<PAGE> 1
Reason for Amendment
This amendment No. 1 to the Registrant's Annual Report on Form 10-K includes
additional exhibits pursuant to section 228.601 involving compensatory plans
which were not available in electronic filing format at the date of filing of
the Form 10-K. The specimen plan documents are filed herewith subject to the
finalization of certain insurance policy data.
Exhibits:
10.1 1999 Stock Option Plan
10.2 Stock Option Agreement
10.3 Summary of Options Under 1999 Option Plan
10.4 Executive Retention Plan
10.5 Life Insurance Endorsement Method Split Dollar Plan and Agreement
2
<PAGE> 2
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
BY: /s/ JAMES L. HARRISON, SR.
--------------------------------------
James L. Harrison, Sr.,
President and Chief Executive Officer
(Duly Authorized Officer)
BY: /s/ JOHN M. MENDEZ
--------------------------------------
John M. Mendez
Chief Financial Officer
(Principal Accounting Officer)
April 13, 2000
3
<PAGE> 3
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibits Dexcription Method of Filing
- -------- ----------- ----------------
<S> <C> <C>
10.1 1999 Stock Option Plan Filed herewith
10.2 Stock Option Agreement Filed herewith
10.3 Summary of Options Under 1999 Option Plan Filed herewith
10.4 Executive Retention Plan Filed herewith
10.5 Life Insurance Endorsement Method Split Dollar
Plan and Agreement Filed herewith
13 Annual Report to shareholders Previously filed
23 Independent Auditors Consent Previously filed
27 Financial Data Schedule Previously filed
</TABLE>
4
<PAGE> 1
Exhibit 10.1
FIRST COMMUNITY BANCSHARES, INC.
1999 STOCK OPTION PLAN
ARTICLE I
PURPOSE
The purpose of this Stock Option Plan (the "Plan") is to encourage and
facilitate investment in the Common Stock of First Community Bancshares, Inc.
(the "Corporation"), by those individuals whose efforts will determine the
future growth and continued success of the Corporation.
ARTICLE II
ELIGIBILITY
The individuals who shall be Participants in the Plan shall be officers
and other key employees of the Corporation and its affiliates who are approved,
from time to time, as Participants by the Committee.
ARTICLE III
ADMINISTRATION
3.1 BOARD OF DIRECTORS. The Plan shall be administered by the Board of
Directors of the Corporation (the "Board"), which may delegate its powers with
respect to the administration of the Plan (except for determinations of
disability under Article V, Section (d) hereof) to its Compensation Committee
(the "Committee") appointed by the Board. The Committee shall be composed of not
less than two members who shall be members of the Board but who are not
employees of the Corporation. If the Board delegates its powers to the
Committee, references hereinafter to the Board, except in Article V, Section
(d), shall be deemed to refer to the Committee.
3.2 POWERS. Within the limits of the express provisions of the Plan,
the Board shall determine: (a) the individuals to whom awards hereunder shall be
granted; (b) the time or times at which such awards shall be granted; (c) the
form and amount of the awards; and (d) the additional limitations, restrictions
and conditions applicable to any such award and not set forth in the Plan. In
making such determinations, the Board may take into account the nature of the
services rendered by such employees, or classes of employees, their present and
potential contributions to the Corporation's success and such other factors as
the Board in its discretion shall deem relevant.
3.3 INTERPRETATIONS. Subject to the express provisions of this Plan,
the Board may interpret the Plan, prescribe, amend and rescind rules and
regulations relating to it, determine the terms and provisions of the respective
awards and make all other determinations it deems necessary or advisable for the
administration of the Plan.
3.4 BOARD DETERMINATIONS CONCLUSIVE. The determinations of the Board on
all matters regarding the Plan shall be conclusive. A member of the Board shall
only be liable for any action taken or determination made in bad faith.
3.5 NONUNIFORM DETERMINATIONS. The Board's determinations under the
Plan, including without limitation, determinations as to the person to receive
awards, the terms and provisions of such awards and the agreements evidencing
the same, need not be uniform and may be made by it selectively among such
person or classes of persons who receive or are eligible to receive awards under
the Plan, whether or not such persons are similarly situated.
3.6 SUSPENSION OF PLAN. Subject to the provisions of Article IX, the
Board may in its sole discretion suspend the Plan either in total or as to one
or more participants. In that event, all options deemed granted at the effective
date of suspension shall continue to vest and be exercisable by the affected
optionee or optionees as provided in the Plan. All options which are not deemed
granted at such time shall be deemed canceled.
<PAGE> 2
ARTICLE IV
AWARD OF OPTIONS
4.1 FORM. Awards under the Plan will be granted in the form of
Nonstatutory Stock Options as described under Section 83 of the Internal Revenue
Code of 1986, as amended (the "Code").
4.2 MAXIMUM LIMITATIONS. The aggregate number of shares of Common Stock
available for grant under the Plan shall be 275,000 shares, subject to
adjustment pursuant to Article VIII. Shares of Common Stock issued pursuant to
the Plan may be either authorized but unissued shares or shares now or hereafter
held by the Corporation as treasury stock. In the event that, prior to the end
of the period during which Stock Options may be granted under this Plan, any
Stock Option under the Plan expires unexercised or is terminated, surrendered or
canceled without being exercised in whole or in part, for any reason, the number
of shares theretofore subject to such Stock Option or the unexercised,
terminated, forfeited or unearned portion thereof, shall be added to the
remaining number of shares of Common Stock available for grant as a Stock Option
under this Plan, including a grant to a former holder of such Stock Option, upon
such terms and conditions as the Board shall determine, which terms may be more
or less favorable than those applicable to such former Stock Option.
ARTICLE V
STOCK OPTIONS
It is intended that the Stock Options granted under the Plan shall be
in such form and upon such terms and conditions as the Board shall from time to
time determine, subject to the following limitations:
(a) OPTION PRICE. The option price of each Stock Option to
purchase Common Stock shall not be less than 100% of the fair
market value of the Common Stock subject to such Stock Option
on the date of grant.
(b) SERIAL GRANT AND PRICE. Stock Options granted pursuant to the
Plan shall be deemed to have been granted in five equal
amounts on the date of initial grant and the first through the
fourth anniversary thereof. The exercise price for each such
portion of the Stock Option shall be determined as of January
1 of each year in which the Stock Option is deemed to have
been granted.
(c) VESTING. A Stock Option granted pursuant to the Plan shall
vest ratably on the first through the seventh anniversary of
the Date of Deemed Grant.
(d) TERM OF OPTIONS. Vested Stock Options granted pursuant to the
Plan shall be exercisable for a period of five years after the
date of the grantee's retirement (provided retirement occurs
at or after age 62), disability (as determined by the Board),
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 shall
be deemed canceled.
(e) STOCK OPTION AGREEMENT. The Board shall, as a condition to the
grant of a Stock Option pursuant to the Plan, require each
recipient of such Stock Option to enter into a Stock Option
Agreement with the Corporation on or prior to the date of
grant of such Option.
ARTICLE VI
GENERAL PROVISIONS APPLICABLE TO STOCK OPTIONS
6.1 EXERCISE. Stock Options shall be subject to such terms and
conditions and shall be evidenced by such form of written option agreement
between the optionee and the Corporation, as the Board shall determine;
provided, that such determinations are not inconsistent with the other
provisions of this Plan.
2
<PAGE> 3
6.2 MANNER OF EXERCISE OF OPTIONS AND PAYMENTS FOR COMMON STOCK. Stock
Options may be exercised by an optionee, by a legatee or legatees of such Stock
Option under the optionee's last will and testament, or by his or her executors,
personal representatives or distributees, by giving written notice to the
Secretary of the Corporation stating the number of shares of Common Stock with
respect to which the Stock Option is being exercised and tendering payment
therefore. At the time that a Stock Option granted under the Plan, or any part
thereof, is exercised, payment for the Common Stock issuable thereupon shall be
made in full in cash or by certified check or, if the Board in its discretion
agrees to accept, in shares of Common Stock of the Corporation (the number of
such shares paid for each share subject to the Stock Option, or part thereof,
being exercised shall be determined by dividing the option price by the fair
market value per share of the Common Stock on the date of exercise) or such
other means of payment as may be agreed to by the Board and optionee to the
extent such payment method is not otherwise inconsistent with the applicable
provisions of law governing Nonstatutory Stock Options at the time of exercise.
As soon as reasonably possible following such exercise, a certificate
representing the shares of Common Stock purchased, registered in the name of the
optionee, shall be delivered to the optionee.
ARTICLE VII
TRANSFERABILITY OF OPTION
No Stock Option provided for under this Plan may be transferred,
assigned, pledged or hypothecated (whether by operation of law or otherwise),
except as provided by will or the applicable laws of descent or distribution,
and no Stock Option shall be subject to execution, attachment or similar
process. Any attempted assignment, transfer, pledge, hypothecation or other
disposition of a Stock Option, or levy of attachment or similar process upon the
Stock Option not specifically permitted herein shall be null and void and
without effect. A Stock Option may be exercised only by an individual during his
or her lifetime, or pursuant to Section 6.2, by his or her estate or the person
who acquires the right to exercise such Stock Option upon his or her death by
bequest or inheritance.
ARTICLE VIII
MODIFICATIONS TO PLAN
The aggregate number of shares of Common Stock with respect to which
Stock Options may be granted, the aggregate number of shares of Common Stock
subject to each outstanding Stock Option, and the option price per share of each
such Stock Option, shall all be appropriately modified or adjusted as a result
of any increase or decrease in the number of shares of issued Common Stock
resulting from a subdivision or consolidation of shares, whether through
reorganization, recapitalization, stock split-up, stock distribution or
combination of shares, or the payment of a share dividend or other increase or
decrease in the number of such shares outstanding effected without receipt of
consideration by the Corporation.
ARTICLE IX
CHANGE OF CONTROL, MERGER,
CONSOLIDATION AND DISSOLUTION
In the event of a change of control, or upon the dissolution or
liquidation of the Corporation, each Stock Option granted hereunder shall
continue to vest and shall be exercisable in accordance with the terms of the
original grant, provided that in any such event, options previously granted to
(a) 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 in control, and (b) any participant who remains employed by the
Corporation, its successor or affiliate during the 90-day period following a
change of control and thereafter resigns, shall continue to be deemed granted
and vest as if the Optionee continued to be employed; and such person or his or
her successor under Section 6.2 shall be entitled to exercise such options
within five years after death or attainment of age 62, whichever first occurs.
The Corporation shall require in connection with any change of control that any
successor agree to honor all Stock Options granted hereunder in accordance with
the terms thereof, modified in accordance with the exchange ratio of the change
of control transaction to provide for the appropriate number of shares of any
successor corporation.
3
<PAGE> 4
Further, in the event of a change of control or dissolution or
liquidation of the corporation, any suspension of this Plan effected under
Section 3.6 by the Board within twelve months prior to such change of control,
dissolution or liquidation, shall be reversed and all options originally
scheduled for deemed grant between the date of such suspension and the date of
adoption of any plan effecting a change of control, dissolution or liquidation
shall be reinstated in full.
For purposes of this Plan,
(a) The term "change in control" shall mean the purchase or
other acquisition by any person, entity or group of persons, within the meaning
of Section 13(d)(3) of the Securities Exchange Act of 1934 (the "Act"), or any
comparable successor provision, of beneficial ownership within the meaning of
Rule 13(d)(3) promulgated under the Act, within any 12-month period, of 30
percent or more of the outstanding shares of common stock of the Corporation; or
the approval by the stockholders of the Corporation of a reorganization, merger,
consolidation, share exchange or similar transaction pursuant to which persons
who were stockholders of the Corporation immediately prior to the effective date
of the first such transaction after the date hereof do not, immediately after
such date, own more than 60 percent of the combined voting power entitled to
vote generally in the election of directors of the surviving or successor
corporation; or a liquidation or dissolution of the Corporation; or the sale of
all or substantially all of its assets.
(b) The term "cause" shall mean the commission of acts or
omissions by the optionee which constitute fraud, dishonesty, excessive
absenteeism without approval of the employer (provided such absenteeism is not
caused by disability), a criminal act involving the person or property of others
or the public generally, gross neglect of duty resulting in substantial loss to
the employer or any affiliate, or willful failure to carry out reasonable and
legal duties and responsibilities consistent with his duties.
ARTICLE X
EFFECTIVE DATE
The Plan shall be effective as of January 1, 1999.
ARTICLE XI
EXPIRATION OF STOCK OPTIONS
Each Stock Option shall expire on the expiration date set forth in the
Agreement evidencing such Stock Option. In no event may the Board permit a
former employee to exercise a Stock Option after such expiration date.
ARTICLE XII
12.1 PROPRIETARY INFORMATION. Participants, while providing services
hereunder, will have access to information, including without limitation
customer information, strategic plans, management and operating policies and
procedures, and similar information, which constitute proprietary information or
trade secrets of the Corporation or its affiliates. No participant shall, at any
time, whether during the term of this Agreement or otherwise, disclose any of
such proprietary information to any person or entity other than the Corporation,
its affiliates and employees.
12.2 COVENANT NOT TO COMPETE. During the term of employment hereunder
and for 24 months after termination of employment (by either party, whether or
not for cause), except with the prior written consent of the Corporation, no
participant will directly or indirectly engage or participate in, or become a
director or officer of, or render advisory or other services to, or become
interested in, become an employee of, or make any financial investment in any
firm, corporation, holding company, business entity or other business enterprise
competing in any respect with the business of the Corporation or any of its
affiliates, whether presently being conducted or hereafter undertaken, from a
location within 50 miles of the main office of the Corporation, and within 25
miles of any other office of the Corporation or any affiliate from which
business is conducted at the time of termination, and shall not, during such
period, solicit business or otherwise call on any person or entity which was a
customer of the Corporation or any affiliate at the date of termination or at
any time within 12 months prior to such date.
4
<PAGE> 5
ARTICLE XIII
MISCELLANEOUS
13.1 LEGAL AND OTHER REQUIREMENTS. The obligation of the Corporation to
sell and deliver Common Stock under this Plan shall be subject to all applicable
laws, regulations, rules and approvals, including, but not by way of limitation,
the effectiveness of a registration statement under the Securities Act of 1933
if deemed necessary or appropriate by the Corporation. Certificates for shares
of Common Stock issued hereunder may be legended as the Board shall deem
appropriate.
13.2 NO OBLIGATION TO EXERCISE OPTIONS. The granting of a Stock Option
pursuant to the provisions of this Plan shall impose no obligation upon an
optionee to exercise such Stock Option.
13.3 APPLICATION OF FUNDS. The proceeds received by the Corporation
from the sale of Common Stock pursuant to Stock Options may be used for such
general corporate purposes as the Board deems appropriate.
13.4 WITHHOLDING TAXES. Whenever the Corporation proposes or is
required to issue or transfer shares of Common Stock to the optionee under this
Plan, the Corporation shall have the right to require the optionee to remit to
the Corporation an amount sufficient to satisfy all federal, state and local
withholding tax requirements prior to the delivery of any certificate or
certificates for such shares. If such certificates have been delivered prior to
the time a withholding obligation arises, the Corporation shall have the right
to require the optionee to remit to the Corporation an amount sufficient to
satisfy all federal, state or local withholding tax requirements at the time
such obligation arises and to withhold from other amounts payable to the
optionee, as compensation or otherwise, as necessary. Whenever payments under
the Plan are to be made to the optionee in cash, such payments shall be net of
any amounts sufficient to satisfy all federal, state and local withholding tax
requirements.
13.5 NO GUARANTEE OF EMPLOYMENT. Nothing in the Plan or any agreement
entered into pursuant to the Plan shall confer upon any employee the right to
continue in the employment of the Corporation or affect any right which the
Corporation may have to terminate the employment of such individual.
13.6 RIGHTS AS A SHAREHOLDER. No optionee shall have any right or
privileges as a shareholder with regard to any option granted hereunder until a
certificate for shares of Common Stock which are issuable to him or her under
this Plan are so issued.
13.7 LEAVES OF ABSENCE AND DISABILITY. The Board shall be entitled to
make such rules, regulations and determinations as it deems appropriate under
this Plan in respect of any leave of absence taken by or disability of any
employee and the effects, if any, of such events upon the terms of this Plan.
Without limiting the generality of the foregoing, the Board shall be entitled to
determine (a) whether or not any such leaves of absence shall constitute a
termination of employment within the meaning of the Plan, and (b) the impact, if
any, of any such leave of absence on awards of Stock Options under the Plan
theretofore made to any individual who takes such leave of absence.
13.8 FAIR MARKET VALUE. Whenever the fair market value of Common Stock
is to be determined under the Plan as of a given date, such fair market value
shall be:
(a) If the Common Stock is traded on the over-the-counter market,
the average of the mean between the bid and the asked price
for the Common Stock at the close of trading for the 10
consecutive trading days immediately preceding such given
date;
(b) If the Common Stock is listed on a national securities
exchange, the average of the closing prices of the Common
Stock on the Composite Tape for the 10 consecutive trading
days immediately preceding such given date; or
(c) If the Common Stock is neither traded on the over-the-counter
market nor listed on a national securities exchange, such
value as the Board, in good faith, shall determine.
5
<PAGE> 6
13.9 NOTICES. Every direction, revocation or notice authorized or
required by this Plan shall be deemed delivered to the Corporation (a) on the
date it is personally delivered to the Secretary of the Corporation at its
principal executive offices or (b) three business days after it is sent by
registered or certified mail, postage prepaid, addressed to the Secretary at
such offices; and shall be deemed delivered to an optionee (a) on the date it is
personally delivered to him or her or (b) three business days after it is sent
by registered or certified mail, postage prepaid, addressed to him or her at the
last address shown for him or her on the records of the Corporation.
13.10 GOVERNING LAW. All questions pertaining to the validity,
construction and administration of the Plan and Stock Options granted hereunder
shall be determined in accordance with the laws of the Commonwealth of Virginia.
13.11 ELIMINATION OF FRACTIONAL SHARES. If under any provision of this
Plan which requires a computation of the number of shares of Common Stock
subject to a Stock Option, the number so computed is not a whole number of
shares of Common Stock, such number of shares of Common Stock shall be rounded
down to the next whole number, without payment by the Corporation for any
fractional share thus eliminated.
APPROVED:
FIRST COMMUNITY BANCSHARES, INC.
BY: __________________________________
CHAIRMAN OF THE BOARD OF DIRECTORS
6
<PAGE> 1
Exhibit 10.2
THE SECURITIES ISSUABLE PURSUANT TO THIS OPTION AGREEMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). WHEN
ISSUED, SUCH SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, OR IN A
TRANSACTION WHICH IN THE OPINION OF COUNSEL FOR THE OPTIONEE, WHICH OPINION
SHALL BE REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, IS EXEMPT
FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS.
FIRST COMMUNITY BANCSHARES, INC.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT, effective as of January 1, 1999, by and
between First Community Bancshares, Inc., a Nevada corporation (herein referred
to as the "Corporation") and James L. Harrison, Sr. (herein referred to as the
"Optionee").
W I T N E S S E T H
WHEREAS, effective December 14, 1999, the Board of Directors of the
Corporation (hereinafter referred to as the "Board") adopted the First Community
Bancshares, Inc. 1999 Stock Option Plan (hereinafter the "Plan") to encourage
and facilitate investment in the common stock of the Corporation by those
individuals whose efforts will determine the future growth and continued success
of the Corporation; and
WHEREAS, the Plan is administered by the Board; and
WHEREAS, the Board has voted to grant the Optionee options to purchase
common stock in the Corporation pursuant to the terms of the Plan; and has
further authorized the execution and delivery of this Agreement.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, it is hereby agreed as follows:
1. GRANT OF OPTION. Subject to the provisions set forth herein and the
terms and conditions of the Plan, the terms of which are hereby incorporated by
reference, the Corporation hereby grants to Optionee an option to purchase from
the Corporation the number of shares of common stock, par value $1.00 per share
(the "Shares"), at the option price per share, and on the schedule, all as set
forth below. At the time of exercise of the option, payments of the purchase
price must be made in cash, or if the Board in its discretion agrees to so
accept, then by the delivery to the Corporation of other common stock owned by
Optionee, valued at its fair market value on the date of exercise, or in some
combination of cash and such common stock so valued.
(g) Number of Shares Subject to Option: 80,646
(h) Option Price Per Share: Pursuant to Annual Advice
(i) Date of Initial Grant: January 1, 1999
(d) Granting and Vesting Schedule: See following Table and
Exhibit I
<TABLE>
<CAPTION>
DATE OF DEEMED GRANT # OF SHARES GRANTED DATE OF 100% VESTING EXERCISE PERIOD
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
January 1, 1999 16,129.2 December 31, 2005 All vested options
January 1, 2000 16,129.2 December 31, 2006 are exercisable as
January 1, 2001 16,129.2 December 31, 2007 set forth in paragraph
January 1, 2002 16,129.2 December 31, 2008 3 below
January 1, 2003 16,129.2 December 31, 2009
</TABLE>
1
<PAGE> 2
2. CONDITIONS TO EXERCISE OF OPTION. The exercise of the option is
conditioned upon the acceptance by Optionee of the terms hereof as evidenced by
his or her execution of this Agreement in the space provided therefor at the end
hereof and the return of an executed copy to the Secretary of the Corporation no
later than January 31, 2000.
3. EXERCISE OF OPTION. If Optionee remains employed by the Corporation
or any affiliate until he or she attains age 62, all vested options shall be
exercisable at any time after Optionee's 62nd birthday and before the fifth
anniversary of termination of employment. If Optionee's employment with the
Corporation is terminated due to disability (as determined by the Board) or
death, all vested options previously granted to Optionee shall be exercisable at
any time within five years after the date of such termination. If Optionee's
employment is terminated for any reason other than death, disability (as
determined by the Board) or retirement at or after age 62, no further vesting
shall occur following termination, and any vested options must be exercised
within 90 days after such termination of employment.
In the event of any change in control, options previously granted to (a) any
participant who is terminated without cause by the Corporation, its successor or
any affiliate during the 12 months preceding or at any time following the change
in control, and (b) any participant who remains employed by the Corporation or
its successor during the 90-day period following the change of control and
thereafter resigns, shall continue to be deemed granted and shall vest as if
Optionee remained employed. Such options shall be exercisable at any time after
such termination (subject to vesting requirements) until five years after
Optionee's 62nd birthday or death, whichever first occurs. Upon the conclusion
of such post-termination exercise period, this option shall be cancelled with
respect to all remaining Shares. Written notice of an election to exercise any
portion of the option specifying the portion thereof being exercised and the
exercise date, shall be given by Optionee or his lawfully appointed personal
representative in the event of Optionee's death (a) by delivering such notice to
the principal executive offices of the Corporation no later than the exercise
date, or (b) by mailing such notice, postage prepaid, addressed to the Secretary
of the Corporation at the principal executive offices of the Corporation, at
least three business days prior to the exercise date, in either case accompanied
by payment of the exercise price.
4. LIMITATION OF EXERCISE OF OPTION. The option may be exercised only
by Optionee during his or her lifetime and may not be transferred other than by
will or the applicable laws of descent or distribution. The option shall not
otherwise be transferred, assigned, pledged, or hypothecated for any purpose
whatsoever and is not subject, in whole or in part, to execution, attachment, or
similar process. Any attempted assignment, transfer, pledge or hypothecation or
other disposition of the option other than in accordance with the terms set
forth herein, shall be null and void and of no effect.
5. OPTION HOLDER NOT STOCKHOLDER. Neither Optionee nor any other person
entitled to exercise the option under the terms hereof shall be, or have any of
the rights or privileges of, a shareholder of the Corporation in respect to any
of the Shares issuable on exercise of the option, unless and until the purchase
price for such Shares is paid in full and certificates representing such Shares
are issued.
6. ADJUSTMENT TO STOCK OPTION AGREEMENT. In the event the option shall
be exercised in whole, this agreement shall be surrendered to the Corporation
for cancellation. In the event the option shall be exercised in part, or a
change in the number or designation of the common stock shall be made, this
agreement shall be delivered by Optionee to the Corporation for the purpose of
making appropriate notation thereon, or if otherwise reflecting in such manner
as the Corporation shall determine, the partial exercise or the change in the
number or designation of the Shares.
7. PROPRIETARY INFORMATION. Optionee, while providing services
hereunder, will have access to information, including without limitation
customer information, strategic plans, management and operating policies and
procedures, and similar information, which constitute proprietary information or
trade secrets of the Corporation or its affiliates. Optionee shall not, at any
time, whether during the term of this Agreement or otherwise, disclose any of
such proprietary information to any person or entity other than the Corporation,
its affiliates and employees.
8. COVENANT NOT TO COMPETE. During the term of employment hereunder and
for 36 months after termination of employment (by either party, whether or not
for cause), except with the prior written consent of the Corporation, Optionee
shall not directly or indirectly engage or participate in, or become a director
or officer of, or render advisory or other services to, or become interested in,
become an employee of, or make any financial investment in any firm,
corporation, holding company, business entity or other business enterprise
competing in any respect with the business of the Corporation or any of its
affiliates, whether presently being conducted or hereafter undertaken, from a
location within 50 miles of the headquarters of the Corporation, or within 25
miles of any other office of the Corporation or any affiliate from which
business is conducted at the time of termination, and shall not, during such
period, solicit business or otherwise call on any person or entity which was a
customer of the Corporation or any affiliate at the date of termination or at
any time within 12 months prior to such date.
2
<PAGE> 3
9. PLAN AND PLAN INTERPRETATIONS AS CONTROLLING. This option and the
terms and conditions herein set forth are subject in all respects to the
definitions, terms and conditions of the Plan, which are incorporated herein by
reference as if set forth herein and shall be controlling. All determinations
and interpretations of the Board shall be binding and conclusive upon the
Optionee or his or her legal representatives with regard to any question arising
hereunder or under the Plan to the extent not inconsistent with Section 83 of
the Internal Revenue Code and regulations issued thereunder.
10. DELIVERY AND REGISTRATION OF SHARES. Notwithstanding the provisions
contained herein to the contrary, the Corporation's obligation to deliver the
Shares hereunder shall be conditioned upon the receipt of a representation as to
the investment intention of the Optionee or any other person to whom such shares
are to be delivered, in such form as the Board shall determine to be necessary
or advisable to comply with the provisions of the Securities Act of 1933, as
amended, or any other federal, state or local securities rules or regulations.
Each certificate representing any Shares issuable upon exercise of this option
shall bear a legend indicating that such shares have not been registered under
any securities laws and may not be transferred in the absence of registration
under such laws or an opinion of counsel that such transfer is exempt from
registration.
11. GOVERNING LAW. The option and this agreement shall be construed,
administered and governed in all respects under and by the laws of the
Commonwealth of Virginia to the extent not inconsistent with Section 83 of the
Internal Revenue Code and regulations issued thereunder.
IN WITNESS WHEREOF, the Corporation has caused this option to be
granted and this agreement to be executed on behalf of the Corporation on the
date first above written.
FIRST COMMUNITY BANCSHARES, INC.
BY: __________________________________
CHAIRMAN OF THE BOARD OF DIRECTORS
The undersigned hereby accepts the option granted hereby and agrees to
comply fully with the terms and conditions hereof.
_________________________________________
JAMES L. HARRISON, SR., OPTIONEE
3
<PAGE> 1
EXHIBIT 10.3
FIRST COMMUNITY BANCSHARES, INC.
SUMMARY OF OPTIONS
UNDER 1999 OPTION PLAN
The following table provides information with respect to individual terms and
options covered under the 1999 Stock Option Plan and Agreement included under
Exhibit 10.1. Each Optionee listed executed an Option Agreement in the form
presented in Exhibit 10.2 for James L. Harrison.
<TABLE>
<CAPTION>
Total Deemed
Options Grant Grant Expiration
Optionee Granted Dates Price Date
-------- ------- ----- ----- ----------
<S> <C> <C> <C> <C>
E. Stephen Lilly 31,201 01/01/99 through Market Value at 07/01/25
01/01/03 Date of Grant
Janice K. Miller 18,803 01/01/99 through Market Value at 01/01/13
01/01/03 Date of Grant
James L. Harrison, Sr. 80,646 01/01/99 through Market Value at 04/01/15
01/01/03 Date of Grant
John M. Mendez 58,300 01/01/99 through Market Value at 03/01/22
01/01/03 Date of Grant
Ruth A. White 14,072 01/01/99 through Market Value at 10/01/24
01/01/03 Date of Grant
Robert L. Buzzo 31,267 01/01/99 through Market Value at 04/01/17
01/01/03 Date of Grant
Robert L. Schumacher 38,291 01/01/99 through Market Value at 04/01/18
01/01/03 Date of Grant
</TABLE>
<PAGE> 1
Exhibit 10.4
FIRST COMMUNITY BANCSHARES, INC. AND AFFILIATES
EXECUTIVE RETENTION PLAN
AND AGREEMENT
THIS PLAN AND AGREEMENT is made and entered into this ______day of
____________, ______, by and between First Community Bancshares, Inc., a
corporation, organized and existing under the laws of the State of Nevada,
(hereinafter, collectively with its affiliates, referred to as the "Company"),
and ______________________________, an Executive of the Company (hereinafter
referred to as the "Executive").
WHEREAS, the Executive has faithfully served the Company and it is the
consensus of the Board of Directors (hereinafter referred to as the "Board"),
that the Executive's services have been of exceptional merit, in excess of the
compensation paid and an invaluable contribution to the profits and position of
the Company in its field of activity. The Board further believes that the
Executive's experience, knowledge of corporate affairs, reputation and industry
contacts are of such value, and the Executive's continued services so essential
to the Company's future growth and profits, that it would suffer severe
financial loss should the Executive terminate his service with the Company.
WHEREAS, the Board has adopted this First Community Bancshares, Inc..
Executive Retention Plan and Agreement (hereinafter referred to as the
"Retention Plan and Agreement") and it is the desire of the Company and
Executive to enter into this plan and agreement by which the Company will agree
to make certain payments to the Executive upon the Executive's retirement or
disability and to the Executive's beneficiary(ies) in the event of the
Executive's death.
WHEREAS, it is the intent of the parties hereto that this Retention
Plan and Agreement be considered an unfunded arrangement maintained primarily to
provide supplemental retirement benefits for the Executive, and to be considered
a non-qualified benefit plan for purposes of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"). The Executive is fully advised of
the Company's financial status and has had substantial input in the design and
operation of this benefit plan.
NOW THEREFORE, in consideration of services the Executive has performed
in the past and those to be performed in the future, and based upon the mutual
promises and covenants herein contained, the Company and the Executive agree as
follows:
I. DEFINITIONS
A. Effective Date:
The Effective Date of the Plan shall be ____________________.
<PAGE> 2
B. Plan Year:
Any reference to the "Plan Year" shall mean a calendar year
from January 1st to December 31st.
C. Retirement Date:
Retirement Date shall mean retirement from service with the
Company which becomes effective on the first day of the
calendar month following the month in which the Executive
reaches age sixty two (62) or such later date as the Executive
may actually retire.
D. Termination of Service:
Termination of Service shall mean the Executive's voluntary
resignation or the Company's discharge of the Executive, in
either case, prior to Normal Retirement Age, death or
disability.
E. Pre-Retirement Account:
A Pre-Retirement Account shall be established as a liability
reserve account on the books of the Company for the benefit of
the Executive. Prior to the Executive's Termination of Service
or the Executive's Retirement, whichever event shall first
occur, or Prior to the Executive's Retirement Date, such
liability reserve account shall be increased or decreased each
Plan Year, until the aforestated event occurs, by the Index
Retirement Benefit. For further reference on the definition(s)
as set forth herein, please see Exhibit "A" attached hereto.
Said Exhibit "A" is referred to herein for illustrative
purposes only. The Company does not promise any amounts as set
forth in Exhibit "A".
F. Index Retirement Benefit:
The Index Retirement Benefit for each Executive in the
Retention Plan for each Plan Year shall be equal to the excess
(if any) of the Index for that Plan Year over the Cost of
Funds Expense for that Plan Year. For further reference on the
definition(s) as set forth herein, please see Exhibit "A"
attached hereto. Said Exhibit "A" is referred to herein for
illustrative purposes only. The Company does not promise any
amounts as set forth in Exhibit "A".
G. Index:
The Index for any Plan Year shall be the aggregate annual
after-tax income from the life insurance contract(s) described
hereinafter as defined by FASB Technical Bulletin 85-4. This
Index shall be applied as if such
<PAGE> 3
insurance contract(s) were purchased on the Effective Date of
the Executive Plan.
Insurance Company:
Policy Form:
Policy Name:
Insured's Age and Sex:
Riders:
Ratings:
Option:
Face Amount:
Premiums Paid:
Number of Premium Payments:
Purchase Date:
If such contracts of life insurance are not purchased or are
subsequently surrendered or lapsed, then the Bank shall
receive annual policy illustrations that assume the
above-described policies were purchased or had not
subsequently been surrendered or lapsed, which illustration
will be received from the respective insurance companies and
will indicate the increase in policy values for purposes of
calculating the amount of the Index.
In either case, references to the life insurance contracts are
merely for purposes of calculating a benefit. The Bank has no
obligation to purchase such life insurance and, if purchased,
the Executives and their beneficiary(ies) shall have no
ownership interest in such policy and shall never have a
greater interest in the benefits under this Retention Plan and
Agreement than that of an unsecured creditor of the Bank.
H. Opportunity Cost:
The Opportunity Cost for any Plan Year shall be calculated by
taking the sum of the amount of premiums for the life
insurance policies described in the definition of "Index" plus
the amount of any after-tax benefits paid to any Executive
pursuant to the Retention Plan and Agreement (Paragraph II
hereinafter) plus the amount of all previous years after-tax
Opportunity Costs, and multiplying that sum by the Average
Opportunity Cost. For further reference on the definition(s)
as set forth herein, please see Exhibit "A" attached hereto.
Said Exhibit "A" is referred to herein for illustrative
purposes only. The Company does not promise any amounts as set
forth in Exhibit "A".
<PAGE> 4
I. Change of Control:
For purposes of this Retention Plan and Agreement, change of
control shall mean the purchase or other acquisition by any
person, entity or group of persons, within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934 (the
"Act"), or any comparable successor provision, of beneficial
ownership within the meaning of Rule 13(d)(3) promulgated
under the Act, within any twelve month period, of 30 percent
or more of the outstanding shares of common stock of First
Community Bancshares, Inc. (the "Holding Company"); or the
approval by the stockholders of the Holding Company of a
reorganization, merger, consolidation, share exchange or
similar transaction pursuant to which persons who were
stockholders of the Holding Company immediately prior to the
effective date of such transaction do not, immediately after
such date, own more than 60 percent of the combined voting
power entitled to vote generally in the election of directors
of the surviving or successor corporation; or a liquidation or
dissolution of the Holding Company; or the sale of all or
substantially all of its assets.
J. Normal Retirement Age:
Normal Retirement Age shall mean the date on which the
Executive attains age sixty-two (62).
K. Average Opportunity Cost:
Average Opportunity Cost is the average annual after tax cost
of interest-bearing deposit liabilities computed on a calendar
year basis.
L. For Cause:
The term for "cause" shall mean the commission of acts or
omissions by the executive which constitute fraud, dishonesty,
excessive absenteeism without approval of the employer
(provided such absenteeism is not caused by disability), a
criminal act involving the person or property of others or the
public generally, gross neglect of duty resulting in
substantial loss to the employer or any affiliate, or willful
failure to carry out reasonable and legal duties and
responsibilities consistent with his duties. If a dispute
arises as to discharge for "cause", such dispute shall be
resolved by arbitration as set forth in this Retention Plan
and Agreement.
<PAGE> 5
II. INDEX BENEFITS
A. Retirement Benefits:
An Executive who remains employed by the Company until the
Normal Retirement Age shall be entitled to receive the balance
in the Pre-Retirement Account in one hundred twenty (120)
equal monthly installments commencing thirty (30) days
following the Executive's retirement. In addition to these
payments and commencing in conjunction therewith, the Index
Retirement Benefit, if any, for each Plan Year subsequent to
the Executive's retirement, and including the remaining
portion of the Plan Year following said retirement, shall be
paid to the Executive until the Executive's death.
B. Termination of Employment:
No benefits will be paid to the Executive or his
beneficiary(ies) in the event of termination of employment for
any reason other than the retirement, disability or death of
the Executive or pursuant to Article IV, hereinafter.
C. Death:
Should the Executive die prior to having received the balance
of the Pre-Retirement Account payable to the Executive under
the terms of this Retention Plan, the unpaid balance shall be
paid in a lump sum to the individual or individuals the
Executive may have designated in writing and filed with the
Company. In the absence of any effective designation of
beneficiary(ies), the unpaid balance shall be paid as set
forth herein to the duly qualified executor or administrator
of the Executive's estate. Said payment due hereunder shall be
made the first day of the second month following the death of
the Executive.
D. Death Benefits:
Except as set forth above, there is no death benefit provided
under this Agreement.
III. RESTRICTION UPON FUNDING
The Company shall have no obligation to set aside, earmark or entrust
any fund or money with which to pay its obligations under this
Retention Plan and Agreement. The Executive, his/her beneficiary(ies),
or any successor in interest shall be and remain simply a general
creditor of the Company in the same manner as any other creditor having
a general claim for matured and unpaid compensation.
<PAGE> 6
The Company reserves the absolute right, at its sole discretion, to
either fund the obligations undertaken by this Retention Plan and
Agreement or to refrain from funding the same and to determine the
extent, nature and method of such funding. Should the Company elect to
fund this Retention Plan, in whole or in part, at no time shall any
Executive be deemed to have any lien nor right, title or interest in or
to any specific funding investment or to any assets of the Company.
If the Company elects to invest in a life insurance, disability or
annuity policy upon the life of the Executive, then the Executive shall
assist the Company by freely submitting to a physical exam and
supplying such additional information necessary to obtain such
insurance or annuities.
IV. TERMINATION OF SERVICE AFTER A CHANGE OF CONTROL
If the Executive suffers a Termination of Service, other than for
cause, during the twelve months prior to a Change in Control, or at
anytime thereafter, (unless the Executive voluntarily terminates his
employment within 90 days following the effective date of the change in
control), then the Executive shall receive all benefits provided for in
this Retention Plan and Agreement upon death (if applicable),
disability or attaining Normal Retirement Age, as if the Executive had
been continuously employed by the Company until such event.
V. COMPETITION AFTER TERMINATION OF SERVICE
No benefits shall be payable if, at anytime within three (3) years
following the Executive's Termination of Service or Retirement, the
Executive, without the prior written consent of the Company, engages
in, becomes interested in, directly or indirectly, as a sole
proprietor, as a partner in a partnership, or as a substantial
shareholder in a corporation, or becomes associated with, in the
capacity of employee, director, officer, principal, agent, trustee or
in any other capacity whatsoever, any enterprise conducted in the
trading area (within a 50 mile radius from the Company's main office
and 25 miles from any branch office) of the business of the Company,
which enterprise is, or may be deemed to be, competitive with any
business carried on by the Company as of the date of the Executive's
Termination of Employment or retirement.
VI. SOLICITATION AFTER TERMINATION OF EMPLOYMENT
No benefits shall be payable if, at anytime within five (5) years
following the Executive's Termination of Service or Retirement, the
Executive, without prior written consent of the Company, solicits any
employee of the Company for the purpose of hiring such employee away
from the Company. Likewise, no benefits shall be payable if, during
such five year period, the Executive, without the prior written consent
of the Company, solicits any entity or person that was a customer of
the Company within twelve months prior to such termination for the
purpose of obtaining such customer's business relationship.
<PAGE> 7
VII. MISCELLANEOUS
A. Alienability and Assignment Prohibition:
Neither the Executive, nor the Executive's surviving spouse,
nor any other beneficiary(ies) under this Retention Plan shall
have any power or right to transfer, assign, anticipate,
hypothecate, mortgage, commute, modify or otherwise encumber
in advance any of the benefits payable hereunder nor shall any
of said benefits be subject to seizure for the payment of any
debts, judgments, alimony or separate maintenance owed by the
Executive or the Executive's beneficiary(ies), nor be
transferable by operation of law in the event of bankruptcy,
insolvency or otherwise. In the event the Executive or any
beneficiary attempts assignment, commutation, hypothecation,
transfer or disposal of the benefits hereunder, the Company's
liabilities hereunder shall forthwith cease and terminate.
B. Binding Obligation of the Bank and any Successor in Interest:
The Company shall not merge or consolidate into or with
another bank or holding company or sell substantially all of
its assets to another bank, firm or person until such bank,
firm or person expressly agrees, in writing, to assume and
discharge the duties and obligations of the Company under this
Retention Plan. This Retention Plan shall be binding upon the
parties hereto, their successors, beneficiaries, heirs and
personal representatives.
C. Amendment or Revocation:
It is agreed by and between the parties hereto that, during
the lifetime of the Executive, this Retention Plan may be
amended or revoked at any time or times, in whole or in part,
by the mutual written consent of the Executive and the
Company.
D. Gender:
Whenever in this Retention Plan and Agreement words are used
in the masculine or feminine gender, they shall be read and
construed as in the masculine or feminine gender, whenever
they should so apply.
E. Effect on Other Bank Benefit Plans:
Nothing contained in this Retention Plan and Agreement shall
affect the right of the Executive to participate in or be
covered by any qualified or non-qualified pension,
profit-sharing, group, bonus or other supplemental
compensation or fringe benefit plan constituting a part of the
Company's existing or future compensation structure.
<PAGE> 8
F. Headings:
Headings and subheadings in this Retention Plan and Agreement
are inserted for reference and convenience only and shall not
be deemed a part of this Retention Plan and Agreement.
G. Applicable Law:
The validity and interpretation of this Retention Plan and
Agreement shall be governed by the laws of the Commonwealth of
Virginia.
H. 12 U.S.C. Section 1828(k):
Any payments made to the Executive pursuant to this Retention
Plan and Agreement, or otherwise, are subject to and
conditioned upon their compliance with 12 U.S.C. Section
1828(k) or any regulations promulgated thereunder.
I. Partial Invalidity:
If any term, provision, covenant, or condition of this
Retention Plan and Agreement is determined by an arbitrator or
a court, as the case may be, to be invalid, void, or
unenforceable, such determination shall not render any other
term, provision, covenant, or condition invalid, void, or
unenforceable, and the Retention Plan and Agreement shall
remain in full force and effect notwithstanding such partial
invalidity.
J. Employment:
No provision of this Retention Plan and Agreement shall be
deemed to restrict or limit any existing employment agreement
by and between the Company and the Executive, nor shall any
conditions herein create specific employment rights to the
Executive nor limit the right of the Employer to discharge the
Executive with or without cause. In a similar fashion, no
provision shall limit the Executive's rights to voluntarily
sever the Executive's employment at any time.
K. Exhibit A:
For further reference on the definition(s) as set forth
herein, please see Exhibit "A" attached hereto. Said Exhibit
"A" is referred to herein for illustrative purposes only. The
Company does not promise any amounts as set forth in Exhibit
"A".
<PAGE> 9
VIII. ERISA PROVISION
A. Named Fiduciary and Plan Administrator:
The "Named Fiduciary and Plan Administrator" of this Retention
Plan and Agreement shall be First Community Bank, N.A., until
its resignation or removal by the Board. As Named Fiduciary
and Plan Administrator, the Bank shall be responsible for the
management, control and administration of the Retention Plan
and Agreement. The Named Fiduciary may delegate to others
certain aspects of the management and operation
responsibilities of the Retention Plan and Agreement including
the employment of advisors and the delegation of ministerial
duties to qualified individuals.
B. Claims Procedure and Arbitration:
In the event a dispute arises over benefits under this
Retention Plan and Agreement and benefits are not paid to the
Executive (or to the Executive's beneficiary(ies) in the case
of the Executive's death) and such claimants feel they are
entitled to receive such benefits, then a written claim must
be made to the Named Fiduciary and Plan Administrator named
above within sixty (60) days from the date payments are
refused. The Named Fiduciary and Plan Administrator shall
review the written claim and if the claim is denied, in whole
or in part, they shall provide in writing within sixty (60)
days of receipt of such claim its specific reasons for such
denial, reference to the provisions of this Retention Plan and
Agreement upon which the denial is based and any additional
material or information necessary to perfect the claim. Such
written notice shall further indicate the additional steps to
be taken by claimants if a further review of the claim denial
is desired. A claim shall be deemed denied if the Named
Fiduciary and Plan Administrator fail to take any action
within the aforesaid sixty-day period.
If claimants dispute the benefit denial based upon completed
performance of this Retention Plan and Agreement or the
meaning and effect of the terms and conditions thereof, then
claimants may submit the dispute to an Arbitrator for final
arbitration. The Arbitrator shall be selected by mutual
agreement of the Company and the claimants. The Arbitrator
shall operate under any generally recognized set of
arbitration rules. The parties hereto agree that they and
their heirs, personal representatives, successors and assigns
shall be bound by the decision of such Arbitrator with respect
to any controversy properly submitted to it for determination.
Where a dispute arises as to the Company's discharge of the
Executive for "Cause", such dispute shall likewise be
submitted to arbitration as above-described; and the parties
hereto agree to be bound by the decision thereunder.
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto acknowledge that each has
carefully read this Retention Plan and Agreement and executed the original
thereof on the ______ day of _________, ______, and that, upon execution, each
has received a conforming copy.
FIRST COMMUNITY BANCSHARES, INC.
BLUEFIELD, VIRGINIA
BY:____________________________________
CHAIRMAN OF THE BOARD OF DIRECTORS
BY:____________________________________
EXECUTIVE
____________________________________
WITNESS
____________________________________
WITNESS
<PAGE> 11
BENEFICIARY DESIGNATION FORM
FOR THE EXECUTIVE
RETENTION PLAN AND AGREEMENT
PRIMARY DESIGNATION:
NAME ADDRESS RELATIONSHIP
---- ------- ------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
SECONDARY (CONTINGENT) DESIGNATION:
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
All sums payable under the Executive Retention Plan and Agreement, by reason of
my death, shall be paid to the Primary Beneficiary, if he, she or they survive
me, and if no Primary Beneficiary shall survive me, then to the Secondary
(Contingent) Beneficiary.
- ---------------------------------- ------------------------------------
SIGNATURE OF PARTICIPANT DATE
<PAGE> 1
Exhibit 10.5
FIRST COMMUNITY BANCSHARES, INC.
LIFE INSURANCE
ENDORSEMENT METHOD SPLIT DOLLAR PLAN
AND AGREEMENT
Insurer:
Policy Number:
Company: First Community Bancshares, Inc.
and its Affiliates
Insured:
Relationship of Insured to Company: Executive
The respective rights and duties of the Company and the Insured in the
above-referenced policy shall be pursuant to the terms set forth below:
I. DEFINITIONS
Refer to the policy contract for the definition of all terms in this
Plan and Agreement not defined herein.
II. POLICY TITLE AND OWNERSHIP
Title and ownership shall reside in the Company for its use and for the
use of the Insured all in accordance with this Plan and Agreement.
Where the Company and the Insured (or assignee, with the consent of the
Insured) mutually agree to exercise the right to increase the coverage
under the subject Split Dollar policy, then, in such event, the rights,
duties and benefits of the parties to such increased coverage shall
continue to be subject to the terms of this Plan and Agreement.
III. BENEFICIARY DESIGNATION RIGHTS
The Insured (or assignee) shall have the right and power to designate a
beneficiary or beneficiaries to receive the Insured's share of the
proceeds payable upon the death of the Insured, and to elect and change
a payment option for such beneficiary, subject to any right or interest
the Company may have in such proceeds, as provided in this Plan and
Agreement.
IV. PREMIUM PAYMENT METHOD
The Company shall pay, in a single deposit, an amount equal to the
premiums calculated under provisions of the Executive Retention Plan
and Agreement.
<PAGE> 2
V. TAXABLE BENEFIT
Annually the Insured will receive a taxable benefit equal to the
assumed cost of insurance as required by the Internal Revenue Service.
The Company (or its administrator) will report to the Insured the
amount of imputed income each year on Form W-2 or its equivalent.
VI. ENTITLEMENT TO THE CASH SURRENDER VALUE OF THE POLICY
The Company shall be entitled to an amount equal to the policy's cash
value, as that term is defined in the policy contract, less any
applicable surrender charges. Such cash value shall be determined and
paid as of the date of death.
VII. DIVISION OF DEATH PROCEEDS
Subject to Paragraphs VI, IX, and XIV herein, the division of the death
proceeds of the policy is as follows:
A. Should the Insured be employed by the Company, disabled or
retired on the date of death, the Insured's beneficiary(ies),
designated in accordance with Paragraph III, shall be entitled
to an amount equal to eighty percent (80%) of the net at risk
insurance portion of the proceeds. The net at risk insurance
portion is the total proceeds less the cash value of the
policy.
B. The Company shall be entitled to the remainder of such
proceeds..
C. Should the Insured not be employed by the Company for reasons
other than disability or retirement at the time of his death,
no benefits will be paid the insured's beneficiary(ies).
D. The Company and the Insured (or assignees) shall share in any
interest due on the death proceeds on a pro rata basis as the
proceeds due each respectively bears to the total proceeds,
excluding any such interest.
VIII. TERMINATION OF PLAN AND AGREEMENT
This Plan and Agreement shall terminate upon the insured leaving the
employment of the Company (voluntarily or involuntarily).
Except as provided above, this Plan and Agreement shall terminate upon
distribution of the death benefit proceeds and the cash value in
accordance with Paragraph VI and VII above.
IX. INSURED'S OR ASSIGNEE'S ASSIGNMENT RIGHTS
The Insured may not, without the written consent of the Company, assign
to any individual, trust or other organization, any right, title or
interest in the subject policy nor any rights, options, privileges or
duties created under this Plan and Agreement.
2
<PAGE> 3
X. PLAN AND AGREEMENT BINDING UPON THE PARTIES
This Plan and Agreement shall bind the Insured and the Company, their
heirs, successors, personal representatives and assigns.
XI. ERISA PROVISIONS
The following provisions are part of this Plan and Agreement and are
intended to meet the requirements of the Employee Retirement Income
Security Act of 1974 ("ERISA"):
A. Named Fiduciary and Plan Administrator.
The "Named Fiduciary and Plan Administrator" of this Endorsement Method
Split Dollar Plan and Agreement shall be First Community Bank, N.A.
until resignation or removal by the Board of Directors. As Named
Fiduciary and Plan Administrator, the Bank shall be responsible for the
management, control and administration of this Split Dollar Plan and
Agreement as established herein. The Named Fiduciary may delegate to
others certain aspects of the management and operation responsibilities
of the Plan, including the employment of advisors and the delegation of
any ministerial duties to qualified individuals.
B. Funding Policy.
The funding policy for this Split Dollar Plan and Agreement shall be to
maintain the subject policy in force by purchasing a single premium
insurance product.
C. Basis of Payment of Benefits.
Direct payment by the Insurer is the basis of payment of benefits under
this Plan and Agreement, with those benefits in turn being based on the
payment of premiums as provided in the Executive Retention Plan and
Agreement.
D. Claim Procedures.
Claim forms or claim information as to the subject policy can be
obtained by contacting Benmark. When the Named Fiduciary has a claim
which may be covered under the provisions described in the insurance
policy, they should contact the office named above, and they will
either complete a claim form and forward it to an authorized
representative of the Insurer or advise the named Fiduciary what
further requirements are necessary. The Insurer will evaluate and make
a decision as to payment. If the claim is payable, a benefit check will
be issued in accordance with the terms of this Plan and Agreement.
3
<PAGE> 4
In the event that a claim is not eligible under the policy, the Insurer
will notify the Named Fiduciary of the denial pursuant to the
requirements under the terms of the policy. If the Named Fiduciary is
dissatisfied with the denial of the claim and wishes to contest such
claim denial, they should contact the office named above and they will
assist in making inquiry to the Insurer. All objections to the
Insurer's actions should be in writing and submitted to the office
named above for transmittal to the Insurer.
XII. GENDER
Whenever in this Plan and Agreement words are used in the masculine or
neuter gender, they shall be read and construed as in the masculine,
feminine or neuter gender, whenever they should so apply.
XIII. INSURANCE COMPANY NOT A PARTY TO THIS PLAN AND AGREEMENT
The Insurer shall not be deemed a party to this Plan and Agreement, but
will respect the rights of the parties as herein developed upon
receiving an executed copy of this Plan and Agreement. Payment or other
performance in accordance with the policy provisions shall fully
discharge the Insurer for any and all liability.
XIV. CHANGE OF CONTROL
For purposes of this Plan and Agreement, Change of Control shall mean
the purchase or other acquisition by any person, entity or group of
persons, within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934 (the "Act"), or any comparable successor
provision, of beneficial ownership within the meaning of Rule 13d-3
promulgated under the Act, within any twelve month period, of 30
percent or more of the outstanding shares of common stock of First
Community Bancshares, Inc. (the "Holding Company"); or the approval by
the stockholders of the Holding Company of a reorganization, merger,
consolidation, share exchange or similar transaction pursuant to which
persons who were stockholders of the Holding Company immediately prior
to the effective date of such transaction or series of transactions do
not, immediately after such date, own more than 60 percent of the
combined voting power entitled to vote generally in the election of
directors of the surviving or successor corporation; or a liquidation
or dissolution of the Holding Company; or the sale of all or
substantially all of its assets.
Upon a Change of Control, if the Insured's employment is subsequently
terminated, except for Cause, then the Insured shall be one hundred
percent (100%) vested in the benefits promised in this Plan and
Agreement. Therefore, upon the death of the Insured, the Insured's
beneficiary(ies) (designated in accordance with Paragraph III) shall
receive the death benefit provided herein as if the Insured had died
while employed by the Company, whether or not such Insured remains
employed by the Company.
4
<PAGE> 5
Cause for this Plan and Agreement shall mean, any of the following that
result in a material adverse effect on the Company: (i) gross
negligence or gross neglect; (ii) conviction for a felony involving
fraud or dishonesty; (iii) a breach of fiduciary duty involving
personal profit; or (iv) excessive absenteeism without approval of the
employer (provided such absenteeism is not caused by disability). If a
dispute arises as to discharge for "cause", such dispute shall be
resolved by arbitration as set forth in the Executive Retention Plan
and Agreement.
XV. AMENDMENT OR REVOCATION
It is agreed by and between the parties hereto that, during the
lifetime of the Insured, this Plan and Agreement may be amended or
revoked at any time or times, in whole or in part, by the mutual
written consent of the Insured and the Company.
XVI. EFFECTIVE DATE
The Effective Date of this Plan and Agreement shall be
____________________.
XVII. SEVERABILITY AND INTERPRETATION
If a provision of this Plan and Agreement is held to be invalid or
unenforceable, the remaining provisions shall nonetheless be
enforceable according to their terms. Further, in the event that any
provision is held to be overbroad as written, such provision shall be
deemed amended to narrow its application to the extent necessary to
make the provision enforceable according to law and enforced as
amended.
XVIII. APPLICABLE LAW
The validity and interpretation of this Plan and Agreement shall be
governed by the laws of the Commonwealth of Virginia.
Executed at ____________, ____________ this ______ day of _____________, ______.
FIRST COMMUNITY BANCSHARES, INC.
Bluefield, Virginia
___________________________ By:_________________________________
Witness Title
___________________________ ____________________________________
Witness Insured
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<PAGE> 6
BENEFICIARY DESIGNATION FORM
FOR THE INSURANCE ENDORSEMENT METHOD
SPLIT DOLLAR PLAN AND AGREEMENT
PRIMARY DESIGNATION:
NAME ADDRESS RELATIONSHIP
---- ------- ------------
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SECONDARY (CONTINGENT) DESIGNATION:
- ------------------------------------------------------------------------
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All sums payable under the Life Insurance Endorsement Method Split Dollar Plan
and Agreement by reason of my death shall be paid to the Primary Beneficiary, if
he or she survives me, and if no Primary Beneficiary shall survive me, then to
the Secondary (Contingent) Beneficiary.
- ---------------------------------- ------------------------------------
Signature of Participant Date
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