. The CRC views the Corporations
compensation program with a long term focus. The greatest amount
of compensation can be achieved over long periods of time
through sustained excellent performance. Larger amounts of
compensation are typically to be deferred or can only be
realized upon retirement. We believe this will provide a strong
incentive to manage the Corporation for the long term with a
clear message to avoid excessive risk in the near term. We
establish goals and objectives with a mix of quantitative and
qualitative performance elements in order to avoid excessive
weight on one performance measure. The CRC also attempts to
balance the various elements of compensation among base salary
(current cash payments), deferred cash payments and equity
awards. The CRC maintains full discretion to adjust compensation
based upon improved performance and adherence to company values.
As a result of the Corporations participation in the TARP
Capital Purchase Program for a portion of 2009, the CRC was
required to review the incentive compensation arrangements of
the Corporations named executive officers with the
Corporations senior risk officer to ensure that their
incentive compensation arrangements do not encourage them to
take unnecessary and excessive risks that threaten the value of
the Corporation. Even though not expressly required, the CRC
Committee also reviewed the compensation arrangements of the
Corporations other top executives. The CRC concluded that
it does not believe that the Corporations compensation
policies and practices encourages excessive or inappropriate
risk taking and instead encourage behaviors that support
sustainable long term value creation. In reaching this
conclusion, the CRC considered the various metrics and elements
of the compensation program. For instance, the CRC does not use
highly leveraged, short-term incentives that drive high risk
investments at the expense of long term company value. Rather,
the Corporations annual incentive compensation is based on
balanced performance metrics that promote disciplined progress
towards longer-term goals.
Future Compensation Opportunity. The
CRCs intentions are to provide a mix of different
compensation elements. We consider current compensation versus
long term compensation and cash versus equity elements. We view
cash payments as reflective of current or recent performance and
stock payments as a means to encourage long term behavior and as
a means to retain executives. CRC believes that each named
executive should have a portion of his compensation at risk
based on how well the Corporation operates and how well its
stock performs in the long run.
15
Beginning in 2010, the CRC has begun a more intensive review of
the relationship between risk management and incentive
compensation to ensure that incentive compensation does not
encourage unnecessary and excessive risks. The CRC also reviews
the relationship between risk management policies and practices,
overall company strategy and executive compensation.
Use of Compensation
Consultants. Neither the CRC nor FCBI used a
compensation consultant in 2009, or at anytime prior thereto,
for any purpose including providing assistance in determining
the amount or form of senior executive or director compensation.
Recently, because of the enhanced level of regulation and
scrutiny on executive compensation, the CRC has sought input
from Mathews, Young Management Consulting
(Mathews Young) regarding the 2010 incentive
compensation plan for non-executive employees of the
Corporation, which plan was designed by our Human Resources
Department. CRC and the Corporation understands that Mathews
Young is the independent consultant of the CRC. The CRC and the
Corporation will not use the same consultant. In regard to
benchmark data, the CRC considers executive compensation at
other similar sized and situated financial service companies as
only one of numerous factors in setting pay. The CRC does not
target a specific percentile within this group of perceived
peers and uses the comparative data only as reference tool after
determining the types and amounts of compensation based upon its
own evaluation.
Employment Agreements. Our named
executives have employment agreements, which include change of
control protection for the executives and non-compete and
non-solicitation requirements for the protection of the
Corporation. The employment agreements with Messrs. Mendez,
Buzzo and Lilly were amended and restated as of
December 16, 2008 to comply with Section 409A of the
Internal Revenue Code and initial employment agreements were
entered into with Messrs. Brown and Mills. We describe all
of these agreements in more detail below.
The amended and restated employment agreement
(agreement) with Mr. Mendez had an initial term
of three years and provided that beginning on the commencement
of the employment period under the agreement and on each
succeeding January 1st the term of the Agreement will
automatically be extended an additional three years, unless the
Corporation or Mr. Mendez gives notice that the employment
term will not thereafter be extended.
Under the agreement, Mr. Mendez initial annual base
salary was $392,902 as of January 1, 2009;
Mr. Mendez current base salary remains at $392,902.
The Corporation may terminate Mr. Mendez employment
at any time for Cause (as defined in the agreement)
without further obligation owed to Mr. Mendez. If the
Corporation terminates Mr. Mendez employment for any
reason other than for Cause or if he terminates his
employment for Good Reason (as defined in the
agreement), the Corporation will generally be obligated to
continue to provide compensation and benefits specified in the
agreement for the balance of the term of the agreement but not
less than thirty (30) months following the date of
termination. Upon the termination of his employment,
Mr. Mendez will be subject to non-competition and
non-solicitation restrictions.
If Mr. Mendez dies while employed by the Corporation, the
Corporation will pay his estate through the end of the month in
which his death occurs. If Mr. Mendez employment is
terminated as a result of permanent disability as determined
pursuant to the agreement, then the Corporation has the right to
terminate his employment before the end of the applicable term.
In the event that there is a change of control of the
Corporation and Mr. Mendez employment is terminated
by the Corporation or he chooses to terminate his employment
within two (2) years after such change of control, the
Corporation will pay Mr. Mendez severance pay in the form
of a lump sum payment of 2.99 times his base salary then in
effect on the date of termination.
The Corporation also entered into amended and restated
employment agreements with Messrs. Buzzo and Lilly as of
December 16, 2008, again to effectuate compliance with
Section 409A; these agreements contain substantially
similar terms and are modeled after Mr. Mendez
agreement. These agreements supersede and replace the employment
agreements for Messrs. Buzzo and Lilly entered into in
2002. Each agreement has an initial term of three years, and,
similar to Mr. Mendez agreement, each is renewed for
an additional three year term each January 1st unless
the Corporation or the individual executive gives notice that
the employment term will not be extended.
Similar to Mr. Mendez agreement, in the event that
there is a change of control of the Corporation and
Messrs. Buzzos or Lillys employment is
terminated by the Corporation or either chooses to terminate his
16
employment within two (2) years of such change of control,
the Corporation will pay that executive severance pay in the
form of a lump sum payment of 2.99 times his base salary then in
effect on the date of termination.
The Corporation also entered initial employment agreements with
Messrs. Brown and Mills as of December 16, 2008. These
agreements contain substantially similar terms and are modeled
after Mr. Mendez agreement. Each agreement has an
initial term of two years, and is renewed for an additional
two-year term each January 1st unless the Corporation
or the individual executive gives notice that the employment
term will not be extended. Each agreement provides for a lump
sum payment of two (2) times base salary in the event of a
change of control coupled with terminated employment either
without cause by the Corporation or by the executive for
Good Reason (as defined in the agreement).
Compensation
Elements Used to Achieve Corporations Goals
We use the compensation elements discussed below as the means to
reward, retain and align executives interests with the
long term interests of the Corporation and stockholders.
Base Salary and Bonus. The amount of
base salary for each named executive depends upon the scope of
the executives duties, his or her individual performance
and length of service, and his or her leadership ability.
Current salary impacts our decisions regarding salary
adjustments relevant to peers (within and outside this company).
Base salaries are reviewed annually. For each named executive
officer, the CRC may award discretionary cash bonuses during the
first quarter of each year based upon the previous years
performance based upon the evaluation by CRC and the CEO (except
the CEO does not participate in his own bonus determination).
Stock Options and Restricted Stock
Awards. The Corporations equity
incentive program is designed to recognize responsibility,
reward excellent performance, retain named executives, and align
their interests with those of our stockholders. The CRC has used
stock options and stock awards sparingly and determined that no
such awards were merited in 2009 due the inability of the
Corporation to attain its performance goals and objectives in an
admittedly difficult economic cycle.
Prior to 2009, non-statutory stock options totaling 332,750 in
five installments, each vesting over a seven- year period, were
awarded under the 1999 Stock Option Plan (1999
Plan). All stock options granted pursuant to the 1999 Plan
were fully vested as of the end of 2009. Vested stock options
granted pursuant to the 1999 Plan are exercisable up to a period
of five years after the date of the grantees retirement
(provided retirement occurs at or after age 62),
disability, or death. If employment is terminated other than by
retirement at or after age 62, disability, or death, vested
options must be exercised within 90 days after the
effective date of termination. An option not exercised within
such period will be deemed cancelled. All vested but unexercised
options under the 1999 Plan are out of the money and
have no intrinsic value to the named executive officers.
The 2004 Omnibus Stock Option Plan (2004 Plan) was
adopted by the Board of Directors in January 2004 and approved
by the stockholders at the 2004 Annual Meeting.
200,000 shares of common stock were reserved for future
issuance pursuant to the 2004 Plan. Grants of incentive stock
options and non-qualified stock options under the 2004 Plan
generally become vested so that 25% of the award vests as of the
date of the grant and 25% vests on each one year anniversary
thereafter, so that 100% of such awards is vested as of the
third anniversary of the date of grant. No grants were awarded
in 2009 to any named executive officer. All vested but
unexercised grants under the 2004 Plan are out of the
money and have no intrinsic value. The 2003 acquisition of
The CommonWealth Bank added additional stock options for
120,155 shares of common stock (124,380 shares
adjusted by the merger conversion factor of .9015 and the 10%
stock dividend in 2003). These options included awards to
employees and directors and were issued by The CommonWealth Bank
in 12 grants beginning in 1994 and ending in 2002 with adjusted
exercise prices ranging from $4.75 to $17.40. The 2009
acquisition of TriStone Community Bank added additional stock
options for 148,764 shares of Common Stock. These options
included awards to employees and directors and were issued by
TriStone Community Bank. Options from these two acquired plans
are fully vested and are exercisable for up to ten years
following the grant date. At December 31, 2009, 5,436
option shares were outstanding and exercisable under the former
CommonWealth Plan and 148,764 option shares were outstanding and
exercisable under the former TriStone Plan.
17
Mr. Brown and Mr. Mills have been granted options
and/or
restricted stock awards under the 2004 Plan. Mr. Brown has
previously been the recipient of awards under the 2004 Plan
totaling 1,500 shares of stock and a total of 11,000
options. Mr. Mills has 5,000 options. Options are subject
to forfeiture if the executive terminates employment prior to a
vesting date. Unexercised vested options are also subject to
forfeiture if not exercised within 90 days of early
retirement or termination of employment.
All stock options under both the 1999 and 2004 Plans have
exercise prices not less than fair market value of the common
stock on the date of each grant. Stock options under the 1999
Plan vest ratably over seven years, while stock options and
restricted stock awards under the 2004 Plan vest ratably over
three to four years as recommended by the Board of Directors.
The 1999 and 2004 Plans prohibit discounted stock options,
reloading of stock options, and stock option repricing. The
Corporation does not provide loans to the named executives for
purposes of exercising options. The average number of options
granted over the past three years as a percentage of basic
shares outstanding was less than 1%. Historically, the named
executives have not been subject to stock ownership guidelines.
Deferred Compensation. The Corporation
offers a qualified defined contribution plan known as the KSOP
to most of its employees. However, the named executives are
unable to fully participate in the KSOP due to certain
restrictions on their deferrals based upon annual testing limits
imposed by the Internal Revenue Code. The Corporation provides a
non-qualified deferred compensation plan discussed in more
detail elsewhere in this proxy statement and referred to as the
WRAP plan as a mechanism to allow highly compensated
participants to defer a portion of their compensation that
cannot otherwise be deferred under the Corporations
qualified plan. The plan is intended to promote retention by
providing a long term savings vehicle on a tax efficient basis.
Pension Plans. The Corporation provides
a defined retirement benefit to the named executives and others
pursuant to separate agreements, each of which is known as a
Supplemental Executive Retention Plan
(SERP). The plan is unfunded and designed to provide
a benefit to be paid at age 62, normal retirement age in
the SERP. The benefit is targeted at 35% of final compensation
projected at an assumed 3% salary progression rate, and subject
to an annual benefit limit of $80,000. Vesting under the plan is
on a graded schedule as follows: 25% vesting after 5 years
of service under the plan; 50% vesting after 10 years of
service under the plan; 75% vesting after 15 years of
service under the plan; plus an additional 5% vesting for each
year of service beyond 15 years under the plan, with full
vesting after 20 years of service from plan inception or
reaching age 62, whichever occurs first.
In connection with the SERP, the Corporation entered into Life
Insurance Endorsement Method Split Dollar Agreements with
Messrs. Mendez, Buzzo and Lilly. Under these agreements,
the Corporation shares 80% of death benefits (after recovery of
cash surrender value) with the designated beneficiaries of the
executives under life insurance contracts. The Corporation, as
owner of the policies, retains a 20% interest in life proceeds
after reimbursement to the Corporation of retirement benefits
paid and a 100% interest in the cash surrender value of the
policies.
Compensation
and Retirement Committee Report
The Compensation and Retirement Committee has reviewed the
Compensation Discussion and Analysis and discussed that analysis
with management. Based on its review and discussions with
management, the committee recommended to our Board of Directors
that the Compensation Discussion and Analysis be included in the
Corporations Annual Report on
Form 10-K
for 2009 and the Corporations 2010 proxy statement. This
report is provided by the following independent directors, who
comprise the Committee:
William P. Stafford, II (Chairman)
Allen T. Hamner
A. A. Modena
18
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Change in
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Aggregate
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Pension
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Date Fair
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Value and
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Value of
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Non-
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Non-
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Stock Awards
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Equity
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Qualified
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and Option
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Incentive
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Deferred
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All
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Awards
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Plan
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Compen-
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Other
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Name of Individual/
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Granted
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Stock
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Option
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Compen-
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sation
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Compen-
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Capacities Served
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Year
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Salary
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Bonus
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in 2009
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Awards(1)
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Awards(1)
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sation(4)
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Earnings(3)
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sation(2)
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Total
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John M. Mendez
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2009
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$
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392,902
|
|
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$
|
|
|
|
$
|
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
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N/A
|
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$
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152,922
|
|
|
$
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49,552
|
|
|
$
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595,376
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President & Chief
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2008
|
|
|
|
392,902
|
|
|
|
|
|
|
|
N/A
|
|
|
|
|
|
|
|
27,603
|
|
|
|
N/A
|
|
|
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124,433
|
|
|
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44,526
|
|
|
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589,464
|
|
Executive Officer
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2007
|
|
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382,200
|
|
|
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75,000
|
|
|
|
N/A
|
|
|
|
|
|
|
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36,234
|
|
|
|
N/A
|
|
|
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39,219
|
|
|
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49,049
|
|
|
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581,702
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David D. Brown
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2009
|
|
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145,000
|
|
|
|
|
|
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6,100
|
|
|
|
N/A
|
|
|
|
N/A
|
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|
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N/A
|
|
|
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5,388
|
|
|
|
20,184
|
|
|
|
176,672
|
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Chief Financial Officer
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2008
|
|
|
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135,000
|
|
|
|
|
|
|
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N/A
|
|
|
|
17,500
|
|
|
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23,946
|
|
|
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N/A
|
|
|
|
10,303
|
|
|
|
18,249
|
|
|
|
204,998
|
|
|
|
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2007
|
|
|
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110,000
|
|
|
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40,000
|
|
|
|
N/A
|
|
|
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17,465
|
|
|
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24,820
|
|
|
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N/A
|
|
|
|
N/A
|
|
|
|
13,759
|
|
|
|
206,044
|
|
Robert L. Buzzo
|
|
|
2009
|
|
|
|
217,800
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
45,112
|
|
|
|
44,564
|
|
|
|
307,476
|
|
Vice President and
|
|
|
2008
|
|
|
|
217,800
|
|
|
|
|
|
|
|
N/A
|
|
|
|
|
|
|
|
14,805
|
|
|
|
N/A
|
|
|
|
187,770
|
|
|
|
42,021
|
|
|
|
462,396
|
|
Secretary
|
|
|
2007
|
|
|
|
213,000
|
|
|
|
20,000
|
|
|
|
N/A
|
|
|
|
|
|
|
|
19,433
|
|
|
|
N/A
|
|
|
|
51,370
|
|
|
|
40,889
|
|
|
|
344,692
|
|
E. Stephen Lilly
|
|
|
2009
|
|
|
|
235,000
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
22,696
|
|
|
|
44,955
|
|
|
|
302,651
|
|
Chief Operating Officer
|
|
|
2008
|
|
|
|
235,000
|
|
|
|
|
|
|
|
N/A
|
|
|
|
|
|
|
|
14,777
|
|
|
|
N/A
|
|
|
|
10,367
|
|
|
|
32,094
|
|
|
|
292,238
|
|
|
|
|
2007
|
|
|
|
218,000
|
|
|
|
50,000
|
|
|
|
N/A
|
|
|
|
|
|
|
|
19,390
|
|
|
|
N/A
|
|
|
|
16,942
|
|
|
|
37,157
|
|
|
|
341,489
|
|
Gary R. Mills
|
|
|
2009
|
|
|
|
172,000
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
10,504
|
|
|
|
20,024
|
|
|
|
202,528
|
|
Chief Credit Officer
|
|
|
2008
|
|
|
|
172,000
|
|
|
|
|
|
|
|
N/A
|
|
|
|
|
|
|
|
10,277
|
|
|
|
N/A
|
|
|
|
56,672
|
|
|
|
18,213
|
|
|
|
257,162
|
|
|
|
|
2007
|
|
|
|
160,000
|
|
|
|
35,000
|
|
|
|
N/A
|
|
|
|
|
|
|
|
16,606
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
22,797
|
|
|
|
234,403
|
|
|
|
|
(1) |
|
Reflects grant date fair value of current vesting of awards. |
|
(2) |
|
These items are detailed in the following table entitled,
Summary of All Other Compensation. |
|
(3) |
|
The amounts reported represent the difference between the vested
liability balance at the end of 2009 and 2008. |
|
(4) |
|
The Company currently has no non-equity incentive compensation
plan. |
2009 ALL
OTHER COMPENSATION
We provide our named executives with additional benefits as
shown in the All Other Compensation column of the
2009 Summary Compensation Table shown above, that we
believe are reasonable, competitive and in line with the
Corporations overall executive program. We provide
additional detail of those benefits in the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
Total
|
|
Split Dollar
|
|
Executive
|
|
|
|
|
|
|
|
|
Matching
|
|
KSOP
|
|
Life
|
|
Life
|
|
|
|
|
Name of Individual
|
|
Year
|
|
Contribution(1)
|
|
Contribution
|
|
Insurance(2)
|
|
Insurance(3)
|
|
Perquisites(4)
|
|
Total
|
|
John M. Mendez
|
|
|
2009
|
|
|
$
|
21,970
|
|
|
$
|
|
|
|
$
|
3,097
|
|
|
$
|
11,905
|
|
|
$
|
12,580
|
|
|
$
|
49,552
|
|
|
|
|
2008
|
|
|
|
20,500
|
|
|
|
|
|
|
|
2,793
|
|
|
|
8,095
|
|
|
|
13,138
|
|
|
|
44,526
|
|
|
|
|
2007
|
|
|
|
15,000
|
|
|
|
12,972
|
|
|
|
784
|
|
|
|
7,393
|
|
|
|
12,900
|
|
|
|
49,049
|
|
David D. Brown
|
|
|
2009
|
|
|
|
8,924
|
|
|
|
|
|
|
|
|
|
|
|
1,080
|
|
|
|
10,180
|
|
|
|
20,184
|
|
|
|
|
2008
|
|
|
|
6,973
|
|
|
|
|
|
|
|
|
|
|
|
538
|
|
|
|
10,738
|
|
|
|
18,249
|
|
|
|
|
2007
|
|
|
|
2,115
|
|
|
|
2,805
|
|
|
|
|
|
|
|
618
|
|
|
|
8,221
|
|
|
|
13,759
|
|
Robert L. Buzzo
|
|
|
2009
|
|
|
|
19,480
|
|
|
|
|
|
|
|
4,339
|
|
|
|
8,345
|
|
|
|
12,400
|
|
|
|
44,564
|
|
|
|
|
2008
|
|
|
|
18,496
|
|
|
|
|
|
|
|
4,206
|
|
|
|
6,361
|
|
|
|
12,958
|
|
|
|
42,021
|
|
|
|
|
2007
|
|
|
|
14,184
|
|
|
|
7,092
|
|
|
|
953
|
|
|
|
5,940
|
|
|
|
12,720
|
|
|
|
40,889
|
|
E. Stephen Lilly
|
|
|
2009
|
|
|
|
26,621
|
|
|
|
|
|
|
|
1,160
|
|
|
|
4,594
|
|
|
|
12,580
|
|
|
|
44,955
|
|
|
|
|
2008
|
|
|
|
15,500
|
|
|
|
|
|
|
|
1,083
|
|
|
|
3,251
|
|
|
|
12,260
|
|
|
|
32,094
|
|
|
|
|
2007
|
|
|
|
13,684
|
|
|
|
7,242
|
|
|
|
350
|
|
|
|
2,981
|
|
|
|
12,900
|
|
|
|
37,157
|
|
Gary R. Mills
|
|
|
2009
|
|
|
|
12,633
|
|
|
|
|
|
|
|
|
|
|
|
1,391
|
|
|
|
6,000
|
|
|
|
20,024
|
|
|
|
|
2008
|
|
|
|
11,287
|
|
|
|
|
|
|
|
|
|
|
|
926
|
|
|
|
6,000
|
|
|
|
18,213
|
|
|
|
|
2007
|
|
|
|
10,560
|
|
|
|
5,280
|
|
|
|
|
|
|
|
957
|
|
|
|
6,000
|
|
|
|
22,797
|
|
|
|
|
(1) |
|
Includes $5,320 for correction to 2008 matching contribution for
Mr. Lilly. |
|
(2) |
|
Imputed income on Company funded premiums or split dollar plan. |
19
|
|
|
(3) |
|
Company funded premium on executive life program. |
|
(4) |
|
Perquisites consist of country club dues and/or automobile
allowance in each instance. |
2009
Other Benefits
The Corporation provides other perquisites and personal benefits
that the Corporation and the CRC believe are reasonable and
consistent with its overall compensation program to better
enable the Corporation to attract and retain superior employees
for key positions. The CRC periodically reviews the levels of
perquisites and other personal benefits provided to the named
executives. Perquisites include the following:
Use of Aircraft The Corporations
banking subsidiary holds a fractional interest in a private
aircraft through its ownership interest (20%) in a LLC. The
aircraft is used by the Corporation for travel throughout the
subsidiary banks branch network, which spans four states,
by the named executives, members of the Board and other
employees. The Corporation has determined that the aircraft is
an efficient use of both capital and personnel time and
significantly enhances productivity of key personnel. Personal
use of the aircraft is prohibited.
Corporate Automobiles/Allowance In lieu of
company vehicles, Messrs. Mendez, Buzzo and Lilly were each
provided an annual automobile allowance of $8,400;
Mr. Brown and Mr. Mills were provided $6,000 as an
auto allowance. Automobile allowances provide a cost effective
means of compensation for business travel and shift the burden
of maintenance costs to the executive. Taxable auto allowances
also avoid time and cost associated with documentation of
business and personal use of Corporate vehicles.
Country Club Dues The Corporation advanced
country club dues on behalf of Messrs. Mendez ($4,180),
Buzzo ($4,000), Lilly ($4,180) and Brown ($4,180) as an added
perquisite commensurate with job performance, level of
responsibility and as a means to provide the named executives
comparable benefits to those available at other similarly
located and like-sized companies. The Corporation considers the
payment of country club dues to be an appropriate part of the
overall compensation packages in order to provide an appropriate
setting for the named executives to conduct business on behalf
of the Corporation, to socialize with other business and
community leaders and to entertain the Corporations
business customers and prospects. All costs associated with
personal use of a country club by the named executive or family
members are borne by the individual named executive and not the
Corporation.
2009
GRANTS OF PLAN-BASED AWARDS
The following table provides information about equity awards
granted (if any) to the named executives in 2009: (1) the
grant date, (2) estimated future payouts under equity
incentive plan awards, (3) the number of shares underlying
all other stock awards, (4) all other awards, (5) the
exercise price of the stock option awards, which reflects the
closing price of company stock on the date of the grant and
(6) the grant date fair value of each equity award computed
under FASB ASC Topic 718 (formerly SFAS 123R).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future
|
|
|
All Other Stock
|
|
|
Awards: Number
|
|
|
Exercise or
|
|
|
|
|
|
|
|
|
|
Payouts Under
|
|
|
Awards: Number
|
|
|
of Securities
|
|
|
Base Price
|
|
|
Full Grant
|
|
|
|
Grant
|
|
|
Equity Incentive
|
|
|
of Shares of
|
|
|
Underlying
|
|
|
of Option
|
|
|
Date Fair
|
|
Name of Executive
|
|
Date
|
|
|
Plan Awards
|
|
|
Stock or Units
|
|
|
Options
|
|
|
Awards
|
|
|
Value
|
|
|
John M. Mendez
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
David D. Brown
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Robert L. Buzzo
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
E. Stephen Lilly
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Gary R. Mills
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
20
2009
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table includes information on the current holdings
of stock option and stock awards by the named executives. This
table includes unexercised and unvested option awards, and
vesting conditions that were not satisfied as of
December 31, 2009. Each equity grant is shown separately
for each named executive. The vesting schedule for each
outstanding award is shown following this table, based on the
grant date.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
Market or
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
Number
|
|
Payout
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
of
|
|
Value of
|
|
|
|
|
|
|
Awards:
|
|
|
|
|
|
|
|
Market
|
|
Unearned
|
|
Unearned
|
|
|
|
|
|
|
Number
|
|
|
|
|
|
Number
|
|
Value of
|
|
Shares,
|
|
Shares,
|
|
|
|
|
|
|
of
|
|
|
|
|
|
of Shares
|
|
Shares or
|
|
Units or
|
|
Units or
|
|
|
|
|
|
|
Securities
|
|
|
|
|
|
or Units
|
|
Units of
|
|
Other
|
|
Other
|
|
|
Number of
|
|
Underlying
|
|
|
|
|
|
of Stock
|
|
Stock
|
|
Rights
|
|
Rights
|
|
|
Securities Underlying
|
|
Unexercised
|
|
Option
|
|
Option
|
|
That Have
|
|
That Have
|
|
That Have
|
|
That Have
|
|
|
Unexercised Options
|
|
Unearned
|
|
Exercise
|
|
Expiration
|
|
Not
|
|
Not
|
|
Not
|
|
Not
|
Name
|
|
Exercisable
|
|
Unexercisable
|
|
Options
|
|
Price
|
|
Date
|
|
Vested
|
|
Vested
|
|
Vested
|
|
Vested
|
|
John M. Mendez
|
|
|
12,092
|
|
|
|
|
|
|
|
|
|
|
$
|
19.80
|
|
|
|
2/3/2022
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16.00
|
|
|
|
2/3/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,015
|
|
|
|
|
|
|
|
|
|
|
|
13.94
|
|
|
|
2/3/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,108
|
|
|
|
|
|
|
|
|
|
|
|
24.65
|
|
|
|
2/3/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,108
|
|
|
|
|
|
|
|
|
|
|
|
29.15
|
|
|
|
2/3/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David D. Brown
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,500
|
|
|
|
2,500
|
|
|
|
|
|
|
|
35.00
|
|
|
|
10/24/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert L. Buzzo
|
|
|
7,566
|
|
|
|
|
|
|
|
|
|
|
|
19.80
|
|
|
|
3/30/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,566
|
|
|
|
|
|
|
|
|
|
|
|
16.00
|
|
|
|
3/30/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,404
|
|
|
|
|
|
|
|
|
|
|
|
13.94
|
|
|
|
3/30/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,566
|
|
|
|
|
|
|
|
|
|
|
|
24.65
|
|
|
|
3/30/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,565
|
|
|
|
|
|
|
|
|
|
|
|
29.15
|
|
|
|
3/30/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E. Stephen Lilly
|
|
|
7,551
|
|
|
|
|
|
|
|
|
|
|
|
19.80
|
|
|
|
6/26/2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,156
|
|
|
|
|
|
|
|
|
|
|
|
13.94
|
|
|
|
6/26/2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,550
|
|
|
|
|
|
|
|
|
|
|
|
24.65
|
|
|
|
6/26/2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,550
|
|
|
|
|
|
|
|
|
|
|
|
29.15
|
|
|
|
6/26/2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary R. Mills
|
|
|
233
|
|
|
|
|
|
|
|
|
|
|
|
13.94
|
|
|
|
2/5/2035
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
865
|
|
|
|
|
|
|
|
|
|
|
|
24.65
|
|
|
|
2/5/2035
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,025
|
|
|
|
|
|
|
|
|
|
|
|
29.15
|
|
|
|
2/5/2035
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
|
32.50
|
|
|
|
6/28/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
OPTION EXERCISES AND STOCK VESTED
The following table provides information for the named
executives on (1) stock option awards exercised during
2009, including the number of shares acquired upon exercise and
the value realized at such time, and (2) the number of
shares acquired upon the vesting of stock awards and the value
realized at such time, before the payment of any applicable
withholding tax and brokerage commissions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
Shares
|
|
|
|
Shares
|
|
|
|
|
Acquired on
|
|
Value
|
|
Acquired on
|
|
Value
|
Name
|
|
Exercise
|
|
Realized
|
|
Vesting
|
|
Realized
|
|
John M. Mendez
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
David D. Brown
|
|
|
|
|
|
|
|
|
|
|
500
|
|
|
|
6,100
|
|
Robert L. Buzzo
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E. Stephen Lilly
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary R. Mills
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21
2009
PENSION BENEFITS
The table below sets forth the details on pension benefits for
the named executives under the following plan:
The FCBI Executive SERP. The FCBI SERP
is unfunded and not qualified for tax purposes. Refer to
page 18 of this proxy statement for a more detailed
discussion of the SERP and to Footnote 10 to the Consolidated
Financial Statements in the Annual Report on
Form 10-K
for the year ended December 31, 2009 for discussion of the
methodologies and assumptions underlying the projected SERP
benefits.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Years
|
|
Present Value of
|
|
Payments During
|
Name
|
|
Plan Name
|
|
Credited Service
|
|
Accumulated Benefit
|
|
Last Fiscal Year
|
|
John M. Mendez
|
|
|
SERP
|
|
|
|
24
|
|
|
$
|
559,745
|
|
|
$
|
|
|
David D. Brown
|
|
|
SERP
|
|
|
|
4
|
|
|
|
15,691
|
|
|
|
|
|
Robert L. Buzzo
|
|
|
SERP
|
|
|
|
36
|
|
|
|
582,329
|
|
|
|
|
|
E. Stephen Lilly
|
|
|
SERP
|
|
|
|
11
|
|
|
|
162,111
|
|
|
|
|
|
Gary R. Mills
|
|
|
SERP
|
|
|
|
10
|
|
|
|
67,176
|
|
|
|
|
|
2009
NONQUALIFIED DEFERRED COMPENSATION
Deferral of Salary. Any employee otherwise
ineligible to fully participate in the qualified retirement plan
(KSOP) and who meet the Internal Revenue Code definition of
being highly compensated, including the named
executives, have historically been eligible to elect to defer up
to 75% of their compensation to the FCBI 401(k) WRAP plan.
Deferrals to this plan are invested as directed by each
participant and are matched at the discretion of the Board of
Directors in conjunction with and subject to limits established
each year by the Board of Directors for elective deferrals to
the KSOP. The Board of Directors authorized a match of 100% of
up to 8% of participant salary for 2009 when deferred under the
401(k) plan. The table below provides detail regarding
nonqualified deferred compensation of the named executives,
which for 2009 included only the deferral of a portion of
salaries to the 401(k) WRAP plan. Balances previously deferred
by the named executives to a second non-qualified plan, known as
the Deferred Compensation Plan, have been combined
with the 401(k) WRAP deferrals and reported in a single table
below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
Company
|
|
Aggregate
|
|
|
|
|
|
|
Contributions
|
|
Contributions
|
|
Earnings
|
|
Aggregate
|
|
Aggregate
|
|
|
in Last
|
|
in Last
|
|
in Last
|
|
Withdrawals/
|
|
Balance at Last
|
Name
|
|
Fiscal Year(1)
|
|
Fiscal Year(1)
|
|
Fiscal Year
|
|
Distributions
|
|
Fiscal Year-End
|
|
John M. Mendez
|
|
$
|
8,335
|
|
|
$
|
3,570
|
|
|
$
|
1,791
|
|
|
|
N/A
|
|
|
$
|
185,307
|
|
David D. Brown
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
|
|
Robert L. Buzzo
|
|
|
9,339
|
|
|
|
1,080
|
|
|
|
24,856
|
|
|
|
N/A
|
|
|
|
100,861
|
|
E. Stephen Lilly
|
|
|
|
|
|
|
8,221
|
|
|
|
4,507
|
|
|
|
N/A
|
|
|
|
79,360
|
|
Gary R. Mills
|
|
|
601
|
|
|
|
|
|
|
|
(8,001
|
)
|
|
|
N/A
|
|
|
|
45,490
|
|
|
|
|
(1) |
|
The amounts reported under Executive Contributions
are included in each NEOs amount under the
Salary column in the Summary Compensation
Table. The amounts reported under Company
Contributions are included in each NEOs amount under
the All Other Compensation column in the
Summary Compensation Table. The Company
contributions reflected in the above table are reflective of
amounts deferred by the executives in the prior plan year, but
matched by the Company in the subsequent year. The Company does
not match Executive Contributions to the Deferred Compensation
Plan. |
POTENTIAL
PAYMENTS UPON TERMINATION
The information below describes the compensation that would
become payable under existing plans and agreements based on the
executives actual termination of employment coupled with
the assumption that the named executives employment had
terminated on December 31, 2009, given the named
executives compensation, years of service and a presumed
age of sixty-two (62).
22
These benefits are in addition to benefits generally available
to other non-executive officers, who are salaried employees,
such as distributions under the KSOP and disability insurance
benefits. We have estimated the amounts of compensation payable
to each named executive under a variety of termination
circumstances, including: early retirement, involuntary
termination not for cause, termination for cause, termination
following a change of control and in the event of the death of
the executive.
Since a variety of factors might affect the nature and amount of
any benefits payable upon the events discussed below, actual
amounts may vary from what we have projected.
Regardless of the manner in which a named executives
employment terminates, he may be entitled to receive amounts
earned during his term of employment. Such amounts include:
|
|
|
|
|
option or stock award grants made pursuant to the 1999 Plan or
2004 Plan that vest through the most recently completed fiscal
year;
|
|
|
|
amounts contributed under the KSOP and the Corporations
non-qualified deferred compensation plans;
|
|
|
|
amounts accrued and vested through the Corporations SERP
would be payable as benefits for the life of the executive
beginning at age 62; and
|
|
|
|
cash surrender value of life insurance would be payable.
|
In the event of an involuntary termination without cause, he
would receive severance payments outlined in the respective
employment agreement.
Payments
Made Upon Retirement
In the event of the retirement of a named executive, in addition
to the items identified above:
|
|
|
|
|
for options granted under the 1999 Plan, he will retain vested
options for up to five years after normal retirement at
age 62 and ninety (90) days after early
retirement; and
|
|
|
|
for options granted under the 2004 Plan, he will retain vested
options for the remainder of the outstanding ten-year term.
|
Payments
Made Upon Death or Disability
In the event of the death or disability of a named executive, in
addition to the benefit payments made upon termination or
retirement, the named executive or his beneficiaries will
receive benefits under the Corporations disability plan or
executive life insurance plan, as appropriate. In addition, if
the named executives had died on December 31, 2009, the
survivors of Messrs. Mendez, Buzzo and Lilly would have
received projected amounts of $848,451, $716,020, and $460,222,
respectively, from the proceeds of individual split dollar life
insurance policies on each of these three named executives
included in the Summary of All Other Compensation
Table on page 19. The estimated amounts payable to
the beneficiaries are derived by reflecting a deduction for
repayment to the Corporation of the cash surrender value of the
split dollar life insurance policies and distribution of 80% of
the face value of any remaining insurance proceeds to the
respective beneficiaries and 20% to the Corporation.
Payments
Made Upon a Change of Control
The Corporation has entered into employment agreements with each
of the named executives, which agreements include change of
control provisions. Pursuant to these agreements, if an
executives employment is terminated following a change of
control (other than a termination by the Corporation for cause)
or if the executive terminates his employment in certain
circumstances defined in the agreement, in addition to the
benefits listed under the heading Payments Made Upon
Termination, the named executive will receive a severance
payment consisting of 2.0 to 2.99 times current salary.
The employment agreements for Messrs. Mendez, Buzzo, Lilly,
Brown, and Mills are substantially similar. The form of the
agreements was filed as an Exhibit to the Corporations
Form 8-K
filed on December 16, 2008.
23
Generally, pursuant to these agreements, a change of control is
defined as:
(i) A change in ownership of the Corporation when one
person (or a group) acquires stock that, when combined with
stock previously owned, controls more than 50% of the value or
voting power of the stock of the Corporation.
(ii) A change in the effective control of the Corporation
on the date that, during any
12-month
period, either (1) any person (or group) acquires stock
possessing 30% of the voting power of the Corporation, or
(2) a majority of the members of the Board of Directors is
replaced by persons whose appointment or election is not
endorsed by a majority of the incumbent Board.
(iii) A change in ownership of a substantial portion of the
assets of the Corporation when a person (or a group) acquires,
during any
12-month
period, assets of the Corporation having a total gross fair
market value equal to 40% or more of the total gross fair market
value of all of the Corporations assets.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary &
|
|
|
Nonqualified
|
|
|
|
|
|
Executive
|
|
|
|
|
|
|
Benefits
|
|
|
Def Comp(4)
|
|
|
SERP
|
|
|
Life Ins(6)
|
|
|
Total
|
|
|
John M. Mendez
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If early retirement occurred at Dec. 31, 2009
|
|
$
|
|
|
|
$
|
185,307
|
|
|
$
|
80,000
|
(1,5)
|
|
$
|
19,186
|
|
|
$
|
284,493
|
|
If retirement occurred at Dec. 31, 2009
|
|
|
|
|
|
|
185,307
|
|
|
|
80,000
|
(2,5)
|
|
|
19,186
|
|
|
|
284,493
|
|
If termination for cause occurred at Dec. 31, 2009
|
|
|
|
|
|
|
185,307
|
|
|
|
|
|
|
|
19,186
|
|
|
|
204,493
|
|
If termination without cause occurred at Dec. 31, 2009
|
|
|
994,647
|
|
|
|
185,307
|
|
|
|
80,000
|
(1,5)
|
|
|
19,186
|
|
|
|
1,279,140
|
|
If change in control termination occurred at Dec.
31, 2009
|
|
|
1,174,777
|
|
|
|
185,307
|
|
|
|
559,745
|
(4)
|
|
|
19,186
|
|
|
|
1,939,015
|
|
If disability occurred at Dec. 31, 2009
|
|
|
1,218,258
|
|
|
|
185,307
|
|
|
|
80,000
|
(1,5)
|
|
|
19,186
|
|
|
|
1,502,751
|
|
If death occurred at Dec. 31, 2009(3)
|
|
|
|
|
|
|
185,307
|
|
|
|
80,000
|
(1,5)
|
|
|
983,000
|
(4)
|
|
|
1,248,307
|
|
David D. Brown
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If early retirement occurred at Dec. 31, 2009
|
|
$
|
|
|
|
$
|
|
|
|
$
|
7,267
|
(1,5)
|
|
$
|
|
|
|
$
|
7,267
|
|
If retirement occurred at Dec. 31, 2009
|
|
|
|
|
|
|
|
|
|
|
80,000
|
(2,5)
|
|
|
|
|
|
|
80,000
|
|
If termination for cause occurred at Dec. 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If termination without cause occurred at Dec. 31, 2009
|
|
|
209,935
|
|
|
|
|
|
|
|
7,267
|
(1,5)
|
|
|
|
|
|
|
217,202
|
|
If change in control termination occurred at Dec.
31, 2009
|
|
|
270,000
|
|
|
|
|
|
|
|
15,691
|
(4)
|
|
|
|
|
|
|
285,691
|
|
If disability occurred at Dec. 31, 2009
|
|
|
3,228,008
|
|
|
|
|
|
|
|
7,267
|
(1,5)
|
|
|
|
|
|
|
3,235,275
|
|
If death occurred at Dec. 31, 2009(3)
|
|
|
|
|
|
|
|
|
|
|
7,267
|
(1,5)
|
|
|
338,000
|
(4)
|
|
|
345,267
|
|
Robert L. Buzzo
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If early retirement occurred at Dec. 31, 2009
|
|
$
|
|
|
|
$
|
100,861
|
|
|
$
|
60,340
|
(1,5)
|
|
$
|
23,905
|
|
|
$
|
185,106
|
|
If retirement occurred at Dec. 31, 2009
|
|
|
|
|
|
|
100,861
|
|
|
|
67,475
|
(2,5)
|
|
|
23,905
|
|
|
|
192,241
|
|
If termination for cause occurred at Dec. 31, 2009
|
|
|
|
|
|
|
100,861
|
|
|
|
|
|
|
|
23,905
|
|
|
|
124,766
|
|
If termination without cause occurred at Dec. 31, 2009
|
|
|
556,892
|
|
|
|
100,861
|
|
|
|
60,340
|
(1,5)
|
|
|
23,905
|
|
|
|
741,998
|
|
If change in control termination occurred at Dec.
31, 2009
|
|
|
651,222
|
|
|
|
100,861
|
|
|
|
582,329
|
(4)
|
|
|
23,905
|
|
|
|
1,358,317
|
|
If disability occurred at Dec. 31, 2009
|
|
|
619,711
|
|
|
|
100,861
|
|
|
|
60,340
|
(1,5)
|
|
|
23,905
|
|
|
|
804,817
|
|
If death occurred at Dec. 31, 2009(3)
|
|
|
|
|
|
|
100,861
|
|
|
|
60,340
|
(1,5)
|
|
|
545,000
|
(4)
|
|
|
706,201
|
|
E. Stephen Lilly
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If early retirement occurred at Dec. 31, 2009
|
|
$
|
|
|
|
$
|
79,360
|
|
|
$
|
28,609
|
(1,5)
|
|
$
|
1,962
|
|
|
$
|
109,931
|
|
If retirement occurred at Dec. 31, 2009
|
|
|
|
|
|
|
79,360
|
|
|
|
75,903
|
(2,5)
|
|
|
1,962
|
|
|
|
157,225
|
|
If termination for cause occurred at Dec. 31, 2009
|
|
|
|
|
|
|
79,360
|
|
|
|
|
|
|
|
1,962
|
|
|
|
81,322
|
|
If termination without cause occurred at Dec. 31, 2009
|
|
|
599,892
|
|
|
|
79,360
|
|
|
|
28,609
|
(1,5)
|
|
|
1,962
|
|
|
|
709,823
|
|
If change in control termination occurred at Dec.
31, 2009
|
|
|
702,650
|
|
|
|
79,360
|
|
|
|
162,111
|
(4)
|
|
|
1,962
|
|
|
|
946,083
|
|
If disability occurred at Dec. 31, 2009
|
|
|
1,555,846
|
|
|
|
79,360
|
|
|
|
28,609
|
(1,5)
|
|
|
1,962
|
|
|
|
1,665,777
|
|
If death occurred at Dec. 31, 2009(3)
|
|
|
|
|
|
|
79,360
|
|
|
|
28,609
|
(1,5)
|
|
|
588,000
|
(4)
|
|
|
695,969
|
|
Gary R. Mills
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If early retirement occurred at Dec. 31, 2009
|
|
$
|
|
|
|
$
|
45,490
|
|
|
$
|
21,368
|
(1,5)
|
|
$
|
4,221
|
|
|
$
|
71,079
|
|
If retirement occurred at Dec. 31, 2009
|
|
|
|
|
|
|
45,490
|
|
|
|
80,000
|
(2,5)
|
|
|
4,221
|
|
|
|
129,711
|
|
If termination for cause occurred at Dec. 31, 2009
|
|
|
|
|
|
|
45,490
|
|
|
|
|
|
|
|
4,221
|
|
|
|
49,711
|
|
If termination without cause occurred at Dec. 31, 2009
|
|
|
265,435
|
|
|
|
45,490
|
|
|
|
21,368
|
(1,5)
|
|
|
4,221
|
|
|
|
336,514
|
|
If change in control termination occurred at Dec.
31, 2009
|
|
|
344,000
|
|
|
|
45,490
|
|
|
|
67,176
|
(4)
|
|
|
4,221
|
|
|
|
460,887
|
|
If disability occurred at Dec. 31, 2009
|
|
|
2,632,229
|
|
|
|
45,490
|
|
|
|
21,368
|
(1,5)
|
|
|
4,221
|
|
|
|
2,703,308
|
|
If death occurred at Dec. 31, 2009(3)
|
|
|
|
|
|
|
45,490
|
|
|
|
21,368
|
(1,5)
|
|
|
430,000
|
(4)
|
|
|
496,858
|
|
|
|
|
(1) |
|
Annual payment deferred to age 60. |
24
|
|
|
(2) |
|
Annual payment; presumed to be 62 on Dec. 31, 2009. |
|
(3) |
|
Payment to beneficiary upon death of NEO. |
|
(4) |
|
Presumes lump sum payout. |
|
(5) |
|
Represents an annuity payable over the life of the NEO at a
reduced amount beginning at age 60, a larger amount
beginning at age 62 or for 10 years certain to a named
beneficiary in event of death. |
|
(6) |
|
Other than the life insurance proceeds payable upon death,
presumed at Dec. 31, 2009, the other amounts listed under
Executive Life Ins represent Cash Surrender Value. |
2009
NON-MANAGEMENT DIRECTORS COMPENSATION
The compensation and benefit package for non-management
directors is intended to fairly compensate directors for work
required for the Corporation and to align the directors
interests with the long term interests of stockholders. The
compensation package for the directors is simple, direct and
easy to understand from a stockholder perspective. The table
below indicates that non-management directors compensation
includes the following:
Cash
Compensation.
During 2009, non-employee members of the Board of Directors
received a retainer of $700 per month. Audit Committee members
received a retainer fee of $1,500 per quarter ($2,000 for
Chairman). Members of the Executive Committee also receive a fee
of $250 per meeting unless held in conjunction with monthly
Board meetings, in which case no committee fee is paid. Members
of the Governance and Nominating Committee receive a fee of $200
per meeting. Members of the Compensation and Retirement
Committee receive a fee of $250 per meeting unless held in
conjunction with monthly Board meetings, in which case no
committee fee is paid. Non-management directors are reimbursed
for travel or other expenses incurred for attendance at Board
and committee meetings. Director Mendez, the Corporations
CEO, receives no Board compensation for service on the Board or
committees.
Deferral
of Cash Compensation.
Directors are permitted on an annual basis, prior to the
beginning of each calendar year, to choose to elect to defer
Board and committee fees to a non-qualified deferred
compensation plan established solely for that purpose. Each
director electing to defer fees is responsible for the
investment of such deferrals and the Corporation does not
provide either a preferential investment or interest rate for
such deferred compensation. Each director, who has deferred any
such compensation, has the ability to access such deferred
compensation upon retirement from active Board service.
Stock
Options.
In addition, non-management directors participate in the
2001 Directors Stock Option Plan (the
directors option plan). The directors
option plan was designed to facilitate and encourage investment
in the Corporation and for directors to become more closely
aligned with the long term interests of stockholders.
Non-employee directors have each been granted options to
purchase a total 6,050 shares of Common Stock. The
outstanding options exercisable at December 31, 2009 by
non-management directors were 24,200 shares. The exercise
price of each option is the market value of a share of Common
Stock on the date of grant adjusted for stock dividends. The
options are fully vested and must be exercised within
10 years of grant or two years following the
directors retirement, whichever occurs first. Presuming
all directors continue as Board members, these options are
scheduled to expire in 2011 with the exception of those granted
to Mr. Johnson in 2008.
Directors
Supplemental Retirement Plan.
FCBI established a Directors Supplemental Retirement Plan
(directors SERP or plan) for its
non-management directors in 2001. In 2003, as part of its
acquisition of The Commonwealth Bank (Commonwealth),
the Corporation assumed responsibility for administration of a
similar plan for the benefit of Director Hall and other former
directors and officers of Commonwealth. These plans provide for
a benefit upon retirement from Board
25
service at specified ages depending upon length of service.
Benefits under the directors SERP become payable at
age 70, 75 and 78 depending upon the individual
directors age and original date of election to the Board.
Benefits payable under these plans vary based on the age of the
director at the date of implementation of the plan.
In connection with the directors SERP, the Corporation has
also entered into Life Insurance Endorsement Method Split Dollar
Agreements (the agreements) with certain directors
covered under the directors SERP. Under the agreements,
the Corporation shares 80% of death benefits (after recovery of
cash surrender value) with the designated beneficiaries of the
directors under life insurance contracts referenced in the
directors SERP. The Corporation as owner of the policies
retains a 20% interest in life proceeds and a 100% interest in
the cash surrender value of the policies.
The directors SERP also contains provisions for change of
control, as defined, which allows the directors to retain
benefits under the plan in the event of a termination of
service, other than for cause, during the twelve months prior to
a change in control or anytime thereafter, unless the director
voluntarily terminates his service within 90 days following
the change in control.
Insurance.
FCBI provides liability insurance for its directors and officers
as well as indemnification agreements. The annual cost of the
directors and officers insurance is approximately $25,000 and
the coverage currently extends until May 10, 2010.
No Other
Compensation.
Non-management directors do not receive any other cash or equity
compensation except as set forth above.
Director
Compensation Table
The following table summarizes non-management director
compensation for fiscal year 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
|
|
|
|
|
|
|
Fees
|
|
|
|
|
|
|
|
Non-qualified
|
|
|
|
|
|
|
Earned
|
|
|
|
|
|
Non-Equity
|
|
Deferred
|
|
|
|
|
|
|
or Paid in
|
|
Stock
|
|
Option
|
|
Incentive Plan
|
|
Compensation
|
|
All Other
|
|
|
Name
|
|
Cash
|
|
Awards
|
|
Awards
|
|
Compensation
|
|
Earnings
|
|
Compensation
|
|
Total
|
|
Franklin P. Hall
|
|
$
|
29,200
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
28,807
|
|
|
$
|
|
|
|
$
|
58,007
|
|
Allen T. Hamner
|
|
|
20,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
120,051
|
|
|
|
|
|
|
|
140,401
|
|
Richard S. Johnson
|
|
|
26,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,600
|
|
I. Norris Kantor
|
|
|
24,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,007
|
|
|
|
|
|
|
|
31,857
|
|
A. A. Modena
|
|
|
14,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,831
|
|
|
|
|
|
|
|
20,081
|
|
Robert E. Perkinson, Jr.
|
|
|
29,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,172
|
|
|
|
|
|
|
|
66,922
|
|
William P. Stafford
|
|
|
22,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,777
|
|
|
|
|
|
|
|
24,177
|
|
William P. Stafford, II
|
|
|
25,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,485
|
|
|
|
|
|
|
|
64,435
|
|
26
Information
on Stock Ownership
The following table includes the stock-based holdings at
December 31, 2009 of significant stockholders having
beneficial ownership greater than 5%, our directors and the
named executives, and our directors and executive officers as a
group.
|
|
|
|
|
|
|
|
|
|
|
Amount and
|
|
|
|
|
Nature
|
|
|
|
|
of Beneficial
|
|
Percent of
|
|
|
Ownership as of
|
|
Common
|
Name and Address of Beneficial Owner or Number of Persons in
Group
|
|
December 31, 2009
|
|
Stock
|
|
Wellington Management Company, LLP
|
|
|
1,573,199
|
|
|
|
8.86
|
%
|
75 State Street, Boston, MA 02109
|
|
|
|
|
|
|
|
|
The H. P. & Anne S. Hunnicutt Foundation(1)
|
|
|
1,222,100
|
|
|
|
6.88
|
%
|
P.O. Box 309, Princeton, WV 24740
|
|
|
|
|
|
|
|
|
The Corporations Directors and Named Executive Officers:
|
|
|
|
|
|
|
|
|
David D. Brown(2)
|
|
|
10,186
|
|
|
|
|
*
|
Robert L. Buzzo(3)
|
|
|
52,984
|
|
|
|
|
*
|
Franklin P. Hall(4)
|
|
|
38,405
|
|
|
|
|
*
|
Allen T. Hamner(5)(6)
|
|
|
20,025
|
|
|
|
|
*
|
Richard S. Johnson(5)
|
|
|
21,150
|
|
|
|
|
*
|
I. Norris Kantor
|
|
|
28,000
|
|
|
|
|
*
|
E. Stephen Lilly(7)
|
|
|
36,067
|
|
|
|
|
*
|
John M. Mendez(8)
|
|
|
65,009
|
|
|
|
|
*
|
Gary R. Mills(9)
|
|
|
13,987
|
|
|
|
|
*
|
A. A. Modena(5)
|
|
|
29,150
|
|
|
|
|
*
|
Robert E. Perkinson, Jr.(5)(10)
|
|
|
41,704
|
|
|
|
|
*
|
William P. Stafford(11)
|
|
|
247,358
|
|
|
|
1.39
|
%
|
William P. Stafford, II
|
|
|
155,675
|
|
|
|
|
*
|
All Directors and Executive Officers as a Group
|
|
|
789,837
|
|
|
|
4.45
|
%
|
|
|
|
* |
|
Represents less than 1% of the outstanding shares. |
|
(1) |
|
The H. P. and Anne S. Hunnicutt Foundation
(Foundation) is a charitable, tax-exempt, private
foundation. The Foundation was created by the family of two
directors, William P. Stafford and William P. Stafford, II.
Neither director holds beneficial ownership of the shares held
by the Foundation. |
|
(2) |
|
Includes 336 shares allocated to Mr. Browns
Employee Stock Ownership and Savings Plan (KSOP)
account. 1,500 shares have been pledged as security by
Mr. Brown. |
|
(3) |
|
Includes 15,995 shares allocated to Mr. Buzzos
KSOP account. Also includes 35,667 shares issuable upon
exercise of currently exercisable options granted under the 1999
Stock Option Plan. |
|
(4) |
|
Includes 2,338 shares issuable upon exercise of currently
exercisable options granted under The CommonWealth Bank Option
Plan. Also includes 33,212 shares held jointly by
Mr. Hall and his wife, and 760 shares held by
Mr. Halls wife. |
|
(5) |
|
Includes 6,050 shares issuable upon exercise of currently
exercisable options granted under the Directors Option
Plan. |
|
(6) |
|
Includes 4,712 shares held by Mr. Hamners wife. |
|
(7) |
|
Includes 2,979 shares allocated to Mr. Lillys
KSOP account. Also includes 24,807 shares issuable upon
exercise of currently exercisable options granted under the 1999
Stock Option Plan. |
|
(8) |
|
Includes 18,870 shares allocated to Mr. Mendezs
KSOP account. Also includes 42,323 shares issuable upon
exercise of currently exercisable options granted under the 1999
Stock Option Plan. In addition, 1,151 shares have been
pledged as security by Mr. Mendez. |
27
|
|
|
(9) |
|
Includes 2,763 shares allocated to Mr. Mills
KSOP account. Also includes 9,123 shares issuable upon
exercise of currently exercisable options granted under the 1999
Stock Option Plan. |
|
(10) |
|
Includes 2,061 shares held by the Robert E. Perkinson, Sr.
Trust, 5,138 shares held by the Robert E. Perkinson, Jr.
Trust in which Mr. Perkinson is deemed to share beneficial
ownership and 5,938 shares held as agent for
Mr. Perkinsons wife. Mr. Perkinson is co-trustee
of the Robert E. Perkinson, Sr. Trust and holds a remainder
interest therein with two of his siblings, and he is co-trustee
and sole beneficiary of the Robert E. Perkinson, Jr. Trust. In
addition, 9,138 shares have been pledged as security by
Mr. Perkinson. |
|
(11) |
|
Includes 43,905 shares held by Stafford Farms LLC as to
which Mr. Stafford is deemed to share beneficial ownership.
Also includes 162,632 shares held jointly by
Mr. Stafford and his wife, and 1,901 shares held by
Mr. Staffords wife. |
Related-Person
Transactions
Review and Approval of Related-Person
Transactions. We review relationships and
transactions in which the Corporation and our directors and
executive officers or their immediate family members are
participants to determine whether such related parties have a
direct or indirect material interest in such transaction.
Although these policies are not currently in writing, the
Corporations in-house counsel is primarily responsible for
developing and implementing processes and controls to obtain
information from the directors and executive officers with
respect to related person transactions and for then determining
whether a related person has a direct or indirect material
interest in the transaction. Part of this process includes a
requirement that each director and executive officer respond to
an annual proxy statement questionnaire, which is designed to
obtain detailed information regarding the directors and
officers, including updated information on their backgrounds,
which serves as a basis to determine an individuals
qualifications to continue to serve as a director. Responses to
the annual D&O questionnaire also provide
disclosure of related person transactions. When it is determined
that a related person transaction may have occurred, it is then
scrutinized to establish whether or not such related person
transaction is directly or indirectly material, in which case
such transaction is then disclosed in this proxy statement
pursuant to SEC requirements.
In the course of reviewing a disclosable related-person
transaction, counsel considers:
|
|
|
|
|
the nature and extent of the related persons interest in
the transaction;
|
|
|
|
the material terms of such transaction, including dollar amount
and type;
|
|
|
|
the importance of the transaction to the related person;
|
|
|
|
the importance of the transaction to the Corporation; and
|
|
|
|
any other matters deemed relevant.
|
If in-house counsel determines that there is a related person
transaction to be disclosed, he reviews it with outside counsel
with expertise in SEC matters prior to including it in this
proxy. No disclosable related person transactions are reported
within this proxy statement other than those discussed below.
Related-Person Transactions. Directors
Stafford and Stafford, II are related to a stockholder of
an incorporated construction firm, which has on occasion
performed construction work for the Corporation.
Messrs. Staffords relative is neither an officer nor
voting stockholder of the construction firm. During 2007 and
2008, the construction firm built a branch office for the
Corporations subsidiary bank at a cost of $702,437 in 2007
and $594,764 in 2008. The construction firm also performed other
work for the Corporation in 2008 and 2009 in the nature of
routine repairs and maintenance with total expenditures in each
year of $10,850 and $300 respectively. In regard to the branch
office construction, the contract for such work was entered into
only after completion of a competitive bidding process. These
transactions were not deemed to be significant to director
Stafford or Stafford, II as they have no financial interest
in the construction firm. The Corporation has had occasion to
build and improve other office facilities using other
construction companies before and since completion of
construction of the branch office mentioned above and has
determined that this transaction and the other work performed by
the construction firm has insignificant importance to both the
Corporation and its directors. The amount of such expenditures
in each fiscal year was immaterial individually and in the
aggregate.
28
Director Stafford, II serves as a partner of a law firm,
which, similar to other firms in other localities, regularly
performs legal services each fiscal year for the Corporation.
The legal fees paid to this firm in 2009 amounted to $71,180.
Mr. Stafford, II performs an insignificant portion of
these legal services personally for the Corporation and deems
the importance of the relationship with the law firm to be
immaterial. The Corporation uses this law firm to a lesser
extent than other outside legal counsel and the dollar amounts
paid to the law firm are not material.
Director Johnson serves as President of a real estate firm,
which previously leased space to the Corporation for a bank
branch prior to Mr. Johnson becoming a director. Since the
date of Mr. Johnsons appointment as a director, the
prior lease space has been abandoned by the Corporation, but an
alternate lease agreement of bank branch space has been executed
by the Corporation and the real estate firm since
Mr. Johnsons appointment as a director. The real
estate company also has occasion to enter into a credit
relationships with our subsidiary bank on the same terms and
conditions as other comparable loan customers. The amount of
lease payments paid and owed by the Corporation to the real
estate firm and the amount of loan payments and any outstanding
loan balance due and payable by the real estate firm to our
subsidiary bank have been determined to be insignificant from
both the perspective of the Corporation and the real estate
firm. In addition, any business loans made by First Community
Bank to the real estate company were determined to be in the
usual course of business, with interest rates and terms no
better than loans advanced to similar customers of the Bank.
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires First Communitys directors and executive
officers, and persons who beneficially own more than ten percent
of our Common Stock, to file initial reports of ownership and
reports of changes in ownership of our Common Stock with the
SEC. As a practical matter, First Community assists it directors
and officers by monitoring and completing and filing
Section 16 reports on their behalf. In 2009, based solely
upon the review of Forms 3 and 4 and amendments thereto
filed in accordance with the instructions and information
provided to the Corporation by its officers and directors, First
Communitys officers and directors complied in all respects
with these reporting requirements.
Report of
the Audit Committee
The Audit Committee reviews First Communitys financial
reporting process on behalf of the Board of Directors.
Management has the primary responsibility for establishing and
maintaining adequate internal financial controls, for preparing
the financial statements and for the public reporting process.
Dixon Hughes PLLC (Dixon Hughes), our Corporations
independent auditor for 2009, is responsible for expressing
opinions on the conformity of the Corporations audited
financial statements with generally accepted accounting
principles and on the Corporations internal control over
financial reporting.
In this context, the committee has reviewed and discussed with
management and Dixon Hughes the audited financial statements for
the year ended December 31, 2009 and Dixon Hughes
evaluation of the Corporations internal control over
financial reporting. The committee regularly communicates with
Dixon Hughes regarding the matters that are required to be
discussed by Statement on Auditing Standards No. 61, as
amended (AICPA Professional Standards, Vol. 1 AU
Section 380), as adopted by the Public Company Accounting
Oversight Board in Rule 3200T as well as other relevant
Standards. Dixon Hughes has provided to the committee the
written disclosures and the letter required by applicable
requirements of the Public Company Accounting Oversight Board
regarding the independent accountants communications with
the Audit Committee concerning independence and the committee
has discussed with Dixon Hughes that firms independence.
The Audit Committee has concluded that Dixon Hughes
provision of audit and non-audit services to First Community and
its affiliates is compatible with Dixon Hughes
independence.
Based on the review and discussions referred to above, the Audit
Committee recommended to our Board of Directors (and the Board
approved) that the audited financial statements for the year
ended December 31, 2009 be included in our 2009 Annual
Report to Stockholders and out Annual Report on
Form 10-K
for 2009 for filing with the SEC. This report is provided by the
following independent directors, who comprise the Audit
Committee.
|
|
|
Robert E. Perkinson, Jr. (Chairman)
|
|
Allen T. Hamner
|
Franklin P. Hall
|
|
Richard S. Johnson
|
29
Independent
Auditor
On behalf of First Community Bancshares, Inc. and it affiliates,
the Audit Committee retained Dixon Hughes to audit our
consolidated financial statements and our internal control over
financial reporting for 2009. In addition, the Audit Committee
retained Dixon Hughes, as well as other accounting firms, to
provide other auditing and advisory services in 2009. We
understand the need for Dixon Hughes to maintain objectivity and
independence in its audit of our financial statements and our
internal control over financial reporting. To minimize
relationships that could appear to impair the objectivity of
Dixon Hughes, our Audit Committee has limited the non-audit
services that Dixon Hughes provides to us primarily to tax
services and merger and acquisition due diligence and
integration services. It is the committees goal that the
fees that the Corporation pays Dixon Hughes for non-audit
services should not exceed the audit fees and that goal has been
achieved for 2009 and 2008.
The Audit Committee has also adopted policies and procedures for
pre-approval of all non-audit work performed by Dixon Hughes. In
each case, the committee has also required pre-approval from the
committee for any engagement over $10,000. The chair of the
committee is authorized to pre-approve any audit or non-audit
service on behalf of the committee, provided such decisions are
presented to the full committee at its next regularly scheduled
meeting.
The aggregate fees billed by Dixon Hughes in 2009 and 2008 for
these services were:
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2009
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2008
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Audit fees
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$
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510,234
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$
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453,631
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Audit related fees
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18,940
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1,500
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All other fees
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Tax fees
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In the above table, in accordance with SECs rules,
audit fees are fees paid by First Community to Dixon
Hughes for the audit of First Communitys financial
statements included in the Annual Report on
Form 10-K
and for the review of financial statements included in the
Quarterly Report on
10-Qs, for
the audit of First Communitys internal control over
financial reporting with the goal of obtaining reasonable
assurance regarding whether or not the effectiveness of the
internal control over financial reporting was maintained in all
material respects, and for services typically provided by the
auditor in connection with statutory and regulatory filings.
Audit related fees also include merger and
acquisition due diligence and audit services, but do not include
employee benefit plan audits or Tax Fees, neither of
which are performed by Dixon Hughes for First Community.
Our Audit Committee has adopted restrictions on our hiring of
any Dixon Hughes partner, director, manager, staff, advising
member of the department of professional practice, reviewing
partner, reviewing tax professional and any other persons having
responsibility for providing audit assurance on any aspect of
their certification of First Communitys financial
statements. These restrictions are contained in the Audit
Committee Charter. The committee also requires key Dixon Hughes
partners assigned to our audit to be rotated at least every five
years.
Representatives of Dixon Hughes are expected to be present at
the Annual Meeting and will have the opportunity to make a
statement if they desire to do so. The representatives of Dixon
Hughes also will be available to respond to appropriate
questions the stockholders may have at the meeting.
PROPOSAL 2: AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
THE COMPANY TO INCREASE THE AUTHORIZED COMMON STOCK
At the Annual Meeting, stockholders will be asked to consider
and approve a proposal to amend the Corporations Articles
of Incorporation, as amended (Articles of
Incorporation), to increase the number of shares of
authorized common stock, $1.00 par value (the Common
Stock), from 25,000,000 to 50,000,000. The amendment to
increase the number of authorized shares of Common Stock was
unanimously approved by the Board of Directors of the
Corporation on January 26, 2010.
The Articles of Incorporation currently authorize
25,000,000 shares of Common Stock and 1,000,000 shares
of Preferred Stock. The proposed amendment to the Articles of
Incorporation would increase the aggregate number of shares of
authorized capital stock by 25,000,000, from 26,000,000 to
51,000,000 shares. If the amendment is
30
authorized by the stockholders, the first sentence of
Article FOURTH of the Corporations Articles of
Incorporation would be amended to read as follows:
The total number of shares of capital stock that the
Corporation has authority to issue is 51,000,000 shares,
including Fifty Million (50,000,000) shares of common stock,
with a par value of One Dollar ($1.00) per share (hereinafter,
the Common Stock), and One Million (1,000,000)
shares of preferred stock (hereinafter, the Preferred
Stock), whose par value, voting powers designations,
preferences, interest rate, limitations, restrictions and
relative rights shall be determined from time to time by
resolution of the Board of Directors of the Corporation.
The Corporation is seeking Stockholder approval to amend its
Articles of Incorporation and increase the number of authorized
shares of Common Stock for several reasons. First, the Board of
Directors has determined that the number of shares of authorized
Common Stock should be increased to provide the Corporation with
the flexibility to conduct the Corporations intended
future operations and business strategy, including the issuance,
distribution, exchange or reservation of shares of Common Stock
for stock dividends, acquisitions, financing, and employee stock
compensation plans. Although the Corporation has no present
plans, arrangements or understandings with respect to a possible
acquisition, newly authorized shares could be used for such
purposes. Further, the Board of Directors currently has no
specific plans to issue additional Common Stock, except as may
be issued pursuant to the Corporations stock compensation
plan.
Second, under certain circumstances, authorized but unissued
shares of Common Stock and Preferred Stock can provide the Board
of Directors with a means of discouraging an unsolicited change
in control of the Corporation. Considering the current economic
climate, the Board of Directors believes that having the
flexibility to potentially discourage an unsolicited change in
control would be in the best interests of the Corporation and
its stockholders. Although the proposed amendment may enable the
Board of Directors to issue additional shares of Common Stock in
the event of an unsolicited attempt to acquire control of the
Corporation as a means of discouraging a hostile acquirer, the
Board of Directors has no present intention of using the
existing or proposed authorized but unissued Common Stock or the
existing authorized but unissued Preferred Stock for such
purpose. Further, the Board of Directors is not presently aware
of any plans to acquire control of the Corporation.
If stockholders of the Corporation approve the proposed
amendment to the Articles of Incorporation, the Corporation will
file Articles of Amendment to the Articles of Incorporation of
the Corporation with the Secretary of State of the State of
Nevada reflecting the increase in authorized capitalization.
YOUR
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE
ARTICLES OF INCORPORATION BE AMENDED TO INCREASE THE NUMBER
OF AUTHORIZED SHARES
OF COMMON STOCK TO 50,000,000 SHARES.
PROPOSAL 3: RATIFICATION
OF SELECTION OF INDEPENDENT AUDITOR
For purposes of determining whether to select Dixon Hughes as
the independent auditor to perform the audit of our financial
statements and our internal control over financial reporting for
2010, the Audit Committee conducted a thorough review of Dixon
Hughes performance. The committee reviewed:
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Dixon Hughes historical and recent performance on the
First Community audit, including the quality of the engagement
team and the firms experience, service level,
responsiveness and expertise;
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the accounting firms leadership, management structure,
client and employee retention and compliance and ethics programs;
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the record of the firm compared to other similarly sized and
reputable accounting firms in various matters, including
regulatory, litigation and accounting matters;
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the PCOAB report of selected Dixon Hughes audits;
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the appropriateness of fees charged;
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the firms familiarity with First Communitys
accounting policies and practices and internal control over
financial reporting; and
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the firms role and performance in matters involving the
SEC.
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During the course of the committees review of Dixon
Hughes performance, company representatives interviewed
senior management of Dixon Hughes with respect to certain of the
matters listed above. Dixon Hughes has been our independent
auditor since 2006. The firm is a registered public accounting
firm.
Dixon Hughes representatives are expected to attend the
2010 Annual Meeting. They will be available to respond to
Stockholder questions and will have an opportunity to make a
statement if they desire to do so.
We are asking our stockholders to ratify the selection of Dixon
Hughes as our independent auditor. Although ratification is not
required by our bylaws or otherwise, the Board is submitting the
selection of Dixon Hughes to our stockholders for ratification
as a matter of good corporate practice. If the selection is not
ratified, the Audit Committee will consider whether it is
appropriate to select another registered public accounting firm.
If the selection is ratified, the Audit Committee still has the
discretion to select a different registered public accounting
firm at any time during the year if it determines that such a
change would be in the best interests of the Corporation and our
stockholders.
THE BOARD
OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF DIXON
HUGHES AS THE CORPORATIONS INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2010.
PROPOSAL 4: ADVISORY
(NON-BINDING) VOTE ON EXECUTIVE COMPENSATION
The American Recovery and Reinvestment Act of 2009 (the
ARRA) was signed into law on February 17, 2009,
and imposes significant new requirements for, and restrictions
relating to, the compensation arrangements of financial
institutions that sold preferred securities to the United States
Treasury. These new executive compensation compliance
requirements are effective for both new and existing TARP
participants during the period that any Treasury Preferred under
the TARP remains outstanding pursuant to the TARP CPP, excluding
any period in which the U.S. Department of the Treasury
only holds warrants to purchase the common stock of the
Corporation. The ARRA requires, among other things, that all
participants in the TARP permit a non-binding stockholder vote
to approve the compensation of the Corporations
executives, commonly referred to as a
say-on-pay
proposal.
In June 2009, the Corporation, through a public offering, raised
sufficient capital that it redeemed in full the outstanding
shares of preferred stock held by the United States Treasury. As
a result, the Corporation is no longer required to seek an
advisory vote on executive compensation. Nevertheless, the Board
of Directors has determined that the best way to allow
stockholders to vote on the Corporations executive pay
programs and policies is through this non-binding
say-on-pay
proposal. The Corporation believes that its compensation
policies and procedures are strongly aligned with the long term
interests of its stockholders. Accordingly, stockholders of the
Corporation are being asked to approve the following resolution:
RESOLVED, that the stockholders approve the compensation
of the Corporations executives named in the Summary
Compensation Table of the Corporations Proxy Statement for
the 2010 Annual Meeting of Stockholders, including the
Compensation Discussion and Analysis and the tabular disclosure
regarding named executive compensation (together with the
accompanying narrative disclosure) in this Proxy Statement.
This vote will not be binding on or overrule any decisions by
the Corporations Board of Directors, will not create or
imply any additional fiduciary duty on the part of the Board,
and will not restrict or limit the ability of the
Corporations stockholders to make proposals for inclusion
in proxy materials related to executive compensation. However,
the Compensation Committee intends to take into account the
outcome of the vote when considering future executive
compensation arrangements.
THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
THE STOCKHOLDERS VOTE FOR THE APPROVAL OF THE CORPORATIONS
NAMED
EXECUTIVE OFFICER COMPENSATION.
32
ADDITIONAL
INFORMATION
Stockholder
Proposals for Inclusion in Next Years Proxy
Statement
To be considered for inclusion in next years proxy
statement, Stockholder proposals, submitted in accordance with
SECs
Rule 14a-8,
must be received at our principal executive office by
November 20, 2010. Proposals should be addressed to Robert
L. Buzzo, Secretary, First Community Bancshares, Inc.,
P.O. Box 989, Bluefield, Virginia
24605-0989.
Other
Stockholder Proposals for Presentation at Next Years
Annual Meeting
Our by-laws require that any Stockholder proposal that is not
submitted for inclusion in the next years proxy statement
under SEC
Rule 14a-8,
but is instead sought to be presented directly at the 2011
Annual Meeting, must be received at our principal executive
office not less than sixty (60) days nor more than ninety
(90) days prior to the anniversary date of the 2010 Annual
Meeting. As a result, proposals, including director nominations,
submitted pursuant to these provisions of our bylaws, must be
received no sooner than January 27, 2011 and no later than
February 28, 2011. Proposals should be addressed to Robert
L. Buzzo, Secretary, First Community Bancshares, Inc.,
P.O. Box 989, Bluefield, Virginia
24605-0989
and include the information set forth in those by-laws, which
are posted on our website. SEC rules permit management to vote
proxies in its discretion in certain cases if the Stockholder
does not comply with this deadline, and in certain other cases
regardless of Stockholders compliance with this deadline.
Other than proposals properly omitted from this proxy statement
pursuant to SEC rules and other matters discussed in this proxy
statement, the Board of Directors has not received timely notice
of any other matter that may come before the annual meeting.
Solicitation
of Proxies
Proxies may be solicited on behalf of the Board of Directors by
mail, telephone, and other electronic means or in person. Copies
of proxy materials and the 2009 Annual Report will be supplied
to brokers, dealers, banks and voting trustees, or their
nominees, for the purpose of soliciting proxies from the
beneficial owners, and we will reimburse such record holders for
their reasonable expenses.
Stockholders
of Record Requesting Copies of 2009 Annual Report
Stockholders who own their shares in their individual names
(directly) and who have elected not to receive an annual report
for a specific account may request that we promptly mail our
2009 Annual Report to that account by writing to First Community
Bancshares, Inc. at P. O. Box 989, Bluefield, Virginia 24605, or
calling
276-326-9000.
Delivery
of Documents to Stockholders Sharing Same Address
(Householding)
If you are the beneficial owner, but not the record holder, of
shares of First Community Bancshares Stock, your broker, bank or
other nominee may only deliver one copy of this proxy statement
and our 2009 Annual Report to multiple stockholders at the same
address, unless that nominee has received contrary instructions
from one or more of the stockholders. We will deliver, upon
request, a separate copy of this proxy statement and our 2009
Annual Report to a Stockholder at a shared address to which a
single copy of the documents was delivered. A Stockholder
desiring to receive a separate copy of the proxy statement and
annual report, now or in the future, should submit this request
by writing to Broadridge Financial Solutions, Inc.
(Broadridge), either by calling toll free at
(800) 542-1061
or by writing to Broadridge, Householding Department, 51
Mercedes Way, Edgewood, New York 11717. Also, beneficial
owners sharing an address who are receiving multiple copies of
proxy materials and annual reports and who wish to receive a
single copy of such materials in the future will need to contact
their broker, bank or other nominee to request that only a
single copy of each document be mailed to all stockholders at
the same address in the future.
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Electronic
Access to Proxy Statement and Annual Report
This proxy statement and our Annual Report may be viewed online
at www.proxyvote.com. If you are a Stockholder of record, you
can elect to access future annual reports and proxy statements
electronically by marking the appropriate box on your proxy form
or by following the instructions provided if you vote on the
internet or by telephone. If you choose electronic access, you
will receive a proxy form in mid to late-March providing the
website address and your choice will remain in effect until you
notify us by mail that you wish to resume delivery of a paper
copy of annual reports and proxy by mail. If your stock is held
for you by a bank, broker or another holder of record, please
refer to the information provided by that entity holding the
stock on your behalf for instructions on how to elect the paper
option.
Financial
and Other Information Incorporation by
Reference
Financial and other information required to be disclosed in this
proxy statement is set forth in our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2009 under the
captions Managements Discussion and Analysis of
Financial Condition and Results of Operations,
Quantitative and Qualitative Disclosures About Market
Risk, Financial Statements and Supplementary
Data, and Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure, is
hereby incorporated herein by reference.
34
Appendix A
Independence
Guidelines
In accordance with NASDAQ rules, the independence determinations
under the guidelines below will be based upon a directors
relationships with First Community Bancshares, Inc.
(FCBI) during the 36 months preceding the
determination (evaluation period). For purposes of
these guidelines, family member means a
persons spouse, parents, children and siblings, whether by
blood, marriage or adoption, or anyone residing in such
persons home.
A director will not be independent if the director:
(A) was employed by FCBI during the evaluation period;
(B) accepted or has a family member who accepted any
compensation from FCBI in excess of $120,000 during any period
of twelve consecutive months within the evaluation period, other
than the following;
(i) compensation for Board or committee service;
(ii) compensation paid to a family member who is an
employee (other than an executive officer) of FCBI; or
(iii) benefits under a tax qualified retirement plan or
non-discretionary compensation.
(C) is a family member of an individual who is employed by
FCBI during the evaluation period as an executive officer;
(D) is a family member of an individual who is a partner in
or a controlling Stockholder or an executive officer of any
organization to which the Corporation made or received payments
for property or services that exceed 5% of the recipients
consolidated gross revenues for that year, or $200,000,
whichever is more, other than payments:
(i) arising solely from investments in FCBI
securities; or
(ii) under non-discretionary charitable contribution
matching programs.
(E) is or has a family member who is employed as an
executive officer of another entity where any of the executive
officers of FCBI serve on the compensation committee of such
entity; or
(F) is or has a family member who is a current partner of
the Corporations outside auditor, or was a partner or
employee of the Corporations outside auditor who worked on
the Corporations audit during the evaluation period.
In addition to these guidelines, Audit Committee members are
also subject to additional more stringent requirements under
NASDAQ Rule 5605(c)(2).
First
Community Bancshares, Inc. Annual Meeting of
Stockholders
11:30 a.m., local time, April 27, 2010
Fincastle Country Club
1000 Country Club Drive
Bluefield, Virginia 24605
Information
About Advance Registration for Attending the Meeting
The top portion of your proxy form serves as your admission
ticket and it will be required to enter the annual meeting. Upon
arrival at the annual meeting you will be asked to present this
ticket and appropriate picture identification to enter the
meeting.
Attendance at the annual meeting is limited to First Community
stockholders, members of their immediate family or their named
representative. We reserve the right to limit the number of
representatives who may attend the meeting.
A-1
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If you hold your shares directly with the Corporation and you
plan to attend the annual meeting, please follow the
instructions on the proxy form, which was included in the
mailing from the Corporation.
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If your shares are held for you by a bank, broker or other
institutional account and you wish to attend the annual meeting,
please send a meeting registration request containing the
information listed below to:
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First Community Bancshares, Inc.
P.O. Box 989
Bluefield, Virginia 24605
Please include the following information:
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Your name and complete mailing address;
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The name(s) of any family members who will accompany you;
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If you wish to name a representative to attend the meeting on
your behalf, the name, address and telephone number of that
individual; and
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Proof that you own First Community Bancshares, Inc. shares such
as a letter from your bank or broker or photocopy of your bank
or brokerage account statement.
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If you have any questions regarding admission to the annual
meeting, please visit our website at www.fcbinc.com or
call FCB Shareowner Services at
(800) 425-0839.
Attendance at First Community Bancshares, Inc.s Annual
Meeting will be limited to persons presenting an admission
ticket and picture identification. To obtain an admission
ticket, please follow the instructions above.
Voting in
Person at the Meeting
We encourage stockholders to submit proxies in advance of the
annual meeting by telephone, internet or mail. Alternatively,
stockholders may also vote in person at the meeting or may
execute a proxy to vote for them at the meeting. If your shares
are held for you by a broker, bank or other institution, you
must obtain a proxy from that entity and bring it with you to
deliver your ballot, in order to be able to vote your shares at
the meeting.
A-2
P.O. BOX 989 BLUEFIELD, VA 24605-0989 Investor Address Line 1 Investor Address Line 2
Investor Address Line 3 Investor Address Line 4 Investor Address Line 5 John Sample 1234 ANYWHERE
STREET ANY CITY, ON A1A 1A1 NAME THE COMPANY NAME INC. COMMON THE COMPANY NAME INC. CLASS A
THE COMPANY NAME INC. CLASS B THE COMPANY NAME INC. CLASS C THE COMPANY NAME INC. CLASS D THE
COMPANY NAME INC. CLASS E THE COMPANY NAME INC. CLASS F THE COMPANY NAME INC. 401 K 1 OF 2 1
1 VOTE BY INTERNET www.proxyvote.com Use the Internet to transmit your voting instructions and
for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off
date or meeting date. Have your proxy card in hand when you access the web site and follow the
instructions to obtain your records and to create an electronic voting instruction form. Electronic
Delivery of Future PROXY MATERIALS If you would like to reduce the costs incurred by our company in
mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and
annual reports electronically via e-mail or the Internet. To sign up for electronic delivery,
please follow the instructions above to vote using the Internet and, when prompted, indicate that
you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE -
1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59
P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand
when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card
and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o
Broadridge, 51 Mercedes Way, Edgewood, NY 11717. CONTROL # 000000000000 SHARES
123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345
123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 PAGE 1 OF 2
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: THIS PROXY CARD IS VALID ONLY WHEN
SIGNED AND DATED. KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY
0000000000 02 For Withhold For All To withhold authority to vote for any All All Except individual
nominee(s), mark For All Except and write the number(s) of the nominee(s) on the line below. The
Board of Directors recommends that you vote FOR the following: 1. Election of Directors Nominees 01
Allen T. Hamner 02 Richard S. Johnson 03 John M. Mendez For Against Abstain The Board of
Directors recommends you vote FOR the following proposal(s): 2 To approve an amendment to the
Articles of Incorporation of the Corporation to increase the number of authorized common shares. 3
The ratification of Dixon Hughes PLLC as independent registered public accountants. 4 To approve,
on a non-binding advisory basis, the Corporations executive compensation. 5 To transact such other
business as may properly come before the meeting or any adjournment thereof. NOTE: The shares
represented by this proxy when properly executed will be voted in the manner directed herein by the
undersigned Stockholder(s). If no direction is made, this proxy will be voted FOR items 1, 2, 3, 4
and 5. If any other matters properly come before the meeting, or if cumulative voting is required,
the person named in this proxy will vote in their discretion. 0000044826_1 R2.09.05.010 Investor
Address Line 1 Investor Address Line 2 Investor Address Line 3 Investor Address Line 4 Investor
Address Line 5 John Sample 1234 ANYWHERE STREET ANY CITY, ON A1A 1A1 Please sign exactly as your
name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary,
please give full title as such. Joint owners should each sign personally. All holders must sign. If
a corporation or partnership, please sign in full corporate or partnershi
p name, by authorized
officer. Signature [PLEASE SIGN WITHIN BOX] Date JOB # Signature (Joint Owners) SHARES CUSIP #
SEQUENCE # Date |
ADMISSION TICKET You are cordially invited to attend the annual meeting of shareholders of First
Community Bancshares, Inc. to be held on Tuesday, April 27, 2010 at 11:30 a.m. at Fincastle Country
Club, 1000 Country Club Drive, Bluefield, Virginia. You should present the top portion of this card
as your admission ticket, and a form of personal identification, in order to gain admittance to the
meeting. This ticket admits only the share ho lder(s) listed on the reverse side and one guest, and
is not transferable. If shares are held in the name of a broker, trust, bank or other nominee, you
should bring with you a proxy or letter from your broker, trustee, bank or nominee confirming your
beneficial ownership of the shares. Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting: The Notice & Proxy Statement, Form 10-K is/are available at
www.proxyvote.com. FIRST COMMUNITY BANCSHARES, INC. This proxy is solicited on behalf of the Board
of Directors Annual Meeting of Shareholders April 27, 2010 The undersigned appoints Samuel G. Hill
and Jeffery L. Farmer, or either of them proxies to vote all shares of stock which the undersigned
is entitled to vote at the annual meeting of shareholders of First Community Bancshares, Inc., to
be held April 27, 2010 or at any adjournment thereof, or on the matter as set forth in the Proxy
Statement and on all matters properly presented at the meeting. This instruction and proxy card is
also solicited by the Board of Directors of First Community Bancshares, Inc. (FCBI) for persons
who participate in the FCBI Employee Stock Ownership and Savings Plan. By signing this instruction
and proxy card, or by phone or internet, the undersigned hereby instructs First Community Bank, N.
A. the trustee of the Plan named above, to exercise the voting rights relating to any shares of
Common Stock of FCBI allocable to his or her account(s) as of March 1,2010. The trustee will
tabulate the votes received from all participants by April 23, 2010, and shall vote the shares of
FCBI Common Stock for which it does not receive voting instruction in the same proportion as the
shares voted under the Plan pursuant to instruction. Proxies will be voted as directed. In the
absence of specific direction, signed proxies will be voted in accordance with the recommendations
of the Board of Directors. Continued and to be signed on reverse side |
*** Exercise Your Right to Vote *** |
IMPORTANT NOTICE Regarding the Availability of Proxy Materials |
FIRST COMMUNITY BANCSHARES, INC. |
Investor Address Line 1 1 Investor Address Line 2 15 12 |
Investor Address Line 3 OF Investor Address Line 4 Investor Address
Line 5 2 John Sample 1234 ANYWHERE STREET |
Meeting Type: Annual Meeting
For holders as of: March 01, 2010 |
Date: April 27, 2010 Time: 11:30 AM EST Location: Fincastle Country Club 1000 Country Club Drive
Bluefield, Virginia |
You are receiving this communication because you hold
shares in the above named company. |
This is not a ballot. You cannot use this notice to vote these
shares. This communication presents only an overview of the more
complete proxy materials that are available to you on the
Internet. You may view the proxy materials online at
www.proxyvote.com or easily request a paper copy (see reverse
side). |
We encourage you to access and review all of the important
information contained in the proxy materials before voting. |
See the reverse side of this notice to obtain proxy
materials and voting instructions. |
Broadridge Internal Use Only Job # Envelope # Sequence # # of # Sequence # |
How to Access the Proxy Materials |
Proxy Materials Available to VIEW or RECEIVE: |
1. Notice & Proxy Statement 2. Form 10-K |
Have the 12-Digit Control Number available (located on the following page) and visit:
www.proxyvote.com. |
How to Request and Receive a PAPER or E-MAIL Copy: |
If you want to receive a paper or e-mail copy of these documents, you must request one. There is NO
charge for requesting a copy. Please choose one of the following methods to make your request: |
1) BY INTERNET: www.proxyvote.com |
2) BYTELEPHONE: 1-800-579-1639 |
3) BY E-MAIL*: sendmaterial@proxyvote.com
* If requesting materials by e-mail, please send a blank e-mail with the 12-Digit Control
Number (located on the following page) in the subject line. |
Requests, instructions and other inquiries sent to this e-mail address will NOT be forwarded to
your investment and other inquiries sent to this e-mail address will NOT be forwarded to your
investment advisor. Please make the request as instructed above on or before April 13, 2010 to
facilitate timely delivery. To facilitate timely delivery please make the request as instructed
above on or before |
Please Choose One of The Following Voting Methods |
Vote In Person: Many shareholder meetings have attendance requirements including, but not
limited to, the possession of an attendance ticket issued by the entity holding the meeting. Please
check the meeting materials for any special requirements for meeting attendance. At the Meeting you
will need to request a ballot to vote these shares. Vote By Internet: To vote now by Internet, go
to www.proxyvote.com. Have the 12 Digit Control Number available and follow the instructions. |
Vote By Mail: You can vote by mail by requesting a paper copy of the materials, which will include
a proxy card. |
The Board of Directors recommends that |
you vote FOR the following: |
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01 Allen T. Hamner 02 Richard S. Johnson 03 John M. Mendez |
The Board of Directors recommends you vote FOR the following proposal(s): |
2 To approve an amendment to the Articles of Incorporation of the Corporation to increase the
number of authorized common shares. |
3 The ratification of Dixon Hughes PLLC as independent registered public accountants.
4 To approve, on a non-binding advisory basis, the Corporations executive compensation.
5 To transact such other business as may properly come before the meeting or any adjournment thereof. |
NOTE: The shares represented by this proxy when properly executed will be voted in the manner
directed herein by the undersigned Stockholder(s). If no direction is made, this proxy will be
voted FOR items 1, 2, 3, 4 and 5. If any other matters properly come before the meeting, or if
cumulative voting is required, the person named in this proxy will vote in their discretion. |
Broadridge Internal Use
Only xxxxxxxxxx xxxxxxxxxx
Cusip Job # Envelope #
Sequence # # of # Sequence
# |
THE COMPANY NAME INC. COMMON 123,456,789,012.12345 |
THE COMPANY NAME INC. CLASS A 123,456,789,012.12345 |
THE COMPANY NAME INC. CLASS B 123,456,789,012.12345 |
THE COMPANY NAME INC. CLASS C 123,456,789,012.12345 |
THE COMPANY NAME INC. CLASS D 123,456,789,012.12345 |
THE COMPANY NAME INC. CLASS E 123,456,789,012.12345 |
THE COMPANY NAME INC. CLASS F 123,456,789,012.12345 |
THE COMPANY NAME INC. 401 K 123,456,789,012.12345 |
THIS SPACE RESERVED FOR SIGNATURES IF APPLICABLE |
Broadridge Internal Use Only Job # Envelope # Sequence # # of # Sequence # |