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

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FIRST COMMUNITY BANCSHARES, INC.

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Notice of 20162017 Annual Meeting of Stockholders

April 26, 2016,25, 2017, at 2:00 p.m. Eastern Daylight Time

Corporate Center

29 College Drive

Bluefield, Virginia 24605

March 15, 201614, 2017

To First Community Bancshares, Inc. Stockholders:

First Community Bancshares, Inc.’s Annual Meeting of Stockholders will be held at the First Community Bancshares, Inc. Corporate Center located at 29 College Drive, Bluefield, Virginia 24605, at 2:00 p.m. Eastern Daylight Time on Tuesday, April 26, 2016.25, 2017. Following a report of the Corporation’s banking and related business operations, stockholders will:

Stockholders of record at the close of business on March 1, 2016,2017, will be entitled to vote at the Annual Meeting and any adjournments.

/s/Robert L. SchumacherDavid D. Brown

Robert L. SchumacherSecretaryDavid D. Brown

Secretary

IMPORTANT NOTICE

REGARDING THE AVAILABILITY OF PROXY MATERIALS

FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON

APRIL 26, 2016.25, 2017.

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

All persons attending the 20162017 Annual Meeting must present photo identification. Please follow the advance registration instructions on the last 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 15, 201614, 2017

Dear Stockholder,

You are invited to attend the 20162017 Annual Meeting of Stockholders of First Community Bancshares, Inc. (the “Corporation”) to be held on Tuesday, April 26, 2016,25, 2017, at 2:00 p.m. Eastern Daylight Time at the First Community Bancshares Corporate HeadquartersCenter located at 29 College Drive, Bluefield, Virginia.

The Annual Meeting will begin with a brief report of the Corporation’s operations. This report will be followed by discussion and voting on the matters set forth in the accompanying noticeNotice 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 20162017 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 card in the enclosed envelope.

Very truly yours,

/s/ William P. Stafford, II

William P. Stafford, II

Chairman of the Board

TABLE OF CONTENTS

PROXY 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 26, 2016,25, 2017, at 2:00 p.m. Eastern Daylight Time at the First Community Bancshares, Inc. Corporate Center, located at 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; the handling and tabulation of proxies received; and charges of brokerage houses and other institutions, nominees or fiduciaries for forwarding such documents to beneficial owners, will be paid by the Corporation. In addition to the mailing of the proxy materials, solicitation may be made in person, by telephone or by other means by officers, directors or 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 17, 2016.14, 2017.

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)three (3) directors nominated by the Board of Directors and named in this proxy statementstatement; FOR approval, on a non-binding, advisory basis, of the Corporation’s executive compensation; FOR, on a non-binding advisory basis, a frequency of every three (3) years for future stockholder advisory votes on the Corporation’s executive compensation; and FOR ratification of Dixon Hughes Goodman LLP as the Corporation’s independent registered public accounting firm.

Any stockholder may 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 the Corporation’s 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 1, 2016,2017, as the record date for stockholders entitled to notice of 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. As of the close of business on March 1, 2016,2017, the outstanding shares of the Corporation consisted of 17,757,153 sharesof16,994,616shares of Common 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 are counted as present and entitled to vote for purposes of determining 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)three (3) 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 requireseach require that the number of votes cast in favor of the proposal exceed the number of votes cast against. AbstentionsThe advisory approval of the frequency for future stockholder advisory votes on the Corporation’s executive compensation requires that the stockholder choose a preferred frequency of one (1) year, two (2) years, or three (3) years, or, alternatively, the shareholder may abstain. The frequency with the highest number of votes cast is deemed as the non-binding, advisory frequency selected by the stockholders for futures advisory votes on executive compensation. Except as stated above regarding the presence of a quorum, 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 name,” thatname” (that is, through a brokerage firm, bank, or other nominee,nominee) you may vote your shares 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 nominee, many of which offer the option of voting online or by 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 nominee, it will only be able to vote your shares for the ratification of the independent registered public accounting firm and it will not be able to vote your shares for the election of directors.directors, the advisory vote on the Corporation’s executive compensation, or the advisory vote as to the frequency of future advisory votes on the Corporation’s executive compensation.

PROPOSAL 1: ELECTION OF DIRECTORS

The Board of Directors is comprised of eight (8) directors, including seven (7)six (6) non-management directors, currently divided into three (3) classes with staggered terms: the class of 2016,2017, consisting of two (2)three (3) directors; the class of 2017,2018, consisting of three (3) directors; and the class of 2018,2019, consisting of three (3)two (2) directors. The two (2)three (3) directors from the class of 20162017 are botheach nominated for re-election at the 20162017 Annual Meeting. The two (2)three (3) directors elected will become the class of 2019,2020, and will serve until the 20192020 Annual Meeting.

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 more than two (2)three (3) persons are nominated for election as directors, the proxy holders intend to vote all proxies received by them for the nominees listed 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.adoption.

AThe table ofset forth below describes each director and nominee, including his or her age; the applicable director class, which is based upon the year in which his or her term of service expires; and title, is set forth below.title. A biography describing each director’s and each 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 20192020

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 University 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 thirty-two (32) years of board service in the banking industry.

Gary R. Mills, President, First Community Bancshares, Inc. and Chief Executive Officer and President, First Community Bank, Bluefield, Virginia

Mr. Mills has served as President of the Corporation and Chief Executive Officer and President of First Community Bank since August 31, 2013, and has been employed by the Corporation and/or one of its subsidiaries since 1998. 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; and most recently as Chief Credit Officer from 2007 until his appointment as Chief Executive Officer. Mr. Mills is a Certified Public Accountant and holds a Bachelor of Science degree in Business Administration with a concentration in Accounting from Concord University.

Mr. Mills’ relevant experience qualifying him for service as a director includes twenty-seven (27) years of experience in the financial services industry; extensive civic and community involvement; and three (3) years of board service for the Corporation’s banking subsidiary.

M. Adam Sarver, Real Estate Developer andBusinessman, 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 and extensive civic and community service on a variety of boards.

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-seven (37) years of expertise and knowledge in insurance products and services and more than thirty-three (33) years of bank board service.

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

Mr. Elmore received a Bachelor 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, Charleston National Bank, One, Beckley,Charleston, 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, Raleigh County Community Action, Pinecrest Development Corporation, and VACHA.the Virginia’s Automated Clearing House Association.

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, Chief Operations Officer, Chief Financial Officer, 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 Bachelor 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 Master 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; The Wilton Companies; Fidelity Group, LLC; and the City of Richmond Economic Development 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 aan 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 Canada, and Landmark Apartment Trust of America.

Mr. Johnson’s relevant experience qualifying him for service as a director includes: background in 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; having served in various 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 Bachelor 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 directorformer President and Director of Mercer Realty Inc., a real estate managementdevelopment company, and current President and Director of Gomolco, Inc., a real estate holdinginvestment 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. 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)fifty-one (51) years as a practicing attorney; his legal work dealing with the issuance and refunding of numerous utility bonds; his ability to understand complex business, legal and financial topics; and twenty-six (26)twenty-seven (27) years of service as a member of the board of 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 Bachelor 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 is a member of Brewster, 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. He currently serves as Chairman of the Board of the Corporation.Corporation and Chairman of the Board of the Corporation’s banking subsidiary. 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 servedCouncil, and 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-two (22)twenty-three (23) years of board service for the Corporation.

Changes to Composition ofof the Board of Directors in 2015.2016

On May 25, 2015,August 30, 2016, long-standing Director Frankand former Chairman of the Board William P. Hall passed away. DueStafford retired. Mr. Stafford was the then-current Vice Chairman of the Board and had served the Corporation and/or its predecessors since 1985. In light of Mr. Stafford’s retirement, the Board, at the recommendation of the Governance and Nominating Committee (the “GNC”), appointed Gary R. Mills to serve as Director for the remainder of Mr. Hall’s passing, and in consideration ofStafford’s term. In selecting Director Mills, the Board fully considered the composition of the Board in general (includingand all of Director Mills’ qualifications, including his long-time service to the ratio of independent to non-independent directorsCorporation and the possibility of future retirements),participation at 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.level. The Board believes that Director Sarver and Director Davis, both of whom were selected after diligent search and recruitments efforts,Mills will add substantial depth and talent to the Board.Board and he is nominated for election in the Class of 2020.

Director Qualifications and Experience

The following table identifiesGNC is committed to presenting for shareholder consideration a slate of nominees that, taken together with current Directors, have the experience, qualifications, attributes, and skills appropriate for functioning effectively as a board and as liaisons to the communities the Corporation serves. The GNC regularly reviews the composition of the Board of Directors in light of the Corporation’s evolving needs, its assessment of the Board’s performance, and the input of shareholders. The GNC looks for certain characteristics in all nominees, including but not limited to integrity, strong professional reputation and record of achievement, constructive and collegial personal attributes, significant investment in or experience with the Corporation, and the ability and commitment to devote sufficient time and energy to Board service. In addition, the GNC seeks to include on the Board a complementary mix of individuals with diverse backgrounds and skills reflecting the broad set of challenges that the Board confronts. Examples of individual qualifications and experience considered are professional standing in their chosen field and in the communities served by the Corporation, expertise in the financial services industry, civic and community involvement, leadership skills, and intelligence. The GNC also considers geographic representation of the Board from within the markets the Corporation serves and seeks candidates who can help ensure the Board has members with a representative mix of skills in finance, technology, marketing, community and business affairs, human resources, and governance.

Diversity ofDirectorNominees

As stated above, in considering whether to recommend any candidate for inclusion in the Board’s slate of recommended director nominees, including candidates recommended by stockholders, the GNC considers a number of criteria, including, without limitation, the candidate’s integrity, business acumen, age, experience, commitment, diligence, geographic representation, conflicts of interest, and ability to act in the interests of all stockholders. The GNC believes diversity should be considered in makingthe director identification and nomination process. The GNC 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 decisionresponsibilities. 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.

Recommendations for Director Candidates

The GNC will consider all stockholder recommendations for director candidates which are received prior to appoint and nominate directorsFebruary 15^th each year. Any such recommendations should be sent to the Corporation’s Board. This information supplementsGNC, c/o Secretary of First Community Bancshares, Inc., P. O. Box 989, Bluefield, Virginia 24605-0989. The Corporation believes that directors should possess the biographical information provided above.highest personal and professional ethics, integrity and values, and be committed to representing the long-term interests of the stockholders. The vertical axis displaysCommittee also considers candidates recommended by current directors, officers, employees, and others. The Committee evaluates all nominees for director in the primary factors reviewed bysame manner and typically bases its initial review on any written materials submitted with respect to the Governance and Nominating Committee in evaluating a Board candidate.

NON-DIRECTORNAMEDEXECUTIVE OFFICERS

ExecutiveNamed executive officers who are not directors of the Corporation, including their title, age, and dateyear 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’sexecutive officer’s business experience.

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’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 athe responsibility forof 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 possesses expertise, and each committee regularly reports to the Board of Directors on its findings. For example, the Audit, Compliance, and Enterprise Risk (the “ACER”) 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. Thereporting, while the Asset/Liability Management Committee of the Corporation’s banking subsidiary monitors liquidity and interest rate risk, and the Corporation’s Compensation and Retirement Committee monitors risks associated with the design and administration of the Corporation’sBoard and employee compensation.

The Board’s role in risk oversightChief Executive Officer, President, other named executive officers, and certain other key officers and executives of subsidiaries (collectively, the Corporation is consistent with the Corporation’s leadership structure, with the CEO“Senior Management Team”) assess and other members of senior management having responsibility for assessing and managingmanage the Corporation’s risk exposure, and theexposure. The Board and its committees providingprovide 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 these criteria,Factors considered include, but are not limited to: each Director’s employment history with the Corporation, if any; compensation by the Corporation to each Director and their family members, if any; and the report of the GNC Chairman, which, for 2016 indicated that no related party transactions with any Director were such that they could constitute a material relationship with the Corporation. After considering each Director’s individual circumstance, the Board of Directors determined that, with regard to the following Directors and nominees, and current membersthere are no circumstances or relationships which would interfere with the exercise of the Board of Directors are independent:independent judgment as a director: W. C. Blankenship, Jr.; C. William Davis; Samuel L. Elmore; Richard S. Johnson; I. Norris Kantor; and MichaelM. Adam Sarver. Accordingly, these Directors and nominees are considered independent. Mr. Stafford, II is not independent because he is an executive officer of the Corporation.and Mr. Stafford isMills are not independent solely because he is a Family Member, as defined inthey are named executive officers of the NASDAQ Market Rules, of Mr. Stafford, II. Although neither an Executive Officer nor family member of an Executive Officer, Mr. Elmore cannot be considered independent until 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.Corporation.

The NASDAQ listing standards contain additional requirements for members of the AuditACER Committee, the Compensation and Retirement Committee (the “CRC”), and the Governance and Nominating Committee.GNC. All of the directors serving on the Audit Committee and Compensation and Retirement Committeethese are independent under the additional requirements applicable to such committees. All three (3) members of the Governance and Nominating Committee are independent since the appointment of Mr. Sarver in October 2015. Mr. Sarver was appointed to replace Mr. Elmore, who was serving pursuant to the exceptional and limited circumstances exemption under NASDAQ Rule 5605(e)(3).

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 are comprised of three (3) entities under common management. During 2015, an affiliate of the Corporation leased office space from one (1) of these entities. Director Johnson holds an equity ownership in this entity. The annual lease payments did not exceed the greater of five percent (5%) of The Wilton Companies’ and its subsidiaries’ consolidated revenues for 2015 or $200,000, and therefore, the relationship satisfied the standards for independence.

The Board of Directors and Board Meetings

Board Leadership Structure. William P. Stafford, II currently serves as CEOChief Executive Officer of the Corporation and as Chairman of the Board of Directors. The role of the CEOChief Executive Officer 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 presiding over meetings of the Board. The Board of Directors believes combining the roles of CEOChief Executive Officer 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;growth and enhanced performance; increases value for shareholders; providesproviders for greater accountability and transparency; enhances oversight of operations; and provides for greater Board involvement. W. C.Director Blankenship is the Lead Independent Director and was appointed as Vice Chairman of the Board upon the retirement of retired Director Stafford. Director Blankenship serves as Chairman of regularly convened meetings of the Independent Directors.

Standards of Conduct. All directors, named executive officers, and other employees of the Corporation must act ethically at all times and in accordance with the policies comprising the Corporation’s Standards of Conduct (the “Code”), which is available at the Corporation’s website (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 named 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 2015.2016. 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 AuditACER 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 AuditACER Committee. Such communications may be confidential or anonymous. A notification explainingDuring orientation, employees are informed on how to submit any such communication is provided to all new employees during orientation,communications and a notice explaining the same 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 subsidiaries. The status of any outstandingunresolved concern is reported to the non-management directors of the Board periodically by the Chairman of the AuditACER 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. Stockholders may address such communication to Secretary, First Community Bancshares, Inc., P. O. Box 989, Bluefield, Virginia 24605-0989, and all communications so addressed will be forwarded to the Chairman of the Board of Directors or to the individual director to whom such correspondence is directed, without exception.

Board Meetings. In 2015,2016, the Board of Directors held nine (9) regular meetings as well as one (1) meeting held jointly with the Bank board.and two (2) special meetings. No member attended fewer than seventy-five percent (75%) of the Board meetings or 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 20152016 Annual Meeting.Meeting with the exception of Director Davis.

Meetings of Non-management Directors. The non-management directors met without any management director or other employee present on at least two (2) occasions in 2016.

Board Committees

The Board of Directors has four (4) standing committees: the AuditACER Committee, the Executive Committee, the Compensation and Retirement Committee (the “CRC”),CRC, and the Governance and Nominating Committee.GNC. For each of these committees, except the Executive Committee, the Board of Directors has adopted a written charter, a current copy of which is available for review and/or printing on the Corporation’s website at www.fcbinc.com.www.fcbinc.com.   Each such charter is reviewed and approved annually by the relevant committee and by the Board.

ACER Committee.On April 26, 2016, the Board of Directors unanimously voted to constitute and establish the ACER Committee by ratification of the ACER Committee Charter previously approved by the former Audit Committee. The ACER Committee combines the functions of the former Audit Committee with those of the banking subsidiary’s Compliance and Enterprise Risk Committees to provide Committee members a more holistic view of the financial, legal, and regulatory risks affecting the Corporation and its banking subsidiary.

Audit Committee.The members of the AuditACER Committee are Director Blankenship, who chairs the Committee; Director Johnson; Director Kantor; and Director Sarver. The Board has determined that Mr.All members of the ACER Committee are independent. Director Johnson is the Audit Committeeaudit committee financial expert.expert, as the SEC defines that term and as the Board interprets such qualification in its business judgment consistent with such definition. The AuditACER 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:include but are not limited to: (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 managementthe Senior Management Team and other relevant employees 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.controls; and (7) oversight of regulatory compliance and enterprise risk management. The former Audit Committee held eight (8)three (3) meetings and the ACER Committee held five (5) meetings during 2015.2016. The AuditACER Committee’s report is on page 31.33.

Executive Committee. The members of the Executive Committee are Director Stafford II, who chairs the Committee; Director Blankenship; Director Davis; Director Elmore; Director Johnson; Director Kantor; Director Sarver;Mills and Director Stafford.Sarver. The Executive Committee did not meet in 2015.2016. 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 Board by law.

Compensation and Retirement Committee. The members of the CRC are Director Johnson, who chairs the Committee; Director Blankenship; and Director Kantor. All three (3) members of the CRC are independent. The CRC’s primary duties and responsibilities are to: (1) review, evaluate, and determine annually compensation of the executive officers’Chief Executive Officer 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;President; (2) review, evaluate, and evaluate allapprove annually compensation decisions otherwise made by the President and CEO;of each other named executive officer; (3) review, evaluate, and determineapprove annually compensation of the Senior Management Team; (4) review, evaluate, and approve all incentive and equity-based awards; (4)  review organizational systems and plans relating to management development and succession planning;compensation; and (5) review, evaluate, and discuss with managementapprove the proxy statement’sstatement Compensation Discussion and Analysis and produce the CRC report. While the CRC receives input from the Chief Executive Officer and President, who play a significant role in the compensation setting process, as well as other members of management, as needed, the ultimate decision regarding compensation of the named executive officers rests with the CRC. Further, the Chief Executive Officer and President do not participate in these matters as they relate to their respective compensation. For a full discussion of the CRC and management’s respective roles administering the executive compensation program, please see the Compensation Discussion and Analysis. The CRC does not delegate any of its responsibilities to subcommittees. The CRC held six (6) meetings in 2015.2016. The CRC’s report is on page 18.20.

Compensation and Retirement Committee Interlocks and Insider Participation. None of the members of the CRC are or were formerly officers or employees ofemployed by the Corporation or any of its subsidiaries. Finally, none of the named 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 CommitteeGNC are Director Blankenship, who chairs the Committee; Director Elmore; Director Kantor; and Director Sarver. All threefour (4) 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 evaluations of the Board, as well as director performance and Board dynamics; (2) makes recommendations to the Board concerning the structure and membership of Board committees; and (3) reviews, approves, and ratifies significant transactions with related persons. This Committee held six (6)five (5) meetings in 2015.2016.

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

Director Candidates, QualificationsPursuant to Section 14A of the Securities and Diversity. In considering whether to recommend any candidate for inclusionExchange Act of 1934, as amended (the “Exchange Act”), the Corporation is requesting stockholder approval of the compensation of its named executive officers as disclosed in the Board’s slate of recommended director nominees, including candidates recommended bythis proxy statement. This proposal, commonly known as a “say-on-pay” proposal, gives stockholders the Governanceopportunity to express their views regarding named executive officers’ compensation. The vote is not intended to address any specific items of compensation, but rather the overall compensation of named executive officers 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 interestphilosophy, policies, and ability to actpractices described 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.this proxy statement. The Corporation believes that the backgroundscompensation of named executive officers is straightforward, uncontroversial, and qualificationsnot designed to provide incentives for excessive risk taking. Accordingly, the following resolution is submitted for stockholder 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 directors, considered as a group, should provide a significant composite mix of experience, knowledgeCD&A, executive officer compensation tables, and abilities that will allow the Board to fulfill its responsibilities. The diversity of the Boardrelated narrative discussion, 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.hereby APPROVED.

The Committee will consider all stockholder recommendations for candidates for“say-on-pay” vote is an advisory vote, which is not binding on the Corporation. However, the Board which should be sentand the CRC value the opinions expressed by stockholders through their vote on this proposal, and will carefully consider the outcome of the vote when making future compensation decisions with respect to the Governance and Nominating Committee, c/o SecretaryCorporation’s named executive officers. The Corporation is currently conducting the “say-on-pay” advisory vote every three (3) years. The timing of First Community Bancshares, Inc.the next “say-on-pay” advisory vote is addressed in Proposal 3.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTEFORTHIS PROPOSAL

PROPOSAL 3: NON-BINDING, ADVISORY VOTE ON THE FREQUENCY OF

THE ADVISORY VOTE ON EXECUTIVE COMPENSATION

Section 14A of the Exchange Act also requires the Corporation to hold an advisory vote on the frequency of the advisory vote on executive compensation as described in Proposal 2 of this proxy statement. By voting on this Proposal 3, stockholders may indicate whether they would prefer that the Corporation hold a “say-on-pay” every one (1), P. O. Box 989, Bluefield, Virginia 24605-0989.two (2), or three (3) years. Stockholders may also abstain from voting. Accordingly, the following resolution is submitted for stockholder approval:

RESOLVED, that the Corporation hold a stockholder non-binding, advisory vote to approve the compensation paid to the Corporation’s named executive officers as disclosed pursuant to Item 402 of Regulation S-K with a frequency of once every one (1) year, two (2) years, or three (3) years, whichever receives the highest number of votes cast with respect to this resolution.

The Corporation asks that you support a frequency of every three (3) years for future stockholder advisory votes on executive compensation. The Corporation believes that directors should possessa three (3) year cycle provides the Board and the CRC with sufficient time to evaluate and respond to stockholder input and effectively implement changes, as needed, to executive compensation.

The frequency of one (1) year, two (2) years, or three (3) years that receives the highest personal and professional ethics, integrity and values, andnumber of votes cast will be committed to representingdeemed by the long-term interestsCorporation as the frequency for the advisory vote on executive compensation selected by stockholders. The Board will consider the outcome of the stockholders. The Committee also considers candidates recommended by current directors, officers, employeesvote when making future decisions regarding the frequency of the “say-on-pay” vote. However, because this is advisory and others. The Committee evaluates all nominees for directornot binding on the Board or the Corporation, the Board may decide that it is in the same mannerbest interest of stockholders and typically bases its initial reviewthe Corporation to hold an advisory vote on any written materials submitted with respectthe compensation of named executive officers more or less frequently than the frequency approved by the stockholders. Stockholders will not be voting to approve or disapprove the candidate.Board’s recommendation.

Meetings of Non-management Directors. The non-management directors met without any management director or employee present on at least threeTHE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTEFOR A

FREQUENCY OF EVERY THREE (3) occasions in 2015.YEARS FOR FUTURE SHAREHOLDER ADVISORY

VOTES ON EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

The following compensation discussion and analysis explainsdetails the Corporation’s compensation program as it applies to the named executive officers, namedas listed in the Summary Compensation Table on page 19, who we refer collectively21. Further, this discussion also seeks to asprovide an overview of the “named executive officers,” as well asCorporation’s general compensation philosophy for its employees, most significantly the Senior Management Team and certain other employees included in anywho are granted equity or other incentive compensation program.compensation. This discussion and analysis should be read in conjunction with the Summary Compensation Table, its accompanying footnotes, and the additional tables and narrative disclosuredisclosures 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.follow.

Compensation Philosophy and Objectives

The goal of the Corporation’s compensation program is to retain and reward named executive officers and key employees who create long-term value for stockholders through consistent financial and operating performance coupled with strong leadership. This overriding objective affects all elements of the compensation program. In addition, the Corporation desires to become the employer of choice and to be viewed as a model of best practices for executive compensation, with theand other compensation. The overall objective of aligningthe executive compensation program is to align the long-term interests of each executive’s long-term interestsmember of the Senior Management Team as closely as possible with those of stockholders and motivating high performing executives to continue with the Corporation for long, productive careers.

Administration of the Executive Compensation Program

The CRC meets as often as necessary to perform its duties and responsibilities. The CRC met six (6) times during calendar year 2015.2016. 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.

CRC. The CRC receives and reviews materials in advance of each meeting. These materials include information that management believes will be helpful to the CRC, as well as materials the CRC has 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 individual executives other than the Chief Executive Officer and President; and recommending salary levels and other terms of employment for individual executives other than the Chief Executive Officer and President.

The CRC meets regularly in executive session, each yearwithout the presence of any employee, including at least annually to evaluate the performance of the Chief Executive Officer and President, to set performance objectives for the Chief Executive Officer and President, and to set base compensation for the Chief Executive Officer and President. In addition,The CRC also annually reviews, evaluates, and approves the CRC meets incompensation of each other named executive session each year to review performance evaluationsofficer; reviews, evaluates, and approves the compensation of the named executive officers, to approve any annualSenior Management Team; reviews, evaluates, and approves all incentive compensation for the current fiscal year, to approve base compensation for the named executive officers for the next calendar year,compensation; and to considerreviews, evaluates, and approveapproves any grants of long term retention and equity compensation for all employees.compensation.

Considerations Used to Determine Compensation

Below is a summary of factors considered by the CRC in setting compensation for named executive officers. The CRC performed its evaluation of compensation in light of the executive’seach named executive officer’s performance, the Corporation’s performance, the current economic environment, and the Corporation’s long-standing practice of prudent executive compensation administration.administration, and shareholder input. 

Emphasis on Consistent and Sustained Performance. The Corporation’s compensation program provides pay opportunities for those executives demonstrating superior performance for sustained periods. Each of the named executivesexecutive officers 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 named executive officer in his or her particular industry segment or function. The CRC also uses its judgment in determining named executiveor approving compensation adjustments and incentive awards, if any. This long-term view has the effect of encouraging executives to focus on sustaining acceptable, long-term financial performance.

Importance of Corporation Results. The CRC places substantial weight on the Corporation’s overall financial 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.

Shareholder Input on Executive Compensation. At the 2014 Annual Meeting, the Corporation conducted a non-binding advisory vote on the compensation of the named executive officers, commonly referred to as a “say on pay” vote. Shareholders approved the compensation of the named executive officers with approximately 85% of shareholder votes in favor of the then stated executive compensation program and less than 3% against.

As the CRC evaluated executive compensation policies and practices throughout 2015 and 2016, it was mindful of the strong support shareholders expressed for the then current compensation program. While changes were made to the compensation of the named executive officers, necessitated by both changes in the slate of named executive officers and the evolving needs of the Corporation, the CRC believes that such changes are consistent with the philosophy and objectives supported by shareholders in 2014.

Judgment Versus Formula-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 named executive officer 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 term with a clear message to avoid excessive risk in the near term. The CRC maintains full discretion to adjust compensation based upon performance and adherence to the Corporation’s values.

In 2015,2016, the CRC continued its extensive review of the relationship between risk management and incentive compensation to ensure that incentive compensation does not encourage engaging in unnecessary or excessive risks. 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 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 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 officer should have a portion of his or her compensation be contingent upon how well the Corporation operates and how well its stock performs in the long run.

Use of Compensation Consultants. The President and CEOAs part of the Corporation provide the CRC’s ongoing effort to ensure its compensation program complies with a performance assessmentindustry best practices and compensation recommendation for each of the executive officers of the Corporation. Because ofto ensure compliance with the enhanced level of regulation and scrutiny on executive compensation, the CRC exercises 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,While the CRC directly engageddid not engage any compensation consultant in 2016, the executive compensation methodology continued in 2016 was previously developed with the assistance of Mathews, Young --- Management Consulting (“Mathews Young”) to provide compensation analysis and best practices advice regarding base and incentive compensation for employees of the Corporation and the Board of Directors. The consultant’s primary functions were to (1) assist in ensuring that any proposed compensation structure was compliant with best 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 peers. The CRC does not target specific compensation levels within this group of peer institutions, but rather uses the comparative data as a reference tool after determining the types and amounts of compensation based upon the CRC’s own evaluation.. 

Matthews Young did not propose any specific compensation calculation, structure, or amount and 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.

Components 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 which include change in control agreements,provisions, 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 officersSenior Management Team based on levels of responsibility and with the competitive market for executives in comparable positions. Base salary is a critical element of executive compensation 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, theestablished goals and objectives, established for the executive, the executive’s past performance, competitive salary practices at competitive companies, internal pay equity, and the tax deductibility of 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 tothe Chief Executive Officer and President do not participate in their ownrespective base compensation.compensation determinations. 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.

Prior 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 Corporation’s banking subsidiary bank since 1998, andincluding serving 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 histo practice law practice on a much reduced scale.scale as a member of the law firm Brewster, Morhous, Cameron, Caruth, Moore, Kersey & Stafford, PLLC. 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. ForDuring the 2015 fiscal year, the CRC noted that Messrs. Stafford, II’s and Mills’ base salary wassalaries were below the lowest end of the peer review data.  Accordingly, the CRC adopted a plan to increase their base salarysalaries over a period of three (3) years, with each annual increase independently considered by the CRC at that time. Based on the aforesaid consideration,considerations, Mr. Stafford, II received a 28.57% increase in his base salary for the 2016 fiscal year and Mr. Mills received a 40%14.28% increase in their respectivehis base salariessalary for the 20152016 fiscal year.  Mr. Brown received a 7%an approximate 4.16% increase in his base salary representative of a continued effort to more closely align his salary more closely with the peer group.peers and Mr. PellLilly received aan approximate 2% performance based increase in his base salary.salary representing a cost of living adjustment. Please see the Summary Compensation Table on page 1921 for more information about the 20152016 base salaries of named executive officers.

DiscretionaryAnnual Incentive Compensation.For each named executive officer, the CRC may award incentive compensation based upon the previous year’s performance as evaluated by the CRC, CEOChief Executive Officer and the President (except the CEOChief Executive Officer and President do not participate in their own respective incentive determinations). Please see the Summary Compensation Table on page 1921 for more information about annual incentive compensation awarded to named executive officers in 20152016, based on 20142015 performance.

In 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 success.

In December 2015, the CRC adopted an executive and board incentive compensation methodology which provides for suggested amounts of annual incentive compensation to be paid to named executivesexecutive officers and other employeesmembers of the Senior Management Team 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 review by the Board of Directors’ reviewDirectors of the CorporationCorporation’s 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”KPI’s”), which align with Corporationthe Corporation’s 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. This methodology was employed to provide suggested compensation awarded in 2016, based on 2015 performance.

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 oversightmonitoring of executive incentive compensation. Further, the Corporation’s Board of Directors retains authority to review and ratifyapprove or disapprove all CRC action. The ultimate goal of the both the CRC and the Board in granting incentive compensation is to align the interests of participantsrecipients with Companythat of shareholders and encourage long-term strategic thinking and performance while at the same time discouraging imprudent, unreasonable or excessive risk taking.

In 2015, the Corporation’s budgetary, strategic and operational achievements were such that the CRC considered them sufficient to warrant payment in 2016 of discretionary annual incentive compensation to the named executive officers and certain 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 21. Such incentives to the named executive officers 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 shareholders by giving the named executives a long-term stake in the Corporation’s success.

Long-Term Retention and Equity Compensation.

Ideology and Mechanism. 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,the named executive officers, aligning executives’their financial interests with the interests of stockholders, and rewarding thethem for achievement of the Corporation’s long-term strategic goals. The CRC may grant either stock options or restricted stock awards to the named executive officers under the Corporation’s long-term retention and equity compensation methodology. Stock options provide the named 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 ourthe stock. When granting restricted stock, the CRC determines the applicable vesting schedule reflecting attainment of designated performance goals and/or other criteria specified in 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 As a mechanism for carrying out these objectives, 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 the stockholders at the 2012 Annual Meeting. The Board of Directors effectively replaced all prior equity plans with this single planthe 2012 Plan that conforms to current best governance practices. As

While the decision whether to award equity compensation remains in the sole discretion of the dateCRC, subject to approval or disapproval by the Board of the mailing of this proxy, there have been eight (8) grants under the 2012 Plan to the named executive officers, none of which occurredDirectors, 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 well as certain other employees under the First Community Bancshares, Inc. 2012 Omnibus Equity Compensation Plan, occurred on May 28, 2015, resulting in the vesting of 17.2% of the restricted stock awards previously granted. No additional stock awards under the 2012 Omnibus Equity Compensation Plan have 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 serve as a guideline and 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 andirectors, named executive officers or directorother members of the Senior Management Team is subject to a ratable three (3)-year vesting schedule and is further subjectedsubject 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 10schedule and expire ten (10) years in which to exercise the option. Annual grants ofafter vesting. The CRC will not grant any equity compensation are contingent upon the Company obtaining a minimum three (3)-year rolling Return on Average Equity (ROAE) of 7.00%. Equity compensation will not be paid in aany year in which the Company’sCorporation’s minimum three (3)-year ROAE is below 7.00%. It is anticipated that, or such other minimum ROAE as determined by the aforesaid ROAE will be adjustedCRC from time to time to reflectconsidering economic conditions, improving bank operating results, and adjustments to the Company’sCorporation’s strategic plan goals. The financial measurements utilized in the administration of the equity compensation methodology are calculated using audited financial information.

The Board of Directors believes that equity compensation should be an integral and ongoing component of total compensation for named executive officers and directors so as to further align their interests with the long-term interests of stockholders, further promote the Corporation’s commitment to sound corporate governance, and specifically discourage imprudent, unreasonable, or excessive risk taking. Accordingly, directors, named executive officers, and other members of the Senior Management team are encouraged to hold as many shares of the Corporation as practical given their individual situation. The equity compensation methodology is consistent with this philosophy, and is specifically designed to assist in achieving the aforesaid stock ownership objectives.

Previous Performance-Restricted Grants. In 2013, certain restricted stock was awarded to the named executive officers and other members of the Senior Management Team as well as certain other employees under the 2012 Plan. 48.4% of said restricted stock immediately vested upon the grant date. The remaining shares of said stock were scheduled to vest equally over a period of three (3) years, provided the Corporation met certain financial performance requirements in each of those years. 17.2% of said stock vested in both 2014 and 2015, and a like amount was scheduled to vest on May 28, 2016. Despite positive performance, both by the Corporation and the subject officers and employees, the Corporation failed to meet the ambitious performance metrics in the preceding measurement period, and the scheduled 2016 vesting did not occur.

Current Long-Term Retention and Equity Compensation Grants. Consistent with the equity compensation methodology developed in 2015, on March 18, 2016, the CRC awarded long-term incentive equity compensation under the 2012 Plan to the named executive officers and other members of the Senior Management Team in the form of transfer-restricted shares. Such shares will vest over a three (3) year period beginning on or about March 18, 2017.

Considerations Used in Setting Base Compensation for 20152016 and Annual Incentive Compensation for 20142015 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 CEOChief Executive Officer 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 thisThis process focusesis designed to focus the Board, the CRC, CEO, President and the entire management teamSenior Management Team on factors that create long-term stockholder value. The CRC discusses with the PresidentChief Executive Officer and the CEOPresident these factors as they relate to their respective compensation. Thecompensation; provided, however, that the Chief Executive Officer and President and CEO do not participate in the final determination of their respective compensation.

In 2015,2016, the CRC worked closely with the CEOChief Executive Officer and President to monitor base and incentive compensation of other named executives.executive officers. The CRC’s goal is to achieve a balance of base compensation and incentives that both contributes to retention of a highly qualified management teamSenior Management Team and ensures that the Corporation remains competitive over the long term.

Each of the other named executivesexecutive officers is a leader of an individual business or function of the Corporation. As part of the executive management team,Senior 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’sexecutive officer’s individual performance against the objectives, the Corporation’s overall performance, and the performance of the executive’snamed executive officer’s business or function. The PresidentChief Executive Officer and CEOPresident then report base compensation levels, including any adjustments, as well as proposed annual incentive compensation for each named executive officer 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,executive officers, other members of the management team,Senior Management Team, and other employees. The named executivesexecutive officers do not play a role in the determination of their compensation except for their discussion with the Chief Executive Officer, President, CEO and/or CRC regarding their individual performance against predetermined objectives.

Retirement Plans

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

KSOP Plan.The Corporation offers a qualified defined contribution Employee Stock Ownership and 401(k) plan known as the “KSOP” to most of its employees, including the named executives.executive officers. The KSOP Plan is administered by a Committee appointed by the Board of Directors of the Corporation.CRC.

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,executive officers, as well as certain other key executives,employees, 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 WRAP plan allows highly compensated participants to defer a portion of their compensation that may not otherwise be deferred under the Corporation’s qualified plan. The WRAP plan is intended to promote retention of key executivesemployees by providing a long-term savings vehicle on a tax efficient basis.

SERP.The Corporation provides a defined retirement benefit to thecertain named executivesexecutive officers and certain other key executivesemployees pursuant to a supplemental executive retention plan (“SERP”(the “SERP”). Each executive’s SERP is unfunded and designed to provide a benefit paid upon separation from service at or after age 62.sixty-two (62). The benefit is targeted at a maximum of thirty-five percent (35%) of final average compensation projected at an assumed three percent (3%) salary progression rate, and subject to an annual benefit limit of $80,000. Final average compensation is calculated as the average of the participant’s last three (3) full calendar years’ compensation, which compensation is determined by assuming a three percent (3%) compound annual rate of increase to the participant’s annualized base monthly salary as of the date that the participant enters the SERP. 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; an additional five percent (5%) vesting for each year of service beyond fifteen (15) years, and full vesting after twenty (20) years of service and reaching age 62.sixty-two (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 addition to the annual 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, club dues, and automobile allowance. These benefits are provided to increase the availability of the executivesnamed executive officers to 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 19.21. A chart disclosing the value of these additional items is found on page 2022 entitled “All Other Compensation.Compensation and Benefits.”

ExecutiveNamed 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 and group disability programs, as well as health savingsflexible spending 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 1921 even if the perquisites fall below the disclosure thresholds under the SEC rules.

Deferred Compensation Opportunities

Another aspect of ourthe executive compensation program is the First Community Bancshares, Inc., Deferred Compensation Plan, which we referreferred to as the WRAP and a separate Directors’ Deferred Compensation Plan. The WRAP (Executives) and the Directors’ 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’sCorporation’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 Nonqualifiedsection entitled “Nonqualified Deferred Compensation tableCompensation” included the related tables beginning on page 2426 for additional information about the Deferred Compensation Plan for named executive officers.

Employment Contracts

The Corporation and its subsidiaries provide certain executive officers, including ourprovides the named executive officers with written employment contracts. There areis no golden parachute, type provisions, tax gross up provisionsgross-up, or other similar type provisions contained in thethese contracts. See the section entitled “Potential Payments Upon Termination,” including the related tables, beginning on page 2526 for an estimate of the benefits 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,executive officers has executed the new prototype agreement. The new agreements result in greater uniformity among the named executive officers concerning the terms of their employment and treat the executive officers as a team.employment. The execution and provisions of said agreements was previously reported on a Form 8-K.8-K filed on April 16, 2015.

The prototype agreement has an initial term of three (3) years and automatically extendextends 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 agreement provides for continuation of base salary for thirty-six (36) months, 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 these terms are defined in their respectivethe 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 has the right to terminate employment before the end of the applicable term.

Tax Deductibility of Compensation

Under Section 162(m) of the Internal Revenue Code, publicly held corporations generally may not take a tax deduction for compensation in excess of $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 2015,2016, none of ourthe named executive officers received compensation that the Corporation could 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 the named executive officers and directors to 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 policy encourages ownership of the Corporation’s Common stock by the directors and executive managementofficers in order to align the interests of the Corporation’s stockholders with the Corporation’s key decision makers. Although minimum stock ownership guidelines are set forth in the policy for certain executive officers and directors, all officers and directors of the Corporation are encouraged to hold as many shares of the Corporation as possiblepractical given their individual situation, ideally in excess of any applicable minimum guideline below.situation.

Compensation and Retirement Committee Report

The CRC has reviewed the Compensation 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 Compensation Discussion and Analysis be included in the Corporation’s 20152016 Annual Report on Form 10-K and the Corporation’s 20162017 proxy statement. The following independent directors, who comprise the CRC, provide this report:

Richard S. Johnson (Chairman)

W.C. Blankenship, Jr.

I. Norris Kantor

2015 2016Summary Compensation Table