Edgar Filing: FIRST COMMUNITY BANCSHARES INC /NV/

SCHEDULE 14A
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant /X/

Filed by a Party other than the Registrant / /

Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material under Section 240.14a-12

FIRST COMMUNITY BANCSHARES, INC.
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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/ / Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(4) Date Filed:

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NOTICE OF ANNUAL MEETING AND PROXY STATEMENT

Annual Meeting of Stockholders April 24, 2001

FIRST COMMUNITY BANCSHARES, INC.
ONE COMMUNITY PLACE
BLUEFIELD, VIRGINIA 24605-0989

NOTICE OF 2001
ANNUAL MEETING OF STOCKHOLDERS

To The Stockholders of First Community Bancshares, Inc.:

The ANNUAL MEETING of Stockholders of First Community Bancshares, Inc.
will be held at Fincastle Country Club, Double Gates, Bluefield, Virginia, at
2:30 p.m. local time on April 24, 2001, for the purpose of considering and
voting upon the following items as more fully discussed herein.

1. Election of three directors to serve as members of the Board of
Directors, Class of 2004.

2. Removal of James L. Harrison, Sr. as a director of the Corporation
for cause.

3. Ratification of the selection of Ernst & Young, Charleston, West
Virginia, as independent auditors for the year ending December 31,
2001.

4. Transacting such other business as may properly come before the
meeting, or any adjournment thereof.

Only stockholders of record at the close of business on March 9, 2001
are entitled to notice of and to vote at such meeting or at any adjournment
thereof.

By Order of the Board of Directors

Robert L. Buzzo, Secretary

IMPORTANT

To ensure your shares are represented at the Annual Meeting, please
complete, sign and return the enclosed proxy as promptly as possible whether or
not you plan to attend the meeting. An addressed return envelope is enclosed for
your convenience. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE TIME IT IS
VOTED.

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PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, APRIL 24, 2001

The Board of Directors of First Community Bancshares, Inc. (the
"Corporation") solicits the enclosed proxy for use at the Annual Meeting of
Stockholders of First Community Bancshares, Inc., which will be held on Tuesday,
April 24, 2001 at 2:30 p.m. local time at Fincastle Country Club, Double Gates,
Bluefield, Virginia, and at any adjournment thereof.

The expenses of the solicitation of the proxies for the 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 24, 2001.

VOTING

Shares of Common Stock (par value $1 per share) 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 removal
of James L. Harrison, Sr. as a Director and FOR ratification of the selection of
Ernst & Young as independent public accountants for the year ended December 31,
2001. Any stockholder has the power to revoke his proxy at any time before it is
voted.

The Board of Directors has fixed March 9, 2001 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. There are no
cumulative voting rights.

Directors are elected by a plurality of votes present in person or by
proxy and entitled to vote, assuming a quorum is present. All other matters
coming before the meeting will be determined by majority vote of those present
in person or by proxy and entitled to vote. Abstentions and broker non-votes for
shares represented at the meeting thus have no direct effect on the election of
directors but have the effect of negative votes on other matters to be
considered.

As of the close of business on March 9, 2001, the outstanding shares of
the Corporation consisted of 9,051,335 shares of Common Stock.

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1. ELECTION OF DIRECTORS

The Corporation's Board of Directors is comprised of eleven directors,
including ten non-employee directors, divided into three classes with staggered
terms. All directors are elected for three-year terms.

The nominees for the Board of Directors to serve until the Annual
Meeting of Stockholders in 2004 are set forth below. 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 any nominee who shall be designated by the present
Board of Directors to fill the vacancy. In the event that additional persons are
nominated for election as directors, the proxy holders intend to vote all
proxies received by them for the nominees listed below. All nominees named
herein have consented to be named and to serve as directors if elected.

YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES
FOR DIRECTOR.

Principal Occupation and Director of Class
Employment Last Five Years; Corporation of
Name Age Principal Directorships Since Directors
---------------------------------------------------------------------------------------------------------------------

Allen T. Hamner 59 Professor of Chemistry, West Virginia 1993 2004
Wesleyan College; Director, First
Community Bank, N. A.

B. W. Harvey 69 President, Highlands Real Estate 1989 2004
Management, Inc.; Director, First
Community Bank, N. A.

John M. Mendez 46 President and Chief Executive Officer 1994 2004
of the Corporation; Director,
Executive Vice President and Secretary,
First Community Bank, N. A.;
Director & Chairman, United First Mortgage,
Inc.; Past Vice President, Chief Financial
Officer & Secretary of the Corporation; Past
Senior Vice President- Finance & Chief
Administrative Officer, First Community
Bank, N.A.

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CONTINUING DIRECTORS

The following persons will continue to serve as members of the Board of
Directors until the Annual Meeting of Stockholders in the year of the expiration
of their designated terms (except in the case of Mr. Harrison in the event item
2 of this proxy statement receives the requisite greater than two-thirds vote).
The name, age, principal occupation and certain biographical information for
each continuing director are presented below:

Sam Clark 69 Agent, State Farm Insurance; Director, 1993 2002
First Community Bank, N. A.

James L. Harrison, Sr. 53 Practicing CPA; Past President & 1989 2003
Chief Executive Officer of the Corporation;
Past President & Director, First Community
Bank, N.A; Past Director & Chairman, United
First Mortgage, Inc. See Item 2 herein.

I. Norris Kantor 71 Of Counsel, Katz, Kantor & Perkins, 1989 2003
Attorneys-at-Law; Director, First
Community Bank, N. A.

A. A. Modena 72 Retired Executive Vice President and 1989 2003
Secretary of the Corporation; Director,
First Community Bank, N. A.

Robert E. Perkinson, Jr. 53 Past Vice President-Operations, MAPCO 1994 2002
Coal, Inc.; Permac, Inc.; Race Fork Coal
Company; South Atlantic Coal, Inc.

William P. Stafford 67 President, Princeton Machinery Service, 1989 2002
Inc.; Chairman of the Board of the
Corporation; Director, First Community
Bank, N. A.

William P. Stafford, II 37 Attorney, Brewster, Morhous & Cameron; 1994 2003
Director, First Community Bank, N. A.

W. W. Tinder, Jr. 75 Chairman & Chief Executive Officer, 1989 2002
Tinder Enterprises, Inc.; President, Tinco
Leasing Corporation (Real Estate Holdings);
Director, First Community Bank, N. A.

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COMPENSATION OF DIRECTORS

During 2000, non-employee members of the Board of Directors received a
director's fee of $500 per month. Directors of the Corporation may also be
reimbursed for travel or other expenses incurred in attendance at Board or
committee meetings. Directors who are employees of the Corporation receive no
additional compensation for service on the Board or its committees.

MEETING ATTENDANCE

The Board of Directors held twelve meetings during 2000. All directors
and those nominees, who are currently directors, attended at least 75% of all
meetings of the Board and any committee of which they were a member, except Mr.
Harrison who attended 73% of such meetings.

BOARD COMMITTEES

The Board of Directors of the Corporation has an Audit Committee
consisting of Chairman Harvey and Messrs. Hamner and Stafford, all non-employee
members of the Board. The Audit Committee of the Board of Directors, which held
six meetings during 2000, reviews and acts on reports to the Board with respect
to various auditing and accounting matters, the scope of the audit procedures
and the results thereof, the internal accounting and control systems of the
Corporation, the nature of service performed for the Corporation by and the fees
to be paid to the independent auditors, the performance of the Corporation's
independent and internal auditors and the accounting practices of the
Corporation. The Audit Committee also recommends to the full Board of Directors
the auditors to be appointed by the Board, subject to stockholders'
ratification. The 2000 Report of the Audit Committee is presented on page 9 of
this Proxy Statement.

The Board of Directors has a Compensation Committee that was formed in
May, 1999 consisting of non-employee Directors Hamner, Tinder, and William P.
Stafford, II. The Compensation Committee reviews and considers the form and
amount of compensation and contractual employment terms of the President and
Chief Executive Officer of the Corporation. Recommendations of the Compensation
Committee are made to the Board of Directors. The 2000 Report of the
Compensation Committee is presented on page 8 of this Proxy Statement

The Board of Directors of the Corporation has an Executive Committee
consisting of seven members including the Chairman and Chief Executive Officer.
The Executive Committee held seven meetings during 2000. The Executive Committee
is empowered to act on behalf of the Board on most Corporate matters not
involving business combinations.

The Board does not maintain a Nominating Committee.

TRANSACTIONS WITH DIRECTORS AND OFFICERS

Some of the directors and officers of the Corporation and members of
their immediate families are at present, as in the past, customers of the
Corporation's subsidiary bank, and have had and expect to have transactions with
the bank. In addition, some of the directors and officers of the Corporation
are, as in the past, also officers of or partners in entities that are customers
of the bank and have had and expect to have transactions with the bank. Such
transactions were made in the ordinary course of business, were made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons, and did
not involve more than normal risk of collectibility or present other unfavorable
features.

Two of the directors, Messrs. Harrison and Stafford, II, are members of
professional firms which provide accounting, legal and /or other services on a
fee basis to the Company. Mr. Harrison is a practicing CPA with Brown, Edwards &
Company, a regional accounting firm. Brown, Edwards & Company performs limited
scope audit services and

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provides accounting and advisory services to the Company. The Company paid
$60,350 for these professional services in the year 2000.

Mr. Stafford, II is a practicing attorney with Brewster, Morhous &
Cameron, a Bluefield, WV law firm which provides general legal services to the
Company. The Company paid $79,564 for these professional services in the year
2000.

REPORTS OF CHANGES IN BENEFICIAL OWNERSHIP

Directors, executive officers and principal shareholders of the
Corporation are required to file Initial Statements of Beneficial Ownership and
Changes of Beneficial Ownership of holdings in the Corporation's stock. These
filings on Form 3, Form 4 and Form 5 are to be filed with the Securities and
Exchange Commission within various time frames following a change in status or
changes in the level of beneficial ownership. During 2000, a filing pursuant to
these requirements was inadvertently made on a late basis by Director Harrison.

PRINCIPAL STOCKHOLDERS

The following sets forth information with respect to those persons who,
to the knowledge of management, beneficially owned more than 5% of the
Corporation's outstanding stock as of March 9, 2001. All shares are subject to
the named entity's sole voting and investment power.

Title of Shares Beneficially Percent
Class Name and Address of Beneficial Owner Owned of Class
-----------------------------------------------------------------------------------------------------------

Common The H. P. & Anne S. Hunnicutt Foundation (1) 1,010,000 11.18 %

(1) William P. Stafford is deemed a beneficial owner of the same shares by
virtue of his position as President of the Foundation.

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OWNERSHIP OF COMMON STOCK BY DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth the beneficial ownership of the Common
Stock of the Corporation as of March 9, 2001, by each director and nominee, each
executive officer named in the Summary Compensation Table, and all directors and
executive officers as a group including each executive officer named in this
Proxy Statement.

Percent of Class
Name of Group Number of Shares Beneficially Owned
--------------------------------------------------------------------------------------------------------------

Robert L. Buzzo 10,015 *
Sam Clark 52,194 *
Allen T. Hamner 6,985 *
James L. Harrison, Sr. 48,744 *
B. W. Harvey 10,011 *
I. Norris Kantor 22,060 *
E. Stephen Lilly 4,022 *
John M. Mendez 18,662 *
A. A. Modena 26,778 *
Robert E. Perkinson, Jr. (1) 35,562 *
Robert L. Schumacher 9,410 *
William P. Stafford (2) 192,536 2.13%
William P. Stafford, II 151,478 1.68%
W. W. Tinder, Jr. 55,962 *
All Directors and Executive Officers 644,419 7.19%
as a Group (Fourteen Persons)
--------------------------------------------------------------------------------------------------------------

(1) Mr. Perkinson serves as Co-trustee of the Trust Under Agreement for Robert
E. Perkinson, Sr., and by virtue of voting power is deemed to share
beneficial ownership of an additional 104,373 shares held by Trust, or
1.16% of the Corporation's outstanding stock.

(2) Mr. Stafford serves as President of The H. P. and Anne S. Hunnicutt
Foundation, and by virtue of voting power is deemed to share beneficial
ownership of an additional 1,010,000 shares held by the Foundation, or
11.18 % of the Corporation's outstanding stock.

* Less than one percent.

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REPORT ON EXECUTIVE COMPENSATION

The Board of Directors maintains a Compensation Committee (the
"Committee") whose role is the establishment and management of employment terms
and the form and levels of compensation paid to the President and Chief
Executive Officer ("CEO"). The CEO manages compensation of other executive
officers named in the Compensation Table.

It is the responsibility of the Compensation Committee to develop
proposed contractual terms of employment and establish a framework for a
competitive compensation package for the CEO and other senior executives that
adequately rewards performance and provides incentives for retention. In
carrying out its responsibilities, the Compensation Committee considers: i) the
need to retain competent and effective management personnel; ii) competitive
terms and levels of compensation relative to other companies of comparable size
and operation within the commercial banking industry; iii) past performance of
the CEO as measured against predetermined goals and objectives; iv) comparative
performance of the CEO as benchmarked against peer groups of comparable
commercial banks; and v) the achievement of overall corporate goals.

The Committee establishes current compensation based primarily on
review of competitive salary practices by similarly sized banking organizations
locally and nationally giving appropriate weight to regional differences in cost
of living and contrasting relative performance of the Company and the designated
peer group. In performing this analysis, the Committee utilized the Sheshunoff
Executive Compensation Survey as well as compensation data from other
specifically identified banking peers.

In 2000, with a change in senior management, the Committee reviewed the
employment contract of the President and Chief Executive Officer. Based on that
review and upon the Committee's recommendation to the Board of Directors, a new
employment contract ("contract") was adopted for the President and Chief
Executive Officer. The new three-year contract contains similar terms of
employment and provides for salary continuation for a period of 35 months in the
event of termination within three years of a change in control of ownership. The
contract also provides for salary continuation for a period of 30 months in the
event of termination without cause, absent a change in control of ownership.

The Committee recommended to the Board of Directors a two-tiered
incentive compensation strategy for the President and Chief Executive Officer
based upon the Company meeting specific financial benchmarks and an additional
discretionary incentive based upon both the financial and non-financial
performance of company.

This report shall not be deemed to be incorporated by reference into
any filing under the Securities Act of 1933 or the Securities Exchange Act of
1934, unless First Community Bancshares, Inc. specifically incorporates this
report by reference. It will not otherwise be filed under such Acts.

Allen T. Hamner
William P. Stafford, II
W. W. Tinder, Jr.

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REPORT OF THE AUDIT COMMITTEE

The Audit Committee of the Board is responsible for providing
independent, objective oversight of the Corporation's accounting functions and
internal controls. The Audit Committee is composed of independent directors, and
acts under a written charter adopted and approved by the Board of Directors.
Each of the members of the Audit Committee is independent as defined by
Corporation policy and by the listing standards of the National Association of
Securities Dealers. A copy of the Audit Committee Charter is attached to this
proxy statement as Appendix A.

The responsibilities of the Audit Committee include recommending to the
Board an accounting firm to be engaged as the Corporation's independent
accountants. Additionally, and as appropriate, the Audit Committee reviews and
evaluates, and discusses and consults with management, internal audit personnel
and the independent accountants regarding, the following:

o the plan for, and independent accountants' report on, each audit of
the Corporation's financial statements

o the Corporation's financial disclosure documents, including all
financial statements and reports sent to shareholders

o changes in the Corporation's accounting practices, principles,
controls or methodologies, or in its financial statements

o significant developments in accounting rules

o the adequacy of the Corporation's internal accounting controls, and
accounting, financial and auditing personnel

o the establishment and maintenance of an environment at the
Corporation that promotes ethical behavior

This year the Audit Committee revised its Audit Committee Charter,
incorporating the new standards set forth in Securities Exchange Commission
regulations and the listing standards of the National Association of Securities
Dealers. After appropriate review and discussion, the Audit Committee determined
that the Committee fulfilled its responsibilities under the Audit Committee
Charter.

The Audit Committee is responsible for recommending to the Board that
the Corporation's financial statements be included in its annual report. The
Committee took a number of steps in making this recommendation and held six
meetings during fiscal year 2000. First, the Audit Committee discussed with its
independent public accountants those matters the accountant communicated to and
discussed with the Audit Committee under applicable auditing standards,
including information regarding the scope and results of the audit. These
communications and discussions are intended to assist the Audit Committee in
overseeing the financial reporting and disclosure process. Second, the Audit
Committee discussed the accountant's independence with that firm and received a
letter from the accountant concerning independence as required under applicable
independence standards for auditors of public companies. This discussion and
disclosure informed the Audit Committee of the accountant's independence, and
assisted the Audit Committee in evaluating such independence. Finally, the Audit
Committee reviewed and discussed, with the Corporation management and the
accounting firm, the Corporation's audited consolidated balance sheet at
December 31, 2000 and consolidated statement of income, cash flows and
stockholders' equity for the year then ended. Based on discussions with the
accountants concerning the audit, the independence discussions, and the
financial statement review, and such other matters deemed relevant and
appropriate by the Audit Committee, the Audit Committee recommended to the Board
(and the Board approved) that these financial statements be included in the
Corporation's 2000 Annual Report on Form 10-K filed with the Securities and
Exchange Commission.

B.W. Harvey, Audit Committee Chair
William P. Stafford, Audit Committee Member
Allen T. Hamner, Audit Committee Member

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EXECUTIVE COMPENSATION FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

The following summary compensation table sets forth information
concerning compensation for services in all capacities awarded to, earned by, or
paid to the Corporation's President and Chief Executive Officer and to other
executive officers of the Corporation whose salary and bonus exceeded $100,000
during the years ended December 31, 2000, 1999 and 1998.

SUMMARY COMPENSATION TABLE

Long-Term Compensation
----------------------------
Awards Payouts
----------- ------------
Securities
Underlying LTIP
Name of Individual / Other Annual Options Payouts
Capacities Served Year Salary Bonus Compensation (1) # $
-------------------------------------------------------------------------------------------------------------------------------

John M. Mendez 2000 $185,460 $30,780 $10,512 11,660 $ --
President & Chief 1999 $157,193 $ -- $ 6,156 11,660 $ --
Executive Officer 1998 $154,970 $14,969 $ 8,062 -- $ --
of the Corporation;
Executive Vice President &
Secretary, First Community
Bank, N. A.; Director & Chairman
of United First Mortgage, Inc.

Robert L. Buzzo 2000 $110,080 $14,450 $ 7,715 6,253 $ --
Vice President and 1999 $ 82,121 $ -- $ 7,416 6,253 $ --
Secretary of the 1998 $ 81,977 $ 3,154 $21,499 -- $ --
Corporation; President of
First Community Bank, N. A.;
Chief Executive Officer of the
Bluefield Division of First
Community Bank, N. A.

E. Stephen Lilly 2000 $ 94,569 $21,035 $ 8,035 6,240 $ --
Chief Operating Officer 1999 $100,379 $ -- $ 4,819 6,240 $ --
of the Corporation 1998 $ 87,217 $ 2,183 $ 5,862 -- $ --

Robert L. Schumacher 2000 $ 99,540 $ 7,943 $ 9,427 7,658 $ --
Senior Vice President, 1999 $ 97,469 $ -- $ 7,571 7,658 $ --
Finance of the Corporation 1998 $ 96,314 $14,293 $ 8,974 -- $ --

James L. Harrison, Sr. 2000 $137,830 $12,246 $ 2,520 -- $ --
Former President, Chief 1999 $219,651 $ -- $29,965 -- $ --
Executive Officer & Director 1998 $199,619 $ -- $46,609 -- $ --
of the Corporation, President &
Director of First Community
Bank, N. A.; Director of United
First Mortgage, Inc. (2)
--------------------------------------------------------------------------------------------------------------------------

(1) Other annual compensation includes non-qualified deferred compensation
agreements, deferred bonuses and non-cash fringe benefits.

(2) Employment with the Corporation ceased on June 11, 2000; however, James L.
Harrison, Sr. continues to serve as a director of First Community Bancshares,
Inc. (See Item 2 herein.)

STOCK OPTIONS

In 1999, the Company instituted a Stock Option Plan to encourage and
facilitate investment in the common stock of the Company by key executives and
to assist in the long-term retention of service by those executives. The Plan
covers key executives as determined by the Company's Board of Directors from
time to time. Options under the Plan were granted in the form of non-statutory
stock options with the aggregate number of shares of common stock available for
grant under the Plan set at 275,000 shares. Total options currently available
under the Plan at December 31, 2000 represent the rights to acquire 191,932
shares with deemed grant dates of January 1st for each year 1999 through 2003
resulting in the deemed grant of 38,387 shares in each year of the five-year
deemed grant period. All stock options granted pursuant to the Plan vest ratably
on the first through the seventh anniversary dates of the deemed grant date. The
option price of each stock option is equal to the fair market value of the
Company's common stock on the date of each deemed grant during the five-year
grant period. Vested stock options granted pursuant to the Plan are exercisable
for 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 after age 62, disability, or death,
vested options must be exercised within 90 days after the effective date of
termination. Any option not exercised within such period will be deemed
cancelled.

In the event of a change of control or upon dissolution of the
corporation, the stock options granted under the Plan continue to vest and are
exercisable in accordance with the terms of the original grant. Change of
control provisions further provide that any optionee who is terminated without
cause by the corporation, its successor or affiliate during the 12 months
preceding, or at any time following a change of control, and any participant who
remains employed by the corporation or any affiliate during the 90-day period
following a change of control and thereafter resigns, shall continue to receive
grants on the deemed grant dates and vest as if the optionee continued to be
employed, and optionee, or his estate, shall be entitled to exercise such
options within five years after death or attainment of age 62, whichever first
occurs.

OPTIONS DEEMED GRANTED IN LAST FISCAL YEAR

Individual Grants
------------------------------------------------------------------------------------------------
Number of % of Total Present Value of
Securities Options Grant at Date of
Underlying Granted to Exercise or Grant Using
Options Employees in Base Price Expiration Options
Name Granted (#) Fiscal Year ($/Sh) (1) Dates (2) Pricing Model (3)
-------------------------------------------------------------------------------------------------------------------------

John M. Mendez 11,660 30.37% 19.36 03/01/22 38,128
Robert L. Buzzo 6,253 16.29% 19.36 04/01/17 20,449
E. Stephen Lilly 6,240 16.26% 19.36 07/01/25 20,405
Robert L. Schumacher 7,658 19.95% 19.36 04/01/18 25,042
6 Optionees
(including the 4
listed above) 38,387 100.00% 19.36 From 01/01/14 125,525
To 07/01/25
-------------------------------------------------------------------------------------------------------------------------

(1) Plan participants may use previously owned shares to pay for an
option's exercise price. Additionally, plan participants may have the
Company withhold their shares due upon exercise of an option to satisfy
their required tax withholding obligations.

(2) Options expire 5 years after the executive's retirement date, death or
disability. In the event of termination other than retirement, death or
disability, options must be exercised within 90 days of effective date
of termination. If not exercised within that period, options are deemed
cancelled. For purposes of this table, retirement age is assumed to be
age 62.

(3) The present value of grant at date of grant values options using the
Black-Scholes model with the following assumptions: risk-free interest
rate of 6.00%, dividend yield of 5.21%, and volatility of the expected
market price of the Company's common stock of 26.1%.

OPTION EXERCISES IN LAST FISCAL YEAR

The following table lists the number of shares underlying unexercised
options as well as values for "in-the-money" options. Options are "in-the-money"
if the 2000 year-end share price is higher than the exercise price. No options
were exercised for the listed officers in 2000, and no shares were acquired on
exercise.

Underlying Unexercised In-the-Money Options
Options at Fiscal Year End at Fiscal Year End
--------------------------------------- -------------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
----------------------------------------------------------------------------------------------------------------------

John M. Mendez -- 23,320 $ -- $ --

Robert L. Buzzo -- 12,506 $ -- $ --

E. Stephen Lilly -- 12,480 $ -- $ --

Robert L. Schumacher -- 15,316 $ -- $ --

EXECUTIVE RETENTION PLAN

In 1999, the Company established an Executive Retention Plan for key
members of senior management, including the individuals named in the Summary
Compensation Table. This Plan provides for a benefit at normal retirement (age
65) targeted at 15% of final compensation projected at an assumed 3% salary
progression rate. Benefits under the Plan become payable at age 62. Actual
benefits payable under the Retention Plan are dependent on an indexed retirement
benefit formula that accrues benefits equal to the aggregate after-tax income of
associated life insurance contracts less the Company's tax-effected cost of
funds for that plan year. Benefits under the Plan are dependent on the
performance of the insurance contracts and are not guaranteed by the Company.

In connection with the Executive Retention Plan, the Company has also
entered into Life Insurance Endorsement Method Split Dollar Agreements (the
"Agreements") with the executives covered under the Retention Plan. Under the
Agreements, the Company shares 80% of death benefits (after recovery of cash
surrender value) with the designated beneficiaries of the executives under life
insurance contracts referenced in the Retention Plan. The Company as owner of
the policies retains a 20% interest in life proceeds and a 100% interest in the
cash surrender value of the policies.

The Retention Plan also contains provisions for change of control, as
defined, which allow the executives to retain benefits under the Plan in the
event of a termination of service, other than for cause, during the twelve
months prior to a change in control or anytime thereafter, unless the executive
voluntarily terminates his employment within 90 days following the change in
control.

Because the Retention Plan was designed to retain the future services
of key executives, no benefits are payable under the Plan in the event of
voluntary or involuntary termination prior to retirement age of 62.

COMPARATIVE PERFORMANCE OF THE COMPANY

The following chart was compiled by SNL Securities, LC and compares
cumulative total shareholder return on the Corporation's Common Stock for the
five-year period ended December 31, 2000 with cumulative total shareholder
return of: (1) The Standard & Poor's 500 market index ("S&P 500"); and 2) a
group of five Peer Bank Holding Companies (First Community Bancshares' Peer
Group) which was selected by management of the Corporation based upon relative
asset size and geographic location; and 3) a group of 21 Peer Bank Holding
Companies (Asset Size & Regional Peer Group) selected to replace the original
peer group which has been diminished in number due to mergers and acquisitions.
Three of the five Bank Holding Companies in First Community Bancshares' Peer
Group are also included in the Asset Size & Regional Peer Group. Both peer
groups are presented in this transition year. Subsequent years will present only
the Asset Size and Regional Peer Group; the newly constituted, larger peer
group.

Period Ending
----------------------------------------------------------------
Index 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00
----------------------------------------------------------------------------------------------------------

First Community Bancshares, Inc. 100.00 109.10 156.89 157.36 128.57 126.83
S&P 500 100.00 122.86 163.86 210.64 254.97 231.74
First Community Bancshares Peer Group* 100.00 131.97 189.72 182.04 156.10 150.41
Asset Size & Regional Peer Group** 100.00 120.13 185.37 175.98 142.48 132.56

*First Community Bancshares, Inc. Peer Group consists of five banks used in the
2000 fiscal year ending Total Return Analysis. The financial institutions which
comprise the Peer Group are: WesBanco, Inc., City Holding Company, United
Bankshares, Inc., One Valley Bancorp, Inc. (which, as of year end 2000, had been
acquired by BB & T Corp.), and Pocahontas Bankshares Corp. (which had a name
change and is now called First Century Bankshares, Inc.).

**Asset Size & Regional Peer Group, used by First Community Bancshares for
comparison in the fiscal year ending December 31, 2000, consists of 21
institutions that have an asset size of $1 billion to $5 billion and are located
in the southeast region.

The graph assumes an initial investment of $100 on December 31, 1995 in the
Corporation's common stock and each of the comparative investments with
dividends from each of the investments reinvested at year-end in additional
shares of stock at the then current market value.

EMPLOYMENT CONTRACT

Under the provisions of an employment contract with Mr. Mendez, in the
event of a change in control of the Corporation, Mr. Mendez may elect to
terminate services and be compensated at his annual salary for the balance of
the term of the contract or for a period of thirty months, whichever is greater.
In the event Mr. Mendez is dismissed for reasons other than cause, as defined,
he will be compensated at his annual salary for the balance of the term of the
three-year contract, or thirty months, whichever is greater.

EMPLOYEE STOCK OWNERSHIP PLAN

The individuals listed in the Summary Compensation Table are covered
under an Employee Stock Ownership and Savings Plan ("ESOP"). Contributions under
the ESOP feature are made annually at the discretion of the Board of Directors.
Allocations of those contributions to participants' accounts are made on the
basis of relative W-2 compensation (up to $170,000). Allocations to the accounts
of the individuals named in the Summary Compensation Table for the 2000 year
were: Buzzo -- $13,225; Lilly --$12,364; Mendez -- $17,000; Schumacher --
$11,958.

SAVINGS PLAN

The Plan also provides a 401(k) Savings feature and matches employee
contributions at the rate of 25% up to 6% of compensation. Matching
contributions for 2000 for the covered persons listed in the Summary
Compensation Table were as follows: Buzzo -- $1,340; Lilly -- $1,261; Mendez --
$2,323; and Schumacher -- $1,214.

WRAP PLAN

The Corporation maintains a non-qualified Supplemental 401(k) Plan
("Plan") for the purpose of providing deferred compensation which cannot be
accumulated under the Basic Plan provisions above because of deferral and
covered compensation limitations on tax-qualified pension plan benefits. The
Company makes a non-qualified matching credit on employee contributions at the
rate of 25% up to 6% of compensation under the 401(k) feature of the basic plan
and also makes contributions in lieu of basic plan ESOP contributions for
compensation in excess of the $170,000 compensation limit. Contributions under
this Plan in 2000 for the covered persons listed in the Summary Compensation
Table were as follows: Buzzo -- $641; Lilly -- $604; Mendez -- $1,262; and
Schumacher -- $581.

2. REMOVAL OF DIRECTOR

In June of 2000, James L. Harrison, Sr. was terminated as President and
Chief Executive Officer of the Corporation, President and Director of First
Community Bank, N.A., a subsidiary of the Corporation, and Director of United
First Mortgage, Inc., a subsidiary of the bank. Termination from these positions
followed an employee complaint and an investigation which established to the
satisfaction of the Board of Directors of the Corporation that serious
violations of personnel policies of the Corporation and the bank had occurred.

Corporate law generally requires a vote of the stockholders to remove a
director, and the Articles of Incorporation of the Corporation further provide
that a director of the Corporation can only be removed for cause relating to the
performance of his duties as a director. The removal of Mr. Harrison as director
of the bank and the mortgage company was possible because the Corporation is the
sole shareholder of the bank, and the bank is the sole shareholder of the
mortgage company. However, the Corporation's board of directors does not have
the authority under applicable law to remove Mr. Harrison as a director of the
Corporation, even if such cause exists.

The chairman of the Corporation's board of directors requested Mr.
Harrison's resignation from the Corporation's board, but he declined to honor
this request. Accordingly, the Executive Committee of the Board of Directors is
asking the

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stockholders to accomplish this result at a meeting of the Corporation duly
called for such purpose. The Committee has unanimously concluded, after
consultation with counsel and extensive discussion, that the conduct which led
to Mr. Harrison's dismissal reflects on his performance as a director and
constitutes due cause for removal, and that it is inappropriate for a former
employee terminated under these circumstances to continue service in such a
critical position as director of the Corporation.

Because applicable law requires that removal be accomplished by the
affirmative vote of the holders of more than two-thirds of the outstanding
common stock of the Corporation, your vote is especially important. If you do
not return your proxy, this has the effect of a vote against removal.

THE BOARD OF DIRECTORS OF THE CORPORATION UNANIMOUSLY (WITH THE
EXCEPTION OF MR. HARRISON) SUPPORTS THIS REQUEST, AND ASKS THAT YOU VOTE IN
FAVOR OF REMOVAL.

3. RATIFICATION OF THE SELECTION OF AUDITORS

Pursuant to the Bylaws of the Corporation, stockholders will be asked
to ratify the selection of Ernst & Young, Charleston, West Virginia, as
independent auditors of the Corporation and its subsidiaries for the fiscal year
ended December 31, 2001. Ernst & Young served as independent auditors for the
Corporation for the fiscal year ended December 31, 2000. The firm Deloitte &
Touche previously served as independent auditors and examined the financial
statements of the Corporation and its subsidiaries from 1985 through 1999. The
Audit Committee of the Board of Directors recommended to the Board of Directors
a change in the independent auditors for 2000 based upon proposals received in
January 2000. Ernst & Young was selected as a qualified national firm based upon
its qualifications, proposed staffing, estimated fees and its proximity to the
Company's operations from its Charleston, West Virginia office. Ernst & Young
has no relationship with the Corporation or its subsidiaries except in its
capacity as proposed Independent Auditor. In connection with its audit of the
Corporation's financial statements for the year ended December 31, 2001, Ernst &
Young will review the Corporation's annual reports to stockholders and its
filings with the Securities and Exchange Commission and will conduct reviews of
quarterly reports to stockholders. Fees for the last annual report were $85,000
and all other fees were $69,500, including audit related services of $34,500,
and non-audit services of $35,000. Audit related services generally include fees
for statutory audits, business acquisitions, accounting consultations, and SEC
registration statements.

The Audit Committee of the Board of Directors has recommended to the
Board of Directors that Ernst & Young be appointed as independent auditors for
the year ended December 31, 2001. The Board of Directors has made that
appointment and recommends that the stockholders ratify the selection of Ernst &
Young as independent auditors for the ensuing year.

A representative of Ernst & Young is expected to be present at the
meeting. Inquiries or questions of Ernst & Young may be directed to Mr. Paul
Arbogast, Managing Partner, Ernst & Young, 900 United Center, Charleston, West
Virginia 25301, (304) 343-8971.

OTHER MATTERS

All properly executed proxies received by the Corporation will be voted
at the meeting in accordance with the specifications contained thereon. The
Board of Directors knows of no other matter that may properly come before the
meeting for action. However, if any other matter does properly come before the
meeting, the persons named in the proxy materials enclosed will vote in
accordance with their judgment upon such matter.

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STOCKHOLDERS' PROPOSALS

If any stockholder intends to present a proposal at the 2002 Annual
Meeting, such proposals must be received by the Corporation at its principal
executive offices on or before November 16, 2001. Otherwise, such proposal will
not be considered for inclusion in the Corporation's Proxy Statement for such
meeting.

You are urged to properly complete, execute and return the enclosed
form of proxy.

By Order of the Board of Directors

Robert L. Buzzo, Secretary to the Board
March 24, 2001

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APPENDIX A.

FIRST COMMUNITY BANCSHARES, INC.

AUDIT COMMITTEE CHARTER

ORGANIZATION

This charter governs the operations of the Audit Committee. The Committee shall
review and reassess the charter at least annually and obtain the approval of the
Board of Directors. The Committee shall be appointed by the Board of Directors
and shall consist of at least three directors, each of whom are independent of
management and the Company. Members of the Committee shall be considered
independent if they have no relationship that may interfere with the exercise of
their independence from management and the Company. All Committee members shall
be generally knowledgeable in financial and auditing matters, including at least
one member with accounting or related financial management expertise. The
Chairman of the Board of Directors of the Corporation will be a permanent member
of the Audit Committee. Other Directors' terms shall be staggered with one and
two year terms. The Committee shall annually elect a Chairman from among the
members.

STATEMENT OF POLICY

The Audit Committee shall provide assistance to the Board of Directors in
fulfilling their oversight responsibility to the stockholders, potential
stockholders, the investment community, and others relating to the Company's
financial statements and the financial reporting process, the systems of
internal accounting and financial controls, the internal audit function, the
annual independent audit of the Company's financial statements, and the legal
compliance and ethics programs as established by management and the Board. In so
doing, it is the responsibility of the Committee to maintain free and open
communication between the Committee, independent auditors, the internal auditors
and management of the Company. In discharging its oversight role, the Committee
is empowered to investigate any matter brought to its attention with full access
to all books, records, facilities, and personnel of the Company and the power to
retain outside counsel or other experts for this purpose. Members of the Audit
Committee are to be present at all meetings either in person, proxy or other
technological means, unless extenuating circumstances prevail. As necessary or
desirable, the Chairman may request that members of management, the Director of
Auditing, and representatives of the independent auditors be present at the
Audit Committee meetings.

RESPONSIBILITIES AND PROCESSES

The primary responsibility of the Audit Committee is to safeguard the Company's
assets and to oversee the financial integrity of the Company's accounting,
auditing and reporting practices and such other duties as directed by the Board.
The Committee is to report significant developments or issues to the Board of
Directors. The Committee will report on its review of quarterly financial
statements included in the filing of the Company's Quarterly Report on Form 10-Q
and report on its review of the annual financial statements included in the
filing of the Company's Annual Report on Form 10-K. Management is responsible
for preparing the Company's financial statements, and the independent auditors
are responsible for auditing those financial statements. The Committee, in
carrying out its responsibilities, believes its policies and procedures should
remain flexible in order to best react to changing conditions and circumstances.
The Committee should take the appropriate actions to set the overall corporate
"tone" for quality financial reporting, sound business practices, and ethical
behavior.

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The following shall be the principal recurring processes of the Audit Committee
in carrying out its oversight responsibilities. The processes are set forth as a
guide with the understanding that the Committee may supplement them as
appropriate.

o The Committee shall have a clear understanding with management and
the independent auditors that the independent auditors are
ultimately accountable to the Board and the Audit Committee, as
representatives of the Company's stockholders. The Committee shall
discuss with the auditors their independence from management and the
Company and the matters included in the written disclosures required
by the Independence Standards Board. Annually, the Committee shall
evaluate the work of the independent auditors and recommend to the
Board the selection of the Company's independent auditors for the
ensuing year, subject to stockholders' approval.

o The Committee shall discuss with the internal auditors and the
independent auditors the overall scope and plans for their
respective audits including the adequacy of staffing and
compensation. Also, the Committee shall discuss with management, the
internal auditors, and the independent auditors, the adequacy and
effectiveness of the accounting and financial controls, including
the Company's system to monitor and manage business risk, and the
legal and ethical compliance programs. Further, the Committee shall
meet separately with the internal auditors and the independent
auditors, with and without management present, to discuss the
results of their examinations.

o The Committee shall review the interim financial statements with
management and the independent auditors prior to the filing of the
Company's Quarterly Report on Form 10-Q. Also, the Committee shall
discuss the results of the quarterly review and any other matters
required to be communicated to the Committee by the independent
auditors under generally accepted auditing standards. The Chairman
of the Committee may represent the entire Committee for the purposes
of this review.

o The Committee shall review with management and the independent
auditors the financial statements to be included in the Company's
Annual Report on Form 10-K (or the annual report to stockholders if
distributed prior to the filing of Form 10-K), including their
judgment about the quality, not just acceptability, of accounting
principles, the reasonableness of significant judgments, and the
clarity of the disclosures in the financial statements. Also, the
Committee shall discuss the results of the annual audit and all
other matters required to be communicated to the Committee by the
independent auditors under generally accepted auditing standards,
including the written disclosures and letter required by the
Independence Standard Board Standard No. 1.

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PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
FIRST COMMUNITY BANCSHARES, INC. ONE COMMUNITY PLACE, BLUEFIELD, VA 24605
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby constitutes and appoints James L. Miller and Barbara J.
Buchanan, or either of them, attorney and proxy with full power of substitution,
to represent the undersigned at the Annual Meeting of the Stockholders of First
Community Bancshares, Inc. (the "Corporation") to be held on Tuesday, April 24,
2001, at the Fincastle Country Club, Double Gates, Bluefield, Virginia, at 2:30
P.M., local time, and any adjournments thereof, with all power then possessed by
the undersigned, and to vote, at that meeting or any adjournment thereof, all
shares which the undersigned would be entitled to vote if personally present.

1. FOR [ ] the election of 3 directors - Class of 2004 WITHHOLD AUTHORITY [ ]
B. W. Harvey John M. Mendez You may withhold authority to vote for any
Allen T. Hamner nominee by lining through or otherwise
striking out his name.

2. To remove James L. Harrison, Sr. as a director of the Corporation for cause.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

3. To ratify the selection of the firm of Ernst & Young, Charleston, West
Virginia, as independent auditors for the year ending December 31, 2001.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

4. To vote upon such other business as may properly come before this meeting.

CONTINUED ON THE REVERSE

SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED, IF AUTHORITY IS NOT
WITHHELD OR IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED FOR ITEMS 1, 2
AND 3 ABOVE.

DATED: ________________________, 2001 ____________________________________
SIGNATURE OF STOCKHOLDER

------------------------------------
SIGNATURE OF STOCKHOLDER

[ ] Please check if you plan to
attend the Stockholders' Meeting
on April 24, 2001

Please sign your name(s) exactly as
shown imprinted hereon. If more than
one name appears as part of
registration name, all names must
sign. If acting in executor, trustee
or other fiduciary capacity, please
sign as such.