DEF 14A of First Community Bankshares Inc /Va/, Mar 11, 2024

DEF 14A of First Community Bankshares Inc /Va/

Filed Mar 11, 2024 · FY20230001437749-24-007286

Open on EDGAR

  1. PROPOSAL 1: ELECTION OF DIRECTORS

    PROPOSAL 1: ELECTION OF DIRECTORS The Board is currently comprised of eight (8) directors, including six (6) non-management directors, divided into three (3) classes with staggered terms: the class of 2024, consisting of three (3) directors; the class of 2025, consisting of three (3) directors; and the class of 2026, consisting of two (2) directors. Accordingly, three (3) directors will be elected to the class of 2027 and will serve until the 2027 Annual Meeting. The three (3) directors from the class of 2024 are each nominated for re-election into the class of 2027. The Board has adopted a policy which requires that a nominee for director in an uncontested election who does not receive a greater number of votes “for” election than votes “withheld” promptly tender her or his resignation to the Board. The GNC shall make a recommendation to the Board of Directors as to whether to accept or reject the tendered resignation or whether other action should be taken. The full text of this policy can be found in the Governance and Nominating Committee Charter available on the Corporation's website www.firstcommunitybank.com under Investor Relations. In the event any nominee is unable or declines to serve as a director at the time of the Annual Meeting, all proxy votes for that individual will be voted for an alternate nominee designated by the present Board to fill the vacancy. Unless contrary instructions are given by a shareholder who signs and returns a proxy, in the event more than three (3) persons are nominated for election as directors, the proxy holder shall assume the shareholder intended to vote all shares represented by that proxy for the nominees listed herein, or for any alternates nominated by the Board. All nominees named herein have consented to be named and to serve as directors if elected. As defined by Item 401(d) of Regulation S-K, no director or executive officer of the Corporation is closely related to any other director or executive officer of the Corporation by blood, marriage, or adoption. The table set forth below describes each director and nominee, including their age; the applicable director class, which is based upon the year in which their term of service expires; and title. A biography describing each director’s and each nominee’s qualifications and business background is set forth below the table. The Corporation does not know of any reason why any nominee would be unable to serve as a director. Members of the Corporation’s Board of Directors are expected to have the appropriate skills and characteristics necessary to function in the Corporation’s current operating environment and contribute to its future direction and strategies. These include legal, financial, management and other relevant skills. In addition, the Corporation looks to achieve a diversified Board, including members with varying experience, age, perspective, residence, background, race, gender, and other demographic characteristics. All members of the Corporation’s Board also serve as directors for the board of the Corporation’s banking subsidiary.

  2. PROPOSAL 1: ELECTION OF DIRECTORS

    | Name and Title | Age | Director of Corporation Since | Class of Directors | | C. William Davis, Director Nominee | 76 | 2015 | 2024 | | Samuel L. Elmore, Director | 77 | 2013 | 2025 | | Richard S. Johnson, Director | 74 | 2008 | 2025 | | Gary R. Mills, President and Director | 56 | 2016 | 2026 | | Harriet B. Price, Director Nominee | 61 | 2021 | 2024 | | M. Adam Sarver, Director | 47 | 2015 | 2026 | | William P. Stafford, II, Chief Executive Officer and Director (Chairman) Nominee | 60 | 1994 | 2024 | | Beth A. Taylor, Director | 68 | 2022 | 2025 |

  3. DIRECTOR NOMINEES FOR THE CLASS OF 2027

    DIRECTOR NOMINEES FOR THE CLASS OF 2027 C. William Davis, Attorney, Richardson & Davis, PLLC, Bluefield, West Virginia. Mr. Davis was appointed to serve on the Board on August 25, 2015. Mr. Davis graduated from the Virginia Military Institute in 1970, with a Bachelor of Science in Civil Engineering and from Washington & Lee University School of Law in 1973, with a Juris Doctor degree. Mr. Davis is a member of Richardson & Davis, PLLC and practices law, primarily in the areas of civil litigation, commercial transactions, trusts and estates, and banking. Mr. Davis has served as a Director of the Corporation since 2015, of the Corporation’s banking subsidiary since 1990, and of a predecessor bank from 1987 to 1990. Mr. Davis has served as a Director for a variety of business and professional organizations in the region, including Bluefield Supply Company, Flat Top Insurance Agency, the Defense Trial Counsel of West Virginia, Inc., and the West Virginia State Bar Board of Governors. Mr. Davis’ relevant experience qualifying him for service as a director includes: a broad range of business, legal, banking, and regulatory related issues encountered in the practice of law; extensive civic and community service; and more than thirty-five (35) years of board service in the banking industry. Harriet B. Price, Chief Financial Officer, Price-Williams Realty, Inc., Radford, Virginia. Ms. Price was appointed to serve on the Boards of both the Corporation and First Community Bank effective January 1, 2021. Ms. Price received a Bachelor of Science in Accounting from Virginia Polytechnic Institute and State University. She is a certified public accountant and active in the executive management of Price-Williams Realty, Inc. Ms. Price takes pride in serving her community through her mentoring of students in accounting at Virginia Tech and Radford University over the past twenty-five years, previously serving on the City of Radford Executive Chamber Board, and volunteering in Radford City Schools. Ms. Price’s relevant experience qualifying her for service as a director includes: more than twenty-five (25) years’ experience in business management and accounting and extensive civic and community service. William P. Stafford, II, Chief Executive Officer, First Community Bankshares, Inc., Bluefield, Virginia and Attorney, Brewster Morhous PLLC, Bluefield, West Virginia. Mr. Stafford is a graduate of Virginia Polytechnic Institute and State University, Blacksburg, Virginia, and holds a Bachelor of Science in Mechanical Engineering. He also holds a Juris Doctor, cum laude, from Washington & Lee University School of Law, Lexington, Virginia. Mr. Stafford is a member of Brewster Morhous PLLC and practices law on a limited basis primarily in the areas of commercial transactions, commercial lending, banking, creditor’s rights, and trusts and estates. Mr. Stafford has served as Chief Executive Officer of the Corporation since his appointment by the Board in August 2013. He currently serves as Chairman of the Board of the Corporation and Chairman of the Board of the Corporation’s banking subsidiary. Mr. Stafford serves as Director and Corporate Secretary of the H. P. and Anne S. Hunnicutt Foundation, Inc., Princeton Machinery Service, Inc., and Melrose Enterprises, Ltd. He is a member of Stafford Farms, LLC, Vermillion Development, LLC, and Walnut Hill, LLC, which include real estate and agricultural holdings. Mr. Stafford has served, and continues to serve, on numerous civic and community service boards and commissions. Mr. Stafford’s relevant experience qualifying him for service as a director includes: a broad range of regulatory, business, legal and banking related issues encountered in the practice of law and personal business endeavors; extensive state and municipal government service; extensive civic and community service; service as an executive officer of the Corporation since 2013; and service as a member of the Board of Directors of the Corporation since 1994. The Board of Directors unanimously recommends a vote FOR the nominees set forth above.

  4. INCUMBENT DIRECTORS

    INCUMBENT DIRECTORS Samuel L. Elmore, Former Executive Vice President and Chief Credit Officer, First Community Bank, Beckley, West Virginia. Mr. Elmore received a Bachelor of Science in Business Management and Marketing in 1970 from the University of Charleston. Prior to joining First Community Bank, Mr. Elmore served as President, Citizens Southern Bank, Beckley, West Virginia; President and Chief Executive Officer, Charleston National Bank, Charleston, West Virginia; Vice President, Key Centurion Bancshares, Huntington, West Virginia; and President and Chief Operations Officer, Beckley National Bank, Beckley, West Virginia. Mr. Elmore also served in the United States Army from 1964 to 1967. Mr. Elmore is the Vice Chairman and Lead Independent Director of First Community Bankshares, Inc. and currently serves on the Board of First Community Bank and has previously served on the Boards of The United Way of Beckley, Beckley Area Foundation, Raleigh General Hospital, Raleigh County Community Action, Pinecrest Development Corporation, Raleigh County Commission on Aging, and the Virginia’s Automated Clearing House Association. Mr. Elmore’s relevant experience qualifying him for service as a director includes: more than forty (40) years of experience in the community banking industry, including service as an auditor, Chief Executive Officer, President, Chief Operations Officer, Chief Financial Officer, and Chief Credit Officer; prior experience with acquisitions and mergers; and experience in a variety of offices held with increasing management responsibilities during his banking career. Richard S. Johnson, Chairman, President and Chief Executive Officer, The Wilton Companies, Richmond, Virginia. Mr. Johnson earned a Bachelor of Science in Business Administration from the University of Richmond, Richmond, Virginia in 1973, with concentrations in Economics and Finance, and graduated with a Master of Science from Virginia Commonwealth University, Richmond, Virginia in 1977, with a concentration in Real Estate and Urban Land Development. Mr. Johnson has been the President and Chief Executive Officer of The Wilton Companies, a real estate investment, development, brokerage and management group of companies, since 2002. He assumed the role of Chairman of The Wilton Companies in 2010. Prior to joining The Wilton Companies, Mr. Johnson served as President of Southern Financial Corp. of Virginia from 1985 to 2002 and Chairman of the Board of Southern Title Insurance Corporation from 1980 to 1985. Mr. Johnson currently serves as a Director of First Community Bankshares, Inc., First Community Bank, The Wilton Companies, Inc., and The Wilton Companies, LLC. Mr. Johnson serves as a Director of the American Civil War Museum. Mr. Johnson also serves as the Assistant Treasurer and Director Emeritus of Ducks Unlimited, Inc. and further serves as Emeritus Trustee of the Board of Trustees for the University of Richmond. He has previously served as a director/trustee of the State Fair of Virginia, the Children’s Museum of Richmond, Omicron Delta Kappa, a National collegiate honor society, Ducks Unlimited Canada, Landmark Apartment Trust of America, and the City of Richmond Economic Development Authority, where he previously held the seat of Chairman. Mr. Johnson’s relevant experience qualifying him for service as a director includes his background in: long-range planning, various aspects of mortgage underwriting, marketing, and mortgage portfolio servicing; previously chairing the Economic Development Authority of the City of Richmond, Virginia; past service as a director and Finance Committee member of Ducks Unlimited, Inc. and Ducks Unlimited Canada; having served in various state and national offices with Ducks Unlimited, Inc., including Assistant Treasurer and member of the Finance and Audit Subcommittee; and previous service as a director and Audit Committee member of the Apartment Trust of America. Gary R. Mills, President, First Community Bankshares, Inc. and Chief Executive Officer and President, First Community Bank, Bluefield, Virginia. Mr. Mills has served as President of the Corporation since August 31, 2013 and currently serves as Chief Executive Officer and President of First Community Bank. Mr. Mills has been employed by the Corporation and/or one of its subsidiaries since 1998. Mr. Mills served as Market President of the Princeton Division of First Community Bank from 1998 until 2005, Senior Vice President of Credit Administration from 2005 to 2006, and most recently as Chief Credit Officer from 2007 until his appointment as Chief Executive Officer. Mr. Mills is a Certified Public Accountant and holds a Bachelor of Science in Business Administration with a concentration in Accounting from Concord College (now University). Mr. Mills’ relevant experience qualifying him for service as a director includes: more than thirty (30) years of experience in the financial services industry; extensive civic and community involvement; and ten (10) years of board service for the Corporation’s banking subsidiary. M. Adam Sarver, Real Estate Developer and Businessman, Princeton, West Virginia. Mr. Sarver was appointed to serve on the Board on August 25, 2015. Mr. Sarver received his Bachelor of Science in Communication Studies in 2000 from West Virginia University. Mr. Sarver has served on the Board of Directors of the Corporation’s banking subsidiary since 2014. He owns and manages several businesses in Southern West Virginia including Main Street Builders, LLC; Eastern Door & Glass, LLC; Longview Properties, LLC; Clover Leaf Properties, LLC; and Eastern Aluminum Fabrication, LLC, which are focused on real estate development coupled with residential and commercial construction and development. Mr. Sarver serves as a Director of the H. P. and Anne S. Hunnicutt Foundation, Inc. Mr. Sarver also currently serves as a Director for a variety of other businesses, civic and charitable organizations in the region, including the Tiger Athletic Foundation, Princeton Salvation Army Advisory Board (past Chairman) and the First United Methodist Church. He was previously a Director for the Princeton – Mercer County Chamber of Commerce. Mr. Sarver’s relevant experience qualifying him for service as a director includes: a broad range of business, financial, and related experience associated with operating multiple business interests and extensive civic and community service on a variety of boards. Beth A. Taylor, Mayor of the Town of Wytheville, Virginia. Dr. Taylor earned a Nursing Degree from Samford University in Birmingham, Alabama in 1976 and a Bachelor of Science from University of Alabama in Birmingham, Alabama in 1985. She then attended medical school at the University of South Alabama in Mobile, Alabama, earning her Doctor of Medicine in 1989. She also received certifications in Internal Medicine (1992) and Gastroenterology (1995) from the University of South Alabama. Dr. Taylor spent her medical career in private practice, focusing on gastroenterology. She retired from medical practice in 2015. In August 2016, Dr. Taylor was elected to the Town Council of the Town of Wytheville, Virginia and on July 30, 2018, she was elected as the first female Mayor of the Town of Wytheville, Virginia. In January 2023, Dr. Taylor was re-elected as Mayor of Wytheville for another four (4) year term. During her tenure with the Town, Dr. Taylor has, at various times, served on multiple committees, including, without limitation the Crossroads Regional Industrial Development Authority, District Three Committee, Beautification Committee, Budget and Finance Committee, and Tree Advisory Committee. She also routinely attends meetings of the Joint Industry Development Authority and the Regional Water Authority and Planning Commission. She currently serves on the Boards of both the Corporation and First Community Bank.

  5. INCUMBENT DIRECTORS

    Dr. Taylor’s relevant experience qualifying her for service as a director includes a broad range of business, financial, and related experience obtained while in private medical practice; extensive civic and community service; and extensive municipal government service, including service directly related to community development activities.

  6. Director Qualifications and Experience

    Director Qualifications and Experience The GNC is committed to presenting for shareholder consideration a slate of nominees who, taken together with current Directors, have the experience, qualifications, attributes, and skills appropriate for functioning effectively as a board and as liaisons to the customers and communities the Corporation serves. The GNC regularly reviews the composition of the Board in light of the Corporation’s evolving needs, its assessment of the Board’s performance, and the input of shareholders. In considering whether to recommend any candidate for inclusion in the Board’s slate of recommended director nominees, including candidates recommended by shareholders, the GNC considers a number of criteria, including, but not limited to, the candidate’s integrity, business acumen, age, experience, education, involvement in the communities served by the Corporation, relationships and familiarity with the Corporation’s customers, commitment to the Corporation, diligence, geographic representation, conflicts of interest, strong professional reputation and record of achievement, constructive and collegial personal attributes, significant investment in or experience with the Corporation, ability and commitment to devote sufficient time and energy to Board service, and ability to act in the interests of all shareholders, rather than focusing on representation of a particular group, issue or interest. Additionally, the GNC must ensure that the composition of the Board and its committees satisfies SEC, NASDAQ, and banking regulatory standards, including those related to director independence. Further examples of individual qualifications and experience considered by the GNC include the candidate’s professional standing in their chosen field and in the communities served by the Corporation, expertise in the financial services industry, civic and community involvement in the communities served by the Corporation, leadership skills, and intelligence. The GNC also strives to accomplish broad geographic representation from the communities and markets the Corporation serves and seeks candidates who can help ensure the Board remains knowledgeable and intimately involved in the banking affairs of those customers and communities. The GNC also seeks candidates with a representative mix of skills in finance, technology, marketing, community and business affairs, human resources, and governance.

  7. Diversity of Director Nominees

    Diversity of Director Nominees The Governance and Nominating Committee Charter, which is publicly available on the Corporation's website www.firstcommunitybank.com under Investor Relations, addresses specifically how diversity is to be considered in the director nomination process. More broadly, however, the GNC seeks to ensure that there is diversity of thought among directors. Having diversity of thought results in more thorough analysis of each issue and better decisions, which in the long-term results in greater shareholder value. The GNC believes that diversity of thought stems from many factors, including professional experience, life experience, socio-economic background, gender, race, religion, nationality, skill set, and geographic representation. The GNC does not assign specific weights to particular factors, and no particular factor is necessarily applicable to all prospective nominees. The Corporation believes that the backgrounds and qualifications of the directors, considered as a group, should provide a significant composite mix of experience, knowledge, and abilities that will allow the Board to fulfill its responsibilities. The diversity of the Board is evaluated on a continuing basis by assessing whether varying viewpoints are routinely presented, evaluating the individual performance and contributions of each Director, and ensuring that varying perspectives are presented on key issues.

  8. Diversity of Director Nominees

    | Board Diversity Matrix (As of February 26, 2024) | | | | | | Total Number of Directors | 8 | | | | | | Female | Male | Non-Binary | Did Not Disclose Gender | | Part I: Gender Identity | | | | | | Directors | 2 | 6 | 0 | 0 | | Part II: Demographic Background | | | | | | African American or Black | 0 | 0 | 0 | 0 | | Alaskan Native or Native American | 0 | 0 | 0 | 0 | | Asian | 0 | 0 | 0 | 0 | | Hispanic or Latinx | 0 | 0 | 0 | 0 | | Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 | | White | 2 | 6 | 0 | 0 | | Two or More Races or Ethnicities | 0 | 0 | 0 | 0 | | LGBTQ+ | 0 | | | | | Did not Disclose Demographic Background | 0 | | | | | Directors who are Military Veterans | 2 | | | |

  9. Executive Summary

    | What We Do | | What We Don’t Do | | | ☑ | Place a heavy emphasis on variable compensation | ☒ | No "single trigger" change-in-control cash payments | | ☑ | 100% of annual long-term incentives are performance based | ☒ | No tax gross-ups | | ☑ | Conduct incentive risk reviews | ☒ | No option backdating or repricing | | ☑ | Recoup equity awards through a clawback policy | ☒ | No hedging | | ☑ | Use an independent compensation consultant | ☒ | No recycling of shares granted under equity plans except forfeited | | ☑ | Require executives and directors to own shares through rigorous stock ownership and holding guidelines | | or terminated shares |

  10. What Guides our Program

    | ● | Annual Incentive Compensation. Annual incentive compensation is intended to directly incentivize the executive to maximize the financial performance of the Corporation while not taking excessive risk. For each named executive officer, annual incentive compensation is paid in the form of cash. Payment of any incentive compensation is completely at-risk and determined based on the Corporation's previous year’s performance as evaluated by the CRC. The Chief Executive Officer and President present their recommendations for Executive Management Team annual incentive compensation for consideration and approval to the CRC, but do not deliberate on their own compensation. |

  11. What Guides our Program

    | ● | Long-Term Equity Compensation. The Corporation’s equity compensation program is designed to align executives’ interests with those of shareholders and to reward long-term performance. The CRC uses stock options and restricted stock awards which are designed to deliver reasonable, but meaningful, equity interests in the Corporation. Payment of any equity compensation is completely at-risk. Vesting of equity awards granted each year is contingent on future years' performance of the Corporation. |

  12. What Guides our Program

    In addition to these principal components, the compensation program also includes retirement programs available to all employees and an option to defer compensation. Perquisites are limited and are generally business-related and granted to facilitate the efficiency and productivity of our executives. Pay Mix. The Corporation’s pay-for-performance philosophy is reinforced through the variable nature of its annual incentive compensation and long-term equity compensation discussed above. The variable nature of such compensation is an important underpinning of the Corporation’s compensation framework. For 2023, total variable compensation, which includes annual incentive compensation in the form of cash and long-term equity compensation in the form of restricted stock units, paid to the CEO was approximately 27% of the CEO's total compensation, and total variable compensation for the other NEOs was approximately 34% of their total compensation, as graphically illustrated in the charts below. Annual Incentive Compensation based on the Corporation's performance in 2023 has not yet been paid. Accordingly, this calculation is based on compensation actually paid, not necessarily earned, in 2023, including annual incentive compensation paid in March 2023 based on 2022 performance.

  13. The Decision-Making Process

    The Decision-Making Process The Role of the CRC. The CRC is responsible for administering the Corporation’s executive compensation program in a manner consistent with the compensation philosophy. Details of the CRC’s authority and responsibilities are specified in its charter, which is available at www.firstcommunitybank.com under Investor Relations. Under its charter, the CRC has authority to review and approve the total compensation, including base compensation, cash and equity incentives, benefits, and other compensation of the named executive officers. The CRC’s goal is to pay executives reasonable, cost-effective compensation, but which is sufficient to attract and retain highly qualified executives and remain competitive over the long term. As discussed above, the CRC believes a balance of fixed and variable compensation is best to achieve these objectives. While the CRC does not use formulas in determining the level or mix of compensation for named executive officers, it evaluates a wide range of quantitative and qualitative factors, which include consistency in reaching targeted goals, the ability to perform in both good and challenging economic times, a history of integrity, evidence that the named executive officer uses good judgment, and the executive’s ability to lead and create future value for the Corporation. In evaluating sustained performance, the CRC gives weight to the relative performance of each named executive officer in their particular industry segment or function. The CRC also places substantial weight on the Corporation’s overall financial success, including achievement of short- and long-term strategic goals and annual financial results. In connection with its analysis, the CRC also reviews and considers information provided by its independent compensation consultant. Such information includes, but is not limited to, the compensation level and performance of peer companies, the mix of each form of compensation, paid by peers, the current best compensation practices of the industry and business in general, and other information available from its consultant to facilitate its decisions in order to set component and total compensation levels commensurate with the Corporation's performance and strategic initiatives. The CRC meets at least annually to evaluate the performance, establish performance objectives, and determine compensation for the Chief Executive Officer and President. The Chief Executive Officer and President are not present for any deliberations regarding their compensation. The CRC also annually reviews, evaluates, and approves each compensation element and total compensation for the other named executive officers and Executive Management Team. The Role of Executive Management. Each Executive Management Team member (including each named executive officer), except the Chief Executive Officer and President, is a leader of several business units or functions of the Corporation’s banking subsidiary. As part of the Executive Management Team, each reports directly to Mr. Mills in his capacity as the Bank’s President. Mr. Mills determines the objectives that each executive is expected to achieve, which are derived largely through the Corporation’s financial and strategic planning processes. Performance is assessed annually, and each executive’s individual performance is assessed against her or his respective objectives, the Corporation’s overall performance, and the performance of that executive's business units or functions. After conferring with Mr. Stafford in his capacity as the Corporation's Chief Executive Officer, Mr. Stafford and Mr. Mills then propose base compensation levels, including any adjustments, as well as any proposed annual incentive compensation and/or long-term equity compensation for each executive to the CRC. The CRC then considers proposed base compensation changes, annual incentive compensation, and/or long-term equity compensation, if any, for each named executive officer, other members of the Executive Management Team, and certain other employees. The Role of the Independent Compensation Consultant. As part of the Corporation’s ongoing effort to ensure its compensation program complies with industry best practices and meets or exceeds regulatory requirements related to executive compensation, the CRC exercises its authority to retain independent compensation consultants, as needed, to provide technical advice and information related to Board and executive compensation. In early 2021, Pearl Meyer & Partners, LLC ("Pearl Meyer") was engaged as the CRC’s independent compensation consultant. Pearl Meyer reports directly to the CRC, although representatives of the firm may meet with members of management, including the Chief Executive Officer and Executive Management Team, for purposes of gathering information on proposals that management may make to the CRC. The CRC has conducted an independence assessment of Pearl Meyer in accordance with SEC rules and concluded that Pearl Meyer is independent. Peer Groups/Benchmarking Practices. In 2021, the CRC engaged Pearl Meyer to conduct a benchmarking and peer group analysis. As a result of this analysis, Pearl Meyer presented to the CRC a recommended peer group that utilized as the primary criteria for inclusion publicly traded U.S. banks with asset sizes of $1.9 billion to $6.2 billion. The CRC considered the "compatibility" and "comparability" of each company when selecting the 2021 peer group. The CRC reviewed, among other things, each peer company's asset size, earnings, geographic location, organizational structure and governance, number of employees, number of branch offices, and service offerings in order to select and approve the peer group. The Corporation was positioned near the median of the selected peer group in terms of asset size. As a result, during 2021, 2022, and 2023, the CRC compared the principal elements of total direct compensation against all peer group members, listed below:

  14. The Decision-Making Process

    (1) Merged with United Community Banks, Inc. in January 2022 and accordingly was not considered as a peer in 2022 or 2023. (2) Merged with F.N.B. Corporation in January 2022 and accordingly was not considered as a peer in 2022 or 2023. In addition to the selected peer group, the CRC also considered the executive compensation of peer companies selected and used by proxy advisory firms to ensure reasonable overlap. As part of the benchmarking analysis, the CRC reviewed relevant market and survey data on comparable banking organizations as well as other analyses provided by Pearl Meyer. Executive positions were matched to survey and/or proxy data based on job duties using the appropriate scope. In addition to reviewing the respective data, the CRC considered recommendations of other key executives, including the Chief Executive Officers. It is anticipated that Pearl Meyer will conduct another benchmarking and peer group analysis in 2024.

  15. 2023 Executive Compensation Decisions in Detail

    *As base compensation adjustments for the Executive Management Team occur in May of each year, the amounts listed in this table reflect annualized base compensation as of December 31st of the relevant year, not base compensation actually received during the relevant fiscal year. Annual Incentive Compensation. In 2022, the CRC requested that Pearl Meyer review the Corporation’s methodology for awarding annual incentive compensation. As a result of this review, the CRC, with Pearl Meyer's assistance, designed a written plan. On May 24, 2022, the CRC approved, and the Board reviewed and adopted, the First Community Bankshares Executive Incentive Compensation Plan (the “Plan”). The Plan uses a multi-step process for determining actual incentives. The first step is for the CRC, as early as possible each year, to determine the specific financial return metric, key performance indicators (“KPIs”), and the weight for each KPI (that sum to 100%) to be used. The next step is for the CRC, also as early as possible each year after the financial performance for the preceding year of members of the selected peer group is available to the public, to determine the range of values for the financial return metric. The target financial return metric is based on the median three-year average results of the Corporation’s peer group of similarly situated banks, along with other information deemed relevant by the CRC, such as the Corporation’s historical and projected performance, changes in accounting regulations and tax rates (if any), and economic factors impacting the banking industry. Achievement by the Corporation of the target financial return metric corresponds to a baseline annual incentive of 30% of base compensation. As part of this step, the Committee also sets a threshold for that financial return metric (at which the baseline annual incentive would be 15% of base compensation and below which no incentives may be paid under the Plan) and a maximum for that financial return metric (at which the baseline annual incentive would be 60% and above which no greater incentives may be paid under the Plan). Results falling between the minimum and the maximum financial return metric are interpolated linearly to calculate the target annual incentive compensation as a percentage of base compensation. At this time, the CRC also determines the performance range for each KPI (threshold, target and maximum). The threshold for each KPI is based on the prior three-year average results of banks comprising the peer group along with other information deemed relevant by the CRC such as the Corporation’s historical and projected performance, changes in accounting regulations and tax rates, and economic factors impacting the banking industry. The threshold for each KPI is 85% of the target KPI, and the maximum for each KPI is 115% of the target KPI. The baseline annual incentive is also adjusted accordingly. Thus, if all KPIs were achieved exactly at the threshold, the resulting actual annual incentive would be 85% of the baseline annual incentive; if all KPIs were achieved exactly at target, the resulting actual annual incentive would be 100% of the baseline annual incentive; and if all KPIs were achieved exactly at maximum, the resulting actual annual incentive would be 115% of the baseline annual incentive. The Corporation's achieved financial return metric and KPIs are calculated using audited financial information obtained from the Corporation’s filed Form 10-K. Based on the Corporation’s achieved financial return metric, the CRC determines a baseline annual incentive as a percentage of base compensation, which percentage is then adjusted by the Corporation’s performance relative to each KPI, as discussed above, resulting in the actual annual incentive as a percentage of base compensation paid to each executive as a result of the preceding year’s performance. The CRC also retains discretion to reduce or eliminate (but not increase) the award calculated under the plan if the CRC believes a calculated award to be inconsistent with the best interests of the Corporation or shareholders, or the CRC’s assessment of individual executive performance. Annual Incentive Compensation Paid in 2023 Based on 2022 Performance. For 2022, the financial return metric was ROAE. The minimum ROAE, below which no incentive would be paid, was 9.0%, which would result in a baseline annual incentive compensation as a percentage of base compensation of 15%. The target ROAE, which is set based on the median of the three (3) year average ROAE of the peer group, was 10.61%, which would result in a baseline annual incentive compensation as a percentage of base compensation of 30%. The maximum ROAE, above which no additional incentive would be paid, was 13.5%, which would result in a baseline annual incentive compensation as a percentage of base compensation of 60%. For 2022, the Corporation’s achieved ROAE was 11.04%. Based on the Corporation's 2022 ROAE of 11.04%, the baseline annual incentive compensation as a percentage of base compensation was 35.40%. This baseline annual incentive compensation factor was then adjusted by the Corporation’s performance relative to the 2022 KPIs. The KPIs selected for 2022 were ROAA, Net Income, and Efficiency, each of which was equally weighted. The ROAA target was 1.10% and the Efficiency target was XX%. The threshold to receive any payout for each KPI was 85% of the target, and the maximum payout for each KPI was 115% of the target. Results falling between the threshold and the target, or the target and the maximum, are interpolated linearly to calculate the resulting payout. Had the Corporation achieved only the threshold level of each KPI, the annual incentive compensation which would have been paid as a result of 2022 performance would have been 30.09% of each named executive offer's annualized base compensation. Had the Corporation achieved the maximum level of each KPI, the annual incentive compensation which would have been paid as a result of 2022 performance would have been 40.71% of each named executive offer's annualized base compensation. The Corporation's 2022 KPIs were: ROAA of 1.45% (which is above the maximum); Net Income was 123.03% of the target (which was above the maximum); and Efficiency of 56.70% (which was better than the target, but not as good as the maximum). Based upon the Corporation's ROAE and the Corporation's KPIs, as outlined above, the annual incentive compensation paid in 2023 as a result of 2022 performance was 39.79% of each named executive officer's annualized base compensation as of December 31, 2022. All annual incentive compensation paid in 2023 was paid in the form of cash. Annual Incentive Compensation to be Paid in 2024 Based on 2023 Performance. For 2023, the financial return metric was again ROAE. The minimum ROAE, below which no incentive would be paid, was 9.25%, which would result in a baseline annual incentive compensation as a percentage of base compensation of 15%. The target ROAE, which is set based on the median of the three (3) year average ROAE of the peer group, was 10.75%, which would result in a baseline annual incentive compensation as a percentage of base compensation of 30%. The maximum ROAE, above which no additional incentive would be paid, was 13.5%, which would result in a baseline annual incentive compensation as a percentage of base compensation of 60%. For 2023, the Corporation’s achieved ROAE was adjusted to eliminate the one-time costs associated with the Surrey Bancorp acquisition (the “Adjusted ROAE”). Based on the Corporation's 2023 Adjusted ROAE of 10.70%, the baseline annual incentive compensation as a percentage of base compensation was 29.50%.

  16. Other Practices, Policies, and Guidelines

    Other Practices, Policies, and Guidelines Stock Ownership Guidelines. The Corporation previously adopted the First Community Bankshares, Inc. Stock Ownership Policy, which encourages ownership of the Corporation’s Common Stock by the directors, named executive officers, and other members of the Executive Management Team in order to align the interests of the Corporation’s key decision makers with the Corporation’s shareholders. For each named executive officer, except the Chief Executive Officers of the Corporation and First Community Bank, the guidelines require Corporation stock ownership of value equal to 2.5 times the officer’s base compensation. For the Chief Executive Officers, the guidelines require ownership of value equal to 3.5 times that Chief Executive Officer’s respective base compensation. In addition to all holding requirements or other restrictions placed upon granted stock or options pursuant to the respective grant agreement as discussed above, the Stock Ownership Policy requires all directors, named executive officers, and other members of the Executive Management Team to hold all shares received as the result of the vesting or payment of any equity awards or obtained by exercising stock options which were granted from and after the original effective date of the policy until such time as the holder is in compliance with the policy. Notwithstanding anything else in this section, members of the Executive Management Team and directors may immediately sell shares acquired by exercising stock options for the limited purposes of paying the exercise price of the stock option and any applicable tax liability. Each year, the CRC receives a report regarding Executive Management Team and director compliance with this policy. As of December 31, 2023, all officers and directors are in compliance with the restrictions contained in the policy and have met or are making satisfactory progress toward meeting their respective guideline level, many of which increased in 2021. Based upon the holding requirements, no specific timeline for achieving the guideline level has been established. Clawback Policy. On October 24, 2023, the Board of Directors adopted a compensation recovery policy ("Clawback Policy") designed to comply with the new NASDAQ listing rules that became effective as of December 1, 2023. The policy applies to current and former covered executive officers of the Corporation and will be administered by the CRC. Under the policy, the Corporation will be required to recover erroneously received incentive-based compensation from the Corporation’s executive officers during the three-year period preceding any date on which the Corporation is required to prepare an accounting restatement due to its material noncompliance with any financial reporting requirement under the federal securities laws, representing the excess of the amount actually received over the amount that would have been received had the financial statements been correct in the first instance. The recovery of such compensation applies regardless of whether an executive officer engaged in misconduct or otherwise caused or contributed to the requirement for a restatement. Anti-Hedging Policy. All named executive officers of the Corporation are subject to the First Community Bankshares, Inc. Insider Trading Policy, inclusive of its anti-hedging provisions. For more information, please see page 14. Retirement Plans. The Corporation maintains certain retirement plans for some or all employees as follows: The First Community Bankshares, Inc. Employee Stock Ownership and Savings Plan (the "KSOP"). The Corporation offers to most of its employees, including the named executive officers, a qualified defined contribution Employee Stock Ownership and 401(k) plan known as the “KSOP". The KSOP Plan is administered by the CRC. The "First Community Bankshares, Inc. Non-Qualified Deferred Compensation Plan (the "Non-Qual Plan"). The First Community Bankshares, Inc. Non-Qualified Deferred Compensation Plan, referred to as the Non-Qual Plan, is a voluntary, non-tax qualified deferred compensation plan available to certain employees, including all named executive officers. Under the Non-Qual Plan, participants may defer a portion of their base, incentive, and/or any other cash compensation. This Plan, new in 2023, replaced the now frozen to new deferrals WRAP Plan. Supplemental Executive Retention Plan. The Corporation previously provided a defined retirement benefit to certain named executive officers and certain other key employees pursuant to a supplemental executive retention plan (the “SERP”). The SERP is unfunded and was designed to provide a benefit at or after age sixty-two (62) upon separation from service. The benefit was targeted at a maximum of thirty-five percent (35%) of final average compensation subject to an annual benefit limit of $80,000. Final average compensation was calculated as the average of the participant’s last three (3) full calendar years’ compensation, which compensation would have been determined by assuming a three percent (3%) compound annual rate of increase to the participant’s annualized base monthly salary as of the date that the participant enters the SERP. Vesting was on a graded schedule as follows: twenty-five percent (25%) vesting after five (5) years of service; fifty percent (50%) vesting after ten (10) years of service; seventy-five percent (75%) vesting after fifteen (15) years of service; an additional five percent (5%) vesting for each year of service beyond fifteen (15) years, and full vesting after twenty (20) years of service or upon reaching age sixty-two (62). As of December 31, 2021, the SERP was frozen to new participants, further vesting, and further accruals. All current participants will receive, upon separation from service at or after age sixty-two (62), only such benefit as was accrued and vested as of December 31, 2021.

  17. Employment Agreements

    Employment Agreements The Corporation provides named executive officers with written employment agreements. Each agreement is consistent with the prototype agreement previously reported on a Form 8-K filed on April 16, 2015. Accordingly, the Corporation maintains uniformity among the named executive officers concerning the terms of their employment. The agreements have an initial term of three (3) years and automatically extend for an additional year each January 1st unless the Corporation or the respective executive gives notice that the employment term will not be extended. There are no golden parachute, tax gross-up, or other similar type provisions contained in these contracts. Each agreement provides for continuation of base compensation for thirty-six (36) months in the event of a change of control coupled with terminated employment either without “Cause” by the Corporation or by the executives for “Good Reason” (as these terms are defined in the agreements). The Corporation may terminate the employment of any executive at any time for “Cause” without further obligation. If the Corporation terminates employment for any reason other than for “Cause” or the executive terminates their employment for “Good Reason,” the Corporation will generally be obligated to provide compensation and benefits specified in the agreement for the balance of the term of the agreement. Upon the termination of employment, the executive will be subject to non-competition and non-solicitation restrictions. If the executive dies while employed by the Corporation, the Corporation will pay their estate through the end of the month in which their death occurs. If their employment is terminated as a result of permanent disability as determined pursuant to the agreement, then the Corporation has the right to terminate employment before the end of the applicable term. See the section entitled “Potential Payments Upon Termination,” including the related tables, beginning on page 32 for an estimate of the benefits that the named executive officers would be entitled to receive pursuant to their respective employment agreements under various employment termination scenarios.

  18. Risk Considerations

    Risk Considerations The CRC views the Corporation’s compensation program with a long-term focus. Under the program, an executive may achieve the greatest amount of compensation through the Corporation’s sustained superior performance over long periods of time. The Corporation believes this provides a strong incentive to manage the Corporation for the long term with a clear message to avoid excessive risk in the near term. The CRC maintains full discretion to adjust compensation based on performance and adherence to the Corporation’s values. In 2023, the CRC continued its extensive review of the relationship between risk management and incentive compensation to ensure that incentive compensation does not encourage engaging in unnecessary or excessive risks that threaten the value of the Corporation. The CRC concluded that the Corporation’s compensation policies and practices do not encourage excessive or inappropriate risk and instead encourage behaviors that support sustainable long-term value creation. For instance, the CRC does not use highly leveraged, short-term incentives that drive high risk investments at the expense of long-term company value. Rather, the Corporation’s annual incentive compensation is based on balanced performance metrics that promote disciplined progress focused on longer-term goals.

  19. 2023 Summary Compensation Table

    2023 Summary Compensation Table

  20. 2023 Summary Compensation Table

    | | | | | | | Change in | | | | | | | | | | Pension | | | | | | | | | | Value and | | | | | | | | | Non-Equity | Nonqualified | | | | | | | | | Incentive | Deferred | | | | Name of Individual / | | | Stock | Option | Plan | Compensation | All Other | | | Capacities Served | Year | Salary | Awards (1) | Awards | Compensation (2) | Earnings (3) | Compensation (4) | Total (5) | | William P. Stafford, II | 2023 | $476,871 | $146,026 | $- | $184,439 | $301,283 | $91,410 | $1,200,029 | | Chief Executive Officer | 2022 | 457,784 | 135,011 | - | 261,646 | 46,618 | 69,430 | 970,489 | | | 2021 | 427,769 | 15,953 | 92,096 | 47,832 | 43,270 | 64,076 | 690,996 | | Gary R. Mills | 2023 | 635,827 | 194,684 | - | 245,918 | 107,091 | 125,773 | 1,309,293 | | President | 2022 | 610,375 | 180,015 | - | 348,862 | 26,774 | 94,840 | 1,260,866 | | | 2021 | 575,551 | 21,552 | 124,339 | 64,573 | 52,121 | 84,796 | 922,932 | | David D. Brown | 2023 | 323,213 | 82,466 | - | 125,008 | 97,008 | 59,865 | 687,560 | | Chief Financial Officer | 2022 | 310,275 | 76,274 | - | 177,338 | 8,211 | 43,380 | 615,478 | | | 2021 | 277,232 | 10,174 | 58,671 | 30,465 | 24,815 | 39,781 | 441,138 | | Jason R. Belcher | 2023 | 323,213 | 82,466 | - | 125,008 | 14,515 | 45,261 | 590,463 | | Chief Operating Officer | 2022 | 310,275 | 76,274 | - | 177,338 | 1,124 | 38,042 | 603,053 | | | 2021 | 275,360 | 10,083 | 58,113 | 30,179 | 3,902 | 35,486 | 413,123 | | Sarah W. Harmon | 2023 | 296,720 | 75,725 | - | 114,761 | - | 35,556 | 522,762 | | Chief Administrative Officer, | 2022 | 284,842 | 70,009 | - | 162,802 | - | 28,986 | 546,639 | | General Counsel, and | 2021 | 230,370 | 7,043 | 40,586 | 21,069 | - | 25,341 | 324,409 | | Corporate Secretary | | | | | | | | |

  21. 2023 Summary Compensation Table

    | (1) All stock awards granted in 2023 were made under the 2022 Plan in the form of restricted stock units that cliff vest in three (3) years upon the attainment of designated performance goals. See section entitled Long-Term Equity Compensation. The stock grant amounts for 2023 reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. | | (2) Non-equity incentive plan award paid in 2023 for 2022 performance. As further discussed in the Compensation Discussion and Analysis under the heading Annual Incentive Compensation Paid in 2024 Based on 2023 Performance, in 2024, the Corporation awarded the following amounts under the First Community Bankshares Executive Incentive Plan based on the CRC selected financial return metric and KPIs communicated to the named executive officers based on 2023 performance: Mr. Stafford - $150,672; Mr. Mills - $200,895; Mr. Brown - $102,122; Mr. Belcher - $102,122; and Ms. Harmon - $93,752. |

  22. 2023 Summary Compensation Table

    | (3) The amounts in this column represent the increase in the actuarial net present value of all future retirement benefits under the SERPs. The net present value of the retirement benefits used to calculate the net change in benefits was determined using the same assumptions used to determine the Corporation’s retirement obligations and expense for financial statement purposes. The increased actuarial net present value of the future retirement benefits under the SERPs in 2023 reflects the calculation performed by the Corporation's new third-party administrator. Additional information about the SERPs is included on page 25. We have not provided above-market or preferential earnings on any nonqualified deferred compensation and, accordingly, no such amounts are reflected in the table. |

  23. 2023 Summary Compensation Table

    | (4) The amounts in this column are detailed on the following table entitled “2023 All Other Compensation and Benefits.” |

  24. 2023 Summary Compensation Table

    | (5) Salary and bonus amounts paid to the named executive officers as a percentage of total compensation are as follows for 2023: Mr. Stafford – fifty-five percent (55%); Mr. Mills – sixty-seven percent (67%); Mr. Brown – sixty-five percent (65%); Mr. Belcher – seventy-six percent (76%); and Ms. Harmon – seventy-nine percent (79%). |

  25. Grants of Plan-Based Awards

    Grants of Plan-Based Awards The following table sets forth information concerning individual grants of all plan-based awards in fiscal year 2023 to the named executive officers.

  26. Grants of Plan-Based Awards

    | | | | | | | Estimated | | | | | | | | | Future Payouts | Grant Date | | | | | | | | Under | Fair Value | | | | | Estimated Future Payouts Under | | | Equity Incentive | of Stock | | | Type of | Grant | Non-Equity Incentive Plan Awards (1) | | | Plan Awards | and Option | | Name | Award * | Date | Threshold ($) | Target ($) | Maximum ($) | Target (#) (2) | Awards ($) (3) | | William P. Stafford, II | ACI | 5/23/2023 | 20,684 | 146,003 | 335,806 | | | | | PRSU | 5/23/2023 | | | | 5,546 | 146,026 | | Gary R. Mills | ACI | 5/23/2023 | 27,578 | 194,670 | 447,741 | | | | | PRSU | 5/23/2023 | | | | 7,394 | 194,684 | | David D. Brown | ACI | 5/23/2023 | 14,019 | 98,958 | 227,603 | | | | | PRSU | 5/23/2023 | | | | 3,132 | 82,466 | | Jason R. Belcher | ACI | 5/23/2023 | 14,019 | 98,958 | 227,603 | | | | | PRSU | 5/23/2023 | | | | 3,132 | 82,466 | | Sarah W. Harmon | ACI | 5/23/2023 | 12,870 | 90,846 | 208,946 | | | | | PRSU | 5/23/2023 | | | | 2,876 | 75,725 |

  27. Grants of Plan-Based Awards

    * ACI = Annual Cash Incentive; PRSU = Performance Restricted Stock Units

  28. Grants of Plan-Based Awards

    | (1) Amounts represent payout opportunities under the First Community Bankshares Executive Incentive Compensation Plan. As further detailed in the section entitled "Annual Incentive Compensation Paid in 2024 Based on 2023 Performance", the award opportunities presented in the table are based on percentages of base salary, KPIs and goals. The actual awards for 2023 are reported in footnote 1 to the Summary Compensation Table under the column heading "Non-Equity Incentive Plan Compensation." | | (2) Awards granted on May 23, 2023 were performance restricted stock units under the 2022 Plan. These performance restricted stock units vest based on the Company's performance in three (3) years. The number of performance restricted stock units that vest is based on the three (3) year average ROE of 8.5%. See the section entitled "Long-Term Equity and Compensation" for more information. | | (3) Amounts reflect the aggregate grant date fair value of the performance restricted stock units computed in accordance with FASB ASC Topic 718. For the performance restricted stock units, the fair value was calculated by multiplying the number of performance restricted stock units awarded by the grant date closing price of $26.33 on May 22, 2023. |

  29. Outstanding Equity Awards at December 31, 2023

    Outstanding Equity Awards at December 31, 2023 The following table includes information on the current holdings of unexercised stock options and stock awards that have not yet vested by the named executive officers as of December 31, 2023. Each equity grant is shown separately for each named executive officer.

  30. Outstanding Equity Awards at December 31, 2023

    | | Option Awards | | | | Stock Awards | | | | | | | | | | | | Equity Incentive | | | | | | | | | | Plan Awards | | | | | | | | | | | Market or | | | | | | | | | Number | Payout | | | | | | | | | of | Value of | | | | | | | | Market | Unearned | Unearned | | | | | | | Number | Value of | Shares, | Shares, | | | | | | | of Shares | Shares or | Units or | Units or | | | | | | | or Units | Units of | Other | Other | | | Number of | | | | of Stock | Stock | Rights | Rights | | | Securities Underlying | | Option | Option | That Have | That Have | That Have | That Have | | | Unexercised Options | | Exercise | Expiration | Not | Not | Not | Not | | Name | Exercisable (1) | Unexercisable (2) | Price | Date | Vested | Vested | Vested (3) | Vested (4) | | William P. Stafford, II | 7,801 | 3,901 | $33.00 | 03/19/31 | - | $- | 4,827 | $179,082 | | | | | | | | | 5,546 | 205,756 | | Gary R. Mills | 865 | - | 24.65 | 02/05/35 | | | 6,436 | 238,776 | | | 3,025 | - | 29.15 | 02/05/35 | | | 7,394 | 274,317 | | | 10,533 | 5,266 | 33.00 | 03/19/31 | | | | | | David D. Brown | 4,970 | 2,485 | 33.00 | 03/19/31 | | | 2,727 | 101,172 | | | | | | | | | 3,132 | 116,197 | | Jason R. Belcher | 4,923 | 2,461 | 33.00 | 03/19/31 | | | 2,727 | 101,172 | | | | | | | | | 3,132 | 116,197 | | Sarah W. Harmon | 1,496 | - | 20.15 | 04/22/26 | | | 2,503 | 92,861 | | | 1,097 | - | 24.72 | 04/07/27 | | | 2,876 | 106,700 | | | 3,438 | 1,719 | 33.00 | 03/19/31 | | | | |

  31. Outstanding Equity Awards at December 31, 2023

    | (1) All options listed in the exercisable column in the above table are vested. |

  32. Outstanding Equity Awards at December 31, 2023

    | (2) The options granted on November 3, 2021 and that expire on March 19, 2031 will vest equally over a period of three (3) years. | | (3) The awards of performance restricted stock units were granted on May 23, 2023 and vest based on the Corporation's performance in three (3) years. |

  33. Outstanding Equity Awards at December 31, 2023

    | (4) The market value is calculated by multiplying the number of the shares of restricted stock that have not vested by the price per share of the Corporation’s stock on December 31, 2023 of $37.10 per share. |

  34. 2023 Options Exercised and Stock Vested

    2023 Options Exercised and Stock Vested The following table provides information for the named executive officers with respect to the number of shares acquired upon the vesting of restricted stock awards and the value realized at such time, before the payment of any applicable withholding tax and brokerage commissions.

  35. 2023 Options Exercised and Stock Vested

    | | Option Awards | | Stock Awards | | | | Number | | Number | | | | of Shares | | of Shares | | | | Acquired on | Value | Acquired on | Value | | Name | Exercise | Realized | Vesting | Realized (1) | | William P. Stafford, II | - | $- | 1,348 | $34,050 | | Gary R. Mills | - | - | 1,819 | 45,948 | | David D. Brown | - | - | 858 | 21,673 | | Jason R. Belcher | - | - | 754 | 19,046 | | Sarah W. Harmon | - | - | 530 | 13,388 |

  36. 2023 Options Exercised and Stock Vested

    | (1) Total value realized on vesting is equal to the number of shares acquired on vesting multiplied by the previous day's closing price of the underlying securities on the vesting date of March 30, 2023 of $25.26. |

  37. 2023 Pension Benefits

    2023 Pension Benefits The table below sets forth the details on pension benefits for the named executive officers under the following plan:

  38. 2023 Pension Benefits

    | | | Number of | Present Value of | Payments | | | | Years Credited | Accumulated | During Last | | Name | Plan Name | Service | Benefit | Fiscal Year | | William P. Stafford, II (1) | SERP | 28 | $1,031,470 | - | | Gary R. Mills | SERP | 23 | 539,803 | - | | David D. Brown | SERP | 17 | 225,672 | - | | Jason R. Belcher | SERP | 7 | 32,223 | - |

  39. 2023 Pension Benefits

    | (1) The number of years of credited service includes years of service as a director of the Corporation. |

  40. 2023 Pension Benefits

    The Corporation’s Executive SERP. The Corporation’s SERP is unfunded and not qualified for tax purposes. The values in the above table reflect the actuarial present value of the named executive officer’s accumulated benefit under the SERP, computed as of December 31, 2023. As of December 31, 2021, the SERP was frozen to new participants; however, previously, employees considered highly compensated under ERISA and other senior management employees were eligible to participate in the SERP at the recommendation of the Chief Executive Officer as approved by the CRC. All participants in the SERP prior to December 31, 2021, will receive, upon separation of service at or after age 62, only such benefit as was accrued and vested as of December 31, 2021. Only those named executive officers that were approved for participation are included in the above table. Refer to page 25 of this proxy statement for a more detailed discussion of the SERP and to Note 12 of the Consolidated Financial Statements in the Annual Report for the year ended December 31, 2023, for discussion of the methodologies and assumptions underlying the projected SERP benefits.

  41. 2023 Non-Qualified Deferred Compensation

    2023 Non-Qualified Deferred Compensation Deferral of Salary. The named executive officers, like any employee otherwise ineligible to fully participate in the KSOP and who meets the Code definition of being “highly compensated,” are eligible to defer into the Corporation's Non-Qual Plan, as discussed on page 24. Deferrals to the Non-Qual Plan are invested as directed by each participant and are matched at the discretion of the Board of Directors in conjunction with and subject to limits established each year by the Board of Directors for elective deferrals to the KSOP. Earnings on deferrals are based on the investment elections made by the individual Non-Qual Plan participants and no guaranteed return is available to any named executive officer participating in the Non-Qual Plan. On an annual basis, each Non-Qual Plan participant is allowed to designate or modify the percentage of salary to defer to the Non-Qual Plan in compliance with Code Section 409A. Participants elect the form of payment for Qualifying Distribution Events at the time they enroll in the Non-Qual Plan. Such Qualifying Distribution Events include without limitation Separation from Service, Change in Control, Unforseeable Emergency, Disability, Death, and Scheduled In-Service Distributions. Prior to 2022, the named executive officers were similarly eligible to participate in the Corporation's previous non-qualified deferred compensation plan referred to as the WRAP. Distributions from the WRAP are only available post-termination or retirement. The table below provides detail regarding non-qualified deferred compensation of the named executive officers. Balances previously deferred by the named executive officers to the WRAP have been combined with the Non-Qual Plan deferrals and reported in a single table below.

  42. 2023 Non-Qualified Deferred Compensation

    | | Executive | Corporation | Aggregate | | Aggregate | | | Contributions | Contributions | Earnings | Aggregate | Balance | | | in Last Fiscal | in Last Fiscal Year | in Last Fiscal | Withdrawals/ | at Last Fiscal | | Name | Year (1) | (1) | Year (2) | Distributions | Year End | | William P. Stafford, II | $186,469 | 40,022 | $355,715 | $- | $1,584,717 | | Gary R. Mills | 52,905 | 58,439 | 91,780 | - | 1,133,847 | | David D. Brown | 22,891 | 21,477 | 39,641 | - | 329,953 | | Jason R. Belcher | 9,156 | 9,944 | 21,621 | - | 124,735 | | Sarah W. Harmon | 1,148 | - | 180 | - | 1,328 |

  43. 2023 Non-Qualified Deferred Compensation

    | (1) The amounts reported under “Executive Contributions” are included in each named executive officer’s amount under the “Salary” column in the “2023 Summary Compensation Table.” The amounts reported under “Corporation Contributions” are included in each named executive officer’s amount under the “2023 All Other Compensation” column in the “2023 Summary Compensation Table.” The Corporation contributions reflected in the above table are reflective of amounts deferred by the executives in the prior plan year, but matched by the Corporation in the subsequent year. |

  44. 2023 Non-Qualified Deferred Compensation

    | (2) The amounts reported under “Aggregate Earnings” are not included in each named executive officer’s amount under the “Salary” column in the “2023 Summary Compensation Table.” |

  45. Potential Payments upon Termination

    Potential Payments upon Termination The information below describes the compensation that would become payable under existing plans and agreements based on the named executive officer’s actual termination of employment coupled with the assumption that the named executive officer’s employment had terminated on December 31, 2023, given the named executive officer’s compensation, years of service, and a presumed age of 62. These benefits are in addition to benefits generally available to other non-executive officers, who are salaried employees, such as distributions under the KSOP and disability insurance benefits. The Corporation has estimated the amounts of compensation payable to each named executive officer under a variety of termination circumstances, including: early retirement, involuntary termination not for “Cause,” termination for “Cause,” termination following a change of control, disability, and death of the named executive officer. Since a variety of factors might affect the nature and amount of any benefits payable upon the events discussed below, actual amounts may vary from what the Corporation has projected. Regardless of the manner in which a named executive officer’s employment terminates, he or she may be entitled to receive amounts earned during their term of employment. Such amounts include:

  46. Potential Payments upon Termination

    | • | option or stock award grants made pursuant to the 1999 Plan, 2004 Plan, 2012 Plan, or 2022 Plan that vest through the most recently completed fiscal year; |

  47. Potential Payments upon Termination

    | • | amounts contributed under the KSOP and the Corporation’s non-qualified deferred compensation plans; |

  48. Potential Payments upon Termination

    | • | amounts accrued and vested through the Corporation’s SERP payable as benefits for the life of the named executive officer beginning at age 62; and |

  49. Potential Payments upon Termination

    | • | cash surrender value of life insurance payable. |

  50. Potential Payments upon Termination

    In the event of an involuntary termination without “Cause” or termination by a named executive officer for “Good Reason” other than a change in control, the Corporation shall pay the named executive officer severance in the form of continuing to pay their base salary for the balance of the existing term of the existing employment agreement. In addition, the Corporation shall maintain and continue to provide health, dental, accident and disability insurance and certain other executive benefit plans, programs and arrangements until the earlier of (i) the expiration of the remaining term; (ii) the named executive officer commences full-time employment with another employer or commences self-employment where earnings are expected to be, on an annualized basis, 75% or more of the base salary as of the date of termination; or (iii) the date on which the Corporation determines that the named executive officer has violated any one of several specified sections of the agreement. Additional details regarding these agreements are set forth in the discussion beginning on page 25. As required by said employment agreements, in the event of termination without “Cause,” termination due to change of control, or termination by a named executive officer for “Good Reason,” payment of any severance amounts due under the employment agreement is conditioned upon the execution of a separation agreement containing a valid waiver and release of any and all claims and a reaffirmation of the restrictions upon the executive contained in the employment agreement.

  51. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION

  52. Director Compensation Table

    Director Compensation Table The following table summarizes non-management director compensation, including compensation for director services at the bank subsidiary for 2023.

  53. Director Compensation Table

    | | | | | | Change in | | | | | | | | | Pension Value | | | | | | | | | and | | | | | Fees | | | | Non-qualified | | | | | Earned | | | Non-Equity | Deferred | | | | | or Paid in | Stock | Option | Incentive Plan | Compensation | All Other | | | Name | Cash (1) | Awards (2) | Awards | Compensation | Earnings (3) | Compensation | Total | | C. William Davis | $43,566 | $32,465 | $- | $- | $(2,995) | $- | $73,036 | | Samuel L. Elmore | 73,276 | 32,465 | - | - | 143,036 | - | 248,777 | | Richard S. Johnson | 74,412 | 32,465 | - | - | 2,287 | - | 109,164 | | Harriet B. Price | 48,329 | 32,465 | - | - | - | - | 80,794 | | M. Adam Sarver | 73,353 | 32,465 | - | - | - | - | 105,818 | | Beth A. Taylor | 46,316 | 32,465 | - | - | - | - | 78,781 |

  54. Director Compensation Table

    | (1) The value represents board fees and committee fees. | | (2) On May 23, 2023, directors were awarded restricted stock units which vest in one (1) year. The amounts represent the grant date fair value of the restricted stock units in accordance with FASB ASC Topic 718. The compensation amount was calculated using a previous day's closing price of $26.33 on the grant date of May 22, 2023. | | (3) The amounts reported represent the difference between the present value of accrued benefits of the director's SERP at the end of 2023 and 2022. |

  55. PAY RATIO DISCLOSURE

    PAY RATIO DISCLOSURE In August 2015, pursuant to a mandate of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd - Frank Act”), the Securities and Exchange Commission (“SEC”) adopted a rule requiring annual disclosure of the ratio of the total annual compensation of the principal executive officer (“PEO”) of the Corporation to the median annual total compensation of all other employees of the Corporation (the “MATC”). The Corporation’s PEO is Mr. Stafford. During calendar year 2023, Mr. Stafford received total compensation of $1,200,029, as reflected in the Summary Compensation Table on page 27. During calendar year 2023, the MATC was $43,273. Accordingly, the aforesaid ratio for the Corporation for fiscal year 2023 is 27.7 to 1. The MATC used in the calculation above was determined from a list of 597 persons, constituting all persons (excluding the PEO) employed by the Corporation as of December 31, 2023 except for the approximately 36 employees who were retained following the acquisition of Surrey Bancorp on April 24, 2023. Determination of the median employee was based on wages actually earned in 2023 plus the following additional 2023 compensation components, where applicable: paid time off; overtime pay; incentive compensation; and commissions. The gross amounts were adjusted for locality differentials where applicable. After identifying the median employee, the MATC was calculated using the same methodology employed for named executive officers, including the PEO, in the Summary Compensation Table.

  56. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE As required by Item 402(v) of Regulation S-K, the Corporation is providing the following information about the relationship between executive compensation as reported in the Summary Compensation Table, “Compensation Actually Paid” ("CAP") as defined by the SEC, and certain financial performance of the Company. CAP is calculated in accordance with SEC rules and does not reflect the actual amount of compensation earned or paid during the applicable year. For information concerning the Corporation’s pay for performance philosophy and how the Corporation aligns executive compensation with the Corporation’s performance, refer to the Compensation Discussion and Analysis beginning on page 18.

  57. Pay versus Performance Table

    Pay versus Performance Table The following table reports the total compensation for the NEOs for the past four (4) fiscal years as shown in the Summary Compensation Table ("SCT"), the CAP to the PEO and, on average, to the other NEOs in accordance with SEC rules. The table also provides information on the Corporation's Total Shareholder Return ("TSR") and the TSR of the selected peer group over the four-year period, the Corporation's Net Income, and the Corporation's ROAE which represents our Company Selected Measure ("CSM") per SEC rules.

  58. Pay versus Performance Table

    | | | | | | Year-end value of $100 invested on 12/31/2019 | | | | | Year | SCT Total for PEO (1) | CAP for PEO (2) | Average SCT Total for Non-PEO NEOs (1) | Average CAP for Non-PEO NEOs (2) | FCBC TSR (3) | Peer Group TSR (4) | FCBC Net Income (MM) | FCBC ROAE (%) | | 2023 | $1,200,030 | $956,254 | $777,519 | $765,683 | $141.73 | $128.73 | $48.02 | 10.02 | | 2022 | 970,489 | 942,931 | 756,509 | 763,304 | 122.88 | 99.82 | 46.66 | 11.04 | | 2021 | 690,996 | 702,133 | 525,401 | 567,120 | 116.90 | 107.19 | 51.17 | 11.96 | | 2020 | 867,481 | 726,805 | 636,693 | 565,591 | 72.83 | 77.43 | 35.93 | 8.54 |

  59. Pay versus Performance Table

    | (1) Mr. William Stafford served as the PEO for all four (4) years covered in the table. Messrs. Gary Mills, David Brown, Jason Belcher, and Ms. Sarah Harmon served as the Non-PEO NEOs for all four (4) years covered in the table. The dollar amounts reported are total compensation in the Summary Compensation Table for the PEO and the average for Non-PEO NEOs for each reported fiscal year. |

  60. Pay versus Performance Table

    | (2) The dollar amounts reported represent "Compensation Actually Paid," as calculated in accordance with SEC rules for the PEO and the average for Non-PEO NEOs for each reported year. These dollar amounts do not reflect actual amounts of compensation paid during the covered year, but reflect adjustments for (i) the year-end fair values of unvested equity awards granted in the current year, (ii) the year-over-year difference of year-end fair values for unvested awards granted in prior years, (iii) the fair values at vest date for awards granted and vested in the current year, and (iv) the difference between prior year-end fair values and vest date fair values for awards granted in prior years. In addition, adjustments were made for the difference in pension values reported in the Summary Compensation Table and the current year service cost obtained from the Corporation's pension actuary. The Corporation does not pay or accrue dividends or dividend equivalents on unvested equity grants; and, as such, reports no adjustments. |

  61. Pay versus Performance Table

    | (3) Reflects the cumulative total shareholder return of First Community Bankshares, Inc. over the four-year period. The reporting is based on a theoretical $100 invested on the last day of 2019 and valued as of the last trading day of 2020, 2021, 2022 and 2023. These calculated values were obtained from the S&P Cap IQ database. |

  62. Pay versus Performance Table

    | (4) Reflects the cumulative total shareholder return of the Corporation’s Asset & Regional Peer Group, weighted according to the member companies’ market capitalization for each period for which the return is indicated. This is the peer group used by FCBC for purposes of Item 201(e) of Regulation S-K in our Annual Report on Form 10K for the year ended December 31, 2023. Calculated values in the table were obtained from the S&P Cap IQ database. |

  63. Calculation of Compensation Actually Paid ("CPT")

    Calculation of Compensation Actually Paid ("CPT") To calculate the amounts in the CAP for the Corporation's PEO and Non-PEO NEOs in the table above according to SEC reporting rules, the following adjustments were made to Total Compensation as reported in the Summary Compensation Table for each covered year.

  64. Calculation of Compensation Actually Paid ("CPT")

    | | 2023 | | 2022 | | 2021 | | 2020 | | | | PEO | Average Non-PEO NEOs | PEO | Average Non-PEO NEOs | PEO | Average Non-PEO NEOs | PEO | Average Non-PEO NEOs | | Total Compensation from Summary Compensation Table | $1,200,030 | $777,519 | $970,489 | $756,509 | $690,996 | $525,401 | $867,481 | $636,693 | | Adjustments for Pension | | | | | | | | | | Adjustment Summary Compensation Table Pension | (301,283) | (54,654) | (46,618) | (9,027) | (43,270) | (20,210) | (40,218) | (20,192) | | Amount added for current year service cost | - | - | - | - | - | 31,734 | - | 29,665 | | Amount added for prior service cost impacting current year | - | - | - | - | - | - | - | - | | Total Adjustments for Pension | (301,283) | (54,654) | (46,618) | (9,027) | (43,270) | 11,524 | (40,218) | 9,473 | | Adjustments for Equity Awards | | | | | | | | | | Adjustment for grant date values in the Summary Compensation Table | (146,026) | (108,835) | (135,011) | (100,643) | (108,049) | (82,640) | (149,657) | (109,973) | | Year-end fair value of unvested awards granted in the current year | 205,757 | 153,353 | 163,635 | 121,981 | 97,254 | 74,372 | 87,248 | 51,911 | | Year-over-year difference of year-end fair values for unvested awards granted in prior years | (2,224) | (1,700) | 9,779 | 7,369 | 41,511 | 24,698 | (21,523) | (12,435) | | Fair values at vest date for awards granted and vested in current year | - | - | - | - | - | - | - | - | | Difference in fair values between prior year-end fair values and vest date fair values for awards granted in prior years | - | - | (19,344) | (12,885) | 23,691 | 13,765 | (16,525) | (10,078) | | Forfeitures during current year equal to prior year-end fair value | - | - | - | - | - | - | - | - | | Dividends or dividend equivalents not otherwise included in total compensation | - | - | - | - | - | - | - | - | | Total Adjustments for Equity Awards | 57,507 | 42,818 | 19,060 | 15,822 | 54,407 | 30,195 | (100,458) | (80,575) | | Compensation Actually Paid (as calculated) | $956,254 | $765,683 | $942,931 | $763,304 | $702,133 | $567,120 | $726,805 | $565,591 |

  65. Pay versus Performance Graphs

    Pay versus Performance Graphs In accordance with SEC reporting rules, the Corporation has prepared the following graphs which overlay the following performance results with CAP:

  66. Pay versus Performance Graphs

    | ● | Corporation and peer group TSR versus Compensation Actually Paid to the PEO and average for other NEOs for each covered year. |

  67. Pay versus Performance Graphs

    | ● | Corporation Net Income versus Compensation Actually Paid to the PEO and average for other NEOs for each covered year. |

  68. Pay versus Performance Graphs

    | ● | Corporation Return on Average Assets (ROAE) versus Compensation Actually Paid to the PEO and average for other NEOs for each covered year. |