First Community Bancshares, Inc.:

The Board of Directors of First Community Bancshares, Inc. (the “Corporation”, “FCBI”, “First Community”, “we”, “us”, and “our”) solicits the enclosed proxy for use at the Annual Meeting of Stockholders of the Corporation (the “Annual Meeting”), which will be held on Tuesday, April 28, 2009,27, 2010, at 11:30 a.m. local time at Fincastle Country Club, 1000 Country Club Drive, Bluefield, Virginia and at any adjournment thereof.

The expenses of the solicitation of the proxies for the Annual Meeting, including the cost of preparing, assembling and mailing the notice, Proxy Statement and return envelopes, the handling and tabulation of proxies received, and charges of brokerage houses and other institutions, nominees or fiduciaries for forwarding such documents to beneficial owners, will be paid by the Corporation. In addition to the mailing of the proxy material, solicitation may be made in person, by telephone or by other means by officers, directors or regular employees of the Corporation.

This Proxy Statement and the proxies solicited hereby are being first sent or delivered to stockholders of the Corporation on or about March , 2009.15, 2010.

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 nominees as described herein under “Election of Directors”, FOR ratification of Dixon Hughes PLLC 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 proxy at any time before it is voted. A proxy may be revoked at any time prior to its exercise by the filing of written notice of revocation with the Secretary of the Corporation, by delivering to the Corporation a duly executed proxy bearing a later date, or by attending the Annual Meeting and voting in person. However, if you are a stockholder whose shares are not registered in your own name, you will need additional documentation from your record holder to vote personally at the Annual Meeting.

The Board of Directors has fixed March 10, 20091, 2010 as the record date for stockholders entitled to notice of and to vote at the Annual Meeting. Shares of Common Stock outstanding on the record date are entitled to be voted at the Annual Meeting and the holders of record will have one vote for each share so held in the matters to be voted upon by the stockholders. Each share of Common Stock outstanding as of the record date will be entitled to one vote on each of the proposals set forth in this proxy statement. Treasury shares are not voted. Individual votes of stockholders are kept private, except as appropriate to meet legal requirements. Access to proxies and other individual stockholder voting records is limited to certain employees of First Community and its agents who acknowledge their responsibility to comply with this policy. Stockholders of the Corporation do not have cumulative voting rights. As of the close of business on March 1, 2010, the outstanding shares of the Corporation consisted of 17,765,164 shares of Common Stock and no shares of Preferred Stock.

The presence in person or by proxy of a majority of the shares of the Common Stock entitled to vote is necessary to constitute a quorum at the Annual Meeting. Abstentions are considered in determining the presence of a quorum. Directors are elected by a plurality of the votes cast at a stockholders’ meeting with a quorum present. The three persons who receive the greatest number of votes of the holders of Common Stock represented in person or by proxy at the Annual Meeting will be elected directors of the Corporation. Approval of the amendment to the Articles of Incorporation to increase the authorized common stock requires a majority of the outstanding voting capital stock approve the amendment. Approval of the ratification of the independent registered public accountants requires that the number of votes cast in favor of the proposal exceeds the number of votes cast against. Advisory approval of the Corporation’s executive compensation program requires that the number of votes cast in favor of the

You can ensure that your shares are voted at the meeting by submitting your instructions by telephone, by internet, or by completing, signing, dating and returning the enclosed proxy form in the envelope provided. Submitting your proxy by any of these methods will not affect your right to attend and vote in person at the meeting. We encourage stockholders to submit their proxies in advance of the close of business on March 10, 2009meeting. A Stockholder who gives a proxy may revoke it at any time before it is exercised by voting in person at the outstanding shares ofannual meeting, by submitting a subsequent proxy or by notifying the Corporation consistedin writing of (i)such revocation. If your FCBI shares of Common Stock,are held for you in a brokerage, bank or other institutional account, you must obtain a proxy from that entity and (ii) 41,500 shares of the Corporation’s Fixed Rate Cumulative Perpetual Stock, Series A (the “Series A Preferred Stock”). The shares of Series A Preferred Stock are not entitledbring it with you to submit it with your ballot in order to be able to vote on

Mr. Johnson earned a BS BA degree from the University of Richmond, Richmond, Virginia in 1973, with a concentration in economics and finance, and graduated with a MS degree from Virginia Commonwealth University, Richmond, Virginia in 1977, with a concentration in real estate and urban land development. Mr. Johnson has been the President and Chief Executive Officer of The Wilton Companies, a real estate investment, development, brokerage and management group of companies, since 2002. Prior to servejoining The Wilton Companies, Mr. Johnson served as membersPresident of Southern Financial Corp. of Virginia from 1985 to 2002 and Chairman of the Board of Directors until the Annual Meeting of Stockholders in the yearSouthern Title Insurance Corporation from 1980 to 1985. Mr. Johnson currently serves as a director of the expirationUniversity of their designated terms. The name, age, principal occupationRichmond, Fidelity Group, LLC, City of Richmond Economic Development Authority, the State Fair of Virginia and certain biographical information for each continuingGrubb & Ellis Apartment REIT. Mr. Johnson previously served as a director are presented below:of the Children’s Museum of Richmond, Ducks Unlimited, Inc., and Ducks Unlimited Canada.

The name, age, principal occupationMr. Mendez attended Marshall University from 1973 to 1975 and certain biographical informationgraduated from Concord University in May 1978 with a BS in Business Administration with a concentration in Accounting. Mr. Mendez earned his certification as a Certified Public Accountant in 1981. Mr. Mendez joined First Community Bank, N.A. in 1985. Prior to serving as President and Chief Executive Officer of First Community Bancshares, Inc., Mr. Mendez served in the positions of Chief Financial Officer and Chief Administrative Officer. Mr. Mendez served as Audit Manager of Brown, Edwards & Co., CPA’s from 1978 to 1985. Mr. Mendez serves on the Concord University Board of Governors. He previously served as a director for each continuing executive officer are presented below:the Community Foundation of the Virginias, the West Virginia Bankers Association, Virginia Bankers Association, and Princeton Community Hospital.

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 following table sets forth,American University, Washington, DC, with an MBA degree in 1964 and The American University Law School with a Juris Doctorate degree in 1966. Mr. Hall currently serves as Senior Partner in the Hall and Hall Family Law Firm in Midlothian, Virginia where he has practiced law since 1969. He served as a Delegate in the Virginia General Assembly from 1976 to 2009, and Minority Leader, Virginia House of March 10, 2009, certain informationDelegates from 2002 to 2008. He is a former Chairman of the Board of the Commonwealth Bank in Richmond, Virginia. Mr. Hall has served on the Greater Richmond Chamber of Commerce Foundation Board since 2004. He also has served as toa Commissioner for the Virginia Alcohol 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-one year law practice; his MBA degree; twenty-five years of service on boards of financial service organizations; thirty years of overseeing the budget for the Common Stock beneficially owned by (i) each person or entity, including any “group”Wealth of Virginia; service as that term is used in Section 13(d)(3)senior member of the SecuritiesJoint Legislative Audit and Exchange ActReview Commission for the Virginia General Assembly; and service as Chair of 1934, as amended (the “Exchange Act”), who or which was known to the Corporation to beHouse Appropriations Subcommittee on Compensation.

Mr. Kantor received a BA degree in 1953 from the beneficial ownerVirginia 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 5%fifty years and is currently Of Counsel with the law firm of Katz, Kantor & Perkins,Attorneys-at-Law. He served as a Judge Advocate USAF from 1956 to 1958. Mr. Kantor is a director of Mercer Realty Inc., a real estate management company, and Gomolco, Inc., a real estate holding company. Mr. Kantor currently serves as a member of the issued and outstanding Common Stock; (ii)board of directors and executive officers of the Corporationfollowing organizations: Bluefield State College Foundation, Secretary of Bluefield State College Research and its major subsidiaries;Development Corp., past President of New River Parkway Authority, the Bluefield Development Authority, and (iii) all directorsPresident and executive officersBoard Member of the CorporationDowntown Health and Wellness Center, Inc.

Mr. Kantor’s relevant experience qualifying him for service as a group. Exceptdirector include: a wide range of legal and business experience gained during his more than fifty years as otherwise indicated, the persons nameda practicing attorney; his legal work in the table below have sole voting and investment power with respect to the Common Stock shown as beneficially owned by them.

Section 16(a)Executive officers who are not directors of the Exchange Act requires the Corporation’s officers, directorsCorporation, including their title, age and persons who own more than 10%date they became an officer of the Corporation’s capital stock (collectively, “Reporting Persons”) to file reportsCorporation is set forth in the chart below, which is followed by a brief biography describing each executive officer’s business experience.

Based solely on reviewMr. Buzzo had been President and a Director of First Community Bank, N. A. since June 2000, and Vice- President and Secretary of the copiesCorporation since June 2000. From October 1994 until June 2000, Mr. Buzzo was the Chief Executive Officer of such forms furnishedFirst Community Bank — Bluefield, a division of First Community Bank, N. A. Prior to 1994, Mr. Buzzo held other leadership positions within the Corporation or written representations from its officers and directors,since he joined the bank in 1973.

Mr. Lilly has been Chief Operating Officer of the Corporation believes that during, and with respect to, fiscal year 2008Senior Vice President and Chief Operating Officer of First Community Bank, N. A. since June 2000. Mr. Lilly has been employed by the Corporation’s officers and directors complied in all respects with the reporting requirements promulgated under Section 16(a)Corporation since 1997.

Mr. Brown has been Chief Financial Officer of the Exchange Act.Corporation and Senior Vice President — Finance of First Community Bank, N.A. since May 2006. Mr. Brown served as Financial Reporting Coordinator of the Corporation from April 2005 to May 2006. Prior to joining the Corporation, Mr. Brown was a Corporate Auditor and Audit Manager of United Bankshares, Inc. from September 1999 to April 2005.

The Board’s Role in Risk Oversight.  We believe that each member of our Board of Directors held thirteen meetings during 2008. All directors attended at least 75%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 all meetingsour Board of Directors to be actively engaged in board discussions, review materials provided to them, and know when it is appropriate to request further information from 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.

Because we believe risk oversight is a responsibility for each member of the Board and any committee of Directors, we do not concentrate the Board’s responsibility for risk oversight in a single committee. Instead, each of our committees concentrates on specific risks for which they were members.have an expertise, and each committee is required to regularly report to the Board of Directors are encouragedon its findings. For example, the audit committee regularly monitors the Corporation’s exposure to attend annual meetingscertain 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 company programs to report and monitor fraud and by monitoring the Corporation’s internal controls over financial reporting. Our compensation committee’s role in monitoring the risks related to our compensation structure is discussed in further detail below.

Director Independence.  First Community currently has eight independent directors out of nine. The Board has satisfied, and expects to continue to satisfy, its objective that at least a majority of the Corporation’s stockholders. All directorsBoard should consist of independent directors. For a director to be considered independent, the Board must determine that the director does not have any direct or indirect material relationship with First Community. The Board has established guidelines to assist it in determining director independence (see Appendix A to this Proxy Statement), which conform to the exceptionindependence requirements of William P. Stafford attended last year’s Annual Meeting.the NASDAQ Stock Exchange listing standards. In addition to applying these guidelines, the Board will consider all relevant facts and circumstances in making an independence determination.

Stockholder Communications.Stockholders may communicate with all or any member of the Board of Directors by sending a letteraddressing correspondence to the First Community Bancshares, Inc. Board“Board of Directors,c/o CorporateDirectors” or to the individual director and addressing such communication to Robert L. Buzzo, Secretary, First Community Bancshares, Inc., P.O.P. O. Box 989, Bluefield, Virginia24605-0989. The Corporate Secretary has the authority to disregard any inappropriateAll communications or to take other appropriate actions with respect to any such inappropriate communications. If deemed an appropriate communication, the Corporate Secretaryso addressed will submit your correspondencebe forwarded to the Chairman of the Board of Directors (in case of correspondence addressed to the “Board of Directors”) or to any specificthe individual director without exception.

The Board held nine (9) regular meetings and four (4) special meetings in 2009. No member attended fewer than 75% of the Board meetings and committee meetings on which the member sits. Each director is expected to whomdevote sufficient time, energy and attention to ensure diligent performance of the correspondencedirector’s duties and to attend all regularly scheduled Board, committee, and Stockholder meetings. It is directed.the Board’s policy that the directors should attend our Annual Meeting of Stockholders absent exceptional circumstances. All current directors attended the 2009 Annual Meeting except Chairman Stafford, who was excused for medical reasons.

The Board of Directors of the Corporation maintains an Audit Committee, which consists of Chairman Perkinson and Messrs. Hamner, Hall and Johnson, all non-employee members of the Board. Each Audit Committee memberare directors Perkinson, who chairs the committee, Hall, Hamner and Johnson. The Board has determined that Mr. Johnson is independent under the NASDAQ Global Select listing standards as well as the Sarbanes-Oxley Act of 2002.“audit committee financial expert”. The Audit Committee held nine meetings during 2008. Under its Board-approved charter,is primarily concerned with the Audit Committee reviews and acts on reports to the Board with respect to various auditing and accounting matters, the scopeintegrity of the audit proceduresCorporation’s financial statements, the Corporation’s compliance with legal and regulatory requirements, the results thereof, the internal accountingindependence and control systemsqualifications of the Corporation, the nature of service performed for the Corporation by, the appointment of and fees to be paid to,independent auditor and the performance of the Corporation’s internal audit function and independent registered publicauditor. Its duties include: (1) selection and oversight of the independent auditor; (2) review of the scope of the audit to be conducted by them, as well as the results of their audit; (3) oversight of our financial reporting activities, including our annual report, and the accounting firm. The Committee also reportsstandards and principles followed; (4) discussion with management of its risk assessment and management policies, including risk relating to the Boardfinancial statements and financial reporting process and key credit risks, liquidity risks, market risks and the steps taken by management to monitor and mitigate such risks; (5) approval of Directors regarding activitiesaudit and non-audit services performedprovided to the corporation by internal auditors, and on the accounting practicesindependent auditor; (6) review of the Corporation.

The Compensation and Retirement Committee, which operates under a Board-approved charter, consists of Chairman Stafford, II and Messrs. Hamner and Modena, all of whom are independent. The Compensation and Retirement Committee is responsible for the review and considerationmembers of the form and amount of compensation and contractual employment terms of the President and Chief Executive Officer (“CEO”) of the Corporation as well as other executive officers and the review of stock-based compensation plans and various non-qualified compensation and retirement programs maintained by the Corporation.

No memberNone of the members of the Compensation and Retirement Committee is or was formerly an officer or employee of theour Corporation and no such member or executive officerany of the Corporation hasits subsidiaries, nor did any members have a relationship with us that would constitute an interlocking relationship withis disclosable as a “Related-Person Transaction” as defined by the SEC. In addition, none of our executive officers served on any compensation committee or any board of directors of another public corporation.company, of which any of our Board members was also an executive officer.

The Compensationmembers of the Governance and RetirementNominating Committee has reviewedare directors Modena, who chairs the committee, Hamner and discussedKantor. The committee’s responsibilities include the Compensation Discussionselection of director nominees for Board service and Analysis with management,the development and based on its review of Governance Guidelines. The committee also (1) oversees the annual self-evaluations of the Board, as well as director performance and discussion, the Compensation and Retirement Committee recommendedBoard dynamics; (2) makes recommendations to the Board of Directors thatconcerning the Compensation Discussionstructure and Analysis be included in this Proxy Statement and incorporated by reference in the Corporation’s Annual Report onForm 10-K.

The Corporation believes thatSpecifically, we decided to compensate the quality, skills and dedication of senior executive officers are key factors affecting both the short- and long-term performance and value of the Corporation. The Corporation also believes that a significant portion of a Senior Executive’s compensation should be tied not only to individual performance, but also to the performance of the Senior Executive’s business unit, division, department or function and to the Corporation’s performance measured against both financial and non-financial goals and objectives. During periods when performance meets or exceeds the established objectives, Senior Executives should be paid at or above pre-determined performance levels, respectively. When performance does not meet key objectives, incentive award payments, if any, should be awarded at reduced levels. For the 2008 fiscal year, the NEO’s elected to forego all discretionary cash bonuses and incentive payments.

The Committee also considers each executive’s current salaryConsistent with past practice, going forward we will continue to use discretion coupled with a goals-driven formula to compensate executives. We will not adopt incentives that promote risky behavior for near term rewards. Although we made no incentive awards in 2009, ordinarily, we attempt to use the equity portion of our compensation program to reward behavior that produces steady, long term performance. We believe executive compensation should reflect and previous year’s bonusbe driven by the Corporation’s long- term operating performance and the need to establish a balance between incentives for long-term and short-term performance.relative stock value compared with similarly situated publicly traded, regional financial services companies.

Base salariesAt the beginning of each year, Mr. Mendez develops objectives necessary for Senior Executivesthe 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 by evaluating a Senior Executive’s levelin most part from the Corporation’s annual financial and budget planning sessions, during which the Corporation’s growth opportunities are analyzed and goals and objectives are established for the upcoming year. These goals and objectives include both objective financial metrics and qualitative strategic and operational considerations that are evaluated subjectively, without any formal weighting assigned. The CRC and Mr. Mendez use this process to focus on factors they believe create long term stockholder value. The CRC discusses with Mr. Mendez its considerations regarding Mr. Mendez’ own compensation. During this process, Mr. Mendez solicits input from our Vice President of responsibilityHuman Resources. Mr. Mendez does not participate in the final determination of his own compensation.

In determining Mr. Mendez’ compensation for 2009, the CRC considered the Corporation performance and experience and the comparisonalso considered Mr. Mendez’ individual performance in 2008.

Although Mr. Mendez did not meet all of the Corporation’s actual performance to targeted performance goals. Adjustments to base salaries, if any, are drivengoals and objectives established by individual performance and an evaluation of the Senior Executive’s success in achieving business results, implementing the Corporation’s strategies, coupled with demonstration of leadership skills. In general, the Compensation and Retirement Committee establishes annual target performance goals for the CEO that will correspond to achievement of the Corporation’s budgeted net income, return on average equity and growth in assets for the ensuing year. The Compensation and Retirement Committee does not consider comparative industry peer group compensation statistics when establishing the level or types of compensation awarded to the CEO and the NEO’s. When considering the base salary of Senior

Through the Corporation’s public offering, Mr. Mendez was instrumental in helping the Corporation maintain its well-capitalized balance sheet while attracting additional, respected institutional investors. The public offering made possible the accelerated repayment of TARP funds in less than eight months from issue, plus provided funding for continued expansion of the corporation. Mr. Mendez also successfully completed a desired acquisition to supplement the Corporation’s banking presence in the Winston-Salem, North Carolina market, in line with the Corporation’s strategic plan. In addition, Mr. Mendez led the management team and the holderBoard through an update of the option remainsCorporation’s strategic plan.

Mr. Mendez has been the Corporation’s CEO since 2000 and has been employed by the Corporation since 1985. He also serves on the Corporation’s Board of Directors. Under his leadership, the Corporation has transformed itself from a community bank into a regional financial services company. The Corporation’s income has been diversified through its acquisition of and continued additions to its insurance agency, Greenpoint Insurance. Despite the difficult economic times in 2009, the Corporation was able to return $4.6 million to common stockholders through dividends and repurchased $167,000 in Treasury shares. As an indication of his alignment with stockholders, Mr. Mendez is the direct and indirect owner of 22,686 shares of the Corporation’s common stock. Mr. Mendez proposed and the CRC agreed that he would receive no bonus or salary increase in 2009. Mr. Mendez proposed these actions because he believed they were appropriate in the current environment. Mr. Mendez was not granted any long term non-cash compensation in 2009 and has received no long term stock based compensation since 2003. His base salary was last increased in 2008.

Each of the other named executives is a leader of an individual business or function of the Corporation. Stock optionsAs 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.

Emphasis on Reliable and Relative Performance.  Our compensation program provides pay opportunities for those executives demonstrating superior performance for sustained periods of time. Each of our named executives has served the Corporation for many years and each has held diverse positions with growing levels of responsibility. Relative compensation reflects previous contributions and anticipated future contributions to the Corporation’s long term success. In evaluating sustained performance, we also linkgive weight to the relative performance of each executive in his particular industry segment or function.

As a result of the Corporation’s participation in the TARP Capital Purchase Program for a portion of 2009, the recipient’sCRC was required to review the incentive compensation arrangements of the Corporation’s named executive officers with the Corporation’s senior risk officer to ensure that their incentive compensation arrangements do not encourage them to take unnecessary and excessive risks that threaten the value of the Corporation. Even though not expressly required, the CRC Committee also reviewed the compensation arrangements of the Corporation’s other top executives. The CRC concluded that it does not believe that the Corporation’s compensation policies and practices encourages excessive or inappropriate risk taking and instead encourage behaviors that support sustainable long term value creation. In reaching this conclusion, the CRC considered the various metrics and elements of the compensation program. For instance, the CRC does not use highly leveraged, short-term incentives that drive high risk investments at the expense of long term company value. Rather, the Corporation’s annual incentive compensation is based on balanced performance metrics that promote disciplined progress towards longer-term goals.

Beginning in 2010, the CRC has begun a more intensive review of the relationship between risk management and incentive compensation to stockholders’ interests byensure that incentive compensation does not encourage unnecessary and excessive risks. The CRC also reviews the relationship between risk management policies and practices, overall company strategy and executive compensation.

Use of Compensation Consultants.  Neither the CRC nor FCBI used a compensation consultant in 2009, or at anytime prior thereto, for any purpose including providing an incentive to increaseassistance in determining the market value and thus the priceamount or form of senior executive or director compensation. Recently, because of the stock.

Employment Agreements.  Our named executives have employment agreements, which include change of control protection for the executives and non-compete and non-solicitation requirements for the protection of the Corporation. The employment agreements with Messrs. Mendez, Buzzo and Lilly were amended and restated as of December 16, 2008 to qualify as incentive stock options must have an exercise price at least equal tocomply with Section 409A of the fair market valueInternal Revenue Code and initial employment agreements were entered into with Messrs. Brown and Mills. We describe all of a share of Common Stock at the time of grant. Non-qualified stock options may have an exercise price that is equal to, below, or above the fair market value of a share of Common Stock at the time of grant. The exercise price applicable to a particular award is set forththese agreements in each individual award agreement.more detail below.

The Board may from time to time grant restrictedamended and unrestricted stock awards to eligible participants in such amounts,restated employment agreement (“agreement”) with Mr. Mendez had an initial term of three years and provided that beginning on such terms and conditions, and for such consideration, including no consideration or such minimum consideration as may be required by law, as it shall determine.

Under the agreement, Mr. Mendez’ initial annual base salary was $392,902 as of January 1, 2009; Mr. Mendez’ current base salary remains at $392,902. The Corporation may terminate Mr. Mendez’ employment at any of its subsidiariestime for “Cause” (as defined in the agreement) without further obligation owed to Mr. Mendez. If the Corporation terminates Mr. Mendez’ employment for any reason other than for “Cause” or if he terminates his death, disability or retirement. In determiningemployment for “Good Reason” (as defined in the numberagreement), the Corporation will generally be obligated to continue to provide compensation and benefits specified in the agreement for the balance of sharesthe term of Common Stock with respect to which such awards are vestedand/or exercisable, fractional sharesthe agreement but not less than thirty (30) months following the date of termination. Upon the termination of his employment, Mr. Mendez will be rounded upsubject to the nearest whole number if the fraction is 0.5 or higher,non-competition and down if it is less.non-solicitation restrictions.

Awards grantedIf Mr. Mendez dies while employed by the Corporation, the Corporation will pay his estate through the end of the month in which his death occurs. If Mr. Mendez’ employment is terminated as a result of permanent disability as determined pursuant to the agreement, then the Corporation has the right to terminate his employment before the end of the applicable term.

In the event that there is a participant are generally exercisable at any time on or after they vest until the earlierchange of (i) ten (10) years after its date of grant or (ii) the date that is six (6) months (ninety (90) days in the case of incentive stock options granted to employees) following the last day on which the participant is employed or renders services for the benefitcontrol of the Corporation or its subsidiaries.

Prior to 2009, non-statutory stock options with the aggregate number of shares of common stock available for granttotaling 332,750 in five installments, each vesting over a seven- year period, were awarded under the 1999 Stock Option Plan set at 332,750 shares. Total options granted and outstanding under the (“1999 Plan at December 31, 2008 represent the right to acquire an aggregate of 178,455 shares. Under the 1999 Plan, optionees were granted options in five annual installments on January 1st of each year beginning January 1, 1999 through January 1, 2003.Plan”). All stock options granted pursuant to the 1999 Plan vest ratably on the first through the seventh anniversary dateswere fully vested as of the deemed grant date. The option priceend of each stock option is equal to the fair market value of the Corporation’s Common Stock on the date of each deemed grant during the five-year grant period.2009. Vested stock options granted pursuant to the 1999 Plan are exercisable upon vesting and up to a period of five years after the date of the grantee’s retirement (provided retirement occurs at or after age 62), disability, or death. If employment is terminated other than by retirement at or

Mr. Brown and the creation of stockholder value by (a) encouraging officers, employees, directors and individuals performing services for the Corporation as consultants Mr. Mills have been granted optionsand/or independent contractors to focus on critical long-range objectives; (b) encouraging the attraction and retention of officers, employees, directors, consultants and independent contractors with exceptional qualifications; and (c) linking officers, employees, directors, consultants and independent contractors directly to stockholder interests through ownership of the Corporation. Each of the 1999 Plan and restricted stock awards under the 2004 Plan seeks to achieve this purpose by providing for awards inPlan. Mr. Brown has previously been the formrecipient of options to purchase shares of the Corporation. Awards may be granted individually or in tandem with other awards.

All stock options under both the 1999 and 2004 Plans which would result inhave exercise prices not less than fair market value of the acquisitioncommon stock on the date of 2,548 additional shares.each grant. Stock options under the 1999 Plan vest ratably over seven years, while stock options and restricted stock awards under the 2004 Plan vest ratably over three to four years as recommended by the Board of Directors. The 1999 and 2004 Plans prohibit discounted stock options, reloading of stock options, and stock option repricing. The Corporation does not provide loans to the named executives for purposes of exercising options. The average number of options granted over the past three years as a percentage of basic shares outstanding was less than 1%. Historically, the named executives have not been subject to stock ownership guidelines.

The Corporation made no grantsfollowing table provides information about equity awards granted (if any) to the named executives in 2009: (1) the grant date, (2) estimated future payouts under equity incentive plan awards, (3) the number of plan-basedshares underlying all other stock awards, to any NEO during years covered in(4) all other awards, (5) the Summary Compensation Table.exercise price of the stock option awards, which reflects the closing price of company stock on the date of the grant and (6) the grant date fair value of each equity award computed under FASB ASC Topic 718 (formerly SFAS 123R).