Edgar Filing: FIRST COMMUNITY BANCSHARES INC /NV/

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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )

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[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 Pursuant to Rule 14a-11(c) or Rule 14a-12.

FIRST COMMUNITY BANCSHARES, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)

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NOTICE OF ANNUAL MEETING AND PROXY STATEMENT

Annual Meeting of Stockholders April 16, 2002

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

NOTICE OF 2002
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, Bluefield, Virginia, at 3:00 p.m. local
time on April 16, 2002, for the purpose of considering and voting upon the
following items as more fully discussed herein.

1. Election of directors to serve as members of the Board of
Directors, Class of 2005.

2. Amendment of the Company's Articles of Incorporation to provide
that the number of Directors shall be determined in accordance
with the Company's Bylaws.

3. Ratification of the selection of Ernst & Young LLP, Charleston,
West Virginia, as independent auditors for the year ended December
31, 2002.

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

/s/ Robert L. Buzzo

Robert L. Buzzo, Secretary

IMPORTANT

YOU MAY VOTE BY THE FOLLOWING METHODS:

1. (888) 216-1279; or at
2. www.proxyvotenow.com/fcb until 11:59 p.m. eastern daylight time on
April 15, 2002.
3. 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.

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, APRIL 16, 2002

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 16, 2002 at 3:00 p.m. local time at Fincastle Country Club, 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 9, 2002.

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," and for
ratification of the selection of Ernst & Young LLP as independent public
auditors for the year ended December 31, 2002. Any stockholder has the power to
revoke his proxy at any time before it is voted.

The Board of Directors has fixed March 5, 2002 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. The amendment to the
Articles of Incorporation requires a favorable two-thirds vote of all those
present in person or by proxy and entitled to vote. 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 5, 2002, the outstanding shares of
the Corporation consisted of 9,916,813?? shares of Common Stock.

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 2005 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
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Robert E. Perkinson, Jr. 54 Past Vice President-Operations, MAPCO 1994 2005
Coal, Inc.; Permac, Inc.; Race Fork Coal
Company; South Atlantic Coal, Inc.;
Director, First Community Bank, N. A.

William P. Stafford 68 President, Princeton Machinery Service, Inc. 1989 2005
Chairman of the Board of the Corporation;
Director, First Community Bank, N. A.

W. W. Tinder, Jr. 76 Chairman & Chief Executive Officer, 1989 2005
Tinder Enterprises, Inc.; Chief Executive
Officer, Tinco Leasing Corporation (Real
Estate Holdings); Director, First Community
Bank, N. A.

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. The name, age, principal occupation and certain
biographical information for each continuing director are presented below:

I. Norris Kantor 72 Of Counsel, Katz, Kantor & Perkins 1989 2003
Attorneys-at-Law; Director, First
Community Bank, N. A.

A. A. Modena 73 Retired Executive Vice President and 1989 2003
Secretary of the Corporation; Director,
First Community Bank, N. A.

William P. Stafford, II 38 Attorney, Brewster, Morhous, Cameron, 1994 2003
Mullins, Caruth, Moore, Kersey & Stafford,
PLLC; Director, First Community Bank, N. A.

Allen T. Hamner 60 Professor of Chemistry, West Virginia 1993 2004
Wesleyan College; Director, First Community
Bank, N. A.

B. W. Harvey 70 President, Highlands Real Estate Management, 1989 2004
Inc.; Director, First Community Bank, N. A.

John M. Mendez 47 President and Chief Executive Officer of the 1994 2004
Corporation; Director, Executive Vice
President, 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.

COMPENSATION OF DIRECTORS

During 2001, 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.

On November 12, 2001, stock options for 45,000 shares were granted
under the 2001 Directors' Stock Option Plan. The 2001 Directors' Stock Option
Plan was implemented to facilitate and encourage investment in the common stock
of the Company by non-employee directors whose efforts, solely as directors, are
expected to contribute to the Company's future growth and continued success.

MEETING ATTENDANCE

The Board of Directors held twelve meetings during 2001. 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 members.

BOARD COMMITTEES

The Board of Directors of the Corporation has an Audit Committee
consisting of Chairman Harvey and Messrs. Hamner, Perkinson and Stafford, all
non-employee members of the Board and independent under the Nasdaq rules
defining an independent director. The Audit Committee of the Board of Directors,
which held seven meetings during 2001, 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 independent auditors to be appointed by the Board, subject to
stockholders' ratification. The 2001 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 2001 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 six meetings during 2001. 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.

One of the directors, Mr. Stafford, II, is a member of a professional
firm which provides legal and /or other services on a fee basis to the Company.
Mr. Stafford, II is a practicing attorney with Brewster, Morhous, Cameron,
Mullins, Caruth, Moore, Kersey & Stafford, PLLC, a Bluefield, WV law firm which
provides general legal services to the Company. The Company paid $46,722 for
these professional services in the year 2001.

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.

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 5, 2002. 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
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Common The H. P. & Anne S. Hunnicutt Foundation(1) 1,010,000 11.20%

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

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 5, 2002, 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
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Robert L. Buzzo 10,643 *
Sam Clark 53,368 *
Allen T. Hamner 6,985 *
B. W. Harvey 10,362 *
I. Norris Kantor 22,160 *
E. Stephen Lilly 4,972 *
John M. Mendez 19,208 *
A. A. Modena 26,198 *
Robert E. Perkinson, Jr. (1) 40,440 *
Robert L. Schumacher 9,918 *
William P. Stafford (2) 199,433 2.21%
William P. Stafford, II 158,375 1.76%
W. W. Tinder, Jr. 58,480 *
All Directors and Executive Officers 620,542 6.88%
as a Group (Thirteen Persons)
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(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 53,164 shares held by
Trust, or 0.59% 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
11.20% of the Corporation's outstanding stock.

* Less than one percent.

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 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 CEO. Based on that review and upon the Committee's
recommendation to the Board of Directors, a new employment contract ("contract")
was adopted for the CEO. 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 CEO based upon the Company meeting
specific financial benchmarks and an additional discretionary incentive based
upon both the financial and non-financial performance of the 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.

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
auditors. Additionally, and as appropriate, the Audit Committee reviews,
evaluates, discusses, and consults with management, internal audit personnel and
the independent auditors regarding the following:

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

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

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

- significant developments in accounting rules

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

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

The Audit Committee Charter incorporates standards set forth in
Securities and 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 in 2001.

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 seven
meetings during fiscal year 2001. First, the Audit Committee discussed with its
independent public auditors 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 auditors' 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, 2001 and consolidated statement of income, cash flows and
stockholders' equity for the year then ended. Based on discussions with the
auditors 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 2001
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
Robert E. Perkinson, Jr., Audit Committee Member

EXECUTIVE COMPENSATION FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

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, 2001, 2000 and 1999.

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) # $
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John M. Mendez 2001 $ 234,335 $ 30,000 $ 13,355 12,826 $ -
President & Chief 2000 $ 185,460 $ 30,780 $ 10,512 12,826 $ -
Executive Officer 1999 $ 157,193 $ - $ 6,156 12,826 $ -
of the Corporation;
Executive Vice President of
First Community
Bank, N. A.; Director & Chairman
of United First Mortgage, Inc.

Robert L. Buzzo 2001 $ 133,396 $ 14,751 $ 7,888 6,878 $ -
Vice President and 2000 $ 110,080 $ 14,450 $ 7,715 6,878 $ -
Secretary of the 1999 $ 82,121 $ - $ 7,416 6,878 $ -
Corporation; President of
First Community Bank, N. A.;
Chief Executive Officer of the
Bluefield Division of First
Community Bank, N. A.;
Director & Secretary of
United First Mortgage, Inc.

E. Stephen Lilly 2001 $ 129,309 $ 30,092 $ 9,023 6,864 $ -
Chief Operating Officer 2000 $ 94,569 $ 21,035 $ 8,035 6,864 $ -
of the Corporation; 1999 $ 100,379 $ - $ 4,819 6,864 $ -
Senior Vice President &
Chief Operating Officer of
First Community Bank, N. A.

Robert L. Schumacher 2001 $ 103,386 $ 8,622 $ 8,829 8,424 $ -
Senior Vice President, 2000 $ 99,540 $ 7,943 $ 9,427 8,424 $ -
Finance of the Corporation; 1999 $ 97,469 $ - $ 7,571 8,424 $ -
Secretary, First Community
Bank, N. A.

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

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 (adjusted for the 10% stock dividend declared on February
19, 2002) set at 302,500 shares. Total options currently available under the
Plan at December 31, 2001 represent the rights to acquire 289,502 shares with
deemed grant dates of January 1st for each year 1999 through 2003. 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.

Individual Grants
------------------------------------------------------------------------------------------
Number of % of Total
Securities Options
Underlying Granted to Exercise or
Options Employees in Base Price Expiration Grant Date
Name Granted(4) Fiscal Year ($/Sh)(1)(4) Dates (2) Present Value(3)
-------------------------------------------------------------------------------------------------------------------

John M. Mendez 12,826 18.76% 15.33 03/01/22 $ 60,539
Robert L. Buzzo 6,878 10.06% 15.33 04/01/17 $ 32,464
E. Stephen Lilly 6,864 10.04% 15.33 07/01/25 $ 32,761
Robert L. Schumacher 8,424 12.32% 15.33 04/01/18 $ 39,761
19 Optionees
(including the 4
listed above) 68,351 100.00% 15.33 From 05/01/10 $322,617
To 05/01/43
-------------------------------------------------------------------------------------------------------------------

(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 grant date present value of options was determined using the
Black-Scholes model with the following assumptions: risk-free interest
rate of 5.15%, dividend yield of 3.40%, expected volatility of the
market price of the Company's common stock of 31.2%, and average
anticipated time to exercise of 15.6 years.
(4) All shares and per share data have been adjusted to reflect the 10%
stock dividend declared on February 19, 2002.

Also, during the fourth quarter of 2001, the Company granted stock
options to non-employee directors. The Director Option Plan was implemented to
facilitate and encourage investment in the common stock of the Company by
non-employee directors whose efforts are expected to contribute to the Company's
future growth and continued success. The options granted pursuant to the Plan
are exercisable no later than ten years from the date of grant or two years
after the optionee ceases to serve as a director of the Corporation, whichever
date occurs first. Options not exercised within the appropriate time shall
expire and be deemed cancelled. The Plan covers non-employee directors as
determined by the Company's Board of Directors. 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 90,000 shares.

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 for directors and
individuals listed in the Summary Compensation table. Options are "in-the-money"
if the 2001 year-end share price is higher than the exercise price. No options
were exercised for the listed officers and directors in 2001, and no shares were
acquired on exercise.

(1) All options and per share data have been adjusted to reflect the 10% stock
dividend declared on February 19, 2002.

Option Exercises in Last Fiscal Year

Number of Securities Underlying Value of Unexercised In-the-Money
Unexercised Options at Fiscal Year End(1) Options at Fiscal Year End
----------------------------------------- -------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
--------------------------------------------------------------------------------------------------------------

John M. Mendez - 38,478 - $136,212

Robert L. Buzzo - 20,635 - $ 73,048

E. Stephen Lilly - 20,592 - $ 72,896

Robert L. Schumacher - 25,271 - $ 89,459

Sam Clark 5,500 - $ 15,580 -

Allen T. Hamner 5,500 - $ 15,850 -

B. W. Harvey 5,500 - $ 15,850 -

I. Norris Kantor 5,500 - $ 15,850 -

A. A. Modena 5,500 - $ 15,850 -

Robert E. Perkinson, Jr 5,500 - $ 15,850 -

William P. Stafford 5,500 - $ 15,850 -

(1) All options and per share data have been adjusted to reflect the 10%
stock dividend declared on February 19, 2002.

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.

DIRECTORS' SUPPLEMENTAL RETIREMENT PLAN

In 2001, the Company established a Directors' Supplemental
Retirement Plan for its non-employee Directors. This Plan provides for a benefit
upon retirement from service on the Board at specified ages depending upon
length of service or death. Benefits under the Plan become payable at age 70, 75
and 78 depending upon the individual director's age and original date of
election to the Board. Actual benefits payable under the 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 Directors' Supplemental Retirement Plan, the
Company has also entered into Life Insurance Endorsement Method Split Dollar
Agreements (the "Agreements") with certain directors covered under the 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 Plan also contains provisions for change of control, as defined,
which allow the Directors 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 Director voluntarily
terminates his service within 90 days following the change in control.

Because the Plan was designed to retain the future services of
Directors, no benefits are payable under the Plan in the event of voluntary or
involuntary termination prior to retirement age as defined in the Plan document.

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, 2001 with cumulative total shareholder
return of: (1) The Standard & Poor's 500 market index ("S&P 500"); and 2) a
group of 18 Peer Bank Holding Companies (Asset Size & Regional Peer Group).

TOTAL RETURN PERFORMANCE

[GRAPH]

Ex date Dividend Stock Price Shares added with div Shares in portfolio Portfolio value

12/31/2000 0.0000 17.750 0.000000000 5.633802817 100.000000000
3/13/2001 0.2300 18.375 0.070518348 5.704321165 104.816901408
6/13/2001 0.2300 27.800 0.047194024 5.751515189 159.892122257
9/17/2001 0.2300 31.000 0.042672532 5.794187721 179.619819356
12/12/2001 0.2900 29.480 0.056998455 5.851186176 172.492968459
12/31/2001 0.0000 27.470 0.000000000 5.851186176 160.732084246

The graph assumes an initial investment of $100 on December 31, 1996 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.

*The Asset Size & Regional Peer Group consists of banks that are traded on the
NASDAQ, pink sheet, and bulletin board exchanges, have total assets between $1B
and $5B, and are in the Southwest region.

PERIOD ENDING
INDEX 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
---------------------------------------------------------------------------------------------------------------------

First Community Bancshares, Inc. 100.00 139.92 134.42 104.84 101.96 163.88
S&P 500 100.00 133.37 171.44 207.52 188.62 166.22
Asset Size & Regional Peer Group* 100.00 160.53 136.71 109.29 99.88 122.82

EMPLOYMENT CONTRACT

COMPARATIVE PERFORMANCE OF THE COMPANY

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 2001 year
were: Mendez -- $14,450; Buzzo -- $13,263; Lilly --$14,316; Schumacher --
$10,271.

SAVINGS PLAN

The Plan also provides a 401(k) Savings feature and matches employee
contributions at the rate of 50% up to 6% of compensation. Matching
contributions for 2001 for the covered persons listed in the Summary
Compensation Table were as follows: Mendez -- $2,737; Buzzo -- $2,512; Lilly --
$2,712; and Schumacher -- $1,945.

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: Mendez -- $5,211; Buzzo -- $2,169; Lilly -- $2,341; and
Schumacher -- $1,680.

2. AMENDMENT OF THE COMPANY'S ARTICLES OF INCORPORATION TO PROVIDE THAT THE
NUMBER OF DIRECTORS SHALL BE DETERMINED IN ACCORDANCE WITH THE COMPANY'S
BYLAWS

The Company's Articles of Incorporation currently provide that the
number of directors of the Company shall be not less than twelve. Because of a
reduction in the number of Board members over the last [two] years, at the
present time, the Board is composed of nine directors. In order to avoid the
need to call a meeting of the Company's stockholders in the future to adjust the
size of the Board, the Board of Directors has determined to recommend to the
stockholders that the size of the Board be determined in accordance with the
Company's Bylaws, which may be more readily revised from time to time by action
of the Board. Accordingly, in February 2002, the Board of Directors adopted a
resolution proposing that the Articles of Incorporation be amended to provide
that the number of directors shall be determined in accordance with the
Company's Bylaws, subject to stockholder approval of the amendment. Subject to
stockholder approval of the proposed amendment, the Board of Directors will
amend the Company's Bylaws to provide that the number of directors shall be not
less than seven nor more than twelve, with the exact number to be determined
from time to time by resolution of the Board.

OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE AMENDMENT OF
THE COMPANY'S ARTICLES OF INCORPORATION TO PROVIDE THAT THE NUMBER OF DIRECTORS
SHALL BE DETERMINED IN ACCORDANCE WITH THE COMPANY'S BYLAWS.

PURPOSE OF PROPOSAL

Currently, the Company's Articles of Incorporation provide that the
number of directors shall not be less than twelve and require the Company to
obtain stockholder approval anytime a board member departure reduces the
composition of the Board below the minimum prescribed number. This amendment
eliminates that costly burden to the Company.

If the proposed amendment is adopted, it will become effective upon
filing of a Certificate of Amendment to the Company's Articles of Incorporation
with the Nevada Secretary of State.

VOTE REQUIRED

Approval of the proposal requires the affirmative vote of two-thirds of
the shares of common stock then outstanding and entitled to vote at the meeting.

PROPOSED AMENDMENT

The following is the text of the proposed amendment to Article VI of
the Articles of Incorporation:

The members of the corporation's governing board shall be styled as
directors. The number of directors of the corporation shall be
determined in accordance with a bylaw or amendment thereof duly adopted
by a majority of the Board of Directors. The Board of Directors of the
corporation shall divide the directors into three classes, as nearly
equal in number as reasonably possible, designated Class I, Class II
and Class III, respectively. Directors shall be assigned to each class
in accordance with a resolution or resolutions adopted by the Board of
Directors. At the first annual meeting of stockholders or any special
meeting in lieu thereof, the terms of the Class I directors shall
expire and Class I directors shall be elected for a full term of three
years. At the second annual meeting of stockholders or any special
meeting in lieu thereof, the terms of the Class II directors shall
expire and Class II directors shall be elected for a full term of three
years. At the third annual meeting of stockholders or any special
meeting in lieu thereof, the terms of the Class III directors shall
expire and Class III directors shall be elected for a full term of
three years. At each succeeding annual meeting of stockholders or
special meeting in lieu thereof, directors elected to succeed the
directors of the class whose terms expire at such meeting shall be
elected for a full term of three years. Each director shall serve until
his or her successor is duly elected and qualified or until his or her
death, resignation, or removal. No person who has attained the age of
70 years shall be elected or appointed as a director of this
corporation; provided, however, that every person, otherwise eligible,
who was serving as a director of the corporation on December 31, 1990,
shall continue to be eligible for re-election as a director of the
corporation regardless of age.

3. RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS

Pursuant to the Bylaws of the Corporation, stockholders will be asked
to ratify the selection of Ernst & Young LLP, Charleston, West Virginia, as
independent auditors of the Corporation and its subsidiaries for the fiscal year
ended December 31, 2002. Ernst & Young served as independent auditors for the
Corporation for the fiscal year ended December 31, 2001. 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, 2002, 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.
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, 2002. 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. John B.
Gianola, Managing Partner, Ernst & Young, 900 United Center, Charleston, West
Virginia 25301, (304) 343-8971.

INDEPENDENT AUDITOR FEES

Fees for the last annual audit which included services in conjunction
with the required quarterly and annual reporting to both shareholders and the
Securities and Exchange Commission ("SEC") were $105,000. All other fees were
$38,500 and consisted of audit related work for statutory audits, accounting
consultations, and SEC registration statements. The Company's Audit Committee
has considered whether the provision of additional non-audit services by Ernst &
Young is compatible with maintaining auditor independence.

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.

STOCKHOLDERS' PROPOSALS

If any stockholder intends to present a proposal at the 2003 Annual
Meeting, such proposal must be received by the Corporation at its principal
executive offices on or before November 9, 2002. 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 or vote via the Internet or toll free number provided elsewhere in
the proxy material.

By Order of the Board of Directors

/s/ Robert L. Buzzo

Robert L. Buzzo, Secretary to the Board
March 9, 2002

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 Jeff Farmer, 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 16, 2002, at the Fincastle Country Club, Double Gates,
Bluefield, Virginia, at 3:00 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 4 directors - Class of 2005 WITHHOLD AUTHORITY [ ]
Robert E. Perkinson, Jr. You may withhold authority to vote for any
William P. Stafford nominee by lining through or otherwise
W. W. Tinder, Jr. striking out his name.

2. To amend the Company's Articles of Incorporation to provide that the number of Directors shall be
determined in accordance with the Company's Bylaws.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

3. To ratify the selection of the firm of Ernst & Young, L.L.P., Charleston, West Virginia, as independent
auditors for the year ending December 31, 2002.

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: , 2002 -------------------------------------
------------------------ SIGNATURE OF STOCKHOLDER

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

Please check if you plan to attend the
Stockholders' Meeting on April 16, 2002

In lieu of using this proxy card, you may also vote upon the items set forth above by entering your voting instructions by
telephone at 1-800--------or on the world wide web at www.proxyvote.com. If you wish to use this proxy card, 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.