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 [x]

Filed by a party other than the Registrant [_][ ]

Check the appropriate box:

FIRST COMMUNITY BANCSHARES, INC.

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Not Applicable

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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.

Notice of 20142016 Annual Meeting of Stockholders

April 29, 201426, 2016, at 2:00 p.m. Eastern Daylight Time

Corporate Center

29 College Drive

Bluefield, Virginia 24605

March 14, 201415, 2016

To theFirst Community Bancshares, Inc. Stockholders:

First Community Bancshares, Inc.’s Annual Meeting of Stockholders will be held at the Corporate Center, located at 29 College Drive, Bluefield, Virginia 24605, at 2:00 p.m. Eastern Daylight Time on Tuesday, April 29, 2014.26, 2016. Following a report of the Corporation’s banking and related business operations, stockholders will:

Stockholders of record at the close of business on March 3, 20141, 2016, will be entitled to vote at the Annual Meeting and any adjournments.

/s/Robert L. BuzzoSchumacher

Robert L. Buzzo

SecretarySchumacherSecretary

IMPORTANT NOTICE

REGARDING THE AVAILABILITY OF PROXY MATERIALS

FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON

APRIL 29, 2014.26, 2016.

The proxy materials for this Annual Meeting of Stockholders of First Community Bancshares, Inc., consisting of the proxy statement, annual report, and form of proxy card are available over the Internet at http://www.fcbinc.com.

If you want to receive a paper or e-mail copy of these documents, or similar documents for future stockholder meetings, you must request the copy. There is NO charge for requesting a copy. In order to facilitate timely delivery, your request should be received no later than April 12, 2014. Please choose one of the following methods to make your request:

All persons attending the 20142016 Annual Meeting must present photo identification. Please follow the advance registration instructions on the back coverlast page of this proxy statement.

WHETHER OR NOT YOU ATTEND THE ANNUAL MEETING, YOUR VOTE IS IMPORTANT TO FIRST COMMUNITY BANCSHARES, INC. YOU MAY VOTE BY THE FOLLOWING METHODS:

FIRST COMMUNITY BANCSHARES, INC. ENCOURAGES STOCKHOLDERS TO SUBMIT THEIR PROXIES IN ADVANCE OF THE ANNUAL MEETING. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE TIME IT IS VOTED.

First Community Bancshares, Inc.

29 College Drive

P. O. Box 989

Bluefield, Virginia 24605-0989

March 14, 201415, 2016

Dear Stockholder,

You are invited to attend the 20142016 Annual Meeting of Stockholders of First Community Bancshares, Inc. (the “Corporation”) to be held on Tuesday, April 29, 201426, 2016, at 2:00 p.m. Eastern Daylight Time at the First Community Bancshares Corporate CenterHeadquarters located at 29 College Drive, Bluefield, Virginia.

The Annual Meeting will begin with a report of the Corporation’s 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. All persons attending the 20142016 Annual Meeting of Stockholders must present photo identification.

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, on the Internet, or by completing, signing, dating and returning your proxy formcard in the enclosed envelope.

Very truly yours,

/s/ William P. Stafford, II

William P. Stafford, II

Chairman of the Board

Table of ContentsTABLE OF CONTENTS

Page

PROXYPROXY STATEMENT

First Community Bancshares, Inc.

29 College Drive

P. O. Box 989

Bluefield, Virginia 24605

The Board of Directors of First Community Bancshares, Inc. (the “Corporation”) 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 29, 2014,26, 2016, at 2:00 p.m. Eastern Daylight Time at the Corporate Center, 29 College 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, proxy card, and return envelopes,envelopes; the handling and tabulation of proxies received,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 materials, 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 14, 2014.17, 2016.

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 stockholder’s instructions contained therein. In the absence of contrary instructions, shares represented by such proxies will be voted FOR the election of the two (2) directors nominated by the Board of Directors and named in this proxy statement; FOR approval, on a non-binding advisory basis, of the Corporation’s executive compensationstatement and FOR ratification of Dixon Hughes Goodman LLP as the Corporation’s independent registered public accounting firm.

Any stockholder has the power tomay revoke his or her 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. If your shares of Common Stock are held for you in a brokerage, bank or other institutional account, you must obtain a proxy from that institution, bring it with you to the Annual Meeting and submit it with your ballot in order to be able to vote your shares at the Annual Meeting.

The Board of Directors has fixed March 3, 20141, 2016, 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 on the record date will have one vote for each share so held in the matters to be voted upon by the stockholders. Treasury shares are not voted. Shares of the Corporation’s Series A Preferred Stock are not entitled to be voted on the matters presented at the Annual Meeting. Stockholders of the Corporation do not have cumulative voting rights. As of the close of business on March 3, 2014,1, 2016, the outstanding shares of the Corporation consisted of 18,390,90517,757,153 shares of Common Stock and 15,151 shares of preferred stock.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 and broker non-votes which are discussed below, are considered incounted as present and entitled to vote for purposes of determining the presence of a quorum. A broker non-vote occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner. Directors are elected by a plurality of the votes cast at a stockholders’ meeting with a quorum present. The two (2) 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. The advisory approval of the Corporation’s executive compensation program and the ratification of the independent registered public accounting firm each requirerequires that the number of votes cast in favor of the proposal exceedsexceed the number of votes cast against. Abstentions and broker non-votes will have no effect on any of the proposals set forth in this proxy statement.

If the shares you own are held in street“street name, by” that is through a brokerage firm, bank, or other nominee, you may vote your brokerage firm, asshares by following the instructions provided by the nominee. As the record holder of your shares, your nominee is required to vote your shares according to your instructions. In order to vote your shares, you will need to follow the directions provided to you by your brokerage firm provides you. Many brokers alsonominee, many of which offer the option of voting by the Internetonline or by telephone, instructions for which would be provided by your brokerage firm on your vote instruction form.telephone. Under the current rules of the New York Stock Exchange, or NYSE, and the NASDAQ Stock Market LLC or NASDAQ, if you do not give instructions to your brokerage firm,nominee, it will stillonly be able to vote your shares with respect to onlyfor the ratification of the independent registered public accounting firm. If you do not provide instructions to your brokerage firm and it will not be able to vote on non-discretionary matters, which can result in a broker non-vote. A broker non-vote occurs when a bank, broker or other nominee holdingyour 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. The election of the two (2) directors nominated by the Board of Directors and named in this proxy statement and the advisory approval of the Corporation’s executive compensation program are non-discretionary matters under the current rules of the NYSE and NASDAQ.directors.

PROPOSAL 1: ELECTION OF DIRECTORS

The Board of Directors is comprised of seven (7)eight (8) directors, including six (6)seven (7) non-management directors, currently divided into three (3) classes with staggered terms. The total numberterms: the class of directors serving in 2013 was eight (8), with seven (7) directors classified as non-management directors. Robert E. Perkinson, Jr. served on the Corporation’s Board of Directors during all of fiscal year 2013. Director Perkinson retired as a Director effective February 21, 2014. After careful consideration and discussion, in order to allow a diligent search for a suitable replacement for Mr. Perkinson, and in accordance with the Corporation’s Amended and Restated Bylaws, effective as of September 24, 2013, the Board has fixed the number of directors at seven (7).

Two (2) directors will be elected at the 2014 Annual Meeting. If the proposed nominees are elected, the Corporation will have a Board of Directors2016, consisting of two (2) classesdirectors; the class of 2017, consisting of three (3) directors; and the class of 2018, consisting of three (3) directors. The two (2) directors and one (1)from the class of three (3) directors.

All directors have been determined to be independent by the Board of Directors except William P. Stafford, II, who is employed by the Corporation as its Chief Executive Officer; William P. Stafford, who is otherwise independent, but is a family Member of William P. Stafford, II; and Samuel L. Elmore, who is neither an Executive Officer nor family member of an Executive Officer, but was technically employed by First Community Bank, the Corporation’s wholly owned banking subsidiary, as a consultant in the Raleigh County, West Virginia market within the past three (3) years.

The class of directors2016 are both nominated for re-election at the 20142016 Annual MeetingMeeting. The two (2) directors elected will be elected tobecome the class of 2019, and will serve until the 20172019 Annual Meeting. All nominees are currently serving on the Corporation’s 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 an alternate nominee designated by the present Board of Directors to fill the vacancy. In the event that additionalmore than two (2) persons are nominated for election as directors, the proxy holders intend to vote all proxies received by them for the nominees listed below.below, or for any alternates nominated by the Board. 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 closely related to any other director or executive officer of the Corporation by blood, marriage or adoption, except for Mr. Stafford who is the father of Mr. Stafford, II.

A table of each director and nominee, including his or her age,age; the applicable director class, which is based upon the year in which his or her term of service expires,expires; and title, is set forth below. A biography describing each director’s and nominee’s qualifications and business background is set forth below the table. The Corporation does not know of any reason why any nominee would be unable to serve as a director.

Members of the Corporation’s Board of Directors are expected to have the appropriate skills and characteristics necessary to function in the Corporation’s current operating environment and contribute to its future direction and strategies. These include legal, financial, management and other relevant skills. In addition, the Corporation looks to achieve a diversified Board, including members with varying experience, age, perspective, residence and background.

NOMINEES FOR THE CLASS OF 2017

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, D.C., with a MBA degree in 1964 and The American University Law School with a Juris Doctor degree in 1966. Mr. Hall currently serves as Senior Partner in Hall & Hall, PLC 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 Department of Alcoholic Beverage Control.

Mr. Hall’s relevant experience qualifying him for service as a director includes: a wide range of business and legal knowledge gained during an active forty-five (45) year law practice; his MBA degree; thirty (30) years of service on boards of financial service organizations; thirty (30) years of overseeing the budget for the Commonwealth 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.

William P. Stafford, President, Princeton Machinery Service, Inc., Princeton, West Virginia.

Mr. Stafford founded and successfully operated Princeton Machinery Service, Inc., a machine repair business, for more than forty (40) years prior to his retirement. Mr. Stafford continues to serve as Director and President of Princeton Machinery Service, Inc. Mr. Stafford serves as Director and President of the H. P. and Anne S. Hunnicutt Foundation, Inc., and Melrose Enterprises, Ltd. He is a member of Stafford Farms, LLC. Mr. Stafford previously served as a member of the West Virginia Legislature, the West Virginia Natural Resources Commission, the Mercer County Airport Authority and the Mercer County, West Virginia Economic Development Authority. Mr. Stafford has served on numerous civic and community service boards and commissions.

Mr. Stafford's significant business and banking experience qualify him for service as a director. In addition, his state government service, extensive civic and community service, and more than twenty-five (25) years of board service for a publicly traded financial services company provide additional qualifications.

Your Board recommends a voteFOR the nominees set forth above.

CONTINUING INCUMBENT DIRECTORSNOMINEES FOR THE CLASS OF 2019

W.C. Blankenship, Jr., Former State Farm Insurance Agent, Tazewell, Virginia.

Mr. Blankenship received his BS degree in 1972 from Appalachian State University and has served as a successful insurance agent for State Farm since 1976. Mr. Blankenship joined First Community Bank in July 1996 following its acquisition of Citizens Bank of Tazewell, Inc. He was appointed to Citizens Bank’s Board of Directors during its formation in 1981 and was instrumental in the establishment of that bank, eventually serving as Chairman of the Board from 1984 through its acquisition by First Community Bank.

Mr. Blankenship’s relevant experience qualifying him for service as a director includes: more than thirty-five (35) years of expertise and knowledge in insurance products and services and more than thirty (30) years of bank board service.

Samuel L. Elmore, Former Chief Credit Officer and Senior Vice President, First Community Bank, Beckley, West Virginia.

Mr. Elmore received a BSBachelor of Science degree in Business Management and Marketing in 1970 from the University of Charleston. Prior to joining First Community Bank, Mr. Elmore served as Executive Vice President, Citizens Southern Bank, Inc.;, Beckley, West Virginia; President and Chief Executive Officer, Bank One, Beckley, West Virginia; Vice President, Key Centurion Bancshares, Huntington, West Virginia; and President and Chief Operations Officer, Beckley National Bank, Beckley, West Virginia. Mr. Elmore currently serves on the Boards of First Community Bank and the Raleigh County Commission on Aging. Mr. Elmore previously served on the Boards of The United Way of Beckley, Beckley Area Foundation, Raleigh General Hospital and VACHA.

Mr. Elmore’s relevant experience qualifying him for service as a director includes: more than forty (40) years of experience in the community banking industry, including service as an auditor and managing the Corporation’s Credit Administration Department; prior experience with acquisitions and mergers; and a variety of offices held with increasing management responsibilities during his banking career.

Richard S. Johnson, Chairman, President and Chief Executive Officer, The Wilton Companies, Richmond, Virginia.

Mr. Johnson earned a BS BABachelor of Science in Business Administration degree from the University of Richmond, Richmond, Virginia in 1973, with concentrations in Economics and Finance, and graduated with a MSMaster of Science 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. He assumed the role of Chairman of The Wilton Companies in 2010.  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 First Community Bank andBank; The Wilton Companies; Fidelity Group, LLC; Trustee Emeritus of the University of Richmond, and Director and past Chairman of the City of Richmond Economic Development Authority.Authority, where he previously held the seat of Chairman.  Mr. Johnson also serves as the Assistant Treasurer and Director Emeritus of Ducks Unlimited, Inc. and is a Emeritus Trustee of the Board of Trustees for the University of Richmond. He has previously served as a director of the State Fair of Virginia, the Children’s Museum of Richmond, Ducks Unlimited Inc., Ducks Unlimited Canada, University of Richmond and Landmark Apartment Trust of America.

Mr. Johnson’s relevant experience qualifying him for service as a director includes: long-range planning, various aspects of mortgage underwriting, marketing and mortgage portfolio servicing; previously 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., including Assistant Treasurer and member of the Finance and Audit Subcommittee; and previous service as a director and Audit Committee member of the Apartment Trust of America.

Your Board recommends a voteFOR the nominees set forth above.

INCUMBENT DIRECTORS

W. C. Blankenship, Jr., Former State Farm Insurance Agent, Tazewell, Virginia.

Mr. Blankenship received his Bachelor of Science degree in 1972 from Appalachian State University and served as a successful insurance agent for State Farm from 1976 until 2013. Mr. Blankenship joined First Community Bank in July 1996 following its acquisition of Citizens Bank of Tazewell, Inc. He was appointed to the Citizens Bank Board of Directors during its formation in 1981 and was instrumental in establishing that bank, eventually serving as Chairman of the Board from 1984 through its acquisition by First Community Bank.

Mr. Blankenship’s relevant experience qualifying him for service as a director includes: more than thirty-six (36) years of expertise and knowledge in insurance products and services and more than thirty-two (32) years of bank board service.

C. William Davis, Attorney, Richardson & Davis, PLLC, Bluefield, West Virginia.

Mr. Davis was appointed to serve on the Board on August 25, 2015. Mr. Davis graduated from the Virginia Military Institute in 1970, with a Bachelor of Science degree in Civil Engineering and from Washington & Lee School of Law in 1973, with a Juris Doctor degree. Mr. Davis is a member of Richardson & Davis, PLLC and practices law, primarily in the areas of civil litigation, commercial transactions, trusts and estates, and banking. Mr. Davis has served as a Director of the Corporation’s banking subsidiary since 1990 and a predecessor bank from 1987 to 1990. Mr. Davis has served as a Director for a variety of business and professional organizations in the region, including Bluefield Supply Company, Flat Top Insurance Agency, the Defense Trial Counsel of West Virginia, Inc., and the West Virginia State Bar Board of Governors.

Mr. Davis’ relevant experience qualifying him for service as a director includes: a broad range of business, legal, banking, and regulatory related issues encountered in the practice of law; extensive civic and community service; and twenty-eight (28) years of board service in the banking industry.

I. Norris Kantor, Of Counsel, Katz, Kantor, Stonestreet & Buckner, PLLC, Princeton and Bluefield, West Virginia.

Mr. Kantor received a BABachelor of Arts 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 (50) years and is currently Of Counsel with the law firm of Katz, Kantor, Stonestreet & Buckner, PLLC. 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 in the following leadership capacities: Board member of the Bluefield State College Board of Governors, New River Parkway Authority, and the Bluefield Development Authority; and Board member and Secretary of Bluefield State College Research and Development Corp.; Board member and President of the Downtown Health and Wellness Center, Inc. Mr. Kantor is also a former member and Chair of the West Virginia Ethics Commission and former Board member of the Bluefield State College Foundation and New River Community College Board of Governors.

Mr. Kantor’s relevant experience qualifying him for service as a director includes: a wide range of legal and business experience gained during his more than fifty (50) years as a practicing attorney; his legal work in issuing numerous utility bondsdealing with the issuance and refunding of numerous utility bond issues;bonds; his ability to understand complex business, legal and financial topics; and twenty-four (24)twenty-six (26) years of service as a member of the board memberof directors of financial service organizations.

Michael Adam Sarver, Real Estate Developer, Businessman, Princeton, West Virginia

Mr. Sarver was appointed to serve on the Board on August 25, 2015. Mr. Sarver received his Bachelor of Science Degree in Communication Studies in 2000 from West Virginia University. Mr. Sarver has served on the Board of Directors of the Corporation’s banking subsidiary since 2014. He manages and owns several businesses in Southern West Virginia including Main Street Builders, LLC, Eastern Door & Glass, LLC and Clover Leaf Properties, LLC, which are focused on real estate development coupled with residential and commercial construction and development. Mr. Sarver has served as a Director for a variety of businesses, civic and charitable organizations in the region, including the Salvation Army and the First United Methodist Church.

Mr. Sarver’s relevant experience qualifying him for service as a director includes: a broad range of business, financial and related experience associated with operating multiple business interests, extensive civic and community service, and service on a variety of boards.

William P. Stafford, President, Princeton Machinery Service, Inc., Princeton, West Virginia.

Mr. Stafford is President, Director, and Chairman of Princeton Machinery Service, Inc., a machine repair business which he founded and has successfully operated for over forty (40) years. Mr. Stafford serves as Director and President of the H. P. and Anne S. Hunnicutt Foundation, Inc. and Melrose Enterprises, Ltd., and is a Director for the Corporation’s banking subsidiary. He is a member of Stafford Farms, LLC. Mr. Stafford previously served as a Delegate of the West Virginia Legislature and as a member of the West Virginia Natural Resources Commission, the Mercer County Airport Authority, the Princeton-Mercer County Chamber of Commerce, the West Virginia Farm Bureau, and the Mercer County, West Virginia Economic Development Authority. Mr. Stafford has served on numerous civic and community service boards and commissions.

Mr. Stafford's significant business and banking experience qualify him for service as a director. In addition, his state government service, extensive civic and community service, and more than twenty-six (26) years of board service for the Corporation provide additional qualifications.

William P. Stafford, II, Chief Executive Officer, First Community Bancshares, Inc., Bluefield, Virginia and Attorney, Brewster, Morhous, Cameron, Caruth, Moore, Kersey & Stafford, PLLC, Bluefield, West Virginia.

Mr. Stafford is a graduate of Virginia Polytechnic Institute and State University, Blacksburg, Virginia, and holds a BSBachelor of Science degree in Mechanical Engineering. He received his Juris Doctor,cum laude, from Washington & Lee University School of Law, Lexington, Virginia. Mr. Stafford has served as Chief Executive Officer of the Corporation since his appointment by the Board in August 2013. Mr. Stafford practices asis a member of his firmBrewster, Morhous, Cameron, Caruth, Moore, Kersey & Stafford, PLLC, and practices law on a limited basis primarily in the areas of commercial transactions, banking, creditor’s rights, and creditor bankruptcy, and trusts and estates.bankruptcy. He currently serves as Chairman of the Board of the Corporation. 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, which include real estate and agricultural holdings. 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. Stafford’s 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 twenty (20)twenty-two (22) years of Boardboard service for the Corporation.

Changes to Composition of the Board of Directors in 2015.On May 25, 2015, long-standing Director Frank P. Hall passed away. Due to Mr. Hall’s passing, and in consideration of the composition of the Board in general (including the ratio of independent to non-independent directors and the possibility of future retirements), the Board determined that it was in the best interest of the Corporation to increase its current number of Directors. Accordingly, as authorized by Section 3.3 of the Bylaws of the Corporation, on August 25, 2015, the Board fixed its current number of Directors at eight (8) and appointed Michael Adam Sarver and C. William Davis to serve as Directors in the Class of 2017. The Board believes that Director Sarver and Director Davis, both of whom were selected after diligent search and recruitments efforts, add substantial depth and talent to the Board.

DirectorDirector Qualifications and Experience.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 Corporation’s 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.

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 are set forth in the chart below, which is followed by a brief biography describing each named executive’s business experience.

Gary R. Mills, President of the Corporation and Chief Executive Officer of First Community Bank.

Mr. Mills has served as President of the Corporation and Chief Executive Officer (“CEO”) of First Community Bank since August 31, 2013, and has been employed by the Corporation and/or one of its subsidiaries since 1998. Prior to his current positions, Mr. Mills served as Chief Executive Officer of the Princeton Division of First Community Bank from 1998 until 2005; Senior Vice President of Credit Administration from 2005 to 2006,2006; and most recently as Chief Credit Officer of the Corporation from 2007 until his August 31, 2013 appointment as President and Chief Executive Officer. Mr. Mills is a CPACertified Public Accountant and holds a Bachelor of Science Degreedegree in Business Administration with a concentration in Accounting from Concord University.

David D. Brown, Chief Financial Officer of the Corporation and First Community Bank.

Mr. Brown has been CFOChief Financial Officer (“CFO”) of the Corporation and First Community Bank since May 2006, and has been employed by the Corporation and/or one of its subsidiaries since 2005. Prior to joining the Corporation, Mr. Brown served in various positions including Corporate Auditor of United Bankshares, Inc. from 1999 to 2005. From 1997 to 1999, Mr. Brown also practiced in the field of public accounting, from 1997 to 1999 where he practicedconcentrating his work on tax, accounting, and auditing across a variety of industries. Mr. Brown is a CPACertified Public Accountant and holds a MPA degreeMaster of Public Accountancy and Bachelor of Science degrees from West Virginia University.

Robert L. Buzzo,ViceMartyn A. Pell, President and Secretary of the Corporation, President Emeritus and Director of First Community Bank.

Mr. BuzzoPell has been Vice President and Secretary of the Corporation and a director of First Community Bank since June 2000. Mr. Buzzo previously served as President of First Community Bank since August 31, 2013, and currently serveshas been employed by the Corporation and/or one of its subsidiaries since 1993. Prior to his current position, Mr. Pell worked in a plethora of business units, including but not limited to accounting, internal audit, credit administration, and commercial lending. He has also previously served as its President Emeritus. From October 1994 until June 2000, Mr. Buzzo was the Chief ExecutiveFinancial Officer for Greenpoint Insurance Group, a subsidiary of First Community Bank – Bluefield,the Corporation. Mr. Pell holds a divisionBachelor of First Community Bank. Prior to 1994, Mr. Buzzo held other leadership positions since joining the CorporationScience degree in 1973.Business Administration from West Virginia University, where he graduatedmagna cum laude, and a Master of Business Administration degree from Wake Forest University.

E. Stephen Lilly, Chief Operating Officer of the Corporation, Executive Vice President and Chief Operating Officer of First Community Bank.

Mr. Lilly has been Chief Operating Officer (“COO”) of the Corporation and First Community Bank since June 2000. Mr. Lilly has been employed by the Corporation and/or one of its subsidiaries since 1997. Mr. Lilly has also served in a variety of banking positions and capacities with the Corporation and other banking organizations where he supervised and managed a number of operational elements, implemented new technologies, and successfully migrated and consolidated bank operations and data. Mr. Lilly also has significant experience in process engineering and customer service management.

Robert L. Schumacher, General Counsel and Secretary of the Corporation and Senior Vice President, General Counsel, and Secretary of First Community Bank.

Mr. Schumacher has served as General Counsel of the Corporation and First Community Bank since 2005. He has also served as Senior Vice President and Secretary of First Community Bank since 2001. Prior to his current positions, Mr. Schumacher served as the Corporation’s CFO and Senior Vice President – Finance from 2001 until 2005. In addition, Mr. Schumacher has previously led First Community Bank’s Trust and Financial Services Division in the capacity of Senior Vice President and Senior Trust Officer. Prior to joining the Corporation in 1983, Mr. Schumacher engaged in the private practice of law in Princeton, West Virginia. Mr. Schumacher is a CPA,Certified Public Accountant, a Certified Financial Planner, is licensed to practice law, and holds a Juris Doctor degree from West Virginia University.

CORPORATE GOVERNANCE

Corporate Governance Guidelines. The Board regularly reviews corporate governance developments and considers modifications to its governance charter to clarify and augment the Board’s processes, including those relating to risk oversight.

The Board’sBoard’s Role in Risk Oversight. The Board of Directors believes that each member has a responsibility to monitor and manage risks faced by the Corporation. At a minimum, this requires members of the 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 through its review of the Corporation’s compliance with regulations set forth by its regulatory authorities, including recommendations contained in regulatory examinations.

Because the Corporation believes risk oversight is a responsibility for each member of the Board of Directors, it does not concentrate the Board’s responsibility for risk oversight in a single committee. Instead, each committee concentrates on specific risks for which it possesspossesses expertise, and each committee regularly reports to the Board of Directors on its findings. For example, the Audit Committee regularly monitors the Corporation’s exposure to certain reputational risks by establishing and evaluating the effectiveness of its programs to report and monitor fraud and by monitoring the Corporation’s internal controls over financial reporting. The Corporation’s Compensation and Retirement Committee monitors risks associated with the design and administration of the Corporation’s compensation.

The Board’s role in risk oversight of the Corporation is consistent with the Corporation’s leadership structure, with the CEO and other members of senior management having responsibility for assessing and managing the Corporation’s risk exposure, and the Board and its committees providing oversight in connection with those efforts.

Independence of Directors

The Board of Directors annually reviews the relationships of each of its members with the Corporation to determine whether each director is independent. This determination is based on both subjective and objective criteria developed by the NASDAQ listing standards and the SEC rules. Based on the subjective and objectivethese criteria, developed by the NASDAQ listing standards and the SEC rules, the Board of Directors determined that the following nominees and current members of the Board of Directors are independent: W. C. Blankenship, Jr.; Franklin P. Hall;C. William Davis; Richard S. Johnson andJohnson; I. Norris Kantor. Robert E. Perkinson, Jr. was independent during 2013Kantor; and through his retirement in February 2014. William P.Michael Adam Sarver. Mr. Stafford, II is not independent because he is an executive officer of the Corporation. William P.Mr. Stafford is not independent solely because he is a Family Member, as defined in the NASDAQ Market Rules, of William P.Mr. Stafford, II. Although neither an Executive Officer nor family member of an Executive Officer, Samuel L.Mr. Elmore is notcannot be considered independent becauseuntil June 1, 2016, as he was employed in a part-time consulting capacity by First Community Bank, the Corporation’s wholly owned banking subsidiary, during 2013 in the Raleigh County, West Virginia market. John M. Mendez was not independent during 2013 due to his service as an executive officer of the Corporation.

The NASDAQ listing standards contain additional requirements for members of the Audit Committee, the Compensation and Retirement Committee and the Governance and Nominating Committee. All of the directors serving on the Audit Committee and Compensation and Retirement Committee are independent under the additional requirements applicable to such committees. TwoAll three (3) members of the Governance and Nominating Committee are independent withsince the third, Samuel L.appointment of Mr. Sarver in October 2015. Mr. Sarver was appointed to replace Mr. Elmore, currentlywho was serving underpursuant to the exceptional and limited circumstances exemption under NASDAQ Rule 5605(e)(3). The Corporation's Board of Directors believes that Mr. Elmore's service on the Governance and Nominating Committee is in the best interests of the Corporation and its Shareholders as further described on page 12.

The Board considered the following relationship in evaluating the independence of the Corporation’s Directors and determined that this relationship does not constitute a material relationship with the Corporation and satisfies the standards for independence:

Director Johnson serves as Chairman, President and CEO of The Wilton Companies. The Wilton Companies isare comprised of three (3) entities under common management. During 2013,2015, an affiliate of the Corporation and its affiliates leased two officesoffice space from twoone (1) of these entities, The Wilton Companies, Inc. and The Wilton Companies, LLC.entities. Director Johnson holds an equity ownership in these two entities.this entity. The combined annual lease payments did not exceed the greater of five percent (5%) of The Wilton Companies’ and its subsidiaries’ consolidated revenues for 20132015 or $200,000, and therefore, the relationship satisfied the standards for independence.

The Board of Directors and Board Meetings

Board Leadership Structure. Previously, John M. Mendez servedWilliam P. Stafford, II currently serves as CEO and President of the Corporation and as a memberChairman of the Board of Directors. With Mr. Mendez’ separation from the Corporation in 2013, the Corporation combined the roles of CEO and Chairman of the Board, and separated the role of President and CEO. The role of the CEO is to set the strategic direction for the Corporation and manage its performance, while the Chairman of the Board is tasked with setting the agenda for Board meetings and presidespresiding over meetings of the full Board.

The Board of Directors believes combining the roles of CEO and Chairman of the Board is in the best interests of the Corporation at this time, as doing so best positions the Corporation to carry out its strategic plan for core growth; increases value for shareholders; provides for greater accountability and transparency; enhances oversight of operationsoperations; and provides for greater Board involvement. Also, by dividingW. C. Blankenship is the roles of CEOLead Independent Director and President between two individuals, the combined CEO/serves as Chairman of the Board role is better positioned to focus on the Corporation’s strategic goals while the President is tasked with the day-to-day managementregularly convened meetings of the Corporation and the other named executive officers.Independent Directors.

Standards of Conduct. All directors, officers and employees of the Corporation must act ethically at all times and in accordance with the policies comprising the Corporation’s Standards of Conduct (“Code”(the “Code”), which is available at the Corporation’s website www.fcbinc.com and available in print to any stockholder upon request.(www.fcbinc.com). Certification of compliance with the Code is required on an annual basis. Only the Board of Directors may waive a provision of the Code for directors and executive officers and will only do so 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 2013.2015. Amendments to the Code will be published on the Corporation’s 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 the Corporation’s conduct, policies, accounting, internal accounting controls or auditing matters, to communicate that concern directly to the Board through an e-mail 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 communication is provided to all new employees during orientation, is available in the employee handbook and on the Corporation’s Intranet, and can be found posted on bulletin boards at each location of the Corporation and its affiliated businesses and is provided to employees in the employee handbook.subsidiaries. The status of any outstanding concern is reported to the non-management directors of the Board periodically by the Chairman of the Audit Committee.

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 addressingdirector. Stockholders may address such communication to Robert L. Buzzo, Secretary, First Community Bancshares, Inc., P. O. Box 989, Bluefield, Virginia 24605-0989. All24605-0989, and 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 to whom such correspondence is directed, without exception.

Board Meetings

The. In 2015, the Board of Directors held eight (8)nine (9) regular meetings in 2013.as well as one (1) meeting held jointly with the Bank board. No member attended fewer than seventy-five percent (75%) of the Board meetings andor committee meetings on which the member sits. Each director is expected to devote sufficient time, energy and attention to ensure diligent performance of the director’s duties and to attend all regularly scheduled Board, committee, and stockholder meetings. It is the Board’s policy that the directors should attend the Annual Meeting absent exceptional circumstances. All current directors attended the 20132015 Annual Meeting.

Board Committees

The Board of Directors has adopted written charters for three (3) of its four (4) standing committees: the Audit Committee, the Executive Committee, the Compensation and Retirement Committee (the “CRC”), and the Governance and Nominating Committee. AFor each of these committees, except the Executive Committee, the Board of Directors has adopted a written charter, a current copy of each committee charterwhich is available for review and printand/or printing on the Corporation’s website at www.fcbinc.com.

Audit Committee.The members of the Audit Committee are DirectorsDirector Blankenship, who chairs the Committee, HallCommittee; Director Johnson; and Johnson.Director Sarver. The Board has determined that Mr. Johnson is the Audit Committee financial expert. The Audit Committee is primarily concerned with the integrity of the Corporation’s financial statements, the independence and qualifications of the independent registered public accounting firm and the performance of the Corporation’s internal audit function and independent registered public accounting firm. Its duties include: (1) selection and oversight of the independent registered public accounting firm; (2) review of the scope of the audit to be conducted by the independent registered public accounting firm, as well as the results of their audit; (3) oversight of the Corporation’s financial reporting activities, including the 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 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 registered public accounting firm; and (6) review of the organization and scope of the Corporation’s internal audit function and its disclosure and internal controls; and (7) review, approve and ratify transactions with related persons.controls. The Audit Committee held fifteen (15)eight (8) meetings during 2013.2015. The Audit Committee’s report is on page 37.31.

Executive Committee. The members of the Executive Committee are DirectorsDirector Stafford II, who chairs the Committee, Blankenship, Elmore, Hall, Johnson, KantorCommittee; Director Blankenship; Director Davis; Director Elmore; Director Johnson; Director Kantor; Director Sarver; and Director Stafford. The Executive Committee did not meet in 2013.2015. 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 DirectorsDirector Johnson, who chairs the Committee, Blankenship,Committee; Director Blankenship; and Director Kantor. The CRC’s primary duties and responsibilities are to: (1) review, evaluate and determine annually the executive officers’ and directors’ compensation and the corporate goals and objectives relevant thereto, and to evaluate the executive officers’ performance in light of such goals and objectives; (2) review and evaluate all compensation decisions otherwise made by the President and CEO; (3) review, evaluate and determine all incentive and equity-based incentive awards; (4)  review organizational systems and plans relating to management development and succession planning; and (5) review and discuss with management the proxy statement’s Compensation Discussion and Analysis and produce the CRC report. The CRC does not delegate any of its responsibilities to subcommittees.

The President and CEO of the Corporation provide the CRC with a performance assessment and compensation recommendation for each of the other executive officers of the Corporation. The CRC has the authority to retain or obtain the advice of any advisors as the CRC deems necessary in the performance of its duties. In 2012, the CRC directly engaged Mathews, Young – Management Consulting (“Mathews Young”) to provide compensation analysis and advice regarding incentive compensation for employees of the Corporation. At the request of the CRC, Mathews Young: (i) developed a peer group analysis for the CRC’s review of compensation levels; (ii) formulated recommendations for long-range performance compensation; and (iii) developed recommendations for an incentive program for the special assets department.Mathews Young was not retained to provide any other services to the Corporation.Retention of Mathews Young by the CRC raised no conflicts of interest. The CRC held four (4)six (6) meetings in 2013.2015. The CRC’s report is on page 21.18.

Compensation and Retirement Committee Interlocks and Insider Participation. None of the members of the CRC are or were formerly officers or employees of the Corporation or any of its subsidiaries. Finally, none of the executive officers of the Corporation served on any compensation committee or any board of directors of another company, of which any of the Corporation’s Board members was also an executive officer.

Governance and Nominating Committee. The members of the Governance and Nominating Committee are DirectorsDirector Blankenship, who chairs the Committee, Kantor (both of whom are independent)Committee; Director Kantor; and Director Elmore. Mr. Elmore was employed by the Corporation’s banking subsidiary until May 31, 2013 in a part-time consulting capacity. As such, Mr. Elmore is not currently deemed to be independent although he is not an Executive Officer, employee or Family Member of an Executive Officer under the NASDAQ Market Rules. Both Mr. Stafford and Mr. Stafford, II previously served on the Committee. Due to the recent appointment of Mr. Stafford, II as CEO of the Corporation, neither Mr. Stafford, II nor Mr. Stafford any longer meets the NASDAQ requirements for independence, which limits their service on certain Board committees, including the Governance and Nominating Committee. In order to preserve a level of continuity on the Governance and Nominating Committee, the Board of Directors determined that Mr. Elmore’s membership on the Governance and Nominating Committee is in the best interests of the Corporation and its Shareholders, especially since the otherSarver. All three members of the Committee are independent. The Committee’s responsibilities include the selection of director nominees for Board service and the development and review of governance guidelines. The Committee also: (1) oversees self-evaluationsevaluations of the Board, as well as director performance and Board dynamics; and (2) makes recommendations to the Board concerning the structure and membership of the Board committees. As noted above, Mr. Elmore is currently serving as a non-independent member of this Committee pursuant to the exceptionalcommittees; and limited circumstances exemption under NASDAQ Rule 5605(e)(3). The Corporation's Board of Directors has considered the current Board membership, the existing membership of all Board committees,reviews, approves, and Mr. Elmore’s qualifications and believes that Mr. Elmore's service on the Governance and Nominating Committee is necessary to ensure diversification among the independent Board committees, and is therefore in the best interests of the Corporation and its Shareholders.ratifies transactions with related persons. This Committee held one (1) meetingsix (6) meetings in 2013.2015.

Director Candidates, Qualifications and Diversity. In considering whether to recommend any candidate for inclusion in the Board’s slate of recommended director nominees, including candidates recommended by stockholders, the Governance and Nominating Committee considers a number of criteria, including, without limitation, the candidate’s integrity, business acumen, age, experience, commitment, diligence, geographic representation, 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. The diversity of the Board is evaluated on a continuing basis by assessing whether varying viewpoints are routinely presented, evaluating the individual performance and contributions of each Director, and ensuring that varying perspectives are presented on key issues.

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, Vice President and Secretary of First Community Bancshares, Inc., P. O. Box 989, Bluefield, Virginia 24605-0989. The Corporation believes 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. The Committee also considers candidates recommended by current directors, officers, employees and others. The Committee evaluates all nominees for directorsdirector 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 directorsdirector or employeesemployee present once last year. Director Stafford, II served as chairmanon at this meeting, which occurred prior to his appointment as CEO.least three (3) occasions in 2015.

PROPOSAL 2: NON-BINDING, ADVISORY VOTE ON EXECUTIVE COMPENSATION

Pursuant to Section 14A of the Securities and Exchange Act of 1934, the Corporation is requesting shareholder approval of the compensation of its named executive officers (NEOs) as disclosed in this proxy statement. This proposal, commonly known as a “say-on-pay” proposal, gives our shareholders the opportunity to express their views on our NEOs’ compensation. The vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the philosophy, policies, and practices described in this proxy statement.

The executive officers named in the Summary Compensation Table set forth in this proxy statement and deemed to be the Corporation’s “named executive officers” are William P. Stafford, II; Gary R. Mills; John M. Mendez; David D. Brown; Robert L. Buzzo and E. Stephen Lilly.

Shareholders are urged to read the compensation information on the following pages of this proxy statement which discusses the compensation policy and procedures with respect to the Corporation’s named executive officers and vote on the following advisory, non-binding resolution. As detailed in the Compensation Discussion and Analysis (“CD&A”) beginning on page 14, the Corporation seeks to closely align the interest of its named executive officers with the interests of its shareholders. The Corporation’s compensation programs are structured to reward the achievement of long-term strategic and operational goals and increased total shareholder return, while at the same time avoiding the encouragement of unnecessary or excessive risk-taking. Accordingly, the following resolution is submitted for shareholder approval:

RESOLVED, that the Corporation’s compensation paid to the Corporation’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the CD&A, executive officer compensation tables and related narrative discussion, is hereby APPROVED.

The “say-on-pay” vote is an advisory vote, which is not binding on the Corporation. However, the Board and CRC value the opinions expressed by shareholders in their vote on this proposal, and will carefully consider the outcome of the vote when making future compensation decisions with respect to our NEOs. At the 2011 Annual Meeting of Stockholders, the stockholders approved the compensation of the Corporation’s named executives, which the CRC considered in its decisions to continue the objectives, policies and philosophy underlying the Corporation’s compensation programs for executives. The majority of the stockholder votes cast on the frequency of future say on pay advisory votes (“say on frequency”) were in support of an advisory vote occurring once every three years. A say on pay advisory vote will be held at this year’s Annual Meeting of Stockholders, with the next say on pay advisory vote and the say on frequency vote to be held at the 2017 Annual Meeting of Stockholders.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTEFOR THIS PROPOSAL.

COMPENSATION DISCUSSION AND ANALYSIS

This section provides a brief explanation of material information relevant to understanding the objectives, policiesThe following discussion and philosophy underlyinganalysis explains the Corporation’s compensation programs for executives andprogram as it applies to the executive officers named in the Summary Compensation Table on page 19, who we refer collectively to as the “named executive officers,” as well as other employees included in any incentive compensation program. This discussion and analysis should be read in conjunction with the Summary Compensation Table, its accompanying footnotes, and the additional tables and narrative disclosure that follows the Summary Compensation Table. The named executive offers of the Corporation presently serve without compensation from the Corporation. They are, however, compensated by the Bank for services rendered.

The Corporation’s Compensation Philosophy and Objectives

The goal of the Corporation’s executive compensation program is to retain and reward executive officers who create long-term value for stockholders.stockholders through consistent financial and operating performance coupled with strong leadership. This overriding objective affects all elements of the compensation program. The Corporation’sIn addition, the Corporation desires to become the employer of choice and to be viewed as a model of best practices for executive compensation, program rewards consistent financial and operating performance coupled with strong leadership. The intent is to align anthe overall objective of aligning each executive’s long-term interests as closely as possible with those of stockholders and to motivatemotivating high performing executives to continue with the Corporation for long, productive careers.

Base Salaries, Discretionary Cash Incentive Bonuses, and EquityAdministration of the Executive Compensation of Executive OfficersProgram

The CRC meets as often as necessary to perform its duties and responsibilities. The CRC met six (6) times during calendar year 2015. The CRC typically meets with the Chief Executive Officer and President of the Corporation and, when appropriate, with legal counsel and/or outside compensation advisors selected and retained by the committee. The CRC also regularly meets in executive session without the presence of management.

The CRC annually reviews the Compensation and Retirement Committee Charter and all incentive plans used throughout the Corporation in all business lines. In this review of the incentive plans, the Committee makes a determination of whether the plans, individually or collectively, encourage excessive risk taking, whether each of the plans have reasonable limits and caps, and whether the overall structure of the incentive plans are aligned with the interests of the stockholders.

The CRC receives and reviews materials in advance of each meeting. These materials include information that management believe it is inbelieves will be helpful to the Corporation’s best interests to maintain consistency in its compensation philosophy and implementation, but it also believes discretion should be used in times of prosperityCRC, as well as times when either the Corporation or the overall economy, or both, are performing below expectations. With this in mind,materials the CRC believes it is appropriatehas specifically requested. Management plays a significant role in the compensation setting process. The most significant aspects of management’s role are: evaluating the performance of the senior executive officers; establishing business performance targets and objectives for some componentsindividual executives other than the Chief Executive Officer and President; and recommending salary levels and other terms of compensation to remain level or decline during periods of economic downturn.employment for individual executives other than the Chief Executive Officer and President.

WhileThe CRC meets in executive session each year to evaluate the Corporation has taken a conservative approachperformance of the Chief Executive Officer and President, to settingset performance objectives for the Chief Executive Officer and President, and to set base compensation in recent years, in February 2013,for the Chief Executive Officer and President. In addition, the CRC approved modest base salary adjustments for themeets in executive officers in 2013. In November 2013, the CRC metsession each year to review the compensation levelsperformance evaluations of certain of its executive officers in light of changes in management. On the recommendation of Mr. Johnson, the CRC set an annual salary for and awarded additional equity compensation to Mr. Stafford, II and Mr. Mills, reflecting their new and increased level of responsibility with the Corporation, and to Mr. Brown to reflect his ongoing responsibility and compensation level compared to peer organizations.

Additionally, at the February 2013 meeting, the CRC approved modest incentive cash bonuses for executive officers based on the achievement of key operating goals in 2012. These incentive bonuses were awarded in the second quarter of 2013. These were only the second incentive bonuses awarded since the onset of the 2008 recession and the associated negative credit and real estate cycle.

In an effort to align key executives’ interests with the long-term interests of shareholders, the CRC awarded restricted stock to the named executive officers, as permitted underto approve any annual incentive compensation for the First Community Bancshares, Inc. 2012 Omnibus Equity Compensation Plan, as approved by shareholders on April 24, 2012. The CRC granted awardscurrent fiscal year, to approve base compensation for the named executive officers for the next calendar year, and to consider and approve any grants of restricted stock on May 28, 2013long term retention and December 31, 2013. Forty-eight and two-fifths percent (48.4%) of the restricted stock awards granted on May 28, 2013 and December 31, 2013 immediately vested upon the grant date. The remaining awards will vest equally over a three-year period beginning on May 28, 2014. Vesting is based upon continued employment through the vesting date and the Corporation’s annual achievement of a three-year average growth rate in core diluted earnings per share of not less than five percent (5%). In light of the salary adjustments and awards of restricted shares in 2013, and in an effort to contain the Corporation’s costs, in February 2014, the CRC determined to award no discretionary cash bonuses or long-term incentive equity compensation to the named executives in 2014.for all employees.

Considerations Used to Determine Compensation Program

Below is a summary of considerationsfactors considered by the CRC affectingin setting compensation for the named executive officers. The CRC performsperformed its evaluation of compensation in light of the executive’s performance, the Corporation’s performance, the current economic environment, and prevailing public sentiments and concerns regardingthe Corporation’s long-standing practice of prudent executive compensation.compensation administration.

Emphasis on Consistent and Sustained Performance. The Corporation’s compensation program provides pay opportunities for those executives demonstrating superior performance for sustained periods of time.periods. Each of the 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 Corporation’s long-term success. In evaluating sustained performance, the Corporation also gives weight to the relative performance of each executive in his or her particular industry segment or function.

Emphasizing consistent, long-term performance impacts annual discretionary cash bonus and equity incentive compensation. After assessing each named executive’s past performance, expected future contribution, as well as the performance of the business or function the executive leads, the The CRC also uses its judgment in determining the amount of bonus or equity award,named executive compensation adjustments and incentive awards, if any. This long-term view has the effect of moderating compensation levels, annual adjustments and awards.encouraging executives to focus on sustaining acceptable, long-term financial performance.

Importance of Corporation Results. The CRC places substantial weight on the named executive’s contribution to the Corporation’s overall financial success.success, including achievement of short and long-term strategic goals and annual financial results. The CRC is of the opinion that the named executives share the responsibility of supporting the Corporation’s overriding goals and objectives as part of the management team.

Judgment Versus Formula DrivenFormula-Driven. The CRC does not use formulas in determining the level or mix of compensation. It evaluates a wide range of quantitative and qualitative factors, which include consistency in reaching targeted goals, the ability to perform in both good and challenging economic times, a history of integrity, evidence that the executive uses good judgment, and his or her ability to lead and create future value for the Corporation.

Risk Considerations in the Compensation Program. The CRC views the Corporation’s compensation program with a long-term focus. Under the program, the greatest amount of compensation can be achieved over long periods of time through sustained superior performance. The Corporation believes this provides a strong incentive to manage the Corporation for the long-termlong term with a clear message to avoid excessive risk in the near-term. The CRC also attempts to balance the various elements of compensation among base salary (current cash payments), incentive cash payments and equity awards.near term. The CRC maintains full discretion to adjust compensation based upon performance and adherence to the Corporation’s values.

In 2013,2015, the CRC continued its intensiveextensive review of the relationship between risk management and incentive compensation to ensure that incentive compensation does not encourage unnecessary or excessive risks.Therisks. The CRC reviewed the incentive compensation arrangements for the Corporation’s named executives and other top executives in various manners to ensure that their incentive compensation arrangements do not encourage them to take unnecessary and excessive risks that threaten the value of the Corporation. The CRC also reviewed the compensation arrangements of the Corporation’s other top executives. The CRC concluded that the Corporation’s compensation policies and practices do not encourage excessive or inappropriate risk and instead encourage behaviors that support sustainable long-term value creation. For instance, the CRC does not use highly leveraged, short-term incentives that drive high-riskhigh risk investments at the expense of long-term company value. Rather, the Corporation’s annual incentive compensation is based on balanced performance metrics that promote disciplined progress focused on longer-term goals.

Future Compensation Opportunity. The CRC intends to continue to provide a mix of different compensation elements. The CRC believes that each named executive should have a portion of his or her compensation at risk based onbe contingent upon how well the Corporation operates and how well its stock performs in the long run.

Use of Compensation Consultants. The President and CEO of the Corporation provide the CRC with a performance assessment and compensation recommendation for each of the executive officers of the Corporation. Because of the enhanced level of regulation and scrutiny on executive compensation, the CRC retainsexercises its authority to retain independent compensation consultants, as needed, to provide technical advice and information related to compensation for all employees of the Corporation. In 2015, the CRC directly engaged Mathews, Young - Management Consulting (“Mathews Young”) to provide compensation analysis and best practices advice regarding base and incentive compensation for employees of the Corporation. In 2012, Mathews Young was the independent consultant of the CRC. The Corporation did not retain a separate compensation consultant. In 2013, neither the CRC nor the Corporation retained a compensation consultant to advise the CRC orand the Board of Directors. The consultant’s primary functions were to (1) assist in ensuring that any proposed compensation structure was compliant with respectbest governance practices and does not impose excessive risk and (2) assist in ensuring that any proposed compensation was reasonable and that no proposed compensation level was excessive in comparison to executive compensation issues. The CRC considers executive compensation at other similarly sized and situated financial service companies as only one of numerous factors in setting pay.peers. The CRC does not target a specific percentilecompensation levels within this group of perceived peers andpeer institutions, but rather uses the comparative data only as a reference tool after determining the types and amounts of compensation based upon itsthe CRC’s own evaluation.

Employment Agreements. Except for Mr. Stafford, II, the named executives have employment agreements, which include change of control protection for the executivesMatthews Young did not propose any specific compensation calculation, structure, or amount and non-compete and non-solicitation requirements for the protection ofMathews Young was not retained to provide any other services to the Corporation. The employment agreements with Messrs. Buzzo and Lilly were amended and restated asRetention of December 16, 2008 to comply with Section 409A of the Internal Revenue Code of 1986, as amended, and initial employment agreements were entered into with Messrs. Brown and Mills on the same date. The Corporation describes all of these agreements in more detail below.

The December 16, 2008 employment agreements with Messrs. Buzzo and Lilly each have an initial term of three (3) years and each is renewed for an additional three (3) year term each January 1st unless the Corporation or the individual executive gives notice that the employment term will not be extended. In the event there is a change of control of the Corporation and Messrs. Buzzo’s or Lilly’s employment is terminatedMathews Young by the Corporation or either chooses to terminate his employment within two (2) yearsCRC raised no conflicts 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. Furthermore, the Corporation may terminate the employment of Messrs. Buzzo and Lilly at any time for “Cause” (as defined in each respective officer’s employment agreement) without further obligation owed. If the Corporation terminates employment for any reason other than for “Cause” or if Messrs. Buzzo or Lilly terminates his employment for “Good Reason” (as defined in the respective employment agreement), the Corporation will generally be obligated 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 their employment, Messrs. Buzzo and Lilly will be subject to non-competition and non-solicitation restrictions. If Messrs. Buzzo or Lilly die while employed by the Corporation, the Corporation will pay his estate through the end of the month in which his death occurs. If their employment is terminated as a result of permanent disability as determined pursuant to the agreement, then the Corporation has the right to terminate employment before the end of the applicable term.

The Corporation entered into initial employment agreements with Messrs. Brown and Mills as of December 16, 2008. These agreements contain substantially similar terms and are modeled after the agreements for Mr. Buzzo and Mr. Lilly. The agreements for Messrs. Brown and Mills have an initial term of two (2) years, and are renewed for an additional two (2) years each January 1st unless the Corporation or Mr. Brown or Mr. Mills, respectively, give notice that the employment term will not be extended. Mr. Brown’s and Mr. Mills’ agreements provide for a lump sum payment of 2.00 times base salary, in the event of a change of control coupled with terminated employment either without “Cause” by the Corporation or by the executives for “Good Reason” (as defined in their respective agreements). Furthermore, the Corporation may terminate the employment of Messrs. Brown or Mills at any time for “Cause” (as defined in each respective officer’s employment agreement) without further obligation owed. If the Corporation terminates employment for any reason other than for “Cause” or if Messrs. Brown or Mills terminates his employment for “Good Reason” (as defined in the respective employment agreement), the Corporation will generally be obligated to provide compensation and benefits specified in the agreement for the balance of the term of the agreement, but not less than eighteen (18) months following the date of termination. Upon the termination of their employment, Messrs. Brown and Mills will be subject to non-competition and non-solicitation restrictions. If Messrs. Brown or Mills die while employed by the Corporation, the Corporation will pay his estate through the end of the month in which his death occurs. If their employment is terminated as a result of permanent disability as determined pursuant to the agreement, then the Corporation has the right to terminate employment before the end of the applicable term.

Agreements with Former Executives. Mr. Mendez and the Corporation entered into an amended and restated employment agreement on December 16, 2008. Effective August 31, 2013, Mr. Mendez’ employment with the Corporation and service on the Board of Directors ended. The Corporation and Mr. Mendez entered into a Separation Agreement and Release dated August 28, 2013, which confirms and clarifies certain benefits and restrictions set forth in the 2008 amended and restated employment agreement. Pursuant to the terms of the 2008 agreement, Mr. Mendez is to receive thirty (30) months of benefits generally consisting of (i) continued salary, (ii) COBRA premiums and (iii) an automobile allowance. However, in accordance with Section 409A of the Internal Revenue Code of 1986, no payments required by the 2008 agreement or the Separation Agreement and Release may be made for a period of six (6) months after separation. In addition, under the terms and conditions of certain qualified and non-qualified retirement plans, Mr. Mendez is entitled to receive retirement benefits under the Corporation’s qualified retirement plan, non-qualified 401(k) WRAP Plan, and non-qualified Executive Retention Plan. Mr. Mendez was previously granted options to purchase 42,323 shares of common stock of the Corporation, ownership of certain life insurance policies, and 3,731 shares of common stock of the Corporation, all of which he retained at termination, subject in the case of the options to the terms and conditions of the applicable option agreement and plan. As a result of the separation from service, future performance incentive awards were forfeited, as described below in the Grants of Plan-Based Awards Table. Additionally, the Corporation agreed to reimburse Mr. Mendez for any fees and expense reasonably incurred by him in connection with his negotiation, execution and delivery of the Separation Agreement and Release up to a maximum amount of $15,000. As consideration for the release, the Corporation paid Mr. Mendez an additional $15,000.

The terms of the Separation and Release Agreement also set forth certain restrictive covenants that apply to Mr. Mendez, including restrictions for thirty-six (36) months on his ability to compete with the Corporation, its subsidiaries and affiliates, and his ability to solicit the employees, customers or other business relationships thereof. Mr. Mendez is further prohibited from disclosing confidential information or disparaging the Corporation, its subsidiaries, affiliates, directors, officers, employees or stockholders.

Compensation Elements Used to Achieve the Corporation’s Goals

The Corporation uses 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.interest.

Base SalaryComponents of Executive Compensation

The principal components of the executive compensation program are:

The CRC attempts to balance the various elements of compensation among annual base compensation (current cash payments), annual incentive awards (when appropriate), and long-term retention and equity awards. In addition to these principal components, the compensation program also includes employment contracts, change in control agreements, deferred compensation elections, retirement plans, a bank owned life insurance program, a supplemental executive retirement plan and other perquisites and benefits, each of which are discussed in this Compensation Discussion and Analysis with respect to the named executive officers.

Base Compensation.Named executive officers receive base compensation in the form of a base salary. Levels of base salary are established annually under a program intended to maintain parity among the Corporation’s and bank’s executive officers based on levels of responsibility and with the competitive market for each namedexecutives in comparable positions. Base salary is a critical element of executive depends uponcompensation because it provides executives with a base level of monthly income. In determining base salaries, the CRC considers the executive’s qualifications and experience, scope of responsibilities and future potential, the goals and objectives established for the executive, the executive’s duties, his or her individualpast performance, competitive salary practices at competitive companies, internal pay equity, and lengththe tax deductibility of service, and his or her leadership ability. Current salary impacts decisions regarding salary adjustments relevant to peers (within and outside the Corporation). Base salaries are reviewed annually.base salary.

Based on the above criteria, as well as compensation data provided by the CRC’s independent compensation consultant, the Chief Executive Officer and President recommend base salaries for all named executive officers to the CRC for their consideration, except with respect to their own base compensation. The CRC then considers and approves or declines base salary adjustments for all named executive officers. Based on the above criteria, the CRC also adjusts base salary for the Chief Executive Officer and President.

CashPrior to appointment to their present positions, Mr. Stafford, II had served as a Board member since 1994 and as Chairman of the Board since 2010, and Mr. Mills had served as an officer of the subsidiary bank since 1998 and as its Chief Credit Officer since 2007. When Mr. Stafford, II, and Mr. Mills assumed their present positions in the third (3^rd) quarter of 2013, the CRC set base compensation for each commensurate with the responsibilities of each position and their prior experience, but which also reflected their absence of prior experience in their new roles. With respect to Mr. Stafford, II, initial base compensation also reflected his agreement with the Board to spend the significant majority, but less than all, of his time in management of the Corporation, which allowed Mr. Stafford, II to remain a member of his firm and continue his law practice on a much reduced scale. Based on consideration of the above factors, and the relatively short time since assuming their present positions, the CRC did not adjust base compensation for the Chief Executive Officer or President in 2014. For the 2015 fiscal year, the CRC noted that Messrs. Stafford, II’s and Mills’ base salary was below the lowest end of the peer review data.  Accordingly, the CRC adopted a plan to increase their base salary over a period of three years, with each annual increase independently considered by the CRC at that time. Based on the aforesaid consideration, Mr. Stafford, II and Mr. Mills received a 40% increase in their respective base salaries for the 2015 fiscal year.  Mr. Brown received a 7% increase in his base salary to align his salary more closely with the peer group.  Mr. Pell received a 2% performance based increase in his base salary. Please see the Summary Compensation Table on page 19 for more information about the 2015 base salaries of named executive officers.

DiscretionaryAnnual Incentive Bonus. Compensation.For each named executive, the CRC may award discretionary cash bonusesincentive compensation based upon the previous year’s performance as evaluated by the CRC, CEO and the President (except the CEO and President do not participate in histheir own bonus determination)incentive determinations). Please see the Summary Compensation Table on page 19 for more information about annual incentive compensation awarded to named executive officers in 2015 based on 2014 performance.

EquityIn 2014, the Corporation’s budgetary, strategic and operational achievements were such that the CRC considered them sufficient to warrant payment in 2015 of a reasonable amount of discretionary annual incentive compensation to the named executive officers and other employees. The CRC, with input from management regarding budget and performance, chose to award incentive compensation to the named executive officers as set forth in the Summary Compensation Table on page 19. Such incentives were paid in the form of cash (75%) and restricted stock (25%). The CRC believes that paying some portion of incentive compensation in the form of stock is a best practice that serves to facilitate its goal of aligning the interest of the named executives with those of the shareholders by giving them a long-term stake in the Corporation’s equitysuccess.

In December 2015, the CRC adopted an executive and board incentive program is designedcompensation methodology which provides suggested amounts of annual incentive compensation, paid to recognize responsibility, reward excellent performance, retain named executives and other employees in the form of cash bonuses (75%) and restricted Corporation stock (25%). The methodology is partially based on certain evaluation criteria, including but not limited to Corporation performance compared to strategic objectives as measured by incentive compensation scorecards, Corporation performance compared to strategic objectives not measured by scorecards, and the overall financial and strategic performance of the Corporation. The methodology will be first employed to provide suggested awards in 2016 for 2015 performance. Scorecards are developed and/or reviewed on an annual basis by the CRC in conjunction with the Board of Directors’ review of the Corporation strategic plan. Financial measurements within the scorecard are calculated using audited financial information obtained from the Corporation’s filed Form 10-K. The scorecard methodology defines suggested maximum incentive compensation payout as a percentage of each executive’s base compensation within a defined return on average equity (“ROAE”) range. Equity compensation, incentive compensation, or other forms of compensation for executives are excluded from the incentive compensation calculation. No incentive compensation is awarded if annual ROAE is 6.50% or less. The scorecard methodology encompasses key performance indicators (“KPI”), which align theirwith Corporation strategic plan objectives and annual financial budget. Each KPI is assigned a weighting. Some KPI’s vary over time (both as to identity and amount). The KPI’s under the current scorecard methodology include: Return on Average Assets (ROAA); Earnings Per Share (EPS); and Efficiency Ratio among others, and include a discretionary component. A performance objective, or target, is established for each KPI. Recognizing the difficulty in precisely defining the appropriate target, and to further discourage imprudent or excessive risk taking, a range of acceptable performance is defined representing the minimum level of performance and maximum level of performance relative to target that results in an incentive compensation payout for that KPI.

However, this methodology provides only a suggested incentive compensation amount based on general guidelines that the CRC may consider in its decision making process. Sole discretion as to the terms and conditions of any award, including whether or not to grant incentive compensation and in what amounts, remains with the Board, acting directly through the CRC. The CRC continues to oversee all aspects of the design, payment, and oversight of executive incentive compensation. Further, the Corporation’s Board of Directors retains authority to review and ratify all CRC action. The ultimate goal of the both the CRC and the Board in granting incentive compensation is to align the interests of participants with Company shareholders and encourage long-term strategic thinking and performance while at the same time discouraging imprudent, unreasonable or excessive risk taking.

Long-Term Retention and Equity Compensation. The CRC believes that long-term retention and equity compensation is an important component of the compensation program because it has the effect of retaining and motivating executives, aligning executives’ financial interests with thosethe interests of stockholders.stockholders, and rewarding the achievement of the Corporation’s long-term strategic goals. The CRC usesmay grant either stock options andor restricted stock awards sparingly but determined that awards based on 2011to executive officers under the Corporation’s long-term retention and 2012equity compensation methodology. Stock options provide executive officers with the opportunity to purchase and maintain an equity interest in the Corporation and to share in the appreciation of the value of our stock. When granting restricted stock, the CRC determines the applicable vesting schedule reflecting attainment of designated performance were warrantedgoals and/or other criteria specified in 2013.the award documents. The CRC may provide for the payment of any applicable dividends paid with respect to any shares of common stock subject to a restricted stock award during the period prior to lapse.

On February 28, 2012, the Board of Directors approved the First Community Bancshares, Inc. 2012 Omnibus Equity Compensation Plan (the “2012 Plan”), which in turn was approved by stockholders at the 2012 Annual Meeting. The Board of Directors effectively replaced all prior equity plans with this single plan approved by the stockholders that conforms to what it believes are current best governance practices. As of the date of the mailing of this proxy, there have been eight (8) grants under the 2012 Plan to the named executive officers, none of which occurred in 2015.

The Corporation did not grant any long-term incentive equity compensation to the named executives in 2015. However, in 2014, the Corporation achieved a three-year average growth rate in core diluted earnings per share of not less than five percent (5%). Accordingly, a scheduled vesting of restricted stock awarded to named and other executive officers, as is set forthwell as certain other employees under the First Community Bancshares, Inc. 2012 Omnibus Equity Compensation Plan, occurred on May 28, 2015, resulting in the Grantsvesting of 17.2% of the restricted stock awards previously granted. No additional stock awards under the 2012 Omnibus Equity Compensation Plan Based Awards Tablehave been granted or are expected to vest, and no stock option awards were granted to named executive officers in 2015.

In December 2015, the CRC adopted an executive and board equity compensation methodology to bring additional consistency and objectivity to the design and award of equity compensation which will be used as a consideration in awarding such equity compensation beginning in 2016. Whether to award equity compensation, as well as the level and structure of any award remains the responsibility and in the sole discretion of the CRC, and the Board of Directors retains authority to review and ratify all CRC actions with respect to equity compensation. The Board of Directors believes that directors, executive officers and certain other key employees of the Company should own and hold a reasonable amount of FCBC common stock to further align their interests with the long-term interests of stockholders, further promote the Company’s commitment to sound corporate governance, and to specifically discourage imprudent, unreasonable or excessive risk taking. All officers and directors of the Company are encouraged to hold as many shares of the Company as possible given their individual situation. The equity compensation methodology is designed and administered to promote and assist directors, officers and other employees to achieve the aforesaid stock ownership objectives. The Board of Directors believes that equity compensation should be an integral and ongoing component of total compensation for Executives and Directors. The equity compensation methodology participants are Executives, Directors, and Employees. Under the methodology, any grant of stock to an executive or director is subject to a ratable three (3)-year vesting schedule and is further subjected to a five (5)-year holding period subsequent to vesting. Any grant of stock to other employees is in the form of incentive stock options with a three (3)-year cliff vesting schedule. Subsequent to vesting, the recipient has 10 years in which to exercise the option. Annual grants of equity compensation are contingent upon the Company obtaining a minimum three (3)-year rolling Return on page 25.Average Equity (ROAE) of 7.00%. Equity compensation will not be paid in a year in which the Company’s minimum three (3)-year ROAE is below 7.00%. It is anticipated that the aforesaid ROAE will be adjusted from time to time to reflect economic conditions, improving bank operating results, and adjustments to the Company’s strategic plan goals. The financial measurements utilized in the administration of the equity compensation methodology are calculated using audited financial information.

DeferredConsiderations Used in Setting Base Compensation for 2015 and Annual Incentive Compensation for 2014 Performance

Each year, and on a continuing basis, the Corporation develops short and long-term objectives necessary for it to be successful. These objectives for the most part mirror the Corporation’s strategic plan and annual financial budget planning sessions, during which the Corporation’s performance and growth opportunities are analyzed and goals and objectives are established for the upcoming year(s). These objectives include both objective financial metrics and quantitative and qualitative strategic and operational goals. The CRC uses these objectives to evaluate the performance of the CEO and President. However, each financial metric or quantitative goal used by the CRC in this process is only one of many considerations. Resulting evaluations and any resulting incentive or other compensation is not exclusively formula-driven. The CRC, President and CEO believe this process focuses the Board, CRC, CEO, President and the entire management team on factors that create long-term stockholder value. The CRC discusses with the President and the CEO these factors as they relate to their respective compensation. The President and CEO do not participate in the final determination of their respective compensation.

In 2015, the CRC worked closely with the CEO and President to monitor base and incentive compensation of other named executives. The CRC’s goal is to achieve a balance of base compensation and incentives that both contributes to retention of a qualified management team and ensures 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 the President, who develops the objectives that each individual is expected to achieve, and against which their performance is assessed. These objectives are reviewed with the CRC and are also derived largely from the Corporation’s financial, budget and strategic planning processes. The President assesses each named executive’s individual performance against the objectives, the Corporation’s overall performance and the performance of the executive’s business or function. The President and CEO then report base compensation levels, including any adjustments, as well as proposed annual incentive compensation for each named executive to the CRC. The CRC then approves proposed annual incentive compensation and/or long-term retention and incentive equity compensation, if any, for the named executives, other members of the management team, and other employees. The named executives do not play a role in the determination of their compensation except for their discussion with the President, CEO and/or CRC regarding their individual performance against predetermined objectives.

Retirement Plans

The Corporation maintains an Employee Stock Ownership and 401(k) Plan for all employees, and a Supplemental Employee Retirement Plan, which we refer to as the SERP, for certain executive officers.

KSOP Plan.The Corporation offers a qualified defined contribution plan known as the KSOP“KSOP” to most of its employees. However,employees, including the named executives. The KSOP Plan is administered by a Committee appointed by the Board of Directors of the Corporation.

WRAP Plan.In addition to the KSOP, the Corporation provides a non-qualified deferred compensation plan (discussed in more detail elsewhere in this proxy statement) referred to as the “WRAP” plan because the named executives, as well as certain other key 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 allowallows highly compensated participants to defer a portion of their compensation that cannotmay not otherwise be deferred under the Corporation’s qualified plan. The WRAP plan is intended to promote retention of key executives by providing a long-term savings vehicle on a tax efficient basis.

Pension Plans. SERP.The Corporation provides a defined retirement benefit to the named executives and otherscertain other key executives pursuant to separate agreements, each of which is known as a supplemental executive retention plan (“SERP”). Each executive’s SERP is unfunded and designed to provide a benefit paid upon separation from service at or after age 62, normal retirement age in the SERP.62. The benefit is targeted at thirty-five percent (35%) of final compensation projected at an assumed three percent (3%) salary progression rate, and subject to an annual benefit limit of $80,000. Vesting is on a graded schedule as follows: twenty-five percent (25%) vesting after five (5) years of service; fifty percent (50%) vesting after ten (10) years of service; seventy-five percent (75%) vesting after fifteen (15) years of service; plus an additional five percent (5%) vesting for each year of service beyond fifteen (15) years, withand full vesting after twenty (20) years of service orand reaching age 62, whichever occurs first. 62.

Why We Maintain the KSOP, WRAP and SERP

The Corporation is a product of an active mergers and acquisitions program and we have evolved and grown from a local community bank into a regional bank holding company over a period of years. The Corporation adopted an employee stock ownership plan in 1992, which evolved into a 401(k) benefit plan. Additionally, the limitations of our KSOP caused us to pursue other strategies designed to provide salary replacement programs for retirement planning for our executive officers. Recruitment of experienced executive officers also required more flexible benefit programs to offset career change disadvantages and to offer offsetting benefit programs. The CRC believes that the benefit plans offered are competitive with those provided by other banks with which we compete for executive talent.

Perquisites and Other Benefits

In connection withaddition to the SERP, the Corporation entered intoannual and long-term compensation described above, named executive officers receive other benefits and items of compensation. Such benefits and other items of compensation include, among others: group life insurance, endorsement method split dollar agreements with Messrs. Buzzoclub dues, and Lilly. Under these agreements,automobile allowance. These benefits are provided to increase the Corporation shares eighty percent (80%) of death benefits (after recovery of cash surrender value) with the designated beneficiariesavailability of the executives underto focus on the business of the enterprise. The costs associated with providing these benefits and other items of compensation for our named executive officers are reflected in the Summary Compensation Table on page 19. A chart disclosing the value of these additional items is found on page 20 entitled “All Other Compensation.”

Executive officers participate in other employee benefit plans generally available to all employees on the same terms as similarly situated employees. These plans include medical, dental, group life insurance contracts. and group disability programs, as well as health savings accounts for reimbursement of medical expenses. The CRC has chosen to disclose all perquisites provided to our named executive officers in the Summary Compensation Table on page 19 even if the perquisites fall below the disclosure thresholds under the SEC rules.

Deferred Compensation Opportunities

Another aspect of our executive compensation program is the First Community Bancshares, Inc., Deferred Compensation Plan, which we refer to as the WRAP and a separate Directors’ Deferred Compensation Plan. The WRAP (Executives) and the Deferred Compensation Plan (Directors) are voluntary, non-tax qualified, deferred compensation plans available to our directors and certain employees, which employees include all of the named executive officers, to enable them to save for retirement by deferring a portion of their base and/or annual incentive compensation or director fees. The Directors’ Deferred Compensation Plan does not require the Corporation to make matching contributions. The WRAP, which is intended to mirror the Company’s qualified KSOP can include a discretionary match that coincides with a match made to the KSOP to the extent any employee, including the named executive officers, cannot otherwise receive a match in the KSOP. Balances for participating employees and directors are deemed invested in investment vehicles permitted from time to time by the Board of Directors in advance and credits (or debits) for investment experience may be made from time to time based on individual fund elections similar to what participants in the KSOP are permitted to make. The CRC believes that these deferred plans are competitive with that provided by other banks with which we compete for executive and director talent. Please see the Nonqualified Deferred Compensation table on page 24 for additional information about the Deferred Compensation Plan for named executive officers.

Employment Contracts

The Corporation as ownerand its subsidiaries provide certain executive officers, including our named executive officers, with written employment contracts. There are no golden parachute type provisions, tax gross up provisions or other similar provisions contained in the contracts. See the section entitled “Potential Payments Upon Termination,” including the related tables, beginning on page 25 for an estimate of the policies, retainsbenefits that the named executive officers would be entitled to receive pursuant to their respective employment agreements under various employment termination scenarios.

Subsequent to reorganization of the executive management team in 2013 and 2014, management and the CRC developed an improved, prototype executive employment agreement. Each of the Corporation’s key executives, including each of the named executives, has executed the new prototype agreement. The new agreements result in greater uniformity among the executive officers concerning the terms of their employment and treat the executive officers as a twenty percent (20%) interestteam. The execution and provisions of said agreements was previously reported on a Form 8-K.

The prototype agreement has an initial term of three (3) years, automatically extend for an additional year each January 1^st unless the Corporation or the respective executive gives notice that the employment term will not be extended. Each provides for continuation of base salary for thirty-six (36) months, in life proceeds after reimbursementthe event of a change of control coupled with terminated employment either without “Cause” by the Corporation or by the executives for “Good Reason” (as defined in their respective agreements). The Corporation may terminate the employment of any executive at any time for “Cause” (as defined in the prototype agreement) without further obligation owed. If the Corporation terminates employment for any reason other than for “Cause” or the executive terminates his employment for “Good Reason” (as defined in the prototype agreement), the Corporation will generally be obligated to provide compensation and benefits specified in the agreement for the balance of the term of the agreement. Upon the termination of employment, the executive will be subject to non-competition and non-solicitation restrictions. If the executive dies while employed by the Corporation, the Corporation will pay his or her estate through the end of the month in which his death occurs. If their employment is terminated as a result of permanent disability as determined pursuant to the agreement, then the Corporation of retirement benefits paid and a one hundred percent (100%) interest inhas the cash surrender valueright to terminate employment before the end of the policies.applicable term.

Considerations Used to Determine President and CEO Base Salary for 2013, Discretionary Cash Incentive Bonuses for 2012 and Equity Compensation.Tax Deductibility of Compensation

AtUnder Section 162(m) of the beginningCode, publicly held corporations generally may not take a tax deduction for compensation in excess of each year,$1 million paid to any named executive officer during any fiscal year. There is an exception to the $1 million limitation for performance-based compensation meeting certain requirements. To maintain flexibility in compensating executive officers in a manner designed to promote varying corporate goals, the CRC has not adopted a policy requiring all compensation to be deductible. However, the CRC considers deductibility under Section 162(m) with respect to compensation arrangements for executive officers. In 2015, none of our executive officers received compensation that the Corporation develops recommended objectives necessarycould not deduct by reason of Section 162(m).

Stock Ownership Guidelines

The Board of Directors believes that it is in the best interests of stockholders for itexecutive officers and directors to be successful.own a significant amount of Common Stock of the Corporation. To that end, the Corporation has adopted the First Community Bancshares, Inc., Stock Ownership Policy. The CEO and President present these objectives to the CRC for its consideration in determining how their performance will be evaluated. These objectives are developed in most part frompolicy encourages ownership of the Corporation’s annual financialCommon stock by the directors and budget planning sessions, during whichexecutive management in order to align the interests of the Corporation’s performance and 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, President and CEO then use this process to focus on factors they believe create long-term stockholder value. The CRC discussesstockholders with the President and the CEO these factors as they relate to his or her respective compensation. The President and CEO do not participateCorporation’s key decision makers. Although minimum stock ownership guidelines are set forth in the final determination of their respective compensation.

In determining Mr. Mendez’ base salarypolicy for 2013certain executive officers and his discretionary cash incentive bonus for 2012, the CRC considered the Corporation’s performance in 2011directors, all officers and 2012 and Mr. Mendez’ individual performance in 2012. Mr. Mendez also received equity compensation awards based on the CRC’s belief that restricted stock awards promoted the long-term performancedirectors of the Corporation and aligned Mr. Mendez’ interests with those of the Corporation’s shareholders. During 2012, Mr. Mendez achieved his principal financial goals, including successful performance against the 2012 operating budget and the continued enhancement of the Corporation’s primary capital ratios.  Revenue gains and strong expense control ledare encouraged to achievement of budget goals for the year and acceptable earnings performance during an extended recessionary environment.  In 2012, the Corporation continued to realize earnings and operational benefits drawn from the Corporation’s banking acquisitions in mid-year 2009 and late 2008,hold as well as two new acquisitions in mid-year 2012. 

On August 13, 2013, the Board of Directors and Mr. Mendez announced that Mr. Mendez would no longer serve as Chief Executive Officer, President and Director of the Corporation effective August 31, 2013, and Mr. Stafford, II was named Interim Chief Executive Officer and Mr. Mills was named President. On August 27, 2013, the Board of Directors appointed Mr. Stafford, II to serve as Chief Executive Officer effective as of August 31, 2013.

In November 2013, the CRC met to establish executive compensation in the context of the Board’s realignment of the duties of the recently appointed President and CEO.  Mr. Stafford, II, in his role as Chairman and CEO, has been charged with strategic leadership of the Corporation including: reviewing suitable candidates for banking mergers and acquisitions within the Corporation’s footprint; leading the Corporation’s strategic planning process; overseeing the Corporation’s stock repurchase program; and, continued monitoring of the Corporation’s primary capital ratios.  Mr. Stafford is expected to assist Mr. Mills and contribute to the effort to enhance revenue and control expenses in order to achieve improved earnings performance.   In determining Mr. Stafford, II's base salary and additional equity compensation for 2013, the CRC considered the foregoing duties and objectives; Mr. Stafford, II's many years of legal experience in the areas of community banking and lending; and his familiarity with the operations of the Corporation and its wholly owned banking subsidiary. The CRC also believed that the award of restricted shares will further align Mr. Stafford II’s interests with those of the Corporation’s shareholders. 

As President, Mr. Mills has been tasked by the Board with the day-to-day management of the Corporation and its employees.  In determining Mr. Mills’ base salary and additional equity compensation, the CRC considered his prior service to the corporation, particularly as Chief Credit Officer of the Corporation as well as his strong management skills.  The CRC also took into account Mr. Mills’ new position and the desire to further align Mr. Mills’ interests with those of the Corporation’s shareholders.  The CRC believes Mr. Mills has demonstrated the ability to manage to the day-to-day activities of the Corporation and to retain and motivate the Corporation’s management team.  With his many years of experience in credit administration, Mr. Mills is expected to maintain the Corporation’s strong asset quality and take maximum advantage of cost savings opportunities.  Although banking mergers and acquisitions are not the primary focus of the Corporation at this juncture, Mr. Mills is expected to assist Mr. Stafford as such opportunities arise within the Corporation’s banking footprint. Mr. Mills is also expected to drive improved earnings per share as a combined result of improved profitability from operations and as a result of the continued stock buyback. 

Throughout 2013, and as noted above, the Corporation’s focus was also directed at capital retention and development, as well as continued improvement of the Corporation’s risk profile and loss mitigation.  These goals were all satisfactorily met during 2013.

Determining 2013 Base Salaries, 2012 Discretionary Cash Incentive Bonuses and Equity Compensation for the Corporation’s Other Named Executives

In 2013, the CRC worked primarily with Mr. Mendez to establish the base and incentive compensation of other named executives. In 2014, both the CEO and the President worked and will continue to work with the CRC in this capacity. The CRC’s 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 the President, who develops the objectives that each individual is expected to achieve, and against which their performance is assessed. These objectives are reviewed with the CRC and are derived largely from the Corporation’s financial, budget and strategic planning processes.

Like the President and CEO, the other named executives have objectives that include both quantitative financial measurements and qualitative strategic and operational considerations affecting the Corporation and the businesses or functions that the named executives lead. The President assesses each named executive’s individual performance against the objectives, the Corporation’s overall performance and the performance of the executive’s business or function. The President and CEO then make 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 the CEO regardingpossible given their individual performance against predetermined objectives.

In determining the base salarysituation, ideally in excess of the other executive officers, the President, CEO and the CRC consider the skill set of the individual executive officer, his or her level of responsibility within the Corporation, and salaries paid by companies of similar size and in similar lines of business as the Corporation. The Corporation does not benchmark to a specific peer group, but uses this information as a general reference for comparing the Corporation’s executive base salary compensation to that of other companies in the industry.

With respect to the named executive officer’s 2012 discretionary cash incentive bonuses, Mr. Mendez and the CRC considered the following criteria:

Gary R. Mills. Prior to his promotion to President, Mr. Mills served as Chief Credit Officer of First Community Bank and his 2012 discretionary cash bonus was based on his performance in this position. As Chief Credit Officer, Mr. Mills was primarily tasked with managing the overall performance of the Bank’s loan portfolio and credit quality. Mr. Mills’ strategic and operational goals included providing guidance and oversight of recovery activities, assisting in the resolution of large-dollar troubled assets, and supervision of the Credit Administration department. Mr. Mills also evaluated the loan portfolios of candidates considered for banking mergers and acquisitions.

David D. Brown. As the leader of the Corporation’s finance function, Mr. Brown’s financial objectives in 2012 focused on the overall performance of the Corporation.  Mr. Brown’s strategic and operational goals included providing operational support to achieve financial goals and strengthen the finance function, while maintaining a strong controllership function and improving regulatory relationships. Mr. Brown also continued to search for suitable candidates for banking mergers and acquisitions within the Corporation’s footprint as well as FDIC-assisted transactions.

Robert L. Buzzo. In 2012, Mr. Buzzo was primarily responsible for First Community Bank’s Southern banking region, along with his Corporate responsibilities. In 2012, Mr. Buzzo’s region achieved its net income, loan and core deposit growth objectives. Mr. Buzzo also achieved his operational strategic objectives in 2012. Under Mr. Buzzo’s leadership, the division comprising the Southern Region was among the top performing areas of the bank.

In addition, Mr. Buzzo continued his supervision of the Trust and Wealth Management Divisions of First Community Bank. During 2012, the Trust Department fell just short of its financial objectives while First Community Wealth Management met its financial performance goals.

E. Stephen Lilly.  Mr. Lilly oversaw the successful conversion of the core banking system followed by an integration of two acquired financial institutions during 2012. His further coordination of Pricing and Product Committees has led to improved net interest margin, which compares favorably to industry peers. Mr. Lilly continued the realignment of the Commercial Services Department and restructuring of the Information Technology Department. His efforts to restructure and redefine responsibilities and workflow produced a more efficient organization and produced cost savings.

In 2013, the CRC also awarded restricted stock to the named executive officers and other employees as permitted under the First Community Bancshares, Inc. 2012 Omnibus Equity Compensation Plan, as approved by shareholders on April 24, 2012. The CRC granted awards of restricted stock on May 28, 2013. These awards were made primarily to align the interest of key executives and other employees with the long-term interests of the Corporation and its shareholders. The CRC granted additional awards of restricted stock on December 31, 2013. The December 2013 awards were limited to the individuals who assumed new positions and responsibilities with the Corporation in third quarter 2013 to reflect their new levels of responsibility and adjusted base compensation and to Mr. Brown to reflect his increase in base compensation to a level closer to that of the CFO’s of the Corporation’s peers. Forty-eight and two-fifths percent (48.4%) of the restricted stock awards granted in May 2013 and December 2013 vested immediately upon the grant date. The remaining awards will vest equally over a three-year period beginning on May 28, 2014. Vesting is based upon continued employment through the vesting date and the Corporation’s annual achievement of a three-year average growth rate in core diluted earnings per share of not less than five percent (5%). All restricted shares will immediately vest upon a change of control of the Corporation or the named executive officer’s death, disability or retirement.any applicable minimum guideline below.

Compensation and Retirement Committee Report

The CRC has reviewed the CD&ACompensation Discussion and Analysis and discussed that analysis with management. Based on its review and discussions with management, the CRC recommended to the Board of Directors that the CD&ACompensation Discussion and Analysis be included in the Corporation’s 2015 Annual Report on Form 10-K for 2013 and the Corporation’s 20142016 proxy statement. This report is provided by theThe following independent directors, who comprise the CRC:CRC, provide this report:

Richard S. Johnson (Chairman)

W.C. Blankenship, Jr.

I. Norris I. Kantor

20132015 Summary Compensation Table