UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) OF THE SECURITIES
Securities Exchange Act of 1934, as amended
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NOTICE OF 2013 ANNUAL MEETING OF STOCKHOLDERS
April 30, 2013 at 11:30 a.m. Eastern Daylight Time
29 College Drive
Bluefield, Virginia 24605
March 13, 2013
To the Stockholders:
First Community Bancshares, Inc.
’s Annual Meeting of Stockholders will be held at the Corporate Center, located at 29 College Drive, Bluefield, Virginia 24605 at 11:30 a.m. Eastern Daylight Time on Tuesday, April 30, 2013. Following a report of the Corporation’s banking and related business operations, stockholders will:
Vote on the election of two directors to serve as members of the Board of Directors, Class of 2016;
Vote on ratification of the selection of the independent registered public accounting firm for 2013; and
Transact other business that may properly come before the meeting.
Stockholders of record at the close of business on March 1, 2013 will be entitled to vote at the Annual Meeting and any adjournments.
/s/ Robert L. Buzzo |
Robert L. Buzzo Secretary |
OneIMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 30, 2013.
The proxy materials for this Annual Meeting of Stockholders of First Community Place
Bancshares, Inc., consisting of the proxy statement, annual report, and form of proxy are available over the Internet at http://www.fcbinc.com.
If you want to receive a paper or e-mail copy of these documents, or similar documents for future stockholder meetings, you must request the copy. There is NO charge for requesting a copy. In order to facilitate timely delivery, your request should be received no later than April 13, 2013. Please choose one of the following methods to make your request:
1. By Internet atwww.proxyvote.com;
2. By telephone: (800) 579-1639; or
3. By e-mail: sendmaterial@proxyvote.com.
All persons attending the 2013 Annual Meeting must present photo identification. Please follow the advance registration instructions on the back cover 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:
1. By telephone: (800) 690-6903 until 11:59 p.m. Eastern Daylight Time on April 29, 2013; or
2. On the Internet at http://www.proxyvote.com until 11:59 p.m. Eastern Daylight Time on April 29, 2013; or
3. Complete, sign and return the enclosed proxy as promptly as possible whether or not you plan to attend the Annual Meeting. An addressed return envelope is enclosed for your convenience.
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, Virginia24605-0989
March 15, 2010
Dear Stockholder,
You are invited to attend the 20102013 Annual Meeting of Stockholders of First Community Bancshares, Inc. (the “Corporation”) to be held on Tuesday, April 27, 201030, 2013 at Fincastle Country Club, 1000 Country Clubthe Corporate Center located at 29 College Drive, Bluefield, Virginia.
The annual meetingAnnual Meeting will begin with a report of ourthe Corporation’s operations. This report will be followed by discussion and voting on the matters set forth in the accompanying notice of annual meetingAnnual Meeting and proxy statement and discussion of other business matters properly brought before the meeting.
If you plan to attend the meeting, please follow the registration instructions on the last page of this proxy statement. An admission ticket, which is required for admission toAll persons attending the meeting, is included as part2013 Annual Meeting of your proxy form.
Whether or not you plan to attend, please ensure that your shares are represented at the meeting by promptly voting and submitting your proxy by telephone, by internet,on the Internet, or by completing, signing, dating and returning your proxy form in the enclosed envelope. All persons attending the 2010 Annual Meeting must present an admission ticket and picture identification.
Very truly yours, |
/s/ William P. Stafford, II |
William P. Stafford, II Chairman of the Board |
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29 College Drive
P. O. Box 989
Bluefield, Virginia 24605 at 11:30 a.m. local time on Tuesday, April 27, 2010. Following a report of the Corporation’s banking and related business operations, stockholders will:
The expenses of the solicitation of the proxies for the Annual Meeting, including the cost of preparing, assembling and mailing the notice, Proxy Statementproxy statement and return envelopes, the handling and tabulation of proxies received, and charges of brokerage houses and other institutions, nominees or fiduciaries for forwarding such documents to beneficial owners, will be paid by the Corporation. In addition to the mailing of the proxy material,materials, solicitation may be made in person, by telephone or by other means by officers, directors or regular employees of the Corporation.
This Proxy Statementproxy statement and the proxies solicited hereby are being first sent or delivered to stockholders of the Corporation on or about March 15, 2010.
Voting
Shares of common stock (par value $1.00 per share) (“Common Stock”) represented by proxies in the accompanying form, which are properly executed and returned to the Corporation, will be voted at the Annual Meeting in accordance with the 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 directors nominated by the Board of Directors and named in this proxy statement and FOR ratification of Dixon Hughes PLLCGoodman LLP as the Corporation’s independent registered public accountants, and FOR approval, on a non-binding advisory basis, of the Corporation’s named executive officer compensation.
Any stockholder has the power to 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. However, ifIf your shares of Common Stock are held for you arein a stockholder whose shares are not registeredbrokerage, 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 your own name, you will need additional documentation from your record holderorder to be able to vote personallyyour shares at the Annual Meeting.
The Board of Directors has fixed March 1, 20102013 as the record date for stockholders entitled to notice of and to vote at the Annual Meeting. Shares of Common Stock outstanding on the record date are entitled to be voted at the Annual Meeting and the holders of record will have one vote for each share so held in the matters to be voted upon by the stockholders. Each share of Common Stock outstanding as of the record date will be entitled to one vote on each of the proposals set forth in this proxy statement. Treasury shares are not voted. Individual votesShares of stockholdersthe Corporation’s Series A Preferred Stock are kept private, except as appropriatenot entitled to meet legal requirements. Access to proxies and other individual stockholder voting records is limited to certain employees of First Community and its agents who acknowledge their responsibility to comply with this policy.be voted on the matters presented at the Annual Meeting. Stockholders of the Corporation do not have cumulative voting rights. As of the close of business on March 1, 2010,2013, the outstanding shares of the Corporation consisted of 17,765,16420,048,284 shares of Common Stock and no17,421 shares of Preferred Stock.
The presence in person or by proxy of a majority of the shares of the Common Stock entitled to vote is necessary to constitute a quorum at the Annual Meeting. Abstentions and broker non-votes, which are discussed below, are considered in determining the presence of a quorum. Directors are elected by a plurality of the votes cast at a stockholders’ meeting with a quorum present. The threetwo persons who receive the greatest number of votes of the holders of Common Stock represented in person or by proxy at the Annual Meeting will be elected directors of the Corporation. Approval of the amendment to the Articles of Incorporation to increase the authorized common stock requires a majority of the outstanding voting capital stock approve the amendment. Approval of the ratification of the independent registered public accountantsaccounting firm requires that the number of votes cast in favor of the proposal exceeds the number of votes cast against. Advisory approvalAbstentions and broker non-votes will have no effect on the election of the Corporation’s executive compensation program requires thattwo directors nominated by the numberBoard of votes castDirectors and named in favorthis proxy statement and the ratification of the
independent registered public accounting firm.
The Board of Directors is comprised of The class of directors No director or executive officer of the Corporation is related to any other director or executive officer of the Corporation by blood, A table of each director and nominee, including his age, the applicable director class, which is based upon the year in which his term of service expires, and title, is set forth below. A biography describing each director’s and nominee’s qualifications and business background is set forth below the table. Members of the Corporation’s Board of Directorsnineeight directors, including eightseven non-management directors, currently divided into three classes with staggered terms. All directors have been determined to be independent by the Board of Directors except Mr. Mendez, who is employed by FCBIthe Corporation as President and Chief Executive Officer.At the 2010 Annual Meeting, the currentis nominated tofor re-election at the 2013 Annual Meeting will be elected to officeserve until the 20132016 Annual Meeting. All nominees are currently serving on the Corporation’s Board of Directors. In the event any nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for anyan alternate nominee who shall be designated by the present Board of Directors to fill the vacancy. In the event that additional persons are nominated for election as directors, the proxy holders intend to vote all proxies received by them for the nominees listed below. All nominees named herein have consented to be named and to serve as directors if elected.or marriage or adoption, except for Mr. Stafford who is the father of Mr. Stafford, II.Each nominee has consented to be named to, and to serve as, a director if elected. We doThe Corporation does not know of any reason why any nominee would be unable to serve as a director. If any nominee is unable to serve, the shares represented by all valid proxies will be voted for the election of such other person as the Board may nominate. of First Community Bancshares, Inc. 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,2
Director of | ||||||||||||
Corporation | Class of | |||||||||||
Name and Title | Age | Since | Directors | |||||||||
Franklin P. Hall, Director | 71 | 2007 | 2011 | |||||||||
Allen T. Hamner, Director Nominee | 68 | 1994 | 2010 | |||||||||
Richard S. Johnson, Director Nominee | 60 | 2008 | 2010 | |||||||||
I. Norris Kantor, Director | 80 | 1989 | 2012 | |||||||||
John M. Mendez, President, CEO and Director Nominee | 55 | 1994 | 2010 | |||||||||
A. A. Modena, Director | 81 | 1989 | 2012 | |||||||||
Robert E. Perkinson, Jr., Director | 62 | 1994 | 2011 | |||||||||
William P. Stafford, Chairman of the Board | 76 | 1989 | 2011 | |||||||||
William P. Stafford, II, Director | 46 | 1994 | 2012 |
Name and Title | Age | Director of Corporation Since | Class of Directors | |||||||||
W.C. Blankenship, Jr., Director | 62 | 2013 | 2015 | |||||||||
Franklin P. Hall, Director | 74 | 2007 | 2014 | |||||||||
Richard S. Johnson, Director Nominee | 63 | 2008 | 2013 | |||||||||
I. Norris Kantor, Director | 83 | 1989 | 2015 | |||||||||
John M. Mendez, President, CEO and Director Nominee | 58 | 1994 | 2013 | |||||||||
Robert E. Perkinson, Jr., Director | 65 | 1994 | 2014 | |||||||||
William P. Stafford, Director | 79 | 1989 | 2014 | |||||||||
William P. Stafford, II, Director | 49 | 1994 | 2015 |
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Mr. Mendez attended Marshall University from 1973 to 1975 and graduated from Concord University in May 1978 with a BS in Business Administration with a concentration in Accounting. Mr. Mendez earned his certification as a Certified Public Accountantcertified public accountant (“CPA”) in 1981. Mr. Mendez1981 and joined First Community Bank N.A. in 1985. Prior to serving as President and Chief Executive Officer (“CEO”) of First Community Bancshares, Inc.,the Corporation, Mr. Mendez served in the positions of Chief Financial Officer (“CFO”) and Chief Administrative Officer. Mr. Mendez served as Audit Manager of Brown, Edwards & Co., CPA’sCompany L.L.P. from 1978 to 1985. Mr. Mendez servespreviously served on the Concord University Board of Governors.Governors and chaired its Finance
and Facilities Committees. He previously served as a director forof the Community Foundation of the Virginias, the West Virginia Bankers Association, Virginia Bankers Association, and Princeton Community Hospital.
Mr. Mendez’ relevant experience qualifying him for service as a director includes: history as a practicing CPA at a regional public accounting firm; external audit experience for a variety of businesses with emphasis in the banking sector while engaged in public accounting; familiarity with bank regulations and bank and parent regulatory examination process;processes; writing, communicating and enforcing company, bank and subsidiary policies; success in negotiating and integrating acquired businesses in the execution of a variety of mergers and acquisitions; past service on a variety of boards and audit committees including a 211-bed community hospital; long term service as CFO of a publicly-tradedpublicly traded company; and the variety of offices held with increasing management responsibilities during twenty-five28 years in management of a publicly-tradedpublicly traded financial services company.
Richard S. Johnson, Chairman, President and Chief Executive Officer, The Wilton Companies, Richmond, Virginia.
Mr. Johnson earned a BS BA degree from the University of Richmond, Richmond, Virginia in 1973, with concentrations in Economics and Finance, and graduated with a MS degree from Virginia Commonwealth University, Richmond, Virginia in 1977, with a concentration in Real Estate and Urban Land Development. Mr. Johnson has been the President and Chief Executive Officer of The Wilton Companies, a real estate investment, development, brokerage and management group of companies, since 2002. 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/trustee of First Community Bank, University of Richmond, Fidelity Group, LLC, and serves as the Chairman of the City of Richmond Economic Development Authority. Mr. Johnson also serves as Director Emeritus of Ducks Unlimited, Inc. and previously served as a director of the State Fair of Virginia, Children’s Museum of Richmond, Ducks Unlimited, Inc., and Ducks Unlimited Canada.
Mr. Johnson’s relevant experience qualifying him for service as a director includes: long-range planning, various aspects of mortgage underwriting, marketing and mortgage portfolio servicing; chairing the Economic Development Authority of the City of Richmond, Virginia; past service as a director and Finance Committee member of Ducks Unlimited, Inc. and Ducks Unlimited Canada; state and national offices with Ducks Unlimited, Inc., including Assistant Treasurer and member of the Finance and Audit Subcommittee; and previous service as a director and Audit Committee member of the Apartment Trust of America.
Your Board recommends a voteFOR the nominees set forth above.
W.C. Blankenship, Jr., State Farm Insurance Agent, Tazewell, Virginia.
Mr. Blankenship received his BS degree in 1972 from Appalachian State University and has served as a successful insurance agent for State Farm since 1976. Mr. Blankenship joined First Community Bank in July of 1996 following its acquisition of Citizens Bank of Tazewell, Inc. He was appointed to Citizens Bank’s Board of Directors during its formation in 1981 and was instrumental in the establishment of that bank, eventually serving as Chairman of the Board from 1984 through its acquisition by First Community Bank.
Mr. Blankenship’s relevant experience qualifying him for service as a director includes: more than 35 years of expertise and knowledge in insurance products and services and more than 30 years of bank board service.
Franklin P. Hall, Retired Commissioner, Virginia Department of Alcoholic Beverage Control, Senior Partner, Hall & Hall, PLC, Richmond, Virginia.
Mr. Hall is a 1961 graduate of Lynchburg College, Lynchburg, Virginia, with a BS degree in Mathematics and Business Administration. Mr. Hall also graduated from The American University, Washington, DC,D.C., with ana MBA degree in 1964 and The American University Law School with a Juris DoctorateDoctor degree in 1966. Mr. Hall currently serves as Senior Partner in the Hall and& Hall, Family Law FirmPLC in Midlothian, Virginia where he has practiced law since 1969. He served as a Delegatedelegate in the Virginia General Assembly from 1976 to 2009, and Minority Leader, Virginia House of Delegates from 2002 to 2008. He is a former Chairman of the Board of the CommonwealthThe CommonWealth Bank in Richmond, Virginia. Mr. Hall has served on the Greater Richmond Chamber of Commerce Foundation Board since 2004. He also has served as a Commissionercommissioner for the Virginia AlcoholDepartment of Alcoholic Beverage Commission.
Mr. Hall’s relevant experience qualifying him for service as a director includes: a wide range of business and legal knowledge gained during an active forty-one44 year law practice; his MBA degree; twenty-five28 years of service on boards of financial service organizations; thirty30 years of overseeing the budget for the Common WealthCommonwealth of Virginia; service as senior member of the Joint Legislative Audit and Review Commission for the Virginia General Assembly; and service as Chair of the House Appropriations Subcommittee on Compensation.
I. Norris Kantor, Of Counsel, Katz, Kantor, Stonestreet & Perkins,Buckner, PLLC, Princeton and Bluefield, West Virginia.
Mr. Kantor received a BA degree in 1953 from the Virginia Military Institute and received a Juris Doctor degree in 1956 from the College of Law at West Virginia University. Mr. Kantor has practiced law for more than fifty50 years and is currently Of Counsel with the law firm of Katz, Kantor, Stonestreet & Perkins,Attorneys-at-Law.Buckner, PLLC. He served as a Judge Advocate USAF from 1956 to 1958. Mr. Kantor is a director of Mercer Realty Inc., a real estate management company, and Gomolco, Inc., a real estate holding company. Mr. Kantor currently serves as ain the following leadership capacities: Board member of the board of directors of the following organizations: Bluefield State College Foundation, Bluefield State College Board of Governors, New River Parkway Authority, and the Bluefield Development Authority; Board member and Secretary of Bluefield State College Research and Development Corp., past President of New River Parkway Authority, the Bluefield Development Authority,; Board member and President and Board Member of the Downtown Health and Wellness Center, Inc.
Mr. Kantor’s relevant experience qualifying him for service as a director include:includes: a wide range of legal and business experience gained during his more than fifty50 years as a practicing attorney; his legal work in issuing
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Robert E. Perkinson, Jr., Former Vice President-Operations of MAPCO Coal and Alliance Coal Co., Inc., Bluefield, Virginia.
Mr. Perkinson received a BS degree in Civil Engineering — Engineering—Construction Option in 1969 and a Professionalprofessional degree in Soil Mechanics and Foundation Energy in 1970 from North Carolina State University. Prior to Mr. Perkinson’s employment with MAPCO Coal, he was employed as Vice President — President—Operations of South Atlantic Coal Co. and worked for J. A. Jones Construction in Charlotte, North Carolina. Upon leaving the employment of MAPCO Coal, Mr. Perkinson served as Acting Executive Director of the Bluefield Sanitary Board for the City of Bluefield from 20072006 to 20092008 and Mayor of the City of Bluefield, West Virginia. Mr. Perkinson currently servesserved as Chairman of the Board of Bluefield Regional Medical Center and currently serves as a member of the Board of Governors of Bluefield State College.
Mr. Perkinson’s relevant experience qualifying him for service as a director includes: previous service as a member of senior management for various companies in the coal industry; experience in municipal government,
including service as executive director of a municipal sanitary board; and service as board chairman for a non-profit regional medical center coupled with approximately twenty20 years of bank board service.
William P. Stafford, President, Princeton Machinery Service, Inc., a machinery manufacturing and repair company.Princeton, West Virginia.
Mr. Stafford is a graduate of the United States Naval OrdinanceOrdnance Laboratory and U.S.U. S. Naval Gun Factory. He currently serves as the Chairman of the Board of First Community Bancshares, Inc., and Vice Chairman of the Board of First Community Bank, N. A.Bank. He serves as President and Director of the H. P. and Anne S. Hunnicutt Foundation, Inc., and Melrose Enterprises, Ltd., and as a Membermember of Stafford Farms, LLC. In addition to his current serviceMr. Stafford serves as President of Princeton Machinery Service, Inc., a machinery manufacturing and repair company, which is a position he has held since the 1950s. Mr. Stafford previously served as its General Manager. Mr. Stafford also previously served as Membera member of the West Virginia Legislature, a Directordirector of the West Virginia Division of Natural Resources, a Membermember of the Mercer County, West Virginia Economic Development Authority, and a Membermember of the Mercer County, West Virginia Airport Authority.
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William P. Stafford, II, Attorney, Brewster, Morhous, Cameron, Caruth, Moore, Kersey & Stafford, PLLC.PLLC, Bluefield, West Virginia.
Mr. Stafford is a graduate of Virginia Polytechnic Institute and State University, Blacksburg, Virginia, and holds a Bachelor of ScienceBS degree in Mechanical Engineering. He received his Juris Doctorate,Doctor,cum laude, from the Washington & Lee University School of Law, Lexington, Virginia. Mr. Stafford practices as a member of his firm primarily in the areas of commercial transactions, banking, creditor’s rights, creditor bankruptcy, and trusts and estates. He currently serves as Chairman of the Board of the Corporation. Mr. Stafford serves as Directora 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.LLC, which include real estate and agricultural holdings. Mr. Stafford is a partner in Legal Realty, A Partnership. Mr. Stafford previously served as a member of the West Virginia Infrastructure and Jobs Development Council. Mr. Stafford previously served as a council member and Mayor of the City of Princeton, West Virginia. Mr. Stafford has served, and continues to serve, on numerous civic and community service boards and commissions.
Mr. Stafford’s relevant experience qualifying him for service as a director includes: a broad range of regulatory, business, legal and banking related issues encountered in the practice of law; extensive state and municipal government service; extensive civic and community service; and more than fifteen15 years of boardBoard service for the Corporation.
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Director Qualifications and Experience. The following table identifies the experience, qualifications, attributes and skills that the Board considered in making its decision to appoint and nominate directors to the Corporation’s Board. This information supplements the biographical information provided above. The vertical axis displays the primary factors reviewed by the Governance and Nominating Committee in evaluating a boardBoard candidate.
Blankenship, Jr. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Hall | Kantor | Johnson | Mendez | Perkinson, Jr. | Stafford | Stafford, II | ||||||||||||||||||||||||||||||||||||||||||||
Experience, Qualifications, | ||||||||||||||||||||||||||||||||||||||||||||||||||
Professional standing in chosen field | X | X | X | X | X | X | X | X | ||||||||||||||||||||||||||||||||||||||||||
Expertise in financial services or related industry | X | X | X | X | X | X | X | X | ||||||||||||||||||||||||||||||||||||||||||
Audit Committee Financial Expert (actual or potential) | X | X | ||||||||||||||||||||||||||||||||||||||||||||||||
Civic and community involvement | X | X | X | X | X | X | X | X | ||||||||||||||||||||||||||||||||||||||||||
Other public company experience (current or past) | X | |||||||||||||||||||||||||||||||||||||||||||||||||
Leadership and team building skills | X | X | X | X | X | X | X | X | ||||||||||||||||||||||||||||||||||||||||||
Diversity of experience, professions, skills, geographic representation and backgrounds | X | X | X | X | X | X | X | X | ||||||||||||||||||||||||||||||||||||||||||
Specific skills/knowledge: | ||||||||||||||||||||||||||||||||||||||||||||||||||
- finance | X | X | X | X | X | X | X | X | ||||||||||||||||||||||||||||||||||||||||||
- technology | ||||||||||||||||||||||||||||||||||||||||||||||||||
X | X | X | ||||||||||||||||||||||||||||||||||||||||||||||||
- marketing | X | X | X | |||||||||||||||||||||||||||||||||||||||||||||||
- public affairs | X | X | X | X | X | X | X | X | ||||||||||||||||||||||||||||||||||||||||||
- HR | X | X | X | X | X | X | X | |||||||||||||||||||||||||||||||||||||||||||
- governance | X | X | X | X | X | X | X | X |
Executive officers who are not directors of the Corporation, including their title, age and date they became an officer of the Corporation isare set forth in the chart below, which is followed by a brief biography describing each executive officer’snamed executive’s business experience.
Executive of | ||||||||
Name and Title | Age | Corporation Since | ||||||
David. D. Brown, V., Chief Financial Officer | 35 | 2006 | ||||||
Robert L. Buzzo, Vice-President and Secretary, President and Director of First Community Bank, N.A. | 59 | 2000 | ||||||
E. Stephen Lilly, Chief Operating Officer | 51 | 2000 | ||||||
Gary R. Mills, Chief Credit Officer | 42 | 2007 |
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Name and Title | Age | Executive of Corporation Since | ||||||
David D. Brown, Chief Financial Officer of Corporation and First Community Bank | 38 | 2006 | ||||||
Robert L. Buzzo, Vice President and Secretary of Corporation, President and Director of First Community Bank | 63 | 2000 | ||||||
E. Stephen Lilly, Chief Operating Officer of Corporation, Executive Vice President and Chief Operating Officer of First Community Bank | 54 | 2000 | ||||||
Robert L. Schumacher, General Counsel of Corporation, Senior Vice President, General Counsel and Secretary of First Community Bank | 62 | 2001 |
Mr. Brown has been CFO of the Corporation and First Community Bank N.A. since May 2006. Mr. Brown served as Financial Reporting Coordinator of the Corporation from April 2005 to May 2006. Prior to joining the Corporation, Mr. Brown was a Corporate Auditor and Audit Manager of United Bankshares, Inc. from September 1999 to April 2005.
Robert L. Buzzo,Vice President and Secretary of the Corporation, President and Director of First Community Bank.
Mr. Buzzo has been Vice President and Secretary of the Corporation and President and a director of First Community Bank since June 2000. From October 1994 until June 2000, Mr. Buzzo was the Chief CreditExecutive Officer of First Community Bank—Bluefield, a division of First Community Bank. Prior to 1994, Mr. Buzzo held other leadership positions since joining the Corporation in 1973.
E. Stephen Lilly, Chief Operating Officer of the Corporation, Executive Vice President and Chief Operating Officer of First Community Bank.
Mr. Lilly has been Chief Operating Officer (“COO”) of the Corporation and First Community Bank since 2007, and has worked in Credit Administration since 2005.June 2000. Mr. MillsLilly has been employed by the Corporation since 1998.
Robert L. Schumacher, General Counsel of the Corporation and Senior Vice President, General Counsel and Secretary of First Community Bank.
Mr. Schumacher has served as General Counsel of the Corporation and First Community Bank since 2005. He has also served as Senior Vice President and Secretary of First Community Bank since 2001. Prior to his current positions, Mr. Schumacher served as the Corporation’s CFO and Senior Vice President—Finance from 2001 until 2005. In addition, Mr. Schumacher has led First Community Bank’s Trust and Financial Services Division
in the capacity of Senior Vice President and Senior Trust Officer. Prior to joining the Corporation in 1983, Mr. Schumacher engaged in the private practice of law in Princeton, West Virginia. Mr. Schumacher is a CPA, a Certified Financial Planner, is licensed to practice law and holds a Juris Doctor degree from West Virginia University.
Corporate Governance Guidelines. The Board of Directors’ Governance and Nominating Committee has enacted guidelines to determine director independence and qualifications for directors. The Board’s Role in Risk Oversight. Because The Governance and Nominating Committee Charter is published at the Corporation’s website under the “Governance Documents” tab of the “Corporate Profile” atwww.fcbresource.com. This section of the website makes available all of First Community’s governance materials, including various Board committee charters, which are available in print to any Stockholder upon request. The Board regularly reviews corporate governance developments and considers modifications to its governance charter to clarify and augment the Board’s processes, including those relating to risk oversight. We believe The Corporation believes that each member of ourthe Board of Directors in his or her fiduciary capacity has a responsibility to monitor and manage risks faced by the Corporation. At a minimum, this requires the members of ourthe Board of Directors to be actively engaged in boardBoard discussions, review materials provided to them, and know when it is appropriate to request further information from managementand/or engage the assistance of outside advisors. Furthermore, because the banking industry is highly regulated, certain risks to the Corporation are monitored by the Board of Directors and the Audit Committee through its review of the Corporation’s compliance with regulations set forth by its regulatory authorities, including the FDIC and recommendations contained in regulatory examinations.we believethe Corporation believes risk oversight is a responsibility for each member of the Board of Directors, we doit does not concentrate the Board’s responsibility for risk oversight in a single committee. Instead, each of ourthe committees concentrates on specific risks for which they haveit has an expertise, and each committee is required to regularly report to the Board of Directors on its findings. For example, the audit committeeAudit Committee regularly monitors the Corporation’s exposure to certain investment risks, such as the effect of interest rate or liquidity changes, the Corporation’s exposure to certain reputational risks by establishing and evaluating the effectiveness of companyits programs to report and monitor fraud and by monitoring the Corporation’s internal controls over financial reporting. OurThe Corporation’s Compensation and Retirement Committee monitors risks associated with the design and administration of the Corporation’s compensation committee’s role in monitoring the risks related to our compensation structure isprograms as discussed in further detail below.8
The Board of Directors reviewed the directors’ responses to continuea questionnaire asking about their relationships with the Corporation (and those of their immediate family members) and other potential conflicts of interest, as well as information provided by management related to satisfy, its objective that at least a majoritytransactions, relationships, or arrangements between the Corporation and the directors or parties related to the directors in order to determine the independence of the current members of the Board should consist of independent directors. For a director to be considered independent,Directors and the nominees for election as directors of the Corporation.
Based on the subjective and objective criteria developed by the NASDAQ listing standards and the SEC rules, the Board must determineof Directors determined that the director does not have any direct or indirect material relationship with First Community. The Board has established guidelines to assist it in determining director independence (see Appendix A to this Proxy Statement), which conform to the independence requirementsfollowing nominees and current members of the NASDAQ Stock Exchange listing standards. In addition to applying these guidelines, the Board will consider all relevant factsof Directors are independent: W. C. Blankenship, Jr., Franklin P. Hall, Richard S. Johnson, I. Norris Kantor, Robert E. Perkinson, Jr., William P. Stafford and circumstances in makingWilliam P. Stafford, II. John M. Mendez is not independent because he is an independence determination.
The NASDAQ listing standards contain additional requirements for members of the Audit Committee and the Compensation and Retirement Committee. All of the directors serving on each of these committees are independent under the additional requirements applicable to such committees.
The Board considered the following relationships in evaluating the independence of the Corporation’s Directors and determined that none of the relationships constitute a material relationship with the Corporation and each of the relationships satisfied the standards for independence:
Director Stafford, II serves as a partner of a law firm, which, similar to other firms in other localities, regularly provides legal services to the Corporation and its affiliates. The law firm provided legal services and received payments from the Corporation for such services during 2012. These payments did not exceed the greater of 5% of the law firm’s consolidated revenues for 2012 or $200,000, and therefore, the relationship satisfied the standards for independence.
Director Johnson serves as Chairman, President and CEO of The Wilton Companies. The Wilton Companies is comprised of three entities under common management. During 2012, the Corporation and its affiliates leased two offices from two of these entities, The Wilton Companies, Inc. and The Wilton Companies, LLC. Director Johnson holds an equity ownership in these two entities. The combined annual lease payments did not exceed the greater of 5% of The Wilton Companies’ and its subsidiaries’ consolidated revenues for 2012 or $200,000, and therefore, the relationship satisfied the standards for independence.
Board Leadership Structure. The Corporation separates the roles of CEO and Chairman of the Board in recognition of the differences between the two roles. The CEO is responsible for setting the strategic direction for the Corporation and the day-to-day leadership and performance of the Corporation, while the Chairman of the Board provides guidance to the CEO and sets the agenda for Board meetings and presides over meetings of the full Board.
The separation of these roles is appropriate for the Corporation because the separation results in a more effective monitoring and objective evaluation of the CEO’s performance. In addition, the CEO is unable to control the Board’s agenda and information flow that reduces the likelihood that the CEO will abuse his power. The Board also believes that directors will be more likely to challenge the CEO if the Chairman of the Board is not the CEO.
Standards of Conduct. All directors, officers and employees of the Corporation must act ethically at all times and in accordance with the policies comprising the Corporation’s Standards of Conduct (“Code”), which is available at the Corporation’s website www.fcbinc.com and available in print to any stockholder upon request. Only the Board of Directors may waive a provision of the Code and only for just cause in an instance where the underlying ethical objective will not be violated. No waivers were granted to any director or officer during 2012. Amendments to the Code will be published on the Corporation’s website, as required by SEC rules. If an actual or potential conflict of interest arises for a director, the director must promptly inform the Board.
Communicating Concerns to Directors. The Audit Committee and the non-management directors have established procedures to enable any employee who has a concern about the Corporation’s conduct, policies, accounting, internal accounting controls or auditing matters, to communicate that concern directly to the Board through an e-mail or written notification directed to the Chairman of the Audit Committee. Such communications may be confidential or anonymous. A notification explaining how to submit any such communication is provided to all employees at each location of the Corporation and its affiliated businesses and is provided to employees in the employee handbook. The status of any outstanding concern is reported to the non-management directors of the Board periodically by the Chairman of the Audit Committee.
Stockholder Communications. Stockholders may communicate with all or any member of the Board of Directors by addressing correspondence to the Board of Directors or to the individual director and addressing such communication to Robert L. Buzzo, Secretary, First Community Bancshares, Inc., P. O. Box 989, Bluefield, Virginia 24605-0989. All communications so addressed will be forwarded to the Chairman of the Board of Directors (in case of correspondence addressed to the Board of Directors) or to the individual director, without exception.
The Board of Directors and Board Meetings
The Board of Directors held ten regular meetings and two joint meetings with the First Community Bank Board in 2012. No member attended fewer than 75% of the Board meetings and committee meetings on which the member sits. Each director is expected to devote sufficient time, energy and attention to ensure diligent performance of the 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 2012 Annual Meeting.
The Board of Directors has adopted written charters for three of its four standing committees: the Audit Committee, the Compensation and Retirement Committee (the “CRC”), and the Governance and Nominating Committee. A current copy of each of the committee charters is available for review and print on the Corporation’s website at www.fcbinc.com.
Audit Committee. The members of the Audit Committee are Directors Perkinson, who chairs the Committee, Hall and Johnson. The Board has determined that Mr. Johnson is the Audit Committee financial expert. The Audit Committee is primarily concerned with the integrity of the Corporation’s financial statements, the independence and qualifications of the independent registered public accounting firm and the performance of the Corporation’s internal audit function and independent registered public accounting firm. Its duties include: (1) selection and oversight of the independent registered public accounting firm; (2) review of the scope of the audit to be conducted by the independent registered public accounting firm, as well as the results of their audit; (3) oversight of the Corporation’s financial reporting activities, including the annual report, and the accounting standards and principles followed; (4) discussion with management of its risk assessment and management policies, including risk relating to the financial statements and financial reporting process and the steps taken by management to monitor and mitigate such risks; (5) approval of audit and non-audit services provided to the Corporation by the independent registered public accounting firm; (6) review of the organization and scope of the Corporation’s internal audit function and its disclosure and internal controls; and (7) reviews, approves and ratifies transactions with related persons. The Audit Committee held 12 meetings during 2012. The Audit Committee’s report is on page 31.
Executive Committee. The members of the Executive Committee are Directors Stafford II, who chairs the Committee, Hall, Johnson, Kantor, Mendez, Perkinson and Stafford. Except for Mr. Mendez, each member of the Executive Committee is independent. The Executive Committee did not meet in 2012. The Committee, subject to the supervision and control of the Board of Directors, has been delegated substantially all of the powers of the Board to act between meetings of the Board, except for certain matters reserved to the full Board by law.
Compensation and Retirement Committee. The members of the CRC are Directors Stafford, II, who chairs the Committee, Johnson, and Stafford. The CRC’s primary duties and responsibilities are to: (1) review, evaluate and determine annually the executive officers’ and directors’ compensation and the corporate goals and objectives relevant thereto, and to evaluate the executive officers’ performance in light of such goals and objectives; (2) review and evaluate all compensation decisions otherwise made by the CEO; (3) review, evaluate and determine all equity-based incentive awards; (4) review organizational systems and plans relating to management development and succession planning; and (5) review and discuss with management the proxy statement’s Compensation Discussion and Analysis and produce the CRC report. The CRC does not delegate any of its responsibilities to subcommittees.
The CEO of the Corporation provides the CRC with a performance assessment and compensation recommendation for each of the other executive officers of the Corporation. The CRC has the authority to retain or obtain the advice of any advisors as the CRC deems necessary in the performance of its duties. In 2012, the CRC directly engaged Mathews, Young—Management Consulting (“Mathews Young”) to provide compensation
analysis and advice regarding incentive compensation for employees of the Corporation. At the request of the CRC, Mathews Young: (i) developed a peer group analysis for the CRC’s review of compensation levels; (ii) formulated recommendations for long range performance compensation; and (iii) developed recommendations for an incentive program for the special assets department.Mathews Young was not retained to provide any other services to the Corporation. The CRC is still in the process of reviewing the Mathews Young recommendations and anticipates implementing some or all of them in 2013. Retention of Mathews Young by the CRC raised no conflicts of interest. The CRC held five meetings in 2012. The CRC’s report is on page 20. In 2012, the Board of Directors voted to amend the CRC Charter, which may be found on the Corporation’s website.
Compensation and Retirement Committee Interlocks and Insider Participation. None of the members of the CRC are or were formerly officers or employees of the Corporation or any of its subsidiaries. Finally, none of the executive officers of the Corporation served on any compensation committee or any board of directors of another company, of which any of the Corporation’s Board members was also an executive officer.
Governance and Nominating Committee. The members of the Governance and Nominating Committee must be independent directors as defined by NASDAQ. Membersare Directors Stafford, II, who chairs the Committee, Kantor, and Stafford. 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 the annual self-evaluations of the AuditBoard, as well as director performance and Board dynamics; and (2) makes recommendations to the Board concerning the structure and membership of the Board committees. This Committee also must satisfy a separate Securities and Exchange Commission (“SEC”) independence requirement, which provides that they may not accept directly or indirectly any consulting, advisory or other compensatory fee from First Community or its subsidiaries other than their directors’ compensation.
Director Candidates, Qualifications and Diversity. In considering whether to recommend any candidate for inclusion in the Board’s slate of recommended director nominees, including candidates recommended by stockholders, the Governance and Nominating Committee will considerconsiders a number of criteria, including, without limitation, the candidate’s integrity, business acumen, age, experience, commitment, diligence, conflicts of interest and the ability to act in the interests of all stockholders. The Governance and Nominating Committee believes diversity should be considered in the director identification and nomination process. The Governance and Nominating Committee seeks nominees with a broad diversity of experience, professions, skills, geographic representation and backgrounds. The Committee does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all prospective nominees. The Corporation believes that the backgrounds and qualifications of the directors, considered as a group, should provide a significant composite mix of experience, knowledge and abilities that will allow the Board to fulfill its responsibilities. Nominees are not discriminated against on the basis of race, religion, national origin, sexual orientation, disability or any other basis proscribed by law.
The CEO is responsible for setting the strategic direction for the Corporation and the day to day leadership and performance of the Corporation, while the Chairman of the Board provides guidance to the CEO and sets the agenda for Board meetings and presides over meetings of the full Board.
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Meetings of Non-management Directors.
This section provides an overview and explanation of the material information relevant to understanding the objectives, policies and philosophy underlying the Corporation’s compensation programs for executives and of the general design philosophy of the Corporation’s compensation policies and practices for employees included in any incentive compensation program. To assist you inwith understanding certain disclosures that we arethe Corporation is required to provide in this section, which we referis referred to as the “CD&A”, we provide&A,” the Corporation provides information relating to executive and director compensation in a series of tables and accompanying narrative.2009 Compensation At the 2011 Annual Meeting of Executive OfficersWe believe it is inStockholders, the Corporation’s best interests to maintain consistency in ourstockholders approved the compensation philosophy and implementation, but we also believe discretion should be used in times of prosperity as well as times when either the Corporation or the overall economy, or both, are performing below expectations. With this in mind, we believe it is appropriate for some components of compensation to remain level or decline during periods of economic downturn, including periods of reduced earnings and declining stock prices, as was the case in 2008 and 2009.11
The Corporation’s banking subsidiary produced continued positive, although decreased, core earnings, and the insurance agency and wealth management subsidiaries performed at or beyond expectations for 2009. Unlike other regional banks, the
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The goal of ourthe Corporation’s executive compensation program is to retain and reward officers who create long termlong-term value for our stockholders. This overriding objective affects all elements of ourthe compensation program. OurThe Corporation’s compensation program rewards continued financial and operating performance coupled with strong leadership. OurThe intent is to align thean executives’ long termlong-term interests with those of our stockholders and to motivate the executive teamhigh performing executives to continue with the Corporation for long productive careers.
Adjustments to 2012 Base Salaries and 2011 Discretionary Bonuses of Executive Officers
In February, 2012, the CRC met to evaluate and establish executive compensation in the context of the Corporation’s 2011 performance. Although the Corporation’s performance in 2011 had been strong, on the recommendation of Mr. Mendez, the CRC decided to continue its conservative approach to determining compensation. Except with respect to Mr. Brown, who received a discretionary cash bonus, the CRC awarded no salary increases for 2012 and no discretionary cash bonuses or long-term incentive awards to the named executive officers. In August, 2012, the CRC met and reevaluated the 2011 performance of the Corporation and considered the sustained strong performance of the Corporation for the first three quarters of 2012. On the recommendation of Mr. Mendez, the CRC decided to award salary increases and discretionary bonuses to Messrs. Brown, Buzzo, Lilly and Schumacher to recognize specific, significant accomplishments and performance in 2011. The CRC awarded no long-term incentive awards for 2011 performance. The criteria used to assess the performance of each individual executive officer is set forth below under the headings “Considerations Used to Determine CEO Base Salary for 2012 and Discretionary Cash Bonus for 2011” and “Determination of 2012 Base Salaries and 2011 Discretionary Cash Bonuses for the Corporation’s other Named Executives.”
Considerations Used to Determine Compensation Program
Below is a summary of important considerations by the CRC affecting compensation for the named executives. For 2009, theThe CRC performedperforms its evaluation of compensation in light of the Corporation’s performance, the current economic recession,situation, and the prevailing public sentiments and concernconcerns regarding executive compensation.
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Emphasizing consistent, long termlong-term performance impacts annual discretionary cash bonus and any equity incentive compensation. After assessing each named executive’s past performance, and expected future contribution, as well as the performance of the business or function the executive leads, the CRC uses its judgment in determining the amount of bonus or equity award, if any. We considerThe Corporation considers the current year
as well as past and expected performance in our compensation decisions. This long termlong-term view has the effect of moderating compensation levels and annual adjustments and awards.
Importance of Corporation Results. The CRC places substantial weight on the named executive’s contribution to the whole Corporation’s overall financial success, as opposed to limiting its focus strictly to an individual business or function. The CRC is of the opinion that the named executives share the responsibility of supporting the Corporation’s overriding goals and objectives as part of the management team.
Judgment versusVersus Formula Driven. The CRC does not use formulas in determining the level or mix of compensation. We evaluateIt evaluates a wide range of quantitative and qualitative factors, which include consistency in reaching financial and growth targets, the ability to perform in both good and challenging economic times, a history of integrity, evidence that the executive uses good judgment and his or her ability to lead and create future value for the Corporation.
Risk Considerations in Ourthe Compensation Program. The CRC views the Corporation’s compensation program with a long termlong-term focus. TheUnder the program, the greatest amount of compensation can be achieved over long periods of time through sustained excellentsuperior performance. Larger amounts of compensation are typically to be deferred or can only be realized upon retirement. We believeThe Corporation believes this will provide a strong incentive to manage the Corporation for the long termlong-term with a clear message to avoid excessive risk in the near term. We establishThe CRC establishes goals and objectives with a mix of quantitative and qualitative performance elements in order to avoid excessive weight on any one performance measure. The CRC also attempts to balance the various elements of compensation among base salary (current cash payments), deferred cash payments and equity awards. The CRC maintains full discretion to adjust compensation based upon improved performance and adherence to company values.
The CRC was required to reviewreviews the incentive compensation arrangements offor the Corporation’s named executive officersexecutives in various manners, including, but not limited to, discussions with the Corporation’s senior risk officercompensation consultant, to ensure that their incentive compensation arrangements do not encourage them to take unnecessary and excessive risks that threaten the value of the Corporation. Even though not expressly required, theThe CRC Committee also reviewedreviews the compensation arrangements of the Corporation’s other top executives. The CRC concluded that it does not believe that the Corporation’s compensation policies and practices encouragesdo not encourage excessive or inappropriate risk taking and instead encourage behaviors that support sustainable long termlong-term value creation. In reaching this conclusion, the CRC considered the various metrics and elements of the compensation program. For instance, the CRC does not use highly leveraged, short-term incentives that drive high riskhigh-risk investments at the expense of long termlong-term company value. Rather, the Corporation’s annual incentive compensation is based on balanced performance metrics that promote disciplined progress towardsfocused on longer-term goals.
Future Compensation Opportunity. The CRC’s intentions areCRC intends to continue to provide a mix of different compensation elements. We considerIt considers current compensation versus long termlong-term compensation and cash versus equity elements. We viewIt views cash payments as reflective of current or recent performance and stock payments as a means to encourage long termlong-term behavior and as a means to retain executives. The CRC believes that each named executive should have a portion of his or her compensation at risk based on how well the Corporation operates and how well its stock performs in the long run.
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Use of Compensation Consultants. Neither the CRC nor FCBI used a compensation consultant in 2009, or at anytime prior thereto, for any purpose including providing assistance in determining the amount or form of senior executive or director compensation. Recently, because Because of the enhanced level of regulation and scrutiny on executive compensation, the CRC has sought input fromretained Mathews Young — Management Consulting (“Mathews Young”) regarding the 2010to assist with amendments to an incentive compensation plan for non-executive employees of the Corporation, which plan was designed by our Human Resources Department. CRC and the Corporation understands thatCorporation. Mathews Young iswas the independent consultant of the CRC. The CRC and the Corporation will
did not use the sameretain a separate compensation consultant. In regard to benchmark data, theThe CRC considers executive compensation at other similarsimilarly sized and situated financial service companies as only one of numerous factors in setting pay. The CRC does not target a specific percentile within this group of perceived peers and uses the comparative data only as a reference tool after determining the types and amounts of compensation based upon its own evaluation.
Employment Agreements. Our The named executives have employment agreements, which include change of control protection for the executives and non-compete and non-solicitation requirements for the protection of the Corporation. The employment agreements with Messrs. Mendez, Buzzo, and Lilly were amended and restated as of December 16, 2008 to comply with Section 409A of the Internal Revenue Code of 1986, as amended, and initial employment agreements were entered into with Messrs. BrownSchumacher and Mills. We describeBrown. The Corporation describes all of these agreements in more detail below.
The amended and restated employment agreement (“agreement”) with Mr. Mendez had an initial term of three years and providedprovides that beginning on the commencementJanuary 1st of the employment period under the agreement and on each succeeding January 1styear the term of the Agreement willagreement automatically be extendedextends an additional three years,one year, unless the Corporation or Mr. Mendez gives notice that the employment term will not thereafter be extended.
The Corporation also entered into amended and restatedDecember 16, 2008 employment agreements with Messrs. Buzzo and Lilly as of December 16, 2008, again to effectuate compliance with Section 409A; these agreements contain substantially similar terms and are modeled after Mr. Mendez’ agreement. These agreements supersede and replace the employment agreements for Messrs. Buzzo and Lilly entered into in 2002. Each agreement has an initial term of three years, and, similar to Mr. Mendez’ agreement, each is renewed for an additional threeone year term each January 1st1st unless the Corporation or the individual executive gives notice that the employment term will not be extended.
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The Corporation also entered into initial employment agreements with Messrs. BrownSchumacher and MillsBrown as of December 16, 2008. These agreements contain substantially similar terms and are modeled after Mr. Mendez’ agreement. EachMr. Schumacher’s agreement has an initial term of three years and is renewed for an additional year each January 1st unless he or the Corporation gives notice that the employment term will not be extended. The agreement for Mr. Brown has an initial term of two years, and is renewed for an additional two-year termyear each January 1st1st unless the Corporation or the individual executiveMr. Brown gives notice that the employment term will not be extended. EachMr. Schumacher’s agreement provides for a lump sum payment of 2.99 times base salary, and Mr. Brown’s agreement provides for a lump sum payment of two (2) times base salary, in the event of a change of control coupled with terminated employment either without cause“Cause” by the Corporation or by the executiveexecutives for “Good Reason” (as defined in the agreement)their respective agreements).
Compensation Elements Used to Achieve Corporation’s Goals
The Corporation uses the compensation elements discussed below as the means to reward, retain and align executives’ interests with the long termlong-term interests of the Corporation and stockholders.
Base Salary and Bonus. The amount of base salary for each named executive depends upon the scope of the executive’s duties, his or her individual performance and length of service, and his or her leadership ability. Current salary impacts our decisions regarding salary adjustments relevant to peers (within and outside this company)the Corporation). Base salaries are reviewed annually.
Bonus. For each named executive, officer, the CRC may award discretionary cash bonuses during the first quarter of each year based upon the previous year’s performance based uponas evaluated by the evaluation by CRC and the CEO (except the CEO does not participate in his or her own bonus determination).
Stock Options and Restricted Stock Awards. The Corporation’s equity incentive program is designed to recognize responsibility, reward excellent performance, retain named executives, and align their interests with those of our stockholders. The CRC has used stock options and stock awards sparingly and determined that no suchnot to make any awards were merited in 2009 due the inability of the Corporation to attain its performance goals and objectives in an admittedly difficult economic cycle.
On February 28, 2012, the Board of Directors approved the First Community Bancshares, Inc. 2012 Omnibus Equity Compensation Plan (the “2012 Plan”), which in January 2004 andturn was approved by stockholders at the 2012 Annual Meeting. The Board of Directors replaced all prior equity plans with this single plan approved by the stockholders at the 2004 Annual Meeting. 200,000 shares of common stock were reserved for future issuance pursuantthat conforms to the 2004 Plan. Grants of incentive stock options and non-qualified stock options under the 2004 Plan generally become vested so that 25% of the award vests ascurrent best governance practices. As of the date of the grant and 25% vests on each one year anniversary thereafter, so that 100%mailing of such awards is vested as ofthis proxy, there have been no grants under the third anniversary of the date of grant. No grants were awarded in 20092012 Plan to any named executive officer. All vested but unexercised grants under the 2004 Plan are “out of the money” and have no intrinsic value. The 2003 acquisition of The CommonWealth Bank added additional stock options for 120,155 shares of common stock (124,380 shares adjusted by the merger conversion factor of .9015 and the 10% stock dividend in 2003). These options included awards to employees and directors and were issued by The CommonWealth Bank in 12 grants beginning in 1994 and ending in 2002 with adjusted exercise prices ranging from $4.75 to $17.40. The 2009 acquisition of TriStone Community Bank added additional stock options for 148,764 shares of Common Stock. These options included awards to employees and directors and were issued by TriStone Community Bank. Options from these two acquired plans are fully vested and are exercisable for up to ten years following the grant date. At December 31, 2009, 5,436 option shares were outstanding and exercisable under the former CommonWealth Plan and 148,764 option shares were outstanding and exercisable under the former TriStone Plan.
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Pension Plans. The Corporation provides a defined retirement benefit to the named executives and others pursuant to separate agreements, each of which is known as a “Supplemental Executive Retention Plan”supplemental executive retention plan (“SERP”). The planEach SERP is unfunded and designed to provide a benefit to be paid at age 62, normal retirement age in the SERP. The benefit is targeted at 35% of final compensation projected at an assumed 3% salary progression rate, and subject to an annual benefit limit of $80,000. Vesting underIn return for certain amendments to his employment agreement, on December 16, 2010, the planBoard of Directors, in concert with the CRC, amended the SERP with respect to Mr. Mendez to remove the annual maximum benefit, with said amendment effective January 1, 2011. Vesting is on a graded schedule as follows: 25% vesting after 5five years of service under the plan;service; 50% vesting after 10ten years of service under the plan;service; 75% vesting after 15 years of service under the plan;service; plus an additional 5% vesting for each year of service beyond 15 years, under the plan, with full vesting after 20 years of service from plan inception or reaching age 62, whichever occurs first.
2012 Discretionary Bonuses and Long-term Incentive Awards
The CRC and management believe it is in the Corporation’s best interests to maintain consistency in its compensation philosophy and implementation, but it also believes discretion should be used in times of
prosperity as well as times when either the Corporation or the overall economy, or both, are performing below expectations. With this in mind, the CRC believes it is appropriate for some components of compensation to remain level or decline during periods of economic downturn.
While the Corporation has taken a conservative approach to setting compensation in recent years, Mr. Mendez proposed, and the CRC approved, modest salary adjustments for the other executive officers in August, 2012. Additionally, the CRC received recommendations for and approved incentive bonuses for executive officers based on the achievement of key operating goals in 2011. These incentive bonuses were generally awarded in the third quarter of 2012. These were the first incentive bonuses awarded since the onset of the 2008 recession and the associated negative credit and real estate cycle. The CRC will meet later this year to evaluate 2012 performance to determine whether to award discretionary cash bonuses and long-term incentive awards to the named executives based on 2012 performance.
Consistent with past practice, going forward the CRC will continue to use discretion coupled with a goals-driven formula to compensate executives. The Corporation will not adopt incentives that promote risky behavior for near-term rewards. The CRC believes executive compensation should include both short-term and long-term elements reflective of, and driven by, the Corporation’s respective current and long-term operating performance compared with similarly situated publicly traded, regional financial services companies.
Considerations Used to Determine CEO Base Salary for 2012 and Discretionary Bonus for 2011.
At the beginning of each year, Mr. Mendez develops recommended objectives necessary for the Corporation to be successful. Mr. Mendez presents these objectives to the CRC for its consideration in determining how Mr. Mendez’ performance will be evaluated. These objectives are determined in most part from the Corporation’s annual financial and budget planning sessions, during which the Corporation’s performance and growth opportunities are analyzed and goals and objectives are established for the upcoming year. These goals and objectives include both objective financial metrics and qualitative strategic and operational considerations that are evaluated subjectively, without any formal weighting assigned. The CRC and Mr. Mendez use this process to focus on factors they believe create long-term stockholder value. The CRC discusses with Mr. Mendez its considerations regarding Mr. Mendez’ own compensation. Mr. Mendez does not participate in the final determination of his own compensation.
In determining Mr. Mendez’ base salary for 2012 and his discretionary bonus compensation for 2011, the CRC considered the Corporation’s performance and Mr. Mendez’ individual performance in 2011. During 2011, Mr. Mendez achieved his principal financial goals, including successful performance against the 2011 operating budget as well as the continued enhancement of the Corporation’s primary capital ratios. Revenue gains and strong expense control led to achievement of budget goals for the year and continuation of the company’s re-establishment of earnings performance at normalized levels following the extended recessionary environment of the preceding three years. These results, along with balance sheet management and other capital strategies, yielded strong and improving leverage and capital ratios, which led the Corporation well beyond capital minimums dictated by regulatory authorities, and placed the Corporation within the top tier among its peers and the industry in terms of capital strength.
In May of 2011 the Corporation’s capital position was significantly advanced as Mr. Mendez organized, directed and led a private placement of the company’s convertible preferred stock resulting in the issuance of $18.9 million in new issue convertible preferred shares, on terms considered favorable to the Corporation. This resulted in significant improvement in the company’s primary capital levels and set the stage for a series of growth initiatives.
In 2011, the Corporation continued to realize earnings and operating benefits drawn from the Corporation’s last banking acquisitions in mid-year 2009 and late 2008. Mr. Mendez also assisted in the identification of further
acquisition targets in execution of the Corporation’s strategic plan for growth. These efforts were instrumental in the completion of additional key business acquisitions in subsequent periods. Mr. Mendez continued work on deployment of the Corporation’s updated strategic plan, which was completed in the first quarter of 2010 and oversaw the execution of key strategies under that plan.
One of the most important objectives for Mr. Mendez and the Corporation was the maintenance of asset quality measures in the top quartile among the industry. This objective was achieved in 2011 as the Corporation continued to manage through a difficult credit and real estate environment. Through the direction of other executives and departments, asset quality measures for the Corporation were maintained at satisfactory strong levels throughout the year and continued to compare favorably with broader industry metrics for non-performing assets, delinquencies and net charge-offs.
Mr. Mendez continues to be charged with the search for suitable candidates for banking mergers and acquisitions within the Corporation’s footprint; to lead the Corporation’s strategic planning process; and to retain and motivate the Corporation’s management team. Throughout 2011, and as noted above, the Corporation’s focus was also directed at capital retention and development, as well as continued improvement of the Corporation’s risk profile and loss mitigation. These goals were all satisfactorily met during 2011.
Determining 2012 Base Salaries and 2011 Discretionary Bonuses for the Corporation’s Other Named Executives
The CRC works in conjunction with Mr. Mendez to establish the base and incentive compensation of other named executives. Its goal is to achieve a balance of incentives that retain a qualified group of senior managers and ensure that the Corporation remains competitive over the long-term.
Each of the other named executives is a leader of an individual business or function of the Corporation. As part of the executive management team, they report directly to Mr. Mendez, who develops the objectives that each individual is expected to achieve, and against which their performance is assessed. Similar to Mr. Mendez, these objectives are reviewed with the CRC and are derived largely from the Corporation’s financial, budget and strategic planning processes.
Like Mr. Mendez, the other named executives have objectives that include both quantitative financial measurements and qualitative strategic and operational considerations affecting the Corporation and the businesses or functions that the named executives lead. Mr. Mendez assesses each named executive’s individual performance against the objectives, the Corporation’s overall performance and the performance of the executive’s business or function. Mr. Mendez then makes a compensation recommendation to the CRC for each named executive. The named executives do not play a role in the determination of their compensation except for their discussion with Mr. Mendez regarding their individual performance against predetermined objectives.
In determining the base salary of the other executive officers, Mr. Mendez and the CRC consider the skill set of the individual executive officer, his or her level of responsibility within the Corporation, and salaries paid by companies of similar size and in similar lines of business as the Corporation. The Corporation does not benchmark to a specific peer group, but uses this information as a general reference for comparing the Corporation’s executive base salary compensation to that of other companies in the industry. With respect to their 2011 discretionary bonuses, Mr. Mendez and the CRC considered the following criteria:
David D. Brown. As the leader of the Corporation’s finance function, Mr. Brown’s financial objectives in 2011 focused on the overall performance of the Corporation similar to Mr. Mendez’. Mr. Brown’s strategic and operational goals included providing operational support to achieve financial goals and strengthen the finance function, while maintaining a strong controllership function and improving regulatory relationships. Mr. Brown also continued to search for suitable candidates for banking mergers and acquisitions within the Corporation’s footprint and FDIC-assisted transactions.
Robert L. Buzzo. In 2011, Mr. Buzzo was primarily responsible for First Community Bank’s largest banking region, along with his Corporate responsibilities. In 2011, Mr. Buzzo’s region achieved its net income, loan and core deposit growth objectives. Mr. Buzzo also achieved his operational strategic objectives in 2011. Under Mr. Buzzo’s leadership, the division comprising the Southern Region was among the top performing areas of the bank.
In addition, Mr. Buzzo continued his supervision of the Trust and Wealth Management Divisions of the Corporation. During 2011, the Trust Department fell just short of its financial objectives while First Community Wealth Management met its financial performance goals.
E. Stephen Lilly. Mr. Lilly completed a core banking system study leading to an integrated, efficient technology platform for the Company and negotiated and executed new technology contracts in October 2011. The new consolidated platform eliminated 11 technology vendors. He also consolidated Secondary Market Mortgage processing into the Credit Administration/Retail Credit Department to provide efficiency and streamlined mortgage processing and underwriting. Consolidation of the departments was completed in May of 2011, which led to reduced costs in producing residential real estate loans. Mr. Lilly completed restructuring of the Corporation’s product/pricing administration, which led to an enhanced net interest margin. His further coordination of Pricing and Product Committees has led to improved net interest margin, which compares favorably to industry peers. Mr. Lilly successfully realigned the Corporation’s Commercial Services Department in February 2011, achieving significant cost savings with the goal of improved delivery of commercial products and generating non-interest income. During 2011, Mr. Lilly established the Office of Project Management to drive strategic initiatives. He restructured Information Technology and was named Chief Information Officer in addition to COO. His efforts to restructure and redefine responsibilities and workflow produced a more efficient organization and produced cost savings.
Robert L. Schumacher. Mr. Schumacher’s strategic and operational goals in 2011 included the organization, launch and management of a newly established Legal Department; assuming control and reporting line responsibility of the Enterprise Risk Management and Compliance functions; and to oversee completion of the first full cycle of internal audits under a new Internal Audit Director and new team since moving this important function in-house. Mr. Schumacher accomplished most of his goals for 2011. These initiatives have been successful, resulting in a reduction in legal fees, continued improvement in overall enterprise risk management, and an improved and more efficient internal audit process.
The William P. Stafford, II (Chairman)Compensation and Retirement CommitteeCRC has reviewed the Compensation Discussion and AnalysisCD&A and discussed that analysis with management. Based on its review and discussions with management, the committeeCRC recommended to ourthe Board of Directors that the Compensation Discussion and AnalysisCD&A be included in the Corporation’s Annual Report onForm 10-K for 20092012 and the Corporation’s 20102013 proxy statement. This report is provided by the following independent directors, who comprise the Committee:Allen T. HamnerA. A. Modena18
William P. Stafford
2009 SUMMARY COMPENSATION TABLE2012 Summary Compensation Table
Change in | ||||||||||||||||||||||||||||||||||||||||
Aggregate | Pension | |||||||||||||||||||||||||||||||||||||||
Date Fair | Value and | |||||||||||||||||||||||||||||||||||||||
Value of | Non- | Non- | ||||||||||||||||||||||||||||||||||||||
Stock Awards | Equity | Qualified | ||||||||||||||||||||||||||||||||||||||
and Option | Incentive | Deferred | All | |||||||||||||||||||||||||||||||||||||
Awards | Plan | Compen- | Other | |||||||||||||||||||||||||||||||||||||
Name of Individual/ | Granted | Stock | Option | Compen- | sation | Compen- | ||||||||||||||||||||||||||||||||||
Capacities Served | Year | Salary | Bonus | in 2009 | Awards(1) | Awards(1) | sation(4) | Earnings(3) | sation(2) | Total | ||||||||||||||||||||||||||||||
John M. Mendez | 2009 | $ | 392,902 | $ | — | $ | — | N/A | N/A | N/A | $ | 152,922 | $ | 49,552 | $ | 595,376 | ||||||||||||||||||||||||
President & Chief | 2008 | 392,902 | — | N/A | — | 27,603 | N/A | 124,433 | 44,526 | 589,464 | ||||||||||||||||||||||||||||||
Executive Officer | 2007 | 382,200 | 75,000 | N/A | — | 36,234 | N/A | 39,219 | 49,049 | 581,702 | ||||||||||||||||||||||||||||||
David D. Brown | 2009 | 145,000 | — | 6,100 | N/A | N/A | N/A | 5,388 | 20,184 | 176,672 | ||||||||||||||||||||||||||||||
Chief Financial Officer | 2008 | 135,000 | — | N/A | 17,500 | 23,946 | N/A | 10,303 | 18,249 | 204,998 | ||||||||||||||||||||||||||||||
2007 | 110,000 | 40,000 | N/A | 17,465 | 24,820 | N/A | N/A | 13,759 | 206,044 | |||||||||||||||||||||||||||||||
Robert L. Buzzo | 2009 | 217,800 | — | — | N/A | N/A | N/A | 45,112 | 44,564 | 307,476 | ||||||||||||||||||||||||||||||
Vice President and | 2008 | 217,800 | — | N/A | — | 14,805 | N/A | 187,770 | 42,021 | 462,396 | ||||||||||||||||||||||||||||||
Secretary | 2007 | 213,000 | 20,000 | N/A | — | 19,433 | �� | N/A | 51,370 | 40,889 | 344,692 | |||||||||||||||||||||||||||||
E. Stephen Lilly | 2009 | 235,000 | — | — | N/A | N/A | N/A | 22,696 | 44,955 | 302,651 | ||||||||||||||||||||||||||||||
Chief Operating Officer | 2008 | 235,000 | — | N/A | — | 14,777 | N/A | 10,367 | 32,094 | 292,238 | ||||||||||||||||||||||||||||||
2007 | 218,000 | 50,000 | N/A | — | 19,390 | N/A | 16,942 | 37,157 | 341,489 | |||||||||||||||||||||||||||||||
Gary R. Mills | 2009 | 172,000 | — | — | N/A | N/A | N/A | 10,504 | 20,024 | 202,528 | ||||||||||||||||||||||||||||||
Chief Credit Officer | 2008 | 172,000 | — | N/A | — | 10,277 | N/A | 56,672 | 18,213 | 257,162 | ||||||||||||||||||||||||||||||
2007 | 160,000 | 35,000 | N/A | — | 16,606 | N/A | N/A | 22,797 | 234,403 |
Name of Individual / Capacities Served | Year | Salary | Bonus | Stock Awards | Option Awards | Non- Equity Incentive Plan Compen- sation (1) | Change in Pension Value and Non- qualified Deferred Compen- sation Earnings (2) | All Other Compen- sation (3) | Total | |||||||||||||||||||||||||
John M. Mendez | 2012 | $ | 392,902 | $ | 35,000 | $ | — | $ | — | $ | 105,137 | $ | 56,333 | $ | 589,372 | |||||||||||||||||||
President & Chief | 2011 | 392,902 | — | — | — | 152,509 | 58,790 | 604,201 | ||||||||||||||||||||||||||
Executive Officer | 2010 | 392,902 | — | — | — | 37,200 | 57,985 | 488,087 | ||||||||||||||||||||||||||
David D. Brown | 2012 | 166,400 | 20,000 | — | — | 7,216 | 21,050 | 214,666 | ||||||||||||||||||||||||||
Chief Financial Officer | 2011 | 160,000 | — | — | — | 5,356 | 19,023 | 184,379 | ||||||||||||||||||||||||||
2010 | 160,000 | — | — | — | 5,219 | 18,352 | 183,571 | |||||||||||||||||||||||||||
Robert L. Buzzo | 2012 | 230,000 | 15,000 | — | — | 23,633 | 43,890 | 312,523 | ||||||||||||||||||||||||||
Vice President and | 2011 | 225,800 | — | — | — | 84,234 | 41,855 | 351,889 | ||||||||||||||||||||||||||
Secretary | 2010 | 225,800 | — | — | — | 57,363 | 44,622 | 327,785 | ||||||||||||||||||||||||||
E. Stephen Lilly | 2012 | 252,000 | 25,000 | — | — | 38,933 | 39,861 | 355,794 | ||||||||||||||||||||||||||
Chief Operating Officer | 2011 | 247,000 | — | — | — | 33,974 | 37,720 | 318,694 | ||||||||||||||||||||||||||
2010 | 247,000 | — | — | — | 24,897 | 37,041 | 308,938 | |||||||||||||||||||||||||||
Robert L. Schumacher | 2012 | 183,600 | 20,000 | — | — | 82,788 | 36,131 | 322,519 | ||||||||||||||||||||||||||
General Counsel | 2011 | 180,000 | — | — | — | 72,691 | 34,089 | 286,780 | ||||||||||||||||||||||||||
2010 | 180,000 | — | — | — | 50,514 | 36,298 | 266,812 |
(1) | ||
The Company currently has no non-equity incentive compensation plan. |
(2) | The amounts in this column represent the increase in the actuarial net present value of all future retirement benefits under the SERPs. The net present value of the retirement benefits used to calculate the net change in benefits were determined using the same assumptions used to determine our retirement obligations and expense for financial statement purposes. Additional information about our SERPs is included on page 16. We have not provided above-market or preferential earnings on any nonqualified deferred compensation and, accordingly, no such amounts are reflected in the table. |
(3) | The amounts in this column are detailed on the following table entitled “2012 All Other Compensation.” |
The Corporation provides the named executives with additional benefits as shown in the “All Other Compensation” column of the 2009 “Summary“2012 Summary Compensation Table” shown above, that we believeit believes are reasonable, competitive and in line with the Corporation’s overall executive program. We provideThe Corporation provides additional detail of those benefits in the table below.
Total | ||||||||||||||||||||||||||||
Retirement | ||||||||||||||||||||||||||||
Plan | Total | Split Dollar | Executive | |||||||||||||||||||||||||
Matching | KSOP | Life | Life | |||||||||||||||||||||||||
Name of Individual | Year | Contribution(1) | Contribution | Insurance(2) | Insurance(3) | Perquisites(4) | Total | |||||||||||||||||||||
John M. Mendez | 2009 | $ | 21,970 | $ | — | $ | 3,097 | $ | 11,905 | $ | 12,580 | $ | 49,552 | |||||||||||||||
2008 | 20,500 | — | 2,793 | 8,095 | 13,138 | 44,526 | ||||||||||||||||||||||
2007 | 15,000 | 12,972 | 784 | 7,393 | 12,900 | 49,049 | ||||||||||||||||||||||
David D. Brown | 2009 | 8,924 | — | — | 1,080 | 10,180 | 20,184 | |||||||||||||||||||||
2008 | 6,973 | — | — | 538 | 10,738 | 18,249 | ||||||||||||||||||||||
2007 | 2,115 | 2,805 | — | 618 | 8,221 | 13,759 | ||||||||||||||||||||||
Robert L. Buzzo | 2009 | 19,480 | — | 4,339 | 8,345 | 12,400 | 44,564 | |||||||||||||||||||||
2008 | 18,496 | — | 4,206 | 6,361 | 12,958 | 42,021 | ||||||||||||||||||||||
2007 | 14,184 | 7,092 | 953 | 5,940 | 12,720 | 40,889 | ||||||||||||||||||||||
E. Stephen Lilly | 2009 | 26,621 | — | 1,160 | 4,594 | 12,580 | 44,955 | |||||||||||||||||||||
2008 | 15,500 | — | 1,083 | 3,251 | 12,260 | 32,094 | ||||||||||||||||||||||
2007 | 13,684 | 7,242 | 350 | 2,981 | 12,900 | 37,157 | ||||||||||||||||||||||
Gary R. Mills | 2009 | 12,633 | — | — | 1,391 | 6,000 | 20,024 | |||||||||||||||||||||
2008 | 11,287 | — | — | 926 | 6,000 | 18,213 | ||||||||||||||||||||||
2007 | 10,560 | 5,280 | — | 957 | 6,000 | 22,797 |
Name of Individual | Year | Total Retirement Plan Matching Contribution | Total KSOP Contribution | Split Dollar Life Insurance (1) | Executive Life Insurance (2) | Perquisites (3) | Total | |||||||||||||||||||||
John M. Mendez | 2012 | $ | 32,047 | $ | — | $ | 901 | $ | 14,426 | $ | 8,959 | $ | 56,333 | |||||||||||||||
2011 | 32,163 | — | 860 | 13,198 | 12,569 | 58,790 | ||||||||||||||||||||||
2010 | 30,335 | — | 3,497 | 12,086 | 12,067 | 57,985 | ||||||||||||||||||||||
David D. Brown | 2012 | 8,300 | — | — | 1,022 | 11,728 | 21,050 | |||||||||||||||||||||
2011 | 7,983 | — | — | 871 | 10,169 | 19,023 | ||||||||||||||||||||||
2010 | 7,744 | — | — | 941 | 9,667 | 18,352 | ||||||||||||||||||||||
Robert L. Buzzo | 2012 | 18,742 | — | 1,007 | 10,674 | 13,467 | 43,890 | |||||||||||||||||||||
2011 | 18,525 | — | 977 | 9,784 | 12,569 | 41,855 | ||||||||||||||||||||||
2010 | 18,841 | — | 4,686 | 9,028 | 12,067 | 44,622 | ||||||||||||||||||||||
E. Stephen Lilly | 2012 | 20,432 | — | 396 | 5,551 | 13,482 | 39,861 | |||||||||||||||||||||
2011 | 19,707 | — | 375 | 5,069 | 12,569 | 37,720 | ||||||||||||||||||||||
2010 | 19,027 | — | 1,287 | 4,660 | 12,067 | 37,041 | ||||||||||||||||||||||
Robert L. Schumacher | 2012 | 14,977 | — | 860 | 7,719 | 12,575 | 36,131 | |||||||||||||||||||||
2011 | 14,762 | — | 835 | 7,123 | 11,369 | 34,089 | ||||||||||||||||||||||
2010 | 14,937 | — | 3,910 | 6,584 | 10,867 | 36,298 |
(1) | ||
Imputed income on |
19
(2) | ||
(3) | Perquisites consist of country club dues and/or automobile allowance in each instance. |
The Corporation provides other perquisites and personal benefits that the Corporation and the CRC believe are reasonable and consistent with its overall compensation program to better enable the Corporation to attract and retain superior employees for key positions. The CRC periodically reviews the levels of perquisites and other personal benefits provided to the named executives. Perquisites include the following:
Outstanding Equity Awards at other similarly located and like-sized companies. The Corporation considers the payment of country club dues to be an appropriate part of the overall compensation packages in order to provide an appropriate setting for the named executives to conduct business on behalf of the Corporation, to socialize with other business and community leaders and to entertain the Corporation’s business customers and prospects. All costs associated with personal use of a country club by the named executive or family members are borne by the individual named executive and not the Corporation.
20
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Equity Incentive Plan Awards | ||||||||||||||||||||||||||||||||||||
Number of Securities Underlying Unexercised Options | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested | Number of Unearned Shares, Units or Other Rights That Have Not Vested | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested | |||||||||||||||||||||||||||||
Name | Exercisable | Unexercisable | ||||||||||||||||||||||||||||||||||
John M. Mendez | 12,092 | — | — | $ | 19.80 | 2/3/2022 | — | $ | — | — | $ | — | ||||||||||||||||||||||||
2,015 | — | 13.94 | 2/3/2022 | |||||||||||||||||||||||||||||||||
14,108 | — | 24.65 | 2/3/2022 | |||||||||||||||||||||||||||||||||
14,108 | — | 29.15 | 2/3/2022 | |||||||||||||||||||||||||||||||||
David D. Brown | 10,000 | — | — | 35.00 | 10/24/2016 | — | — | — | — | |||||||||||||||||||||||||||
Robert L. Buzzo | 7,566 | — | — | 19.80 | 3/30/2017 | — | — | — | — | |||||||||||||||||||||||||||
7,566 | — | 16.00 | 3/30/2017 | |||||||||||||||||||||||||||||||||
5,404 | — | 13.94 | 3/30/2017 | |||||||||||||||||||||||||||||||||
7,566 | — | 24.65 | 3/30/2017 | |||||||||||||||||||||||||||||||||
7,565 | — | 29.15 | 3/30/2017 | |||||||||||||||||||||||||||||||||
E. Stephen Lilly | 7,551 | — | — | 19.80 | 6/26/2025 | — | — | — | — | |||||||||||||||||||||||||||
2,156 | — | 13.94 | 6/26/2025 | |||||||||||||||||||||||||||||||||
7,550 | — | 24.65 | 6/26/2025 | |||||||||||||||||||||||||||||||||
7,550 | — | 29.15 | 6/26/2025 | |||||||||||||||||||||||||||||||||
Robert L. Schumacher | 1,323 | — | — | 13.94 | 3/24/2018 | — | — | — | — | |||||||||||||||||||||||||||
3,970 | — | 24.65 | 3/24/2018 | |||||||||||||||||||||||||||||||||
9,266 | — | 29.15 | 3/24/2018 |
All options listed in the above table based on the grant date.
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Equity Incentive | ||||||||||||||||||||||||||||||||||||
Plan Awards | ||||||||||||||||||||||||||||||||||||
Equity | Market or | |||||||||||||||||||||||||||||||||||
Incentive | Number | Payout | ||||||||||||||||||||||||||||||||||
Plan | of | Value of | ||||||||||||||||||||||||||||||||||
Awards: | Market | Unearned | Unearned | |||||||||||||||||||||||||||||||||
Number | Number | Value of | Shares, | Shares, | ||||||||||||||||||||||||||||||||
of | of Shares | Shares or | Units or | Units or | ||||||||||||||||||||||||||||||||
Securities | or Units | Units of | Other | Other | ||||||||||||||||||||||||||||||||
Number of | Underlying | of Stock | Stock | Rights | Rights | |||||||||||||||||||||||||||||||
Securities Underlying | Unexercised | Option | Option | That Have | That Have | That Have | That Have | |||||||||||||||||||||||||||||
Unexercised Options | Unearned | Exercise | Expiration | Not | Not | Not | Not | |||||||||||||||||||||||||||||
Name | Exercisable | Unexercisable | Options | Price | Date | Vested | Vested | Vested | Vested | |||||||||||||||||||||||||||
John M. Mendez | 12,092 | — | — | $ | 19.80 | 2/3/2022 | — | $ | — | — | $ | — | ||||||||||||||||||||||||
— | — | 16.00 | 2/3/2022 | |||||||||||||||||||||||||||||||||
2,015 | — | 13.94 | 2/3/2022 | |||||||||||||||||||||||||||||||||
14,108 | — | 24.65 | 2/3/2022 | |||||||||||||||||||||||||||||||||
14,108 | — | 29.15 | 2/3/2022 | |||||||||||||||||||||||||||||||||
David D. Brown | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
7,500 | 2,500 | 35.00 | 10/24/2016 | |||||||||||||||||||||||||||||||||
Robert L. Buzzo | 7,566 | — | — | 19.80 | 3/30/2017 | — | — | — | — | |||||||||||||||||||||||||||
7,566 | — | 16.00 | 3/30/2017 | |||||||||||||||||||||||||||||||||
5,404 | — | 13.94 | 3/30/2017 | |||||||||||||||||||||||||||||||||
7,566 | — | 24.65 | 3/30/2017 | |||||||||||||||||||||||||||||||||
7,565 | — | 29.15 | 3/30/2017 | |||||||||||||||||||||||||||||||||
E. Stephen Lilly | 7,551 | — | — | 19.80 | 6/26/2025 | — | — | — | — | |||||||||||||||||||||||||||
2,156 | — | 13.94 | 6/26/2025 | |||||||||||||||||||||||||||||||||
7,550 | — | 24.65 | 6/26/2025 | |||||||||||||||||||||||||||||||||
7,550 | — | 29.15 | 6/26/2025 | |||||||||||||||||||||||||||||||||
Gary R. Mills | 233 | — | — | 13.94 | 2/5/2035 | — | — | — | — | |||||||||||||||||||||||||||
865 | — | 24.65 | 2/5/2035 | |||||||||||||||||||||||||||||||||
3,025 | — | 29.15 | 2/5/2035 | |||||||||||||||||||||||||||||||||
5,000 | — | 32.50 | 6/28/2015 |
2009 OPTION EXERCISES AND STOCK VESTED2012 Pension BenefitsThe following table provides information for the named executives on (1) stock option awards exercised during 2009, including the number of shares acquired upon exercise and the value realized at such time, and (2) the number of shares acquired upon the vesting of stock awards and the value realized at such time, before the payment of any applicable withholding tax and brokerage commissions. Option Awards Stock Awards Shares Shares Acquired on Value Acquired on Value Exercise Realized Vesting Realized John M. Mendez — $ — — $ — David D. Brown — — 500 6,100 Robert L. Buzzo — — — — E. Stephen Lilly — — — — Gary R. Mills — — — — 21
The FCBICorporation’s Executive SERP. The FCBICorporation’s SERP is unfunded and not qualified for tax purposes. Refer to page 1816 of this proxy statement for a more detailed discussion of the SERP and to Footnote 10Note 11 to the Consolidated Financial Statements in the Annual Report onForm 10-Kfor the year ended December 31, 20092012 for discussion of the methodologies and assumptions underlying the projected SERP benefits.
Number of Years | Present Value of | Payments During | ||||||||||||||
Name | Plan Name | Credited Service | Accumulated Benefit | Last Fiscal Year | ||||||||||||
John M. Mendez | SERP | 24 | $ | 559,745 | $ | — | ||||||||||
David D. Brown | SERP | 4 | 15,691 | — | ||||||||||||
Robert L. Buzzo | SERP | 36 | 582,329 | — | ||||||||||||
E. Stephen Lilly | SERP | 11 | 162,111 | — | ||||||||||||
Gary R. Mills | SERP | 10 | 67,176 | — |
Name | Plan Name | Number of Years Credited Service | Present Value of Accumulated Benefit | Payments During Last Fiscal Year | ||||||||||||
John M. Mendez | SERP | 28 | $ | 854,591 | — | |||||||||||
David D. Brown | SERP | 8 | 33,482 | — | ||||||||||||
Robert L. Buzzo | SERP | 40 | 747,559 | — | ||||||||||||
E. Stephen Lilly | SERP | 15 | 259,915 | — | ||||||||||||
Robert L. Schumacher | SERP | 29 | 665,629 | — |
2009 NONQUALIFIED DEFERRED COMPENSATIONSalary.Salary. Any employee otherwise ineligible to fully participate in the qualified retirement plan (KSOP)KSOP and who meetmeets the Internal Revenue Code definition of being “highly compensated”,compensated,” including the named executives, have historically been eligible to elect to defer up to 75% of their compensation to the FCBI 401(k)Corporation’s WRAP plan. Deferrals to this plan are invested as directed by each participant and are matched at the discretion of the Board of Directors in conjunction with and subject to limits established each year by the Board of Directors for elective deferrals to the KSOP. The Board of Directors authorized a match of 100% of up to 8% of participant salary for 20092012 when deferred under the 401(k) plan.KSOP. The table below provides detail regarding nonqualifiednon-qualified deferred compensation of the named executives, which for 20092012 included only the deferral of a portion of salaries to the 401(k) WRAP plan. Balances previously deferred by the named executives to a second non-qualified plan, known as the “Deferred Compensation Plan”,Plan,” which the Corporation amended and terminated on December 22, 2010, with said termination effective December 31, 2010, have been combined with the 401(k) WRAP deferrals and reported in a single table below: Executive Company Aggregate Contributions Contributions Earnings Aggregate Aggregate in Last in Last in Last Withdrawals/ Balance at Last Fiscal Year(1) Fiscal Year(1) Fiscal Year Distributions Fiscal Year-End John M. Mendez $ 8,335 $ 3,570 $ 1,791 N/A $ 185,307 David D. Brown — — — N/A — Robert L. Buzzo 9,339 1,080 24,856 N/A 100,861 E. Stephen Lilly — 8,221 4,507 N/A 79,360 Gary R. Mills 601 — (8,001 ) N/A 45,490
Name | Executive Contributions in Last Fiscal Year (1) | Corporation Contributions in Last Fiscal Year (1) | Aggregate Earnings in Last Fiscal Year (2) | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last Fiscal Year End | |||||||||||||||
John M. Mendez | $ | 12,900 | $ | 15,304 | $ | 26,456 | $ | — | $ | 299,427 | ||||||||||
David D. Brown | — | — | — | — | — | |||||||||||||||
Robert L. Buzzo | �� | 7,621 | 2,732 | 17,784 | — | 165,440 | ||||||||||||||
E. Stephen Lilly | 561 | 3,689 | 27,809 | — | 126,389 | |||||||||||||||
Robert L. Schumacher | 20,950 | 2,183 | (2,619 | ) | — | 194,948 |
(1) | The amounts reported under “Executive Contributions” are included in each |
(2) | The amounts reported under “Aggregate Earnings” are not included in each named executive’s amount under the “Salary” column in the “2012 Summary Compensation |
The information below describes the compensation that would become payable under existing plans and agreements based on the named executive’s actual termination of employment coupled with the assumption that the named executive’s employment had terminated on December 31, POTENTIAL PAYMENTS UPON TERMINATIONPotential Payments Upon Termination2009,2012, given the named executive’s compensation, years of service and a presumed age of sixty-two (62).22
Since a variety of factors might affect the nature and amount of any benefits payable upon the events discussed below, actual amounts may vary from what we havethe Corporation has projected.
Regardless of the manner in which a named executive’s employment terminates, he or she may be entitled to receive amounts earned during his or her term of employment. Such amounts include:
option or stock award grants made pursuant to the 1999 Plan, 2004 Plan, or 2012 Plan that vest through the most recently completed fiscal year;
amounts contributed under the KSOP and the Corporation’s non-qualified deferred compensation plans;
amounts accrued and vested through the Corporation’s SERP payable as benefits for the life of the named executive beginning at age 62; and
cash surrender value of life insurance payable.
In the event of an involuntary termination without cause, he“Cause,” a named executive officer would receive severance payments outlined in the respective employment agreement.
In the event of the retirement of a named executive, in addition to the items identified above:
for options granted under the 1999 Plan, he or she will retain vested options for up to five years after normal retirement at age 62 and 90 days after early retirement; and
for options granted under the 2004 Plan, he or she will retain vested options for the remainder of the outstanding ten year term.
for options granted under the 2012 Plan, he or she will retain vested options for the period of up to three months, or any statutorily required period.
In the event of the death or disability of a named executive, in addition to the benefit payments made upon termination or retirement, the named executive or his or her beneficiaries will receive benefits under the Corporation’s disability plan or executive life insurance plan, as appropriate. In addition, if the named executives had died on December 31, 2009,2012, the survivors of Messrs. Mendez, Buzzo, Lilly and LillySchumacher would have received projected amounts of $848,451, $716,020,$807,666, $685,372, $439,891, and $460,222,$616,606, respectively, from the proceeds of individual split dollar life insurance policies on each of these threefour named executives, the premiums of which are included in the “Summary of“2012 All Other Compensation Table”Compensation” table on page 19.21. The estimated amounts payable to the beneficiaries are derived by reflecting a deduction for repayment to the Corporation of the cash surrender value of the split dollar life insurance policies and distribution of 80% of the face value of any remaining insurance proceeds to the respective beneficiaries and 20% to the Corporation.
As previously stated, the Corporation has entered into employment agreements with each of the named executives, which agreements include change of control provisions. Pursuant to these agreements, if an executive’s employment is terminated following a change of control (other than a termination by the Corporation for cause)“Cause”) or if the executive terminates his or her employment in certain circumstances defined in the agreement, in addition to the benefits listed under the heading “Payments Made“Potential Payments Upon Termination”,Termination,” the named executive will receive a severance payment consisting of 2.0two to 2.99 times current salary.
23
Salary & | Nonqualified | Executive | ||||||||||||||||||
Benefits | Def Comp(4) | SERP | Life Ins(6) | Total | ||||||||||||||||
John M. Mendez | ||||||||||||||||||||
If early retirement occurred at Dec. 31, 2009 | $ | — | $ | 185,307 | $ | 80,000 | (1,5) | $ | 19,186 | $ | 284,493 | |||||||||
If retirement occurred at Dec. 31, 2009 | — | 185,307 | 80,000 | (2,5) | 19,186 | 284,493 | ||||||||||||||
If termination for cause occurred at Dec. 31, 2009 | — | 185,307 | — | 19,186 | 204,493 | |||||||||||||||
If termination without cause occurred at Dec. 31, 2009 | 994,647 | 185,307 | 80,000 | (1,5) | 19,186 | 1,279,140 | ||||||||||||||
If “change in control” termination occurred at Dec. 31, 2009 | 1,174,777 | 185,307 | 559,745 | (4) | 19,186 | 1,939,015 | ||||||||||||||
If disability occurred at Dec. 31, 2009 | 1,218,258 | 185,307 | 80,000 | (1,5) | 19,186 | 1,502,751 | ||||||||||||||
If death occurred at Dec. 31, 2009(3) | — | 185,307 | 80,000 | (1,5) | 983,000 | (4) | 1,248,307 | |||||||||||||
David D. Brown | ||||||||||||||||||||
If early retirement occurred at Dec. 31, 2009 | $ | — | $ | — | $ | 7,267 | (1,5) | $ | — | $ | 7,267 | |||||||||
If retirement occurred at Dec. 31, 2009 | — | — | 80,000 | (2,5) | — | 80,000 | ||||||||||||||
If termination for cause occurred at Dec. 31, 2009 | — | — | — | — | — | |||||||||||||||
If termination without cause occurred at Dec. 31, 2009 | 209,935 | — | 7,267 | (1,5) | — | 217,202 | ||||||||||||||
If “change in control” termination occurred at Dec. 31, 2009 | 270,000 | — | 15,691 | (4) | — | 285,691 | ||||||||||||||
If disability occurred at Dec. 31, 2009 | 3,228,008 | — | 7,267 | (1,5) | — | 3,235,275 | ||||||||||||||
If death occurred at Dec. 31, 2009(3) | — | — | 7,267 | (1,5) | 338,000 | (4) | 345,267 | |||||||||||||
Robert L. Buzzo | ||||||||||||||||||||
If early retirement occurred at Dec. 31, 2009 | $ | — | $ | 100,861 | $ | 60,340 | (1,5) | $ | 23,905 | $ | 185,106 | |||||||||
If retirement occurred at Dec. 31, 2009 | — | 100,861 | 67,475 | (2,5) | 23,905 | 192,241 | ||||||||||||||
If termination for cause occurred at Dec. 31, 2009 | — | 100,861 | — | 23,905 | 124,766 | |||||||||||||||
If termination without cause occurred at Dec. 31, 2009 | 556,892 | 100,861 | 60,340 | (1,5) | 23,905 | 741,998 | ||||||||||||||
If “change in control” termination occurred at Dec. 31, 2009 | 651,222 | 100,861 | 582,329 | (4) | 23,905 | 1,358,317 | ||||||||||||||
If disability occurred at Dec. 31, 2009 | 619,711 | 100,861 | 60,340 | (1,5) | 23,905 | 804,817 | ||||||||||||||
If death occurred at Dec. 31, 2009(3) | — | 100,861 | 60,340 | (1,5) | 545,000 | (4) | 706,201 | |||||||||||||
E. Stephen Lilly | ||||||||||||||||||||
If early retirement occurred at Dec. 31, 2009 | $ | — | $ | 79,360 | $ | 28,609 | (1,5) | $ | 1,962 | $ | 109,931 | |||||||||
If retirement occurred at Dec. 31, 2009 | — | 79,360 | 75,903 | (2,5) | 1,962 | 157,225 | ||||||||||||||
If termination for cause occurred at Dec. 31, 2009 | — | 79,360 | — | 1,962 | 81,322 | |||||||||||||||
If termination without cause occurred at Dec. 31, 2009 | 599,892 | 79,360 | 28,609 | (1,5) | 1,962 | 709,823 | ||||||||||||||
If “change in control” termination occurred at Dec. 31, 2009 | 702,650 | 79,360 | 162,111 | (4) | 1,962 | 946,083 | ||||||||||||||
If disability occurred at Dec. 31, 2009 | 1,555,846 | 79,360 | 28,609 | (1,5) | 1,962 | 1,665,777 | ||||||||||||||
If death occurred at Dec. 31, 2009(3) | — | 79,360 | 28,609 | (1,5) | 588,000 | (4) | 695,969 | |||||||||||||
Gary R. Mills | ||||||||||||||||||||
If early retirement occurred at Dec. 31, 2009 | $ | — | $ | 45,490 | $ | 21,368 | (1,5) | $ | 4,221 | $ | 71,079 | |||||||||
If retirement occurred at Dec. 31, 2009 | — | 45,490 | 80,000 | (2,5) | 4,221 | 129,711 | ||||||||||||||
If termination for cause occurred at Dec. 31, 2009 | — | 45,490 | — | 4,221 | 49,711 | |||||||||||||||
If termination without cause occurred at Dec. 31, 2009 | 265,435 | 45,490 | 21,368 | (1,5) | 4,221 | 336,514 | ||||||||||||||
If “change in control” termination occurred at Dec. 31, 2009 | 344,000 | 45,490 | 67,176 | (4) | 4,221 | 460,887 | ||||||||||||||
If disability occurred at Dec. 31, 2009 | 2,632,229 | 45,490 | 21,368 | (1,5) | 4,221 | 2,703,308 | ||||||||||||||
If death occurred at Dec. 31, 2009(3) | — | 45,490 | 21,368 | (1,5) | 430,000 | (4) | 496,858 |
(i) | A change in ownership of the Corporation when one person (or a group) acquires stock that, when combined with stock previously owned, controls more than 50% of the value or voting power of the stock of the Corporation. |
(ii) | A change in the effective control of the Corporation on the date that, during any 12 month period, either: (1) any person (or group) acquires stock possessing 30% of the voting power of the Corporation; or (2) a majority of the members of the Board of Directors is replaced by persons whose appointment or election is not endorsed by a majority of the incumbent Board. |
(iii) | A change in ownership of a substantial portion of the assets of the Corporation when a person (or a group) acquires, during any 12 month period, assets of the Corporation having a total gross fair market value equal to 40% or more of the total gross fair market value of all of the Corporation’s assets. |
John M. Mendez If early retirement occurred at Dec. 31, 2012 If retirement occurred at Dec. 31, 2012 If termination for “Cause” occurred at Dec. 31, 2012 If termination without “Cause” occurred at Dec. 31, 2012 If change in control termination occurred at Dec. 31, 2012 If disability occurred at Dec. 31, 2012 If death occurred at Dec. 31, 2012 (3) David D. Brown If early retirement occurred at Dec. 31, 2012 If retirement occurred at Dec. 31, 2012 If termination for “Cause” occurred at Dec. 31, 2012 If termination without “Cause” occurred at Dec. 31, 2012 If change in control termination occurred at Dec. 31, 2012 If disability occurred at Dec. 31, 2012 If death occurred at Dec. 31, 2012 (3) Robert L. Buzzo If early retirement occurred at Dec. 31, 2012 If retirement occurred at Dec. 31, 2012 If termination for “Cause” occurred at Dec. 31, 2012 If termination without “Cause” occurred at Dec. 31, 2012 If change in control termination occurred at Dec. 31, 2012 If disability occurred at Dec. 31, 2012 If death occurred at Dec. 31, 2012 (3) E. Stephen Lilly If early retirement occurred at Dec. 31, 2012 If retirement occurred at Dec. 31, 2012 If termination for “Cause” occurred at Dec. 31, 2012 If termination without “Cause” occurred at Dec. 31, 2012 If change in control termination occurred at Dec. 31, 2012 If disability occurred at Dec. 31, 2012 If death occurred at Dec. 31, 2012 (3) Robert L. Schumacher If early retirement occurred at Dec. 31, 2012 If retirement occurred at Dec. 31, 2012 If termination for “Cause” occurred at Dec. 31, 2012 If termination without “Cause” occurred at Dec. 31, 2012 If change in control termination occurred at Dec. 31, 2012 If disability occurred at Dec. 31, 2012 If death occurred at Dec. 31, 2012 (3) Salary &
Benefits Nonqualified
Def Comp (4) SERP Executive
Life Ins (6) Total $ — $ 299,427 $ 100,549 (1,5) $ 9,589 $ 409,565 — 299,427 133,215 (2,5) 9,589 442,231 — 299,427 — 9,589 309,016 998,931 299,427 100,549 (1,5) 9,589 1,408,496 1,174,777 299,427 854,591 (4) 9,589 2,338,384 891,661 299,427 100,549 (1,5) 9,589 1,301,226 — 299,427 100,549 (1,5) 983,000 (4) 1,382,976 $ — $ — $ 12,983 (1,5) $ — $ 12,983 — — 80,000 (2,5) — 80,000 — — — — — 259,605 — 12,983 (1,5) — 272,588 332,800 — 33,482 (4) — 366,282 2,936,522 — 12,983 (1,5) — 2,949,505 — — 12,983 (1,5) 338,000 (4) 350,983 $ — $ 165,440 $ 67,475 (1,5) $ 47,082 $ 279,997 — 165,440 67,475 (2,5) 47,082 279,997 — 165,440 — 47,082 212,522 590,008 165,440 67,475 (1,5) 47,082 870,005 687,700 165,440 747,559 (4) 47,082 1,647,781 287,697 165,440 67,475 (1,5) 47,082 567,694 — 165,440 67,475 (1,5) 545,000 (4) 777,915 $ — $ 126,389 $ 37,939 (1,5) $ 9,272 $ 173,600 — 126,389 75,903 (2,5) 9,272 211,564 — 126,389 — 9,272 135,661 646,676 126,389 37,939 (1,5) 9,272 820,276 753,480 126,389 259,915 (4) 9,272 1,149,056 1,239,152 126,389 37,939 (1,5) 9,272 1,412,752 — 126,389 37,939 (1,5) 588,000 (4) 752,328 $ — $ 194,948 $ 60,234 (1,5) $ 34,232 $ 289,414 — 194,948 62,041 (2,5) 34,232 291,221 — 194,948 — 34,232 229,180 475,676 194,948 60,234 (1,5) 34,232 765,090 548,964 194,948 665,629 (4) 34,232 1,443,773 391,593 194,948 60,234 (1,5) 34,232 681,007 — 194,948 60,234 (1,5) 430,000 (4) 685,182
(1) | Annual payment deferred to age 60. |
24
(2) | Annual payment; presumed to be 62 on | |
(3) | Payment to beneficiary upon death of | |
(4) | Presumes lump sum payout. | |
(5) | Represents an annuity payable over the life of the | |
(6) | Other than the life insurance proceeds payable upon death, presumed at |
The compensation and benefit package for non-management directors is intended to fairly compensate directors for work required for the Corporation and to align the directors’ interests with the Cash Deferral of Cash Stock Directors’ Supplemental Retirement Plan. The Corporation established a directors’ supplemental retirement plan (“2009 NON-MANAGEMENT DIRECTORS’ COMPENSATION2012 Non-Management Directors’ Compensationlong termlong-term interests of stockholders. The compensation package for the directors is simple, direct and easy to understand from a stockholder perspective. The table belowon the next page indicates that non-management directors’ compensation includes the following:Compensation.2009,2012, non-employee members of the Board of Directors received a retainer fee of $700 per month. Audit Committee members received a retainer fee of $1,500 per quarter ($2,000 for Chairman). Members of the Executive Committee also receive a fee of $250 per meeting unless held in conjunction with monthly Board meetings, in which case no committeeadditional fee is paid. Members of the Governance and Nominating Committee receive a fee of $200 per meeting. Members of the Compensation and Retirement CommitteeCRC receive a fee of $250 per meeting unless held in conjunction with monthly Board meetings, in which case no committeeadditional fee is paid. Non-management directors are reimbursed for travel or other expenses incurred for attendance at Board and committee meetings. Director Mendez, the Corporation’s CEO, receives no Board compensation for service on the Board or committees.Compensation. to choose to elect to defer Board and committee fees to a non-qualified deferred compensation plan established solely for that purpose. Each director electing to defer fees is responsible for the investment of such deferrals and the Corporation does not provide either a preferential investment or interest rate for such deferred compensation. Each director, who has deferred any such compensation, has the ability to access such deferred compensation upon retirement from active Board service.Options.In addition, non-managementOptions. Like the Corporation’s named executive officers, the directors participate in the 2001 Directors’ Stock Option Plan (the “directors’ option plan”). The directors’ option plan was designed to facilitate and encourage investment in the Corporation and for directors to become more closely aligned with the long term interests2012 Plan. As of stockholders. Non-employee directors have each been granted options to purchase a total 6,050 shares of Common Stock. The outstanding options exercisable at December 31, 2009 by non-management directors were 24,200 shares. The exercise price of each option is the market value of a share of Common Stock on the date of grant adjusted for stock dividends. The options are fully vested and must be exercised within 10 yearsthe mailing of grant or two years followingthis proxy, no grants have been made to the director’s retirement, whichever occurs first. Presuming all directors continue as Board members, these options are scheduled to expire in 2011 withunder the exception of those granted to Mr. Johnson in 2008.Directors’ Supplemental Retirement2012 Plan.FCBI established a directors’Directors’ SERP” or “plan”) for its non-management directors in 2001. In 2003, as part of its acquisition of The CommonwealthCommonWealth Bank, (“Commonwealth”), the Corporation assumed responsibility for administration of a similar plan for the benefit of Director Hall and other former directors and officers of Commonwealth.The CommonWealth Bank. These plans provide for a benefit upon retirement from Board25
In connection with the directors’Directors’ SERP, the Corporation has also entered into Life Insurance Endorsement Method Split Dollar Agreements (the “agreements”)life insurance endorsement method split dollar agreements with certain directors covered under the directors’Directors’ SERP. Under the agreements, the Corporation shares 80% of death benefits (after recovery of cash surrender value) with the designated beneficiaries of the directors under life insurance contracts referenced in the directors’Directors’ SERP. The Corporation as owner of the policies retains a 20% interest in life insurance proceeds and a 100% interest in the cash surrender value of the policies.
The directors’Directors’ SERP also contains provisions for change of control, as defined, which allows the directors to retain benefits under the planDirectors’ SERP in the event of a termination of service, other than for cause,“Cause,” during the twelve12 months prior to a change in control or anytime thereafter, unless the director voluntarily terminates his or her service within 90 days following the change in control.
Insurance.
No Other Compensation.
The following table summarizes non-management director compensation, including compensation for fiscal year 2009.
Change in | ||||||||||||||||||||||||||||
Pension Value | ||||||||||||||||||||||||||||
and | ||||||||||||||||||||||||||||
Fees | Non-qualified | |||||||||||||||||||||||||||
Earned | Non-Equity | Deferred | ||||||||||||||||||||||||||
or Paid in | Stock | Option | Incentive Plan | Compensation | All Other | |||||||||||||||||||||||
Name | Cash | Awards | Awards | Compensation | Earnings | Compensation | Total | |||||||||||||||||||||
Franklin P. Hall | $ | 29,200 | $ | — | $ | — | $ | — | $ | 28,807 | $ | — | $ | 58,007 | ||||||||||||||
Allen T. Hamner | 20,350 | — | — | — | 120,051 | — | 140,401 | |||||||||||||||||||||
Richard S. Johnson | 26,600 | — | — | — | — | — | 26,600 | |||||||||||||||||||||
I. Norris Kantor | 24,850 | — | — | — | 7,007 | — | 31,857 | |||||||||||||||||||||
A. A. Modena | 14,250 | — | — | — | 5,831 | — | 20,081 | |||||||||||||||||||||
Robert E. Perkinson, Jr. | 29,750 | — | — | — | 37,172 | — | 66,922 | |||||||||||||||||||||
William P. Stafford | 22,400 | — | — | — | 1,777 | — | 24,177 | |||||||||||||||||||||
William P. Stafford, II | 25,950 | — | — | — | 38,485 | — | 64,435 |
26
Name | Fees Earned or Paid in Cash | Stock Awards | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value and Non-qualified Deferred Compensation Earnings (1) | All Other Compensation | Total | |||||||||||||||||||||
W. C. Blankenship, Jr. (2) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||
Franklin P. Hall | 30,900 | — | — | — | 14,327 | — | 45,227 | |||||||||||||||||||||
Richard S. Johnson | 28,375 | — | — | — | — | — | 28,375 | |||||||||||||||||||||
I. Norris Kantor | 26,250 | — | — | — | 30,261 | — | 56,511 | |||||||||||||||||||||
Robert E. Perkinson, Jr. | 30,500 | — | — | — | 29,800 | — | 60,300 | |||||||||||||||||||||
William P. Stafford | 20,600 | — | — | — | (2,239 | ) | — | 18,361 | ||||||||||||||||||||
William P. Stafford, II | 25,600 | — | — | — | 5,824 | — | 31,424 |
(1) | The amounts reported represent the difference between the present value of accrued benefits of the director’s SERP at the end of 2012 and 2011. |
(2) | Mr. Blankenship became a director in January, 2013. |
The following table includes the stock-based holdings at December 31, 20092012 of significant stockholders having beneficial ownership greater than 5%, ourthe directors and the named executives, and ourthe directors and executive officers as a group. Amount and Nature of Beneficial Percent of Ownership as of Common December 31, 2009 Stock Wellington Management Company, LLP 1,573,199 8.86 % 75 State Street, Boston, MA 02109 The H. P. & Anne S. Hunnicutt Foundation(1) 1,222,100 6.88 % P.O. Box 309, Princeton, WV 24740 The Corporation’s Directors and Named Executive Officers: David D. Brown(2) 10,186 * Robert L. Buzzo(3) 52,984 * Franklin P. Hall(4) 38,405 * Allen T. Hamner(5)(6) 20,025 * Richard S. Johnson(5) 21,150 * I. Norris Kantor 28,000 * E. Stephen Lilly(7) 36,067 * John M. Mendez(8) 65,009 * Gary R. Mills(9) 13,987 * A. A. Modena(5) 29,150 * Robert E. Perkinson, Jr.(5)(10) 41,704 * William P. Stafford(11) 247,358 1.39 % William P. Stafford, II 155,675 * All Directors and Executive Officers as a Group 789,837 4.45 %
Name and Address of Beneficial Owner or Number of Persons in Group | Amount and Nature of Beneficial Ownership as of December 31, 2012 | Percent of Common Stock | ||||||
Richard G. Preservati (1) | 1,521,033 | 7.58 | % | |||||
P.O. Box 1003, Princeton, WV 24740 | ||||||||
Wellington Management Company, LLP (2) | 1,227,553 | 6.12 | % | |||||
75 State Street, Boston, MA 02109 | ||||||||
The H. P. & Anne S. Hunnicutt Foundation (3) | 1,222,100 | 6.09 | % | |||||
P.O. Box 309, Princeton, WV 24740 | ||||||||
BlackRock (2) | 1,020,479 | 5.09 | % | |||||
40 East 52nd Street, New York, NY 10022 | ||||||||
Wells Fargo (2) | 1,019,744 | 5.09 | % | |||||
420 Montgomery Street, San Francisco, CA 94104 | ||||||||
The Corporation’s Directors and Named Executive Officers: | ||||||||
W. C. Blankenship, Jr. (4) | 26,439 | * | ||||||
David D. Brown (5) | 13,910 | * | ||||||
Robert L. Buzzo (6) | 57,983 | * | ||||||
Franklin P. Hall (7) | 41,855 | * | ||||||
Richard S. Johnson (8) | 31,100 | * | ||||||
I. Norris Kantor (9) | 29,725 | * | ||||||
E. Stephen Lilly (10) | 41,062 | * | ||||||
John M. Mendez (11) | 77,826 | * | ||||||
Robert E. Perkinson, Jr. (12) | 43,981 | * | ||||||
Robert L. Schumacher (13) | 37,854 | * | ||||||
William P. Stafford (14) | 268,058 | 1.34 | % | |||||
William P. Stafford, II (15) | 170,441 | * | ||||||
All Directors and Executive Officers as a Group | 856,890 | 4.27 | % |
* | Represents less than 1% of the outstanding shares. | |
(1) | Number of shares are as of Form 13G filing with SEC as of December 31, 2011. |
(2) | Number of shares are as of Form 13G filing with SEC as of December 31, 2012. |
(3) | The H. P. and Anne S. Hunnicutt Foundation (“Foundation”) is a charitable, tax-exempt, private |
(4) | Includes |
(5) | Includes 1,910 shares allocated to Mr. Brown’s |
(6) | Includes | |
(7) | Includes 34,550 shares held jointly by Mr. Hall and his wife, and 760 shares held by Mr. Hall’s wife. Also includes 3,450 shares that may be issued upon a conversion of Series A Preferred Stock. |
(8) | Includes 6,050 shares issuable upon exercise of currently exercisable options granted under the 2001 Directors’ |
(9) | Includes |
(10) | Includes |
(11) | Includes |
27
(12) | Includes |
(13) | Includes |
(14) | Includes 247,058 shares held by Stafford Farms LLC as to which Mr. Stafford is deemed to share beneficial ownership. Also includes |
(15) | Includes 14,766 shares |
In the course of reviewing a disclosable the nature and extent of the related person’s interest in the transaction; the material terms of such transaction, including dollar amount and type; the importance of the transaction to the related person; the importance of the transaction to the Corporation; and any other matters deemed relevant. If in-house counsel determines that there is a related person transaction, disclosable related person transactions are reported within this proxy statement other than those discussed below. In-house counsel reviewed all transactions with related parties since January 1, 2012 to determine if suchRelated-Person TransactionsRelated-PersonRelated Person Transactions. We review The Corporation reviews relationships and transactions in which the Corporation and ourits directors and executive officers or their immediate family members are participants to determine whether such related parties have a direct or indirect material interest in such transaction.transactions. Although these policies are not currently in writing, the Corporation’s in-house counsel is primarily responsible for developing and implementing processes and controls to obtain information from the directors and executive officers with respect to related person transactions and for then determining whether a related person has a direct or indirect material interest in the transaction.transaction that would require approval of such transaction by the Audit Committee and disclosure of such transaction in this proxy statement. Part of this process includes a requirement that each director and executive officer respondresponds to an annual proxy statement questionnaire, which is designed to obtain detailed information regarding the directors and officers, including updated information on their backgrounds, which serves as a basis to determine an individual’s qualifications to continue to serve as a director. Responses to the annual “D&O” questionnaire also provide disclosure of related person transactions. When it is determined that a related person transaction may have occurred itor management of the Corporation desires to enter into a related person transaction, the transaction is then scrutinized to establish whether or not such related person transaction is directly or indirectly material, in which case such transaction is approved or ratified by the Audit Committee and then disclosed in this proxy statement pursuant to SEC requirements.related-personrelated person transaction, counsel considers:• the nature and extent of the related person’s interest in the transaction;• the material terms of such transaction, including dollar amount and type;• the importance of the transaction to the related person;• the importance of the transaction to the Corporation; and• any other matters deemed relevant.to be disclosed, hethe transaction is approved or ratified by the Audit Committee. In-house counsel then reviews itthe related person transaction with outside counsel with expertise in SEC matters prior to including itdetermine whether the transaction must be disclosed in this proxy.proxy statement. NoRelated-PersonDescription of Related Person Transactions. Directors Stafford and Stafford, II are related to a stockholder of an incorporated construction firm, which has on occasion performed construction work for the Corporation. Messrs. Staffords’ relative is neither an officer nor voting stockholder of the construction firm. During 2007 and 2008, the construction firm built a branch office for the The Corporation’s subsidiary bank at a costhas made from time-to-time loans to directors and executive officers of $702,437 in 2007 and $594,764 in 2008. The construction firm also performed other work for the Corporation and to certain companies in 2008which they are officers or have significant ownership interests. All such loans and 2009commitments have been made: (i) in the natureordinary course of routine repairsbusiness; (ii) on substantially the same terms, including interest rates and maintenancecollateral, as those prevailing at the time for comparable transactions with total expenditures in each year of $10,850 and $300 respectively. In regardother persons not related to the branch office construction,Corporation and subsidiary bank; and (iii) did not involve more than the contract fornormal risk of collectability or present other unfavorable terms. Loans made to directors and executive officers are in compliance with federal banking regulations and are thereby exempt from insider loan prohibitions included in the Sarbanes-Oxley Act of 2002. work was entered into only after completion of a competitive bidding process. These transactions were not deemedrequired to be significant to director Stafford or Stafford, II as they have no financial interestreported in the construction firm.this proxy statement. The Corporation has had occasion to build and improve other office facilities using other construction companies before andnot entered into any transactions with related persons since completion of constructionJanuary 1, 2012 that met the threshold for disclosure in this proxy statement under the relevant SEC rules, nor has the Corporation entered into a current transaction in which the amount of the branch office mentioned abovetransaction exceeds $120,000 and has determined that this transaction andin which a related person had or will have a direct or indirect material interest. In-house counsel reviewed the other work performed by the construction firm has insignificant importance to bothlease of two offices of the Corporation and its directors.affiliates from The amount of such expenditures in each fiscal year was immaterial individuallyWilton Companies as further described on Page 10, and concluded that Director Johnson did not have a material interest in the aggregate.28
Section 16(a) of the Securities Exchange Act of 1934, as amended requires First Community’sand the SEC regulations, require the Corporation’s directors and executive officers, and persons who beneficially own more than ten percent10% of our Common Stock, to file initial reports of ownership and reports of changes in ownership of our Common Stock with the SEC. As a practical matter, First Communitythe Corporation assists it directors and officers by monitoring and completing and filing Section 16 reports on their behalf. In 2009, basedBased solely upon the review of Forms 3, 4 and 45, and amendments thereto filed in accordance with the instructions and information provided to the Corporation by its officers and directors, First Community’sthe Corporation believes that all Section 16(a) filing requirements applicable to its directors, executive officers and directors complied in all respects with these reporting requirements.
The Audit Committee reviews First Community’sthe Corporation’s financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for establishing and maintaining adequate internal financial controls, for preparing the financial statements and for the public reporting process. Dixon Hughes PLLC (Dixon Hughes)Goodman LLP (“Dixon Hughes”), ourthe Corporation’s independent auditorregistered public accounting firm for 2009,2012, is responsible for expressing opinions on the conformity of the Corporation’s audited financial statements with generally accepted accounting principles and on the Corporation’s internal control over financial reporting.
In this context, the committeeAudit Committee has reviewed and discussed with management and Dixon Hughes the audited financial statements for the year ended December 31, 20092012 and Dixon Hughes’ evaluation of the Corporation’s internal control over financial reporting. The committeeAudit Committee regularly communicates with Dixon Hughes regarding the matters that are required to be discussed by Statement on Auditing Standards No. 61, as amended (AICPA Professional Standards, Vol. 1 AU Section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T as well as other relevant Standards.standards. Dixon Hughes has provided to the committeeAudit Committee the written disclosures and the letter required by applicable requirements of the Public
Company Accounting Oversight Board regarding the independent accountant’sregistered public accounting firm’s communications with the Audit Committee concerning independence, and the committeeAudit Committee has discussed with Dixon Hughes that firm’s independence. The Audit Committee has concluded that Dixon Hughes’ provision of audit and non-audit services to First Communitythe Corporation and its affiliates is compatible with Dixon Hughes’ independence.
Based on the review and discussions referred to above, the Audit Committee recommended to ourthe Board of Directors (and the Board approved) that the audited financial statements for the year ended December 31, 20092012 be included in our 2009the Annual Report to Stockholders and out Annual Report onForm 10-K for 20092012 for filing with the SEC. This report is provided by the following independent directors, who comprise the Audit Committee.
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Franklin P. Hall
On behalf of The Audit Committee has also adopted policies and procedures for pre-approval of all non-audit work performed by Dixon Hughes. In each case, the The aggregate fees billed by Dixon Hughes in Audit fees Audit related fees All other fees Tax fees In the above table, in accordance with SEC’s rules, “Audit related fees” also include merger and acquisition due diligence and audit services, but do not include employee benefit plan audits The Audit Committee has adopted restrictions on Representatives of Dixon Hughes are expected to be present at the Annual Meeting and will have the opportunity to make a statement if they desire to do so. The representatives of Dixon Hughes also will be available to respond to appropriate questions the stockholders may have at the Independent AuditorINDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMFirst Community Bancshares, Inc.the Corporation and itits affiliates, the Audit Committee retained Dixon Hughes to audit our consolidated financial statements and our internal control over financial reporting for 2009.2012. In addition, the Audit Committee retained Dixon Hughes, as well as other accounting firms, to provide other auditing and advisory services in 2009. We understand2012. The Corporation understands the need for Dixon Hughes to maintain objectivity and independence in its audit of ourthe Corporation’s financial statements and ourits internal control over financial reporting. To minimize relationships that could appear to impair the objectivity of Dixon Hughes, ourthe Audit Committee has limited the non-audit services that Dixon Hughes provides to usit primarily to tax services and merger and acquisition due diligence and integration services. It is the committee’sAudit Committee’s goal that the fees that the Corporation pays Dixon Hughes for non-audit services should not exceed the audit fees and that goal has been achieved for 20092012 and 2008.committeeAudit Committee has also required pre-approval from the committee for any engagement over $10,000. The chair of the committeeAudit Committee is authorized to pre-approve any audit or non-audit service on behalf of the committee,Audit Committee, provided such decisions are presented to the full committeeAudit Committee at its next regularly scheduled meeting.20092012 and 20082011 for these services were: 2009 2008 Audit fees $ 510,234 $ 453,631 Audit related fees 18,940 1,500 All other fees — — Tax fees — — 2012 2011 $ 547,473 $ 374,565 5,500 19,490 — — 101,375 59,035 “audit“Audit fees” are fees paid by First Communitythe Corporation to Dixon Hughes for the audit of First Community’sthe Corporation’s financial statements included in the Annual Report onForm 10-K and for the review of financial statements included in the Quarterly Report on10-Qs, for the audit of First Community’sthe Corporation’s internal control over financial reporting with the goal of obtaining reasonable assurance regarding whether or not the effectiveness of the internal control over financial reporting was maintained in all material respects, and for services typically provided by the auditor in connection with statutory and regulatory filings. “Auditor “Tax Fees”, neither of which are not performed by Dixon Hughes for First Community.Ourthe Corporation.ourthe hiring of any Dixon Hughes partner, director, manager, staff, advising member of the department of professional practice, reviewing partner, reviewing tax professional and any other persons having responsibility for providing audit assurance on any aspect of their certification of First Community’sthe Corporation’s financial statements. These restrictions are contained in theThe Audit Committee Charter. The committee also requires key Dixon Hughes partners assigned to ourthe Corporation’s audit to be rotated at least every five years.meeting.
AMENDMENT TO THE ARTICLES OF INCORPORATION OFTHE COMPANY TO INCREASE THE AUTHORIZED COMMON STOCKAt the Annual Meeting, stockholders will be asked to consider and approve a proposal to amend the Corporation’s Articles of Incorporation, as amended (“Articles of Incorporation”), to increase the number of shares of authorized common stock, $1.00 par value (the “Common Stock”), from 25,000,000 to 50,000,000. The amendment to increase the number of authorized shares of Common Stock was unanimously approved by the Board of Directors of the Corporation on January 26, 2010.The Articles of Incorporation currently authorize 25,000,000 shares of Common Stock and 1,000,000 shares of Preferred Stock. The proposed amendment to the Articles of Incorporation would increase the aggregate number of shares of authorized capital stock by 25,000,000, from 26,000,000 to 51,000,000 shares. If the amendment is30
For purposes of determining whether to select Dixon Hughes as the independent auditorregistered public accounting firm to perform the audit of ourthe Corporation’s financial statements and ourits internal control over financial reporting for 2010,2013, the Audit Committee conducted a thorough review of Dixon Hughes’ performance. The committeeAudit Committee reviewed:
Dixon Hughes’ historical and recent performance on the Corporation’s audit, including the quality of the engagement team and the firm’s experience, service level, responsiveness and expertise; | ||
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the record of the firm compared to other similarly sized and reputable accounting firms in various matters, including regulatory, litigation and accounting matters;
the Public Company Accounting Oversight Board report of selected Dixon Hughes’ audits;
the appropriateness of fees charged;
the firm’s familiarity with the Corporation’s accounting policies and practices and internal control over financial reporting; and
the firm’s role and performance in matters involving the SEC.
During the course of the committee’sAudit Committee’s review of Dixon Hughes’ performance, companythe Corporation’s representatives interviewed senior management of Dixon Hughes with respect to certain of the matters listed above. Dixon Hughes has been ourthe Corporation’s independent auditor since 2006. The firm is a registered public accounting firm.
The Corporation is asking our stockholders to ratify the selection of Dixon Hughes as ourits independent auditor.registered public accounting firm. Although ratification is not required by ourthe Corporation’s bylaws or otherwise, the Board is submitting the selection of Dixon Hughes to our stockholders for ratification as a matter of good corporate practice. If the selection is not ratified, the Audit Committee will consider whether it is appropriate to select another registered public accounting firm. If the selection is ratified, the Audit Committee still has the discretion to select a different registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Corporation and our stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTEFOR THE RATIFICATION OF DIXON HUGHES AS THE CORPORATION’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2010.2013.
PROPOSAL 4: ADVISORY (NON-BINDING) VOTE ON EXECUTIVE COMPENSATIONThe American Recovery and Reinvestment Act of 2009 (the “ARRA”) was signed into law on February 17, 2009, and imposes significant new requirements for, and restrictions relating to, the compensation arrangements of financial institutions that sold preferred securities to the United States Treasury. These new executive compensation compliance requirements are effective for both new and existing TARP participants during the period that any Treasury Preferred under the TARP remains outstanding pursuant to the TARP CPP, excluding any period in which the U.S. Department of the Treasury only holds warrants to purchase the common stock of the Corporation. The ARRA requires, among other things, that all participants in the TARP permit a non-binding stockholder vote to approve the compensation of the Corporation’s executives, commonly referred to as a“say-on-pay” proposal.In June 2009, the Corporation, through a public offering, raised sufficient capital that it redeemed in full the outstanding shares of preferred stock held by the United States Treasury. As a result, the Corporation is no longer required to seek an advisory vote on executive compensation. Nevertheless, the Board of Directors has determined that the best way to allow stockholders to vote on the Corporation’s executive pay programs and policies is through this non-binding“say-on-pay” proposal. The Corporation believes that its compensation policies and procedures are strongly aligned with the long term interests of its stockholders. Accordingly, stockholders of the Corporation are being asked to approve the following resolution:“RESOLVED, that the stockholders approve the compensation of the Corporation’s executives named in the Summary Compensation Table of the Corporation’s Proxy Statement for the 2010 Annual Meeting of Stockholders, including the Compensation Discussion and Analysis and the tabular disclosure regarding named executive compensation (together with the accompanying narrative disclosure) in this Proxy Statement.”This vote will not be binding on or overrule any decisions by the Corporation’s Board of Directors, will not create or imply any additional fiduciary duty on the part of the Board, and will not restrict or limit the ability of the Corporation’s stockholders to make proposals for inclusion in proxy materials related to executive compensation. However, the Compensation Committee intends to take into account the outcome of the vote when considering future executive compensation arrangements.THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THATTHE STOCKHOLDERS VOTE FOR THE APPROVAL OF THE CORPORATION’S NAMEDEXECUTIVE OFFICER COMPENSATION.32
Stockholder Proposals for Inclusion in Next Year’s Proxy Statement
To be considered for inclusion in next year’s proxy statement, Stockholderstockholder proposals, submitted in accordance with SEC’sRule 14a-8, must be received at ourthe Corporation’s principal executive office by November 20, 2010.13, 2013. Proposals should be addressed to Robert L. Buzzo, Secretary, First Community Bancshares, Inc., P.O. Box 989, Bluefield, Virginia24605-0989.
Other Stockholder Proposals and Stockholder Nominations for Directors for Presentation at Next Year’s Annual Meeting
The Corporation’s amended and restated bylaws require that any Stockholderstockholder proposal that is not submitted for inclusion in the next year’s proxy statement under SECRule 14a-8, but is instead sought to be presented directly at the 20112014 Annual Meeting, and any stockholder nominations for directors, must be received at ourthe Corporation’s principal executive office not less than sixty (60)60 days nor more than ninety (90)90 days prior to the anniversary date of the 20102013 Annual Meeting. As a result, proposals, including director nominations, submitted pursuant to these provisions of ourthe bylaws, must be received no sooner than January 27, 201130, 2014 and no later than February 28, 2011.March 1, 2014. Proposals should be addressed to Robert L. Buzzo, Secretary, First Community Bancshares, Inc., P.O. Box 989, Bluefield, Virginia24605-0989 and include the information set forth in those by-laws,bylaws, which are posted on ourthe Corporation’s website. Shareholder nominations for directors may be made only if such nominations are made in accordance with the procedures set forth in Section 2.3 of the Corporation’s amended and restated bylaws. SEC rules permit management to vote proxies in its discretion in certain cases if the Stockholderstockholder does not comply with this deadline, and in certain other cases regardless of Stockholder’sstockholder’s compliance with this deadline.
Solicitation of Proxies
Proxies may be solicited on behalf of the Board of Directors by mail, telephone, and other electronic means or in person. Copies of proxy materials and the 20092012 Annual Report will be supplied to brokers, dealers, banks and voting trustees, or their nominees, for the purpose of soliciting proxies from the beneficial owners, and wethe Corporation will reimburse such record holders for their reasonable expenses.
Stockholders of Record Requesting Copies of 20092012 Annual Report
Upon written request, the Corporation will provide, without charge, to receive an annual reportstockholders of record and beneficial owners as of close of business on March 1, 2013 a copy of this proxy statement and the 2012 Annual Report. Any written request for a specific account may request that we promptly mail our 2009copy of this proxy statement or the 2012 Annual Report should be mailed to that account by writing toRobert L. Buzzo, Secretary, First Community Bancshares, Inc. at P. O., P.O. Box 989, Bluefield, Virginia 24605, or calling276-326-9000.
Delivery of Documents to Stockholders Sharing Same Address (Householding)
To reduce the expenses of delivering duplicate proxy materials to its stockholders, the Corporation may deliver only one proxy statement and Annual Report to multiple stockholders who share an address unless the Corporation receives contrary instructions from any stockholders at that address. If you are the beneficial owner, but not the record holder, of shares of First Community Bancshares Stock,the Corporation’s stock, your broker, bank or other nominee may only deliver one copy of this proxy statement and our 20092012 Annual Report to multiple stockholders at the same address, unless that nominee has received contrary instructions from one or more of the stockholders. WeThe Corporation will deliver, upon request, a separate copy of this proxy statement and our 20092012 Annual Report to a Stockholderstockholder at a shared address to which a single copy of the documents was delivered. A Stockholderstockholder desiring to receive a separate copy of the proxy statement and annual report,Annual Report, now or in the future, should submit this request by writing to Broadridge Financial Solutions, Inc. (“Broadridge”), either by calling toll free at(800) 542-1061 or by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717. Also, beneficial ownersstockholders sharing an address who are receiving multiple copies of proxy materials and annual reports and who wish to receive a single copy of such materials in the future will need to, in the case of beneficial owners, contact their broker, bank or other nominee or, in the case of record owners, contact Broadridge (using the above contact information) to request that only a single copy of each document be mailed to all stockholders at the same address in the future.
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This proxy statement and ourthe 2012 Annual Report may be viewed online at www.proxyvote.com.www.fcbinc.com. If you are a Stockholderstockholder of record, you can elect to access future annual reports and proxy statements electronically by marking the appropriate box on your proxy form or by following the instructions provided if you vote on the internetInternet or by telephone. If you choose electronic access, you will receive a proxy form in mid to late-Marchlate March providing the website address and your choice will remain in effect until you notify usthe Corporation by mail that you wish to resume delivery of a paper copycopies of annual reports and proxyproxies by mail. If your stock is held for you by a bank, broker or another holder of record, please refer to the information provided by that entity holding the stock on your behalf for instructions on how to elect the paper option.
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11:30 a.m., local time, Eastern Daylight Time, April 27, 2010
Corporate Center
29 College Drive
Bluefield, Virginia 24605
Information About Advance Registration for Attending the Meeting
Attendance at the annual meetingAnnual Meeting is limited to First Communitythe Corporation’s stockholders, members of their immediate family or their named representative. We reserveUpon arrival at the Annual Meeting, stockholders, members of their immediate family or their named representative will be asked to present appropriate identification to enter. The Corporation reserves the right to limit the number of representatives who may attend the meeting.
If you hold your shares directly with the Corporation and you plan to attend the Annual Meeting, you are not required to follow any additional instructions.
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If your shares are held for you by a bank, broker or other institution and you wish to attend the Annual Meeting, please send a meeting registration request containing the information listed below to:
P. O. Box 989
Bluefield, Virginia 24605
Please include the following information:
Your name and complete mailing address;
The name(s) of any family members who will accompany you;
If you wish to name a representative to attend the meeting on your behalf, the name, address and telephone number of that individual; and
Proof that you own Corporation shares such as a letter from your bank or broker or photocopy of your bank or brokerage account statement.
If you have any questions regarding admission to the annual meeting, please visit our website atwww.fcbinc.com or call FCB Shareowner Services at(800) 425-0839.
Voting in Person at the Meeting
The Corporation encourages stockholders to submit proxies in advance of the annual meetingAnnual Meeting by telephone, internetInternet or mail. Alternatively, stockholders may also vote in person at the meeting or may execute a proxy to vote for them at the meeting. If your shares are held for you by a broker, bank or other institution, you must obtain a proxy from that entityinstitution and bring it with you to the meeting to deliver with your ballot in order to be able to vote your shares at the meeting.
A-2Annual Meeting.