Document:

EX-10.12

 Exhibit 10.12 

SERVICES AND SECONDMENT AGREEMENT 

among 
 PENNTEX
MIDSTREAM PARTNERS, LLC, 
 PENNTEX MIDSTREAM MANAGEMENT COMPANY, LLC, 

PENNTEX MIDSTREAM GP, LLC 

and 
 PENNTEX MIDSTREAM
PARTNERS, LP 
 Dated as of [—], 2015 

 TABLE OF CONTENTS 

 

							
	 	  	 	  	Page	 
	ARTICLE 1 DEFINITIONS; INTERPRETATION	  	 	1	  
			
	 1.1
	  	Definitions	  	 	1	  
	 1.2
	  	Interpretation	  	 	1	  
	 1.3
	  	Legal Representation of Parties	  	 	2	  
	 1.4
	  	Titles and Headings	  	 	2	  
		
	ARTICLE 2 SECONDMENT	  	 	2	  
			
	 2.1
	  	Provided Personnel	  	 	2	  
	 2.2
	  	Period of Secondment	  	 	2	  
	 2.3
	  	Withdrawal, Departure or Resignation	  	 	3	  
	 2.4
	  	Termination of Secondment	  	 	3	  
	 2.5
	  	Supervision	  	 	3	  
	 2.6
	  	Provided Personnel Qualifications; Approval	  	 	4	  
	 2.7
	  	Workers Compensation	  	 	4	  
	 2.8
	  	Benefit Plans	  	 	4	  
		
	ARTICLE 3 REIMBURSEMENT FOR PROVIDED PERSONNEL	  	 	4	  
			
	 3.1
	  	Reimbursement for Provided Personnel	  	 	4	  
	 3.2
	  	Provided Personnel Expenses	  	 	4	  
	 3.3
	  	Adjustments for Period of Secondment	  	 	5	  
	 3.4
	  	Adjustments for Shared Services	  	 	5	  
		
	ARTICLE 4 ALLOCATION; RECORDS	  	 	5	  
			
	 4.1
	  	Allocation; Records	  	 	5	  
		
	ARTICLE 5 GENERAL AND ADMINISTRATIVE SERVICES	  	 	5	  
			
	 5.1
	  	General and Administrative Services Provided by Development	  	 	5	  
		
	ARTICLE 6 TERM; DEFAULT AND TERMINATION	  	 	8	  
			
	 6.1
	  	Term	  	 	8	  
	 6.2
	  	Default	  	 	8	  
	 6.3
	  	Termination	  	 	8	  
		
	ARTICLE 7 INDEMNIFICATION	  	 	8	  
			
	 7.1
	  	Indemnification by Development and Subsidiaries	  	 	8	  
	 7.2
	  	Indemnification Procedures	  	 	9	  
		
	ARTICLE 8 GENERAL PROVISIONS	  	 	10	  
			
	 8.1
	  	Accuracy of Recitals	  	 	10	  
	 8.2
	  	Notices	  	 	10	  
	 8.3
	  	Further Assurances	  	 	11	  
	 8.4
	  	Modifications	  	 	11	  
	 8.5
	  	No Third Party Beneficiaries	  	 	11	  

							
	 8.6
		Relationship of the Parties		 	11	  
	 8.7
		Assignment		 	11	  
	 8.8
		Binding Effect		 	11	  
	 8.9
		Counterparts		 	11	  
	 8.10
		Time of the Essence		 	11	  
	 8.11
		Governing Law		 	11	  
	 8.12
		Delay or Partial Exercise Not Waiver		 	11	  
	 8.13
		Entire Agreement		 	11	  
	 8.14
		Waiver		 	12	  
	 8.15
		Signatories Duly Authorized		 	12	  
	 8.16
		Incorporation of Exhibits and Schedules by References		 	12	  
	 8.17
		Arbitration		 	12	  

 SCHEDULES AND EXHIBITS 
  

			
	Schedule 5.1(a)		General and Administrative Services Provided by Development
	Exhibit A		Definitions
	Exhibit B		Provided Personnel
	Exhibit C		Addition/Removal/Change of Responsibility of Provided Personnel Form

  
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 SERVICES AND SECONDMENT AGREEMENT 

This Services and Secondment Agreement (“Agreement”), dated as of [•], 2015 (the “Effective
Date”), is entered into among PennTex Midstream Partners, LLC, a Delaware limited liability company (“Development”), PennTex Midstream Management Company, LLC, a Delaware limited liability company
(“Admin”), PennTex Midstream GP, LLC, a Delaware limited liability company (the “General Partner”), and PennTex Midstream Partners, LP, a Delaware limited partnership (the
“Partnership”). Each of Development, Admin, the General Partner and the Partnership is sometimes referred to herein as a “Party” and collectively as the “Parties.” 

RECITALS: 
 WHEREAS, the
General Partner is the sole general partner of the Partnership; 
 WHEREAS, the Partnership owns 100% of the limited liability company
interests in PennTex Midstream Operating, LLC, a Delaware limited liability company (“Midstream Operating”); 

WHEREAS, PennTex North Louisiana, LLC, a Delaware limited liability company (“PennTex Operating”), owns and will
operate certain midstream natural gas and natural gas liquids gathering, processing and transportation assets, including natural gas processing plants located in Lincoln Parish, Louisiana and certain related pipelines (collectively, the
“Assets”); 
 WHEREAS, pursuant to that certain Contribution, Conveyance and Assumption Agreement, dated as of
[•], 2015, (i) PennTex NLA Holdings, LLC, a Delaware limited liability company, and MRD WHR LA Midstream LLC, a Delaware limited liability company, have contributed their respective limited liability company interests in PennTex
Operating to the Partnership and (ii) the Partnership has contributed all of such limited liability company interests in PennTex Operating to Midstream Operating; 

WHEREAS, Admin desires to second to the General Partner certain personnel who will be responsible for managing and operating the Assets; and

 WHEREAS, Development will provide the General Partner, on behalf of the Partnership Group, certain centralized partnership and
administrative services. 
 NOW THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, and
other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows: 

ARTICLE 1 
 DEFINITIONS;
INTERPRETATION 
 1.1 Definitions. As used in this Agreement, (a) the terms defined in this Agreement will have the meanings
so specified, and (b) capitalized terms not defined in this Agreement will have the meanings ascribed to those terms on Exhibit A to this Agreement. 

1.2 Interpretation. In this Agreement, unless a clear contrary intention appears: (a) the singular includes the plural and vice
versa; (b) reference to any Person includes such Person’s successors and assigns but, in the case of a Party, only if such successors and assigns are permitted by this Agreement, and reference to a Person in a particular capacity excludes
such Person in any other capacity; (c) reference to any gender includes each other gender; (d) reference to any agreement (including this Agreement), document or instrument means such agreement, document, or instrument as amended or
modified and in effect from time to time in accordance with the terms thereof and, if applicable, the terms of this Agreement; (e) reference to any Section means such Section of this Agreement, and references in any 

  
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Section or definition to any clause means such clause of such Section or definition; (f) “hereunder,” “hereof,” “hereto” and words of similar import will be
deemed references to this Agreement as a whole and not to any particular Section or other provision hereof or thereof; (g) “including” (and with correlative meaning “include”) means including without limiting the generality
of any description preceding such term; and (h) relative to the determination of any period of time, “from” means “from and including,” “to” means “to but excluding” and “through” means
“through and including.” 
 1.3 Legal Representation of Parties. This Agreement was negotiated by the Parties with the
benefit of legal representation, and any rule of construction or interpretation requiring this Agreement to be construed or interpreted against any Party merely because such Party drafted all or a part of such Agreement will not apply to any
construction or interpretation hereof or thereof. 
 1.4 Titles and Headings. Section titles and headings in this Agreement are
inserted for convenience of reference only and are not intended to be a part of, or to affect the meaning or interpretation of, this Agreement. 

ARTICLE 2 
 SECONDMENT

 2.1 Provided Personnel. Subject to the terms of this Agreement, Admin agrees to second, or cause its Affiliates to second, to
the General Partner, and the General Partner agrees to accept the Secondment of, those certain specifically identified individuals (the “Provided Personnel”) listed in Exhibit B (the “Provided Personnel
Schedule”) for the purpose of performing job functions related to the Assets (the “Personnel Services”). The Provided Personnel will remain employees of Admin during the Period of Secondment; however, at all
times during the Period of Secondment (and with respect to Shared Provided Personnel, during those times that the Shared Provided Personnel are performing services for the General Partner hereunder), the Provided Personnel shall work solely under
the direction, supervision and control of the General Partner. No Provided Personnel shall have authority or apparent authority to act on behalf of Admin during any period such individual is under the direction, supervision or control of the General
Partner. Individuals may be added or removed from the Provided Personnel Schedule from time to time by the execution by Admin and the General Partner of a completed “Addition/Removal/Change of Responsibility of Provided Personnel” form,
the form of which is attached to this Agreement as Exhibit C, which will be fully binding on Admin and the General Partner for all purposes under this Agreement. Those rights and obligations of Admin and the General Partner under this
Agreement that relate to individuals that were on the Provided Personnel Schedule but then later removed from the Provided Personnel Schedule, which rights and obligations accrued before the removal of such individual, will survive the removal of
such individual from the Provided Personnel Schedule to the extent necessary to enforce such rights and obligations. 
 2.2 Period of
Secondment. Admin will second, or cause its applicable Affiliate (such affiliate, a “Seconding Affiliate”) to second, to the General Partner the Provided Personnel on the Effective Date and continuing, during the period
(and only during the period) that the Provided Personnel are performing services for the General Partner, until the earlier of: 

(a) the end of the term of this Agreement; 

(b) such end date as is mutually agreed in writing by Admin and the General Partner; 

(c) a withdrawal, departure, resignation or termination of such Provided Personnel under Section 2.3; or 

  
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 (d) a termination of Secondment of such Provided Personnel under
Section 2.4. 
 The period of time that any Provided Personnel is provided by Admin to the General Partner is referred to in
this Agreement as the “Period of Secondment.” At the end of the Period of Secondment for any Provided Personnel, such Provided Personnel will no longer be subject to the supervision, control or direction of the General
Partner. Admin and the General Partner acknowledge that certain of the Provided Personnel may also provide services to Admin and its Affiliates in connection with their respective operations unrelated to the General Partner (“Shared
Provided Personnel”), and Admin and the General Partner intend that such Shared Provided Personnel shall only be seconded to the General Partner during those times that the Shared Provided Personnel are performing services for the
General Partner hereunder. 
 2.3 Withdrawal, Departure or Resignation. If any Provided Personnel tenders his resignation to Admin as
an employee of Admin, Admin will promptly notify the General Partner. During the Period of Secondment of any Provided Personnel, Admin will not voluntarily withdraw or terminate any Provided Personnel except for terminations for cause (as reasonably
determined by Admin) or with the written consent of the General Partner (which may be through the execution of a completed “Addition/Removal/Change of Responsibility of Provided Personnel” form as set forth on Exhibit C), such
consent not to be unreasonably withheld, conditioned or delayed. Upon the termination of employment, the Provided Personnel will cease performing services for the General Partner. 

2.4 Termination of Secondment. The General Partner will have the right to terminate the Secondment to the General Partner of any
Provided Personnel for any reason at any time in accordance with the policies and procedures of Admin. Upon the termination of the Period of Secondment for any Provided Personnel other than the Shared Provided Personnel, the General Partner shall be
responsible for reimbursing Admin for any and all severance costs or other expenses (which, for the avoidance of doubt, shall constitute Provided Personnel Expenses hereunder) associated with the termination of such Provided Personnel’s
employment by Admin, provided that such termination of employment occurs within thirty (30) calendar days following the termination of the applicable Period of Secondment. Upon the termination of a Secondment, the Provided Personnel will cease
performing services for the General Partner. 
 2.5 Supervision. During the Period of Secondment, the General Partner shall: 

(a) be ultimately and fully responsible for the daily work assignments of the Provided Personnel (and with respect to Shared
Provided Personnel, during those times that the Shared Provided Personnel are performing services for the General Partner hereunder), including supervision of their the day-to-day work activities and performance consistent with the purposes stated
in Section 2.1 and the job functions set forth in the Provided Personnel Schedule; 
 (b) subject to Admin’s
policies and procedures, set the hours of work and the holidays and vacation schedules for Provided Personnel (other than with respect to Shared Provided Personnel, as to which the General Partner and Admin shall jointly determine); and 

(c) have the right to determine training which will be received by the Provided Personnel. 

In the course and scope of performing any Provided Personnel job functions, the Provided Personnel will be integrated into the organization of
the General Partner, will report into the General Partner’s management structure and will be under the direct management and supervision of the General Partner. 

  
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 2.6 Provided Personnel Qualifications; Approval. Admin will provide such suitably
qualified and experienced Provided Personnel as Admin is able to make available to the General Partner, and the General Partner will have the right to approve such Provided Personnel. 

2.7 Workers Compensation. At all times, Admin will maintain workers’ compensation or similar insurance (either through an insurance
company or self-insured arrangement) applicable to the Provided Personnel, as required by applicable state and federal workers’ compensation and similar laws, and will name the General Partner as an additional named insured under each such
insurance policy. 
 2.8 Benefit Plans. Neither the General Partner nor any Partnership Group Member shall be deemed to be a
participating employer in any Benefit Plan during the Period of Secondment. Subject to the General Partner’s reimbursement obligations hereunder, Admin (or its ERISA Affiliate) shall remain solely responsible for all obligations and liabilities
arising under the express terms of the Benefit Plans, and the Provided Personnel will be covered under the Benefit Plans subject to and in accordance with their respective terms and conditions, as they may be amended from time to time. Admin and its
ERISA Affiliates may amend or terminate any Benefit Plan in whole or in part at any time. During the Period of Secondment, neither the General Partner nor any Partnership Group Member shall assume any Benefit Plan or have any obligations,
liabilities or rights arising under the Benefit Plans, in each case except for cost reimbursement pursuant to this Agreement. 
 ARTICLE 3

 REIMBURSEMENT FOR PROVIDED PERSONNEL 

3.1 Reimbursement for Provided Personnel. On or before the fifteenth (15th) business day after the end of each month during the
Period of Secondment, Admin shall send an itemized invoice (in a form mutually agreed upon by the General Partner and Admin) to the General Partner detailing all reimbursable expenses under Section 3.2, as incurred by Admin with respect
to the Provided Personnel in connection with the performance of the Personnel Services during the preceding month (the “Services Reimbursement”). The General Partner shall, within fifteen (15) business days of receipt,
pay such invoice, except for any amounts therein being disputed in good faith by the General Partner. Any amounts that the General Partner has disputed in good faith and that are later determined by any arbitrator, court or other competent authority
having jurisdiction, or by agreement of Admin and the General Partner, to be owing from the General Partner to Admin shall be paid in full within fifteen (15) business days of such determination, together with interest thereon at the Interest
Rate from the date due under the original invoice until the date of payment. 
 3.2 Provided Personnel Expenses. Subject to
Section 3.3 and Section 3.4, the Services Reimbursement for each month during the Period of Secondment shall include all reasonable costs and expenses incurred for such month by Admin for the Provided Personnel (collectively,
the “Provided Personnel Expenses”), including, but not limited to, the following: 
 (a) salaries,
wages, bonuses or commissions (including payroll and withholding taxes associated therewith) of Provided Personnel; 
 (b)
the cost of providing the Benefit Plans to Provided Personnel; 
 (c) the cost of providing workers’ compensation
coverage and/or benefits to Provided Personnel; and 
 (d) reimbursable business expenses of Provided Personnel. 

  
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 Where it is not reasonably practicable to determine the amount of any Provided Personnel
Expenses, Admin and the General Partner shall mutually agree on the method of determining or estimating such amount, which may include the application of an agreed percentage benefit load to a Provided Personnel’s salary and wages in order to
value certain of the benefits listed above. If the actual amount of any cost or expense, once known, varies from the estimate used for billing purposes hereunder, the difference, once determined, shall be reflected as either a credit or additional
charge in the next monthly invoice issued by Admin, or in such manner as may otherwise be agreed between Admin and the General Partner. 

3.3 Adjustments for Period of Secondment. It is understood and agreed that the General Partner shall be liable for Provided Personnel
Expenses to the extent, and only to the extent, they are attributable to the Period of Secondment. As such, if the Period of Secondment begins on other than the first day of a month or ends on other than the last day of a month, the Provided
Personnel Expenses for such month shall be prorated based on the number of days during such month that the Period of Secondment was in effect. 

3.4 Adjustments for Shared Services. With respect to each Provided Personnel who is a Shared Provided Personnel, Admin (or its
applicable Seconding Affiliate) will determine in good faith the percentage of such Shared Provided Personnel’s time spent providing services to the General Partner (the “Allocation Percentage”). For each month during
the Period of Secondment, the amount of the Services Reimbursement payable by the General Partner with respect to each Shared Provided Personnel shall be calculated by multiplying the Provided Personnel Expenses for such Shared Provided Personnel by
the Allocation Percentage for such Shared Provided Personnel. 
 ARTICLE 4 

ALLOCATION; RECORDS 
 4.1
Allocation; Records. Admin will use commercially reasonable efforts to maintain an allocation schedule reflecting the direct and indirect costs of the Provided Personnel Expenses based on the services that the Provided Personnel have provided
to the General Partner in relation to the Assets. The General Partner will use commercially reasonable efforts to keep and maintain books/records reflecting hours worked and costs and expenses incurred in connection with each of the Provided
Personnel. The General Partner and its representatives will have the right to audit such records and such other records as the General Partner may reasonably require in connection with its verification of the Provided Personnel Expenses during
regular business hours and on reasonable prior notice. 
 ARTICLE 5 

GENERAL AND ADMINISTRATIVE SERVICES 

5.1 General and Administrative Services Provided by Development. 

(a) Development agrees to provide, and agrees to cause its Affiliates to provide, to the General Partner, for the Partnership
Group’s benefit, certain centralized partnership and administrative services related to the Partnership’s ownership and operation of the Assets, including, without limitation, the general and administrative services listed on
Schedule 5.1(a) to this Agreement (collectively, the “G&A Services”). At the General Partner’s request from time to time, Development shall consult with the General Partner and provide such information as may be
reasonably requested by the General Partner with respect to the performance of the G&A Services. The Partnership shall have the right to terminate any or all of the G&A Services, without penalty, upon thirty (30) days’ prior
written notice to Development. 
 (b) As consideration for the provision of G&A Services, the Partnership will pay
Development an administrative fee (the “Administrative Fee”). For the period from the Effective Date through the end of the 2016 fiscal year, the Administrative Fee shall be payable on or before the fifteenth (15th) business
day of each month and be calculated as follows: 
 (i) for the period from and including the Effective Date to and including [•], 2015
the Administrative Fee shall be $[•] per day; 
 (ii) for each calendar month after [•], 2015 to and including the Mt. Olive
Commencement Month, the Administrative Fee shall be $[333,333] per month; 
 (iii) for each calendar month after the Mt. Olive Commencement
Month to and including the month of December 2015, the Administrative Fee shall be $[583,333] per month; and 
 (iv) for each calendar month
during the 2016 fiscal year, the Administrative Fee shall be $[667,000]. 
         (c) With respect
to the 2017 fiscal year and each subsequent year through the end of the term of this Agreement, Development and the General Partner shall negotiate in good faith and mutually agree on an annual Administrative Fee for the upcoming year, which shall
be payable in equal monthly installments on or before the fifteenth (15th) business day of each month. If Development and the General Partner are unable to agree on the amount of the Administrative Fee for an upcoming year on or prior to December 1
of the preceding year, then the Administrative Fee for such upcoming year shall equal the Administrative Fee for the preceding year (or, with respect to the 2017 fiscal year, $8.0 million) as increased by a percentage equal to the change in the
Producer Price Index over the previous 12 calendar months; provided, however, that if Development and the General Partner are unable to agree on the amount of the Administrative Fee on or prior to March 31, then Development shall have
the right to terminate the G&A Services, without penalty. If the Agreement is not terminated and Development and the General Partner agree on the amount of the Administrative Fee, then Development shall thereafter charge such agreed-upon
Administrative Fee for the remainder of the year. 

  
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 (d) The Partnership shall reimburse Development for all other direct or allocated
costs and expenses incurred by Development on behalf of the Partnership Group including, but not limited to: 
 (i) salaries, wages, bonuses
or commissions (including payroll and withholding taxes associated therewith) of employees of Development and its Affiliates (other than the Provided Personnel) who devote more than 50% of their business time to the business and affairs of the
Partnership Group, to the extent, but only to the extent, such employees perform services for the Partnership Group as determined in good faith by Development based on Development’s reasonable allocation methodologies as in effect from time to
time; 
 (ii) the cost of employee benefits relating to employees of Development and its Affiliates (other than the Provided Personnel) who
devote more than 50% of their business time to the business and affairs of the Partnership Group, including 401(k), pension, bonuses and health insurance benefits, to the extent, but only to the extent, such employees perform services for the
Partnership Group as determined in good faith by Development based on Development’s reasonable allocation methodologies as in effect from time to time; 

  
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 (iii) any expenses incurred or payments made by Development for insurance coverage with respect
to the Assets or the business of the Partnership Group; 
 (iv) all expenses and expenditures incurred by Development as a result of the
Partnership becoming and continuing as a publicly traded entity, including, but not limited to, costs associated with annual and quarterly reports, independent auditor fees, partnership governance and compliance, registrar and transfer agent fees,
tax return and Schedule K-1 preparation and distribution, legal fees and independent director compensation; 
 (v) all sales, use,
excise, value added or similar taxes, if any, that may be applicable from time to time with respect to the G&A Services provided by Development to the Partnership Group pursuant to Section 5.1(a); and 

(vi) all costs for outside services, including any third-party legal, consulting, tax and accounting services not included in clause
(iv) above, that are incurred for the Partnership Group’s benefit. 
 On or before the fifteenth (15th) business day
after the end of each month during the term of this Agreement, Development shall send an itemized invoice (in a form mutually agreed upon by Development and the Partnership) to the Partnership detailing all reimbursable expenses under this
Section 5.1(d) incurred by Development during the preceding month. The Partnership shall, within fifteen (15) business days of receipt, pay such invoice, except for any amounts therein being disputed in good faith by the
Partnership. Any amounts that the Partnership has disputed in good faith and that are later determined by any court or other competent authority having jurisdiction, or by agreement of Development and the Partnership, to be owing from the
Partnership to Development shall be paid in full within fifteen (15) business days of such determination, together with interest thereon at the Interest Rate from the date due under the original invoice until the date of payment. For the
avoidance of doubt, the costs and expenses set forth in this Section 5.1(d) shall be paid by the Partnership in addition to, and not as a part of or included in, the Administrative Fee. 

Development does not make any representations or warranties of any kind, express or implied, with respect to the services (including the
G&A Services) to be provided under this Article 5, except that the services shall be provided in a reasonably timely manner by personnel that Development deems to be competent and qualified to perform such services. 

ARTICLE 6 
 TERM; DEFAULT
AND TERMINATION 
 6.1 Term. The term of this Agreement will commence on the Effective Date and will continue for an initial
period of ten (10) years. Upon the expiration of the initial ten-year period, the term of this Agreement shall automatically extend for an additional five-year period, unless either Party provides at least 30 days’ prior written notice to
the other Party prior to the expiration of such initial period that the Party wishes for this Agreement to expire at the end of the initial ten-year period. After the initial five-year renewal period, the term of this Agreement shall automatically
extend for additional five-year periods, unless either Party provides prior written notice at least 30 days prior to the expiration of the applicable five-year period, that the Party wishes for this Agreement to expire at the end of such five-year
period. Upon proper notice by a Party to the other Party, in accordance with this Article 6, that the Party 

  
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wishes for this Agreement to expire on the expiration of the applicable five- or ten-year period, this Agreement shall not automatically extend, but shall instead expire upon the expiration of
the five- or ten-year period and only those provisions that, by their terms, expressly survive this Agreement shall so survive. 
 6.2
Default. A Party shall be in default under this Agreement if: (a) it fails to perform a material obligation and (b) such failure continues for a period of thirty (30) days after notice thereof or, if such failure cannot
reasonably be cured within such thirty (30) day period, such longer period (not to exceed sixty (60) days) so long as such Party is diligently and continuously engaged in curing such failure. In the event a Party is in default of this
Agreement, the non-defaulting Party may terminate this Agreement upon notice to the defaulting Party or submit any claims regarding the defaulting Party’s non-performance to arbitration in accordance with Section 8.17, which, for
the avoidance of doubt, permits the non-defaulting Party to seek interim relief and specific performance in connection with such arbitration proceedings. 

6.3 Termination. This Agreement may be terminated as follows, and only those provisions that, by their terms, expressly survive this
Agreement shall so survive: 
 (a) by the Partnership Group at any time upon thirty (30) days’ prior written notice
to Admin or Development; 
 (b) by any Party upon a default of this Agreement by any other Party that has an obligation to
such Party; or 
 (c) by any Party at any time upon a Partnership Change of Control. 

Any termination pursuant to this Section 6.3 shall be evidenced by a notice given by the Party effectuating such termination. 

ARTICLE 7 

INDEMNIFICATION 
 7.1
Indemnification by Development and Subsidiaries. Development and its Subsidiaries shall indemnify, protect and defend the Partnership Group and all of the officers, directors, employees and agents of any Partnership Group Member (each, an
“Indemnified Party” and, collectively, the “Indemnified Parties”) against, and hold the Indemnified Parties harmless from, any and against all losses (including lost profits), costs, damages, injuries,
taxes, penalties, interests, expenses, obligations, claims and liabilities (joint or severable) of any kind or nature whatsoever (collectively, the “Claims”) that are incurred by such Indemnified Parties in connection with,
relating to or arising out of (a) the breach by Development or any of its Subsidiaries, or their respective directors, officers, employees, agents, contractors, subcontractors or consultants of any term or condition of this Agreement, or
(b) the performance of any services under this Agreement; provided, however, that Development and its Subsidiaries shall not be obligated to indemnify, reimburse, defend or hold harmless any Indemnified Party for any Claims
incurred by such Indemnified Party in connection with, relating to or arising out of (i) a breach by such Indemnified Party of this Agreement, (ii) the gross negligence, willful misconduct, bad faith or reckless disregard of such
Indemnified Party with respect to any services provided under this Agreement or (iii) the fraudulent or dishonest acts of such Indemnified Party. 

  
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 7.2 Indemnification Procedures. 

(a) An Indemnified Party agrees that promptly after it becomes aware of facts giving rise to a Claim under this Article
7, it will provide notice thereof to Admin or Development, as applicable, pursuant to Section 7.1 (the “Indemnifying Party”), specifying the nature of and specific basis for such claim, copies of all
correspondence with third parties, Governmental Authorities or other individuals relating to the claim, and other relevant information reasonably requested by the Indemnifying Party. 

(b) The Indemnifying Party shall have the right to control all aspects of the response to and/or defense of (and any
counterclaims with respect to) any Claims brought against the Indemnified Party that are covered by the indemnification under this Article 7, including correspondence and negotiation with Governmental Authorities, the selection of counsel and
engineering and other consultants, determination of the scope of and approach to any investigation or remediation, determination of whether to appeal any decision of any court, determination of whether to enter into any voluntary agreement with any
Governmental Authority, and the settling of any such matter or any issues relating thereto; provided, however, that no such settlement shall be entered into without the consent of the Indemnified Party unless it includes a full release
of the Indemnified Party from such matter or issues, as the case may be. 
 (c) The Indemnified Party agrees to cooperate
fully with the Indemnifying Party, with respect to all aspects of the defense of any Claims covered by the indemnification under this Article 7, including the prompt furnishing to the Indemnifying Party of any correspondence or other notice
relating thereto that the Indemnified Party may receive, permitting the name of the Indemnified Party to be utilized in connection with such defense, the making available to the Indemnifying Party of any files, records or other information of the
Indemnified Party that the Indemnifying Party considers relevant to such defense and the making available to the Indemnifying Party of any employees of the Indemnified Party; provided, however, that in connection therewith the
Indemnifying Party agrees to use reasonable efforts to minimize the impact thereof on the operations of the Indemnified Party and further agrees to maintain the confidentiality of all files, records, and other information furnished by the
Indemnified Party pursuant to this Section 7.2. In no event shall the obligation of the Indemnified Party to cooperate with the Indemnifying Party as set forth in the immediately preceding sentence be construed as imposing upon the
Indemnified Party an obligation to hire and pay for counsel in connection with the defense of any Claims covered by the indemnification set forth in this Article 7; provided, however, that the Indemnified Party may, at its own option,
cost and expense, hire and pay for counsel in connection with any such defense. The Indemnifying Party agrees to keep any such counsel hired by the Indemnified Party informed as to the status of any such defense, but the Indemnifying Party shall
have the right to retain sole control over such defense. 
 (d) In determining the amount of any loss, cost, damage or
expense for which the Indemnified Party is entitled to indemnification under this Agreement, the gross amount of the indemnification will be reduced by (i) any insurance proceeds realized by the Indemnified Party, and such correlative insurance
benefit shall be net of any incremental insurance premiums that become due and payable by the Indemnified Party as a result of such claim and (ii) all amounts recovered by the Indemnified Party under contractual indemnities from third Persons.

 ARTICLE 8 
 GENERAL
PROVISIONS 
 8.1 Accuracy of Recitals. The paragraphs contained in the recitals to this Agreement are incorporated in this
Agreement by this reference, and the Parties to this Agreement acknowledge the accuracy thereof. 

  
 9 

 8.2 Notices. Any notice, demand, or communication required or permitted under this
Agreement shall be in writing and delivered personally, by reputable courier, or by facsimile, and shall be deemed to have been duly given as of the date and time reflected on the delivery receipt if delivered personally or sent by reputable courier
service, or on the automatic telecopier receipt if sent by telecopier, addressed as follows: 
 Development: 

PennTex Midstream Partners, LLC 

11931 Wickchester Ln., Suite 300 

Houston, TX 77043 
 Attn:
Stephen M. Moore 
 Facsimile: (832) 456-4050 

Admin: 
 PennTex
Midstream Management Company, LLC 
 11931 Wickchester Ln., Suite 300 

Houston, TX 77043 
 Attn:
Stephen M. Moore 
 Facsimile: (832) 456-4050 

General Partner: 

PennTex Midstream GP, LLC 

11931 Wickchester Ln., Suite 300 

Houston, TX 77043 
 Attn:
Stephen M. Moore 
 Facsimile: (832) 456-4050 

Partnership: 
 PennTex
Midstream Partners, LP 
 11931 Wickchester Ln., Suite 300 

Houston, TX 77043 
 Attn:
Stephen M. Moore 
 Facsimile: (832) 456-4050 

A Party may change its address for the purposes of notices hereunder by giving notice to the other Parties specifying such changed address in the manner
specified in this Section 8.2. 
 8.3 Further Assurances. The Parties agree to execute such additional instruments,
agreements and documents, and to take such other actions, as may be necessary to effect the purposes of this Agreement. 
 8.4
Modifications. Any actions or agreement by the Parties to modify this Agreement, in whole or in part, shall be binding upon the Parties, so long as such modification shall be in writing and shall be executed by all Parties with the same
formality with which this Agreement was executed. 
 8.5 No Third Party Beneficiaries. No Person not a Party to this Agreement will
have any rights under this Agreement as a third party beneficiary or otherwise, including, without limitation, Provided Personnel. 

  
 10 

 8.6 Relationship of the Parties. Nothing in this Agreement will constitute any Partnership
Group Member, Development, Admin or their respective Affiliates as members of any partnership, joint venture, association, syndicate or other entity. 

8.7 Assignment. No Party will, without the prior written consent of the other Parties, which consent shall not be unreasonably withheld,
assign, mortgage, pledge or otherwise convey this Agreement or any of its rights or duties hereunder; provided, however, that (a) a Party may assign or convey this Agreement without the prior written consent of the other Parties
to an Affiliate and (b) the Partnership may make a collateral assignment of this Agreement to secure financing for the Partnership Group without the prior written consent of the other Parties. Unless written consent is not required under this
Section 8.7, any attempted or purported assignment, mortgage, pledge or conveyance by a Party without the written consent of the other Parties shall be void and of no force and effect. No assignment, mortgage, pledge or other conveyance
by a Party shall relieve the Party of any liabilities or obligations under this Agreement. 
 8.8 Binding Effect. This Agreement will
be binding upon, and will inure to the benefit of, the Parties and their respective successors, permitted assigns and legal representatives. 

8.9 Counterparts. This Agreement may be executed in any number of counterparts, each of which will be deemed to be an original, and all
of which together shall constitute one and the same Agreement. Each Party may execute this Agreement by signing any such counterpart. 
 8.10
Time of the Essence. Time is of the essence in the performance of this Agreement. 
 8.11 Governing Law. This Agreement shall
be deemed to be a contract made under, and for all purposes shall be construed in accordance with and governed by, the laws of the State of Delaware excluding its conflicts of laws principles that would apply the laws of another jurisdiction, except
that the arbitration agreement in Section 8.17 and any arbitration shall be governed by the Federal Arbitration Act, Chapters 1 and 2, to the exclusion of state law inconsistent therewith. 

8.12 Delay or Partial Exercise Not Waiver. No failure or delay on the part of any Party to exercise any right or remedy under this
Agreement will operate as a waiver thereof; nor shall any single or partial exercise of any right or remedy under this Agreement preclude any other or further exercise thereof or the exercise of any other right or remedy granted hereby or any
related document. The waiver by a Party of a breach of any provisions of this Agreement will not constitute a waiver of a similar breach in the future or of any other breach or nullify the effectiveness of such provision. 

8.13 Entire Agreement. This Agreement constitutes and expresses the entire agreement between the Parties with respect to the subject
matter hereof. All previous discussions, promises, representations and understandings relative thereto are hereby merged in and superseded by this Agreement. 

8.14 Waiver. To be effective, any waiver or any right under this Agreement will be in writing and signed by a duly authorized officer or
representative of the Party bound thereby. 
 8.15 Signatories Duly Authorized. Each of the signatories to this Agreement represents
that he is duly authorized to execute this Agreement on behalf of the Party for which he is signing, and that such signature is sufficient to bind the Party purportedly represented. 

  
 11 

 8.16 Incorporation of Exhibits and Schedules by References. Any reference herein to any
exhibit or schedule to this Agreement will incorporate it herein, as if it were set out in full in the text of this Agreement. 
 8.17
Arbitration. Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration
Rules and judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The place of arbitration shall be Houston, Texas, and the hearings shall be conducted in Houston, Texas. If the claim in the demand
for arbitration is less than $1 million, there shall be one (1) arbitrator; otherwise, there shall be three (3) arbitrators. In the case of one (1) arbitrator, the arbitrator shall be jointly appointed by the Parties within thirty
(30) days of the filing of the demand for arbitration. In the case of three (3) arbitrators, one shall be appointed by the claimant(s) in the demand for arbitration, the second appointed by the respondent(s) within thirty (30) days of
receipt of the demand for arbitration, and the third, who shall act as chairman of the arbitral tribunal, appointed by the Parties within thirty (30) days of the appointment of the second arbitrator. If any arbitrators are not appointed within
these time periods, the American Arbitration Association shall make the appointment(s). All arbitrators must (a) be neutral parties who have never been officers, directors or employees of any Partnership Group Member, Development, Admin or
their respective Affiliates and (b) have not less than seven years’ experience in the energy industry. An arbitral tribunal constituted under this agreement may, unless consolidation would prejudice the rights of any Party, consolidate an
arbitration hereunder with arbitration under the Omnibus Agreement if the arbitration proceedings raise common questions of law or fact. If two or more arbitral tribunals under these agreements issue consolidation orders, the order issued first
shall prevail. The award shall be made within twelve months of the filing of the notice of intention to arbitrate (demand), and the arbitrators shall agree to comply with this schedule before accepting appointment. However, this time limit may be
extended by the arbitrators for good cause shown, or by mutual agreement of the Parties. The arbitrators shall have no right to grant or award indirect, consequential, punitive or exemplary damages of any kind. The award of the arbitrators shall be
accompanied by a reasoned opinion. Except as may be required by law, neither a Party nor an arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of the other Parties. 

[Signature page follows] 

  
 12 

 AS WITNESS HEREOF, the Parties have caused this Agreement to be executed by their duly authorized
representatives on the date herein above mentioned. 
  

			
	PennTex Midstream Partners, LLC
		
	By:		  

	Name:		Steven R. Jones
	Title:		Chief Financial Officer
	
	PennTex Midstream Management Company, LLC
		
	By:		  

	Name:		
	Title:		
	
	PennTex Midstream GP, LLC
		
	By:		  

	Name:		Steven R. Jones
	Title:		Chief Financial Officer
	
	PennTex Midstream Partners, LP
	
	By: PennTex Midstream GP, LLC, its general partner
		
	By:		  

	Name:		Steven R. Jones
	Title:		Chief Financial Officer

 Signature Page to Services and Secondment Agreement 

 SCHEDULE 5.1(a) 

General and Administrative Services Provided by Development 

 

	(i)	Executive services of employees of the General Partner who devote less than 50% of their business time to the business and affairs of the Partnership Group 

 

	(ii)	Financial and administrative services (including treasury and accounting) 

  

	(iii)	Information technology 

  

	(iv)	Legal services 

  

	(v)	Health, safety and environmental services 

  

	(vi)	Human resources services 

  

	(vii)	Business development services 

  

	(viii)	Investor relations and government relations 

  

	(ix)	Tax matters 

  

	(x)	Insurance administration 

  
 Schedule 5.1(a) 

 EXHIBIT A 

Definitions 

“Admin” has the meaning set forth in the preamble to this Agreement. 

“Administrative Fee” has the meaning set forth in Section 5.1(b). 

“Affiliate” means, with respect to any Person, (a) any other Person directly or indirectly Controlling,
Controlled By or under common control with such Person, (b) any Person owning or controlling fifty percent (50%) or more of the voting interests of such Person, (c) any officer or director of such Person, or (d) any Person who is
the officer, director, trustee, or holder of fifty percent (50%) or more of the voting interest of any Person described in clauses (a) through (c). For purposes of this definition, the term “controls,” “is
controlled by” or “is under common control with” shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of Voting
Securities, by contract or otherwise. For purposes of this Agreement, no Partnership Group Member shall be deemed to be an Affiliate of Development or Admin nor shall Development or Admin be deemed to be an Affiliate of any Partnership Group Member
or of each other. 
 “Agreement” shall mean this Services and Secondment Agreement, including all Exhibits,
Schedules and amendments to this Agreement. 
 “Applicable Law” means all statutes, regulations, rules, ordinances,
codes, licenses, permits, orders, approvals and rules of common law of each Governmental Authority having jurisdiction over the Parties, including Environmental Laws, all health, building, fire, safety and other codes, ordinances and requirements,
in each case, as amended, and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree, judgment or settlement; in each case, as applicable to any Party or the Assets. 

“Assets” has the meaning set forth in the Recitals to this Agreement. 

“Allocation Percentage” has the meaning set forth in Section 3.4. 

“Benefit Plans” means each employee benefit plan, as defined in Section 3(3) of ERISA, and any other plan,
policy, program, practice, agreement, understanding or arrangement (whether written or oral) providing compensation or other benefits to any Provided Personnel (or to any dependent or beneficiary thereof), including, without limitation, any
equity-based compensation, bonus or incentive compensation, deferred compensation, profit sharing, holiday, cafeteria, medical, disability or other employee benefit plan, program, policy, agreement or arrangement sponsored, maintained, or
contributed to by Admin or any of its ERISA Affiliates, or under which Admin or any of its ERISA Affiliates may have any obligation or liability, whether actual or contingent, in respect of or for the benefit of any Provided Personnel. 

“Claims” has the meaning set forth in Section 7.1. 

“Control” (including with correlative meaning, the term “Controlled by”) means, as used with
respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of a majority of the Voting Securities, by contract or
otherwise. 

  
 Exhibit A-1 

 “Development” has the meaning set forth in the preamble to this
Agreement. 
 “Effective Date” has the meaning set forth in the preamble to this Agreement. 

“Environmental Laws” means all federal, state, and local laws, statutes, rules, regulations, orders, judgments,
ordinances, codes, injunctions, decrees, permits and other legally enforceable requirements and rules of common law now or hereafter in effect, relating to (a) pollution or protection of human health, natural resources, wildlife and the
environment including, without limitation, the federal Comprehensive Environmental Response, Compensation, and Liability Act, the Superfund Amendments Reauthorization Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Federal
Water Pollution Control Act, the Toxic Substances Control Act, the Oil Pollution Act, the Safe Drinking Water Act, the Hazardous Materials Transportation Act, and other environmental conservation and protection laws and the regulations promulgated
pursuant thereto, and any state or local counterparts, each as amended from time to time, and (b) the generation, manufacture, processing, distribution, use, treatment, storage, transport, or handling of any hazardous wastes. 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended. 

“ERISA Affiliate” means any entity that would be treated as a single employer with an Operator under Sections 414(b),
(c) or (m) of the Code or Section 4001(b)(1) of ERISA. 
 “General Partner” has the meaning set forth
in the preamble to this Agreement. 
 “Governmental Authority” means any federal, state, local or foreign government
or any provincial, departmental or other political subdivision thereof, or any entity, body or authority exercising executive, legislative, judicial, regulatory, administrative or other governmental functions or any court, department, commission,
board, bureau, agency, instrumentality or administrative body of any of the foregoing. 
 “Indemnified Party” or
“Indemnified Parties” has the meaning set forth in Section 7.1. 
 “Indemnifying
Party” has the meaning set forth in Section 7.2(a). 
 “Interest Rate” means the lesser of
(i) two percent (2%) over the one month London Interbank Offered Rate (LIBOR) prevailing during the period in question, and (ii) the maximum rate permitted by Applicable Law. 

“Midstream Operating” has the meaning set forth in the Recitals to this Agreement. 

“Mt. Olive Commencement Month” means the calendar month in which the Mt. Olive Plant commences commercial operations.

 “Mt. Olive Plant” means that certain gas processing plant being constructed by the Partnership and its Affiliates
and located at 155 LP&L Road-PVT, Ruston, Louisiana. 
 “Omnibus Agreement” means that certain Omnibus
Agreement, dated as of [l], 2015, by and among the Partnership, the General Partner and Development. 

“Partnership” has the meaning set forth in the preamble to this Agreement. 

“Partnership Change of Control” means Development ceases to Control the General Partner. 

“Partnership Group” means the General Partner, the Partnership and all of the Partnership’s Subsidiaries, treated
as a single consolidated entity. 
 “Partnership Group Member” means any member of the Partnership Group. 

  
 Exhibit A-2 

 “Party” or “Parties” has the meaning set forth in
the preamble to this Agreement. 
 “PennTex Operating” has the meaning set forth in the Recitals to this Agreement.

 “Period of Secondment” has the meaning set forth in Section 2.2. 

“Person” means any individual or any partnership, corporation, limited liability company, trust, or other legal
entity. 
 “Personnel Services” has the meaning set forth in Section 2.1. 

“Producer Price Index” shall have the meaning ascribed to the term “PPI,” as published by the United
States Bureau of Labor Statistics. 
 “Provided Personnel” has the meaning set forth in
Section 2.1. 
 “Provided Personnel Expenses” has the meaning set forth in Section 3.2. 

“Provided Personnel Schedule” has the meaning set forth in Section 2.1. 

“Seconding Affiliate” has the meaning set forth in Section 2.2. 

“Secondment” means each assignment of any Provided Personnel to the General Partner from Admin or its applicable
Seconding Affiliate in accordance with the terms of this Agreement. 
 “Services Reimbursement” has the meaning set
forth in Section 3.1. 
 “Shared Provided Personnel” has the meaning set forth in
Section 2.2. 
 “Subsidiary” means, with respect to any Person, (a) a corporation of which more
than 50% of the voting power of shares entitled (without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned, directly or indirectly, at the date of determination, by
such Person, by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or a Subsidiary of such Person is, at the date of determination, a general or limited partner
of such partnership, but only if such Person, directly or by one or more Subsidiaries of such Person, or a combination thereof, Controls such partnership on the date of determination, or (c) any other Person (other than a corporation or a
partnership) in which such Person, one or more Subsidiaries of such Person, or a combination thereof, directly or indirectly, at the date of determination, has (i) at least a majority ownership interest or (ii) the power to elect or direct
the election of a majority of the directors, managers or other governing body of such Person. 
 “Voting Securities”
of a Person means securities of any class of such Person entitling the holders thereof to vote in the election of, or to appoint, members of the board of directors or other similar governing body of the Person; provided that, if such Person
is a limited partnership, Voting Securities of such Person shall be the general partner interest in such Person. 

  
 Exhibit A-3 

 EXHIBIT B 

Provided Personnel 

In reference to that certain Services and Secondment Agreement, dated as of
[l], 2015 (the “Secondment Agreement;” terms with initial capital letters used but not defined herein
shall have the meanings ascribed to such terms in the Secondment Agreement), among PennTex Midstream Partners, LLC, a Delaware limited liability company, PennTex Midstream Management Company, LLC, a Delaware limited liability company, PennTex
Midstream GP, LLC, a Delaware limited liability company, and PennTex Midstream Partners, LP, a Delaware limited partnership. 
  

					
	 Company
	 	 Name of Provided

Personnel
	 	 Title and Job Functions

		 		 	

  
 Exhibit B-1 

 EXHIBIT C 

Addition/Removal/Change of Responsibility of Provided Personnel Form 

In reference to that certain Services and Secondment Agreement, dated [•], 2015 (the “Secondment Agreement;”
terms with initial capital letters used but not defined herein shall have the meanings ascribed to such terms in the Secondment Agreement), among PennTex Midstream Partners, LLC, a Delaware limited liability company, PennTex Midstream Management
Company, LLC, a Delaware limited liability company (“Admin”), PennTex Midstream GP, LLC, a Delaware limited liability company (the “General Partner”), and PennTex Midstream Partners, LP, a Delaware
limited partnership. 
 In accordance with Section 2.1 of the Secondment Agreement, Admin and the General Partner hereto wish to
add remove, or change the responsibilities of the following individual or individuals to the Provided Personnel Schedule (all information must be filled in for this form to be valid): 

Provided Personnel 
  

					
	 Company
	  	 Name of Provided

Personnel
	  	 Title and Job Functions

		  		  	

  

			
	PENNTEX MIDSTREAM GP, LLC
		
	By:	 	  

	Name:	 	  

	Title:	 	  

	
	PENNTEX MIDSTREAM MANAGEMENT COMPANY, LLC
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  
 Exhibit C-1Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS AMENDED AND
RESTATED EMPLOYMENT AGREEMENT made effective as of the 1st day of January, 2015 (the “Effective Date”) by and between
WILLIAM P. STAFFORD, II, hereinafter referred to as “Executive,” and FIRST COMMUNITY BANCSHARES, INC.,
hereinafter referred to as “the Corporation.” 

 

WITNESSETH

 

WHEREAS, the
Corporation is a bank holding company which wholly owns the subsidiary bank, First Community Bank (the “Bank”) and
other Affiliates (defined below);

 

WHEREAS, Executive
is currently employed as the Corporation’s Chief Executive Officer; and

 

WHEREAS, the
Board of Directors of the Corporation (the “Board”) recognizes the significant contributions which Executive has made
to the Corporation during Executive’s tenure, and believes it to be in the best interests of the Corporation to provide for
stability in its senior management; and

 

WHEREAS, this
Agreement amends, restates, supersedes and replaces all employment and/or similar agreements previously between Executive and the
Corporation, the Bank or their Affiliates, if any.

 

NOW, THEREFORE,
in consideration of the mutual covenants herein set forth and the benefits that have and will accrue to Executive from continued
employment with the Corporation, as well as the payment of $300, Executive and the Corporation agree to the following terms of
employment as follows:

 

1.           Definitions.
The following words and terms shall have the meanings set forth below for the purposes of this Agreement.

 

(a)           Affiliate.
“Affiliate” means all Persons and Entities, directly or indirectly, controlling, controlled by or under common ownership
with the Corporation or the Bank where control is by management authority, equity ownership, contract or otherwise, including,
without limitation, Greenpoint Insurance Group, Inc., First Community Insurance Services and First Community Wealth Management.

 

(b)           Cause.
“Cause” means the termination of Executive’s employment by the Corporation prior to the expiration of the Term
or any renewal term as a result of a finding by the Board (excluding Executive if s/he is a Board member) that any of the following
have occurred: (i) Executive has engaged in or has directed others to engage in an act or omission, or series of actions, deemed
to be fraudulent, dishonest or unlawful; (ii) any knowing and material breach of this Agreement by Executive; (iii) any knowing
and material violation by Executive of corporate policies and procedures that result in damage to the business or reputation of
the Corporation or its Affiliates, including, without limitation, the Corporation’s Standards of Conduct, or the Corporation’s
or Affiliate’s policies prohibiting discrimination, harassment and/or retaliation; (iv) Executive has engaged in, or has
directed others to engage in, a criminal act (other than a minor traffic offense) or other willful misconduct determined to be
substantially detrimental to the best interests of the Corporation or any of its Affiliates; (v) knowing breach of fiduciary duty
by Executive; (vi) Executive fails to follow the directions of the Board, is grossly neglectful of Executive’s duties or
continues to fail to perform assigned duties, which are not cured within twenty-one (21) days after the Board provides written
notice of the issue; or (vii) demonstrated incompetence of Executive.

 

    	1

    	 

    

 

(c)           Change
of Control. “Change of Control” means a “change in the ownership of the Corporation”, a “change
in the effective control of the Corporation”, or a “change in the ownership of a substantial portion of the assets
of the Corporation.”

 

A “change in the
ownership of the Corporation” occurs on the date that any one Person, or more than one Person acting as a group, acquires
ownership of stock of the Corporation that, together with stock already held by such Person or group, constitutes more than 50%
of the total fair market value or total voting power of the outstanding stock of the Corporation. However, if such Person or group
owns more than 50% of the total fair market value or total voting power of the stock of the Corporation before a particular acquisition
of stock, such acquisition shall not be considered to cause a “change in the ownership of the Corporation.”

 

A “change in the
effective control of the Corporation” occurs when either (i) any one Person, or more than one Person acting as a group, acquires
(or has acquired during the 12-month period ending on the date of the most recent acquisition) ownership of stock of the Corporation
possessing 30% or more of the total voting power of the stock of such Corporation; or (ii) a majority of the members of the Board
is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the Board prior
to the date of the appointment or election. To avoid any confusion, it shall not be deemed a change in effective control of the
Corporation under Section (i) above if a Person (or group) already owns at least 30% of the voting power before acquiring additional
stock of the Corporation.

 

A “change in the
ownership of a substantial portion of the assets of the Corporation” occurs when one Person, or more than one Person acting
as a group, acquires, during a 12-month period, assets that have a total gross fair market value of 40% or more of the total gross
fair market value of all of the assets of the Corporation immediately prior to such acquisition. An acquisition of assets shall
not be considered a “change in the ownership of a substantial portion of the assets of the Corporation” if the assets
acquired are purchased by (A) a shareholder of the Corporation in exchange for or with respect to Corporation stock; (B) an entity,
50% or more of the total value or voting power of which is owned, directly or indirectly, by the Corporation; (C) a Person, or
more than one Person acting as a group, that owns, directly or indirectly, 50% or more of the total fair market value or voting
power of all the outstanding stock of the Corporation; or (D) an entity, at least 50% of the total fair market value or voting
power of which is owned, directly or indirectly, by a person who is a “related person” under applicable Treasury Regulations.

 

Notwithstanding anything
to the contrary contained in this definition, whether an action or series of actions is deemed a Change of Control shall be determined
consistent with and interpreted in accordance with Internal Revenue Code Section 409A and the regulations issued thereunder, including
Treasury Regulation 1.409A-3.

 

    	2

    	 

    

 

(d)           Competing
Financial Services Organization. “Competing Financial Services Organization” means an entity unaffiliated with
the Corporation that is engaged in the commercial, retail or mortgage banking or lending business, wealth management business,
investment advisory business, trust service business, or insurance business that provides services and products that are the same
as or competitive with the services and products offered by the Corporation, the Bank or any of their Affiliates) immediately prior
to the Date of Termination or were approved to be offered within ninety (90) days of the Date of Termination.

 

(e)           Competitive
Service or Product. “Competitive Service or Product” means those services or products offered by a Competing Financial
Services Organization that are the same as or competitive with those services or products offered by the Corporation, the Bank
or any of their Affiliates at the Date of Termination or which have been approved by the Corporation, the Bank or any of their
Affiliates to be offered within ninety (90) days of the Date of Termination.

 

(f)           Confidential
Information. “Confidential Information” means all information, technical or financial data, materials, computer
records or data, trade secrets and/or know-how regarding the Corporation, the Bank and/or any of their Affiliates or their internal
operations and plans that is treated as confidential by the Corporation, the Bank and/or their Affiliates, that is not generally
known by persons not employed by the Corporation or its Affiliates, and that is not otherwise available to the public by lawful
and proper means. Confidential Information also includes all information received from customers of the Bank or other Affiliates,
along with the identity of and services provided to the customers, regardless of the manner which such information is conveyed
or stored. Confidential Information includes, but is not limited to, strategic plans and forecasts; product or service plans or
research; products, services and customer lists; marketing research, plans and/or forecasts; compilations and databases of customers,
business or marketing information that are developed by or for the Corporation or any Affiliate; budget and/or financial information;
customer contact, account and mailing information; pricing, costs or profitability analysis; sales and marketing techniques and
programs; incentive compensation plans; account information (including loan terms, expiration or renewal dates, fee schedules and
commissions); software, access codes, passwords, databases and source codes; inventions; processes, formulas, designs, drawings
or engineering information; hardware configuration, and all other financial or other business information or systems of the Corporation
and/or its Affiliates, as well as the following non-public information regarding the employees of the Corporation and/or its Affiliates;
Social Security numbers, date of birth, names of family members, home addresses and email addresses, telephone numbers, health-related
information and compensation information. This definition applies to information generated by Executive or others who work for
the Corporation or one of its Affiliates, as well as information received from a customer or another third party. For purposes
of this definition, the term “not available to the public” shall include all information or material in the public
domain by virtue of improper disclosure of such information or material by Executive. Notwithstanding the foregoing, information
shall not be considered Confidential Information if (i) such information is already known to others not bound by a duty of confidentiality
with respect thereto, (ii) such information is or becomes publicly available through no fault of Executive, or (iii) the furnishing
or use of such information is compelled by or in connection with legal proceedings.

 

    	3

    	 

    

 

(g)           Customer.
“Customer” means a Person or Entity that has an account with, loan from, an investment or deposit with the Bank or
any of its Affiliates, or that has received or used other financial or investment products or services from the Corporation, the
Bank or any of their Affiliates at any time within the twelve (12) months immediately prior to the Date of Termination.

 

(h)           Date
of Termination. “Date of Termination” means the date specified in the Notice of Termination or Executive’s
date of Death as applicable. If either party fails to deliver a Notice of Termination, the Date of Termination means the last day
of Executive’s employment with the Corporation.

 

(i)           Good
Reason. “Good Reason” means Executive’s termination of employment with the Corporation as a result of (i)
a material reduction in Executive’s duties, authorities, or reporting responsibilities, without Executive’s prior consent;
(ii) the Corporation commits a material breach of this Agreement, including, without limitation, reducing Executive’s Base
Salary, or failing to provide Executive with the compensation and benefits provided for under this Agreement; or (iii) excluding
required travel on business for the Corporation to an extent substantially consistent with Executive’s present business obligations,
(a) the Corporation or Bank requires Executive to move Executive’s principal location for work to a location that is fifty
(50) miles or more from Bluefield, Virginia (measured by driving distance from the Corporation’s current headquarters); or
(b) if the Executive’s principal location for work is more than fifty (50) miles from Bluefield, Virginia at the time a relocation
is required by the Corporation or Bank, the Corporation or Bank requires Executive to move Executive’s principal location
for work to any location other than Bluefield, Virginia. Notwithstanding the foregoing, no event described in the preceding sentence
shall give rise to a termination for Good Reason unless Executive first gives the Corporation notice that such an event has occurred
within the ninety (90) days immediately following the occurrence of such event, and the Corporation fails to cure the breach within
fifteen (15) business days of such notice.

 

(j)           Person.
“Person” shall mean any individual or Entity, and the heirs, executors, administrators, legal representatives, successors,
and assigns of such “Person” where the context so permits. For purposes of this Agreement, the term “Entity”
shall mean any general partnership, limited partnership, limited liability company, corporation, joint venture, trust, business
trust, cooperative or association or any foreign trust or foreign business organization.

 

(k)           Prospect.
“Prospect” means a business entity or individual who has not previously done business with the Corporation, the Bank
or their Affiliates, but who had one or more communications with Executive within the six (6) months immediately before the end
of employment with the Corporation where the business entity or individual applied for a loan, inquired about establishing an account
or making an investment, or otherwise had discussions with Executive about utilizing or obtaining service(s) and/or product(s)
offered by the Corporation, the Bank or their Affiliates.

 

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(l)           Notice
of Termination. The term “Notice of Termination” means any written notice that Executive’s employment is
being terminated given by the Corporation or Executive for any reason which specifies a Date of Termination, which may be effective
immediately.

 

(m)           Separation
from Service. “Separation from Service” means the termination, whether voluntary or involuntary, of Executive’s
employment with the Corporation for reasons other than death. Whether a Separation from Service takes place is determined based
on the facts and circumstances surrounding the termination of Executive’s employment and whether the Corporation and Executive
intended for Executive to provide significant services for the Corporation following such termination. A termination of employment
will not be considered a Separation from Service if the termination from employment is not considered a termination of employment
under Treasury Regulation 1.409A-1(h)(1)(ii).

 

(n)           Specified
Executive. Pursuant to Code Section 409A, a “Specified Executive means a key employee (as defined in Section 416(i) of
the Code without regard to paragraph 5 thereof) of the Corporation if any stock of the Corporation is publicly traded on an established
securities market or otherwise.

 

2.           Employment
and Term. The Corporation hereby hires Executive, and Executive hereby agrees to continue to serve as its Chief Executive
Officer, with such duties as normally associated with this position. Executive shall also serve in such additional offices for
the Corporation, Bank and other Affiliates as the Board may specify. The term of employment under this Agreement shall begin on
the Effective Date (each successive anniversary of the Effective Date is referred to herein as an “Anniversary Date”)
and shall continue for a term of three (3) years (the “Term”). After expiration of the initial year of the Term, the
Agreement shall automatically extend for an additional year, so that the Term will continue for a new three (3) year period from
the time of the extension, unless the Board or Executive gives notice to the other party that the Term will not be extended no
later than sixty (60) days prior to the first Anniversary Date. If either party gives timely notice that the Term will not be extended,
then this Agreement shall terminate at the conclusion of its then remaining Term.

 

(a)           Duty
of Loyalty. Executive is employed in a position that involves and requires a high level of trust and confidence and requires
a significant time commitment. Executive agrees to act at all times with the highest degree of loyalty and integrity toward the
Corporation, and shall devote his/her full attention, energies and best efforts on behalf of the Corporation, the Bank and their
Affiliates, except as otherwise approved by the Board pursuant to Section 13(b) of this Agreement. Executive further agrees to
comply with all policies, guidelines, rules and operating procedures adopted from time to time.

 

(b)           Outside
Activities. In addition to activities approved by the Board pursuant to Section 13(b) of this Agreement, Executive may, after
making a full disclosure of the material terms, serve on corporate, civic or charitable boards or committees, deliver lectures,
fulfill speaking engagements, or manage personal investments, provided that such activities do not individually or in the aggregate
interfere with the performance of Executive’s duties under this Agreement (as determined by the Board).

 

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(c)           Licenses
and Legal Compliance. Executive shall be responsible to obtain and maintain any licenses or certifications which may be required
for the performance of his/her duties and shall comply with all laws, regulations and rules that apply to the Corporation, the
Bank and their Affiliates.

 

3.           Compensation
and Benefits.

 

(a)           Base
Salary. Executive’s Base Salary shall not be less than Two Hundred Eighty Thousand Dollars ($280,000.00), subject to
adjustment on each Anniversary Date of this Agreement (“Base Salary”). The annual adjustment to Base Salary, if any,
shall be a discretionary increase deemed appropriate by the Board or one of its Committees in accordance with the prevailing salary
administration practices of the Corporation. The Base Salary shall be paid in accordance with the Corporation’s regular payroll
during the Term, and if applicable, during the severance pay period, less all required payroll taxes and authorized withholdings.

 

(b)           Incentive
Compensation. Executive shall be eligible to be considered for incentive compensation, if any, in an amount determined appropriate
by the Corporation based upon the recommendation of the Compensation and Retirement Committee and an annual evaluation of achievement
of key objectives as may be established from time to time by such Committee.

 

(c)           Vacation.
Executive shall be entitled to accrued vacation of four (4) weeks per year during the Term. In the event Executive does not use
all four (4) weeks each year, the unused vacation days will not carry over into the next succeeding year. Executive shall not be
entitled to receive any additional compensation for failure to take any vacation.

 

(d)           Benefits.
Executive shall be entitled to participate, on the same basis as other members of senior management, in all welfare, retirement
and/or pension benefit plans that the Corporation establishes and makes available to all employees, including but not limited to
First Community Bank KSOP. Executive may be considered for perquisite benefits and participation in other executive welfare, retirement,
pension benefit or other plans (such as the Corporation’s SERP), however, Executive acknowledges that Executive is not entitled
to such perquisites and is not entitled to participate in such plans except as specifically approved in writing by the Board.

 

(e)           Expenses.
The Corporation shall reimburse Executive or otherwise provide for or pay for all reasonable expenses incurred by Executive in
furtherance of or in connection with the business of the Corporation, including, but not by way of limitation, traveling expenses,
subject to such reasonable documentation and other limitations as may be established by the Board.

 

4.           Termination
for Death or for Cause. The Corporation may terminate the employment of Executive prior to the expiration of the Term or
any renewals, upon Executive’s death or for Cause as set forth in this Section.

 

(a)           Death.
Executive’s employment shall terminate automatically upon Executive’s death. Upon Executive’s death, the Corporation
shall pay Executive’s estate Executive’s full Base Salary through the date of Executive’s death. Executive’s
estate and heirs will be entitled to apply for and receive whatever plan benefits might be in place at the time of Executive’s
death. Further, Executive’s eligible dependents shall have the right to continue their health insurance coverage under COBRA.

 

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(b)           Cause.
The Corporation may at any time, and without prior notice, terminate Executive’s employment upon a finding of Cause. In the
event the Corporation terminates Executive’s employment for Cause, then Executive’s right to receive any further compensation
or benefits from the Corporation shall cease immediately as of the Date of Termination.

 

5.           Termination
for Disability. If, as a result of Executive’s incapacity due to an accident or physical or mental illness, Executive
is substantially unable to perform Executive’s duties due to such physical or mental impairment, even with reasonable accommodation,
for more than twenty (20) weeks, whether or not consecutive, in any twelve (12) month period, then the Corporation shall have the
right to terminate Executive’s employment for “Permanent Disability” before the end of the applicable Term. The
determination of whether Executive has a “Permanent Disability” shall be made by the Board after receiving a report
from a physician or psychiatrist selected by the Board. In the event that Executive is Separated from Service as a result of “Permanent
Disability” during the Term, Executive shall receive a lump sum payment equal to (90) days of Executive’s then applicable
Base Salary. The payment shall be made within sixty (60) days after the Date of Termination.

 

After Executive’s
Separation from Service as a result of “Permanent Disability,” the Corporation shall reimburse Executive, after receipt
of reasonable documentation, for any premiums Executive pays for continuing insurance coverage to which the Executive is entitled
under Part 6 of Subtitle B of Title I of the Employee Retirement Income Security Act of 1974, as amended (commonly known as COBRA)
for a period of six (6) months from the date of Executive’s Permanent Disability.

 

6.           Termination
Upon Expiration of Term. In the event that either the Corporation or Executive gives notice under Section 2 that the Term
is not to be renewed but will terminate at the end of the then current Term, Executive’s employment, if not otherwise terminated
under Sections 4 or 5, shall automatically terminate as of December 31 of the year in which the Term ends. In this situation, the
Corporation shall not owe Executive any severance, subject only to the provisions of Section 10(a).

 

7.           Termination
by Corporation Without Cause. In the event the Corporation desires to terminate Executive’s employment for any reason
other than as set forth in Sections 4, 5 or 6, the Corporation may do so by providing at least thirty (30) days prior written notice,
or in lieu thereof, may relieve Executive of all duties and place Executive on a thirty (30) day paid administrative leave. Upon
the Separation of Service or the Date of Termination, and subject to the provisions of Section 7(a), the Corporation shall pay
Executive severance in the form of continuing to pay Executive’s Base Salary for the balance of the existing term of this
Agreement (for purposes of this Section 7, the “Remaining Term”). In addition, the Corporation shall maintain and continue
to provide to Executive health, dental, accident and disability insurance and other Executive benefit plans, programs and arrangements
in which Executive was entitled to participate under Section 3(d) immediately prior to the Date of Termination (excluding (a) any
stock option or other stock compensation, (b) any bonus or incentive compensation of the Corporation, (c) any retirement benefit
plan contributions, (d) any vehicle allowance, and (e) any social or professional club dues) until the earlier of (i) the expiration
of the Remaining Term; (ii) Executive commences full-time employment with another employer or commences self-employment where Executive
will earn compensation on an annualized basis that is 75% or more of the Base Salary as of the Date of Termination; or (iii) the
date on which the Corporation determines that the Executive has violated any provisions of Sections 13-16 of this Agreement.

 

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(a)           Preconditions.
The payment of any amounts due under this Section 7 and Section 8 below, if applicable, shall be subject to and conditioned upon
prior receipt by the Corporation of a separation agreement containing a valid waiver and release by Executive, in a form provided
by the Corporation, of any and all claims Executive may have against the Corporation, the Bank and their Affiliates,
or their then current or former officers, directors, or employees. Further, Executive must reaffirm and comply with the
restrictions contained in Sections 13-16 this Agreement which survive termination of employment.

 

(b)           Alternative
Benefit. Notwithstanding the foregoing, if the Corporation terminates the employment of Executive under Section 6 (above) or
without Cause under this Section 7 in connection with, or within thirty-six (36) months after, a Change of Control and there is
a Separation from Service, then Executive shall be eligible to receive the benefits provided by Section 10(a) but will not receive
benefits under Section 7(a).

 

8.           Termination
by Executive for Good Reason. If, in the absence of a Change of Control, Executive terminates his/her employment under
this Agreement for Good Reason and is Separated from Service, Executive shall be entitled to severance and benefits as if Executive
were terminated by the Corporation without Cause under Section 7. If, within three (3) years of a Change of Control, Executive
terminates his/her employment under this Agreement for Good Reason and is Separated from Service, Executive shall be entitled to
severance and benefits as if Executive were terminated by the Corporation without Cause under Section 10.

 

9.           Voluntary
Termination by Executive. Except in the case of termination for Good Reason, in the event that Executive terminates or
resigns from his/her employment with the Corporation prior to or in connection with the expiration of the Term (and any renewals
thereof), then the Corporation shall have no obligation to pay Executive severance benefits of any kind. If Executive elects to
resign or terminate employment prior to the expiration of the Term, other than pursuant to Section 8, Executive shall give the
Corporation thirty (30) days prior written notice. Upon receipt of such notice, the Corporation may relieve Executive of his/her
duties, in whole or in part, prior to the expiration of the notice period, and his/her right to receive compensation shall end
on his/her last day of employment.

 

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10. Change of Control.

 

(a)           Severance
Benefit following a Change of Control. If within three (3) years after a Change of Control, Executive is Separated from Service
either because (i) the Corporation elects not to renew the Agreement under Section 2, (ii) the Corporation terminates Executive’s
employment without Cause under Section 7, (iii) Executive terminates his/her employment for Good Reason under Section 8, or (iv)
the Executive terminates his/her employment because of Forced Relocation (as defined herein), then the Corporation shall pay Executive
severance in the form of continued payment of Executive’s Base Salary and providing all other compensation benefits of a
like kind and value as in effect at the time of a Change of Control, or on the Date of Termination, whichever is greater, for a
period of thirty-six (36) months after the Date of Termination. The payment of benefits under Section 10(a) is subject to each
of the following: (i) Executive’s providing the release required under Section 10(b), (ii) compliance with the tax provisions
of Section 10(c) and Section 12 (below), and (iii) compliance with the provisions of Sections 13-16 of this Agreement and shall
be in lieu of any other severance and/or benefits that might otherwise be due to Executive under Sections 6, 7 or 8. No payments
under this Section 10(a) shall be due if Executive is terminated under Sections 4, 5 or 9. The benefits provided by Section 10(a)
will not be available to the Executive if there is a Separation from Service prior to the Change of Control, or if the Separation
from Service occurs following expiration of 36 months following the Change of Control. A “Forced Relocation”
shall be deemed to have occurred at any time during the three (3) years after a Change of Control, if the Executive receives a
notice from the Corporation or Bank to move Executive’s principal location for work to a location that is fifty (50) miles
or more from Executive’s then principal location for work and the Executive does not voluntarily consent to the relocation.
To exercise his right to terminate under Section 10(a)(iv), the Executive must give written notice of termination within sixty
(60) days after receiving notice of the proposed relocation and if the Corporation or Bank does not rescind the relocation requirement
within ten (10) days of receipt of the Executive’s notice, then the Executive’s employment will terminate thirty (30)
days after the notice of termination is sent.

 

(b)           Preconditions.
The payment of any amounts due under this Section 10, if applicable, shall be subject to and conditioned upon prior receipt by
the Corporation of a separation agreement containing a valid waiver and release by Executive, in a form provided by the Corporation,
of any and all claims Executive may have against the Corporation, the Bank and their Affiliates,
or their then current or former officers, directors, or employees. Further, Executive must reaffirm and abide by the restrictions
contained in this Agreement which survive termination of employment.

 

(c)           Tax
Issues. If the payments and benefits pursuant to Section 10 hereof, either alone or together with other payments and benefits
which Executive has the right to receive from the Corporation, would constitute a “parachute payment” under Section
280G of the Code, the payments and benefits payable by the Corporation pursuant to this Section 10 shall be reduced, in the manner
determined by Executive, by the amount, if any, which is the minimum necessary to result in no portion of the payments and benefits
payable by the Corporation under this Section 10 being non-deductible to the Corporation pursuant to Section 280G of the Code and
subject to the excise tax imposed under Section 4999 of the Code. The determination of any reduction in the payments and benefits
to be made pursuant to this Section 10(c) shall be based upon the opinion of the Corporation’s independent public accountants
and the fee for such calculation shall be borne by the Corporation. Such accountants shall promptly prepare the foregoing opinion,
but in no event later than thirty (30) days from the Date of Termination, and may use such actuaries such as accountants deemed
necessary or advisable for the purpose. Nothing contained herein shall result in a reduction of any payments or benefits to which
Executive may be entitled upon termination of employment under any circumstances other than as specified in this Section 10.

 

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11.         Withholding.
Anything to the contrary notwithstanding, all payments required to be made by the Corporation to Executive shall be subject to
the withholding of such amounts relating to taxes as the Corporation may reasonably determine it should withhold pursuant to any
applicable law or regulation.

 

12.         Compliance
with Code Section 409A.

 

(a)           General.
It is intended that this Agreement comply with the provisions of Section 409A of the Code and the regulations and guidance of general
applicability issued thereunder (referred to herein as “Section 409A”) so as to not subject Executive to the payment
of additional interest and taxes under Section 409A. In furtherance of this intent, this Agreement shall be interpreted, operated
and administered in a manner consistent with these intentions, and to the extent Section 409A would result in Executive being subject
to the payment of additional income taxes or interest under Section 409A, the parties agree to amend the Agreement to avoid the
application of such taxes and interest.

 

(b)           Delayed
Payments. Notwithstanding any provision in this Agreement to the contrary, as needed to comply with Section 409A, if Executive
is a “specified employee” (within the meaning of Section 409A), payments due under Sections 6, 7, 8, or 10 above shall
be subject to a six (6) month delay such that amounts otherwise payable during the six (6) month period following Executive’s
Separation from Service shall be accumulated and paid in a lump-sum catch-up payment as of the first day of the seventh month following
Executive’s Separation from Service (or, if earlier, the date of Executive’s death).

 

(c)           Treatment
as Separation Pay. This Section 12 shall not apply to the extent such payments can be considered to be separation pay that
is not part of a deferred compensation arrangement under Section 409A. If permitted by Section 409A, cash payments to Executive
pursuant to Section 5, 7, 8 and 10 shall be considered first to come from separation pay.

 

13.         Loyalty
Obligations. Executive acknowledges and agrees that by virtue of Executive’s position and involvement with the business
and affairs of the Corporation, Executive will develop substantial expertise and knowledge with respect to all aspects of the Corporation’s
business, affairs and operations and will have access to all significant aspects of the business and operations of the Corporation
and to Confidential Information. Executive agrees that the following obligations (“Loyalty Obligations”) shall apply
in consideration of Executive’s employment by or continued employment with the Corporation:

 

(a)           Confidential
Information.

 

(i)           Confidential
Information. At all times during the Term and thereafter, Executive shall hold in strictest confidence, and shall not use or
disclose (except for the benefit of the Corporation and to fulfill Executive’s employment obligations) to any Person, business
or other Entity, without authorization of the Corporation, any Confidential Information of the Corporation, the Bank or their Affiliates.

 

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(ii)         Third
Party Information. Executive recognizes that the Corporation, the Bank and their Affiliates have received, and in the future
will receive, information from third parties that the third party considers to be confidential or proprietary information and which
is, or may be, subject to a duty on the part of the Corporation, the Bank or their Affiliates not to disclose to others and to
restrict its use only for certain limited purposes. Executive agrees to hold all such confidential or proprietary information from
third parties in the strictest confidence and not to disclose it to any Person or Entity to use it except as necessary in carrying
out Executive’s work for the Corporation consistent with the obligations of the Corporation or Affiliates to such third party.

 

(iii)        Work
Product. Executive acknowledges that all discoveries, inventions innovations, improvements, developments, methods, designs,
analyses, drawings, reports and all similar or related information (whether or not patentable) which relate to the Corporation,
the Bank or their Affiliates, and all research and development regarding existing or future products or services which are conceived,
developed or made by Executive while employed (“Work Product”) belong to the Corporation, the Bank and their Affiliates
(as applicable). Executive hereby assigns, without further compensation, any and all rights, title or interest Executive has or
may have in such Work Product to the Corporation, the Bank or their Affiliates (as applicable). Executive shall promptly disclose
such Work Product to the Corporation and perform all actions reasonably requested by the Corporation (whether during or after Executive’s
employment) to establish and confirm such ownership (including, without limitation, executing assignments, consents, powers of
attorney and other instruments).

 

(b)           Conflicting
Employment. Unless otherwise specifically approved by the Board after full disclosure in writing, during the Term (including
the renewals), (i) Executive shall not engage in any other employment, occupation, consulting or other business activity directly
related to the business in which the Corporation, the Bank or their Affiliates are now involved or become involved during Executive’s
employment; and (ii) Executive shall not engage in any other activities that conflict with the business of the Corporation, the
Bank or their Affiliates or that materially interfere with Executive’s ability to devote the time necessary to fulfill Executive’s
obligations to the Corporation.

 

(c)           Returning
Property. On the Date of Termination, if not previously requested sooner than that date, Executive shall return to the Corporation
(and will not keep copies in Executive’s possession, recreate or deliver to anyone else) any and all Work Product, devices,
records, data, computer files, records or disks, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints,
sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items developed by Executive
or others pursuant to or during Executive’s employment or otherwise belonging to the Corporation, the Bank or their Affiliates
and their respective successors or assigns regardless of the form in which such information or documents are stored.

 

(d)           Notification
of New Employer. In the event that Executive leaves the employ of the Corporation and begins employment elsewhere, Executive
agrees the Corporation may send notice to Executive’s new employer (whether Executive is employed as an employee, consultant,
independent contractor, director, partner, officer, advisor or manager) informing the new employer about Executive’s loyalty
obligations and restrictions contained in this Agreement.

 

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(e)           Post-Employment
Duty of Cooperation. By virtue of Executive’s employment, Executive will know information, including but not limited
to Confidential Information, that is or may be material to and necessary for the Corporation, the Bank and/or its Affiliates to
appropriately and successfully conclude matters that involve third parties. As a result, following termination of employment (regardless
of the circumstances) Executive agrees to assist, and cooperate fully with, the Corporation, the Bank and their Affiliates upon
reasonable request, and to do so voluntarily (without legal compulsion) when such matters arise. This duty of cooperation is intended
to allow the Corporation to meet its legal obligations and satisfactorily conclude matters in a manner that achieves the best result
possible for the Corporation, the Bank and their Affiliates. The matters on which cooperation may be requested include, but is
not limited to, the actual or contemplated defense, prosecution, or investigation of claims involving the Corporation, Bank or
an Affiliate, and a third party (including employees who may assert claims) as well as responding to any other civil, criminal,
administrative or investigative action, suit, proceeding, or inquiry, whether formal or informal, by a federal, state, or law enforcement
or regulatory department, agency or authority, where the matter arises from or is related to events, acts, or omissions involving
or pertaining to the operations, activities, employees or customers of the Corporation, the Bank and their Affiliates that occurred
during the period of Executive’s employment by the Corporation (“Third Party Claims”). The Executive’s
duty to cooperate includes, without limitation, Executive making himself or herself reasonably available upon reasonable notice,
without subpoena, to meet with the Corporation, the Bank, an Affiliate and/or their counsel to provide complete, truthful and accurate
information in interviews, depositions, and trial testimony as well as other related support activity. If the Executive provides
cooperation under this Section 13(e) during a period in which the Corporation is paying severance pay to the Executive, then the
Corporation will only reimburse the Executive for all out-of-pocket travel expenses reasonably incurred at the Corporation’s
request. If the cooperation provided occurs when no severance pay is due the Executive, then in addition to reimbursing the Executive
for out-of-pocket travel expenses, the Corporation will also reimburse Executive for his time expended on the Corporation’s
behalf at a rate of $400/day, or a pro-rata portion thereof. The Corporation will make reasonable efforts to accommodate the scheduling
needs of Executive so as to avoid, to the maximum extent possible, interference with the Executive’s then current duties
and responsibilities.

 

(f)           Clarification.
Nothing in this Section 13 or this Agreement shall be construed to interfere with, restrict or allow any retaliation against the
Executive or his/her right to make disclosures, reports or complaints as authorized, permitted or required by federal or state
law, including without limitation pursuant to the provisions of the Sarbanes-Oxley Act or Dodd-Frank Wall Street Reform Act and
Consumer Protection Act.

 

14.         Non-Solicitation
Restriction. During employment with the Corporation and for the twenty-four (24) month period that immediately follows
the Date of Termination, or such time period as the Corporation is obligated to pay severance benefits under this Agreement (whichever
is longer), Executive shall not unfairly compete with the Corporation (which for purposes of this Section 14 shall include the
Corporation, the Bank and all of their Affiliates) by attempting to disrupt business relationships that the Corporation, the Bank
or their Affiliates have with either: (i) a Customer (see Section 1(g)) with whom Executive either had communications within
the eighteen (18) months prior to the Date of Termination, or as to which Executive received Confidential Information during that
eighteen (18) month period, or (ii) a Prospect (see Section 1(k)).

 

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In this regard, Executive
shall refrain during the restricted period from engaging in any of the following activities, whether Executive alone, or as an
officer, director, stockholder, partner, member, investor, employee, consultant or agent for or on behalf of any other person or
legal entity:

 

(1)         Attempting
to disrupt or interfere with the business relationship with a Customer (as limited above) by directly or indirectly requesting,
suggesting, encouraging or advising that Customer to withdraw, curtail, limit, cancel, terminate or not renew all or any portion
of the Customer’s business with the Corporation, the Bank or their Affiliates.

 

(2)         Solicit
the business of a Customer (as limited above) by communicating directly with that Customer (regardless of who initiates the communication
and in what form it occurs) when as part of the communication Executive discusses or offers a Competitive Service or Product.

 

(3)         Solicit
the business of a Prospect by communicating directly with a Prospect (regardless of who initiates the communication and in what
form it occurs) when as part of the communication Executive discusses or offers a Competitive Service or Product with the intent
to limit, interfere with or divert the Prospect’s business away from the Corporation, the Bank or their Affiliates.

 

15.         Non-Compete
Restriction. At all times during employment and for the twenty-four (24) month period that immediately follows the Date
of Termination, or such time period as the Corporation is obligated to pay severance benefits under this Agreement to Executive
(whichever is longer), Executive shall not accept employment with or provide services to or on behalf of any Competing Financial
Services Organization if (i) the position held or the services to be performed by Executive involve the same or substantially similar
duties and responsibilities as those performed by Executive on behalf of the Corporation during Executive’s last eighteen
(18) months of employment with the Corporation, or (ii) Executive is providing consulting, advisory or contract services (whether
as a director, officer, independent contractor, member, owner or shareholder) related to the design, development, marketing or
delivery of Competitive Services or Products that are intended to be directly competitive with offerings by the Corporation, the
Bank or their Affiliates.

 

(a)           Clarification.
This restrictive covenant applies only if (a) the Competing Financial Services Organization operates, or is seeking to open
one or more branch facilities, within a fifty (50) mile radius of the Corporation’s headquarters or within a twenty-five
(25) mile radius of any facility operated by the Corporation, the Bank or their Affiliates where it offers commercial, retail or
mortgage banking, or lending, investment or insurance services and products to the public (“Restricted Territory”),
and (b) Executive will be performing services for the Competing Financial Services Organization in the Restricted Territory, or
will be supervising others who will be offering or providing Competitive Services or Products in the Restricted Territory on behalf
of the Competing Financial Services Organization.

 

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(b)           Limitation.
Nothing in this Section shall prevent Executive from owning stock in a publicly traded company that offers Competitive Services
or Products in the areas serviced by the Corporation, the Bank or their Affiliates, provided Executive’s ownership constitutes
less than five percent (5%) of the outstanding shares of the publicly traded company.

 

16.         Anti-Piracy
Restriction. At all times during employment with the Corporation, and for twelve (12) months immediately after the Date
of Termination (regardless of the circumstances), Executive shall refrain from inducing, soliciting or encouraging a Key Employee
of the Corporation, the Bank or their Affiliates to quit employment with the intent, hope or purpose of having the Key Employee
join a Competing Financial Services Organization in a similar capacity, if that competitive organization has customer service facilities
located within a twenty-five (25) mile radius of any of the Corporation’s facilities. As used in this Section 16, “Key
Employee” means anyone who holds a position of Vice President or higher with the Corporation, the Bank or their Affiliates
or any individuals who have reported to, or worked directly with, the Executive within the last six (6) months of Executive’s
employment with the Corporation.

 

17.         Enforcement.
Executive acknowledges that the restrictive covenants set forth above in Sections 13, 14, 15 and 16 are reasonable and necessary
in order to protect the legitimate business interests of the Corporation, the Bank and their Affiliates, and that a violation of
any of those covenants will result in irreparable injury. In the event of a breach or a threatened breach of this Agreement, in
addition to all other remedies (legal or equitable), the Corporation shall be entitled to specific performance of these provisions
and the issuance of a restraining order and/or injunction prohibiting Executive from violating one or more of these restrictions.
If litigation is filed which relates to or arises under this Section 17, then in addition to all other remedies, the Corporation
shall be entitled to recover its attorneys’ fees, costs and expenses incurred in connection with the litigation (including
all appeals), as well as the Corporation’s pre-litigation efforts to prevent a breach, to enforce the Agreement, or to seek
redress for a breach. Nothing contained herein shall be construed as limiting or prohibiting the Corporation from pursuing any
other remedies available to it for such breach or threatened breach, including the recovery of money damages. Should an injunction
be issued, Executive waives the right to require that the court require a bond to be posted in excess of $1,000.00.

 

18.         Notice
of Termination. Any purported termination of Executive’s employment under this Agreement (whether by the Corporation
or by Executive) shall be delivered in writing by a Notice of Termination to the non-terminating party.

 

19.         Amendment
and Waiver. The provisions of this Agreement may be amended or waived only with the prior written consent of the Corporation
and Executive, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity,
binding effect or enforceability of this Agreement.

 

20.         Severability.
Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision or subsection of this Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law, then such invalidity, illegality or unenforceability cannot be reformed by the court to cause it to be enforceable,
then the offending provision shall be stricken from this Agreement, the remainder of this Agreement shall be construed and enforced
as if the invalid, illegal or unenforceable provision had never been contained herein.

 

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21.         Construction.
The parties agree that the traditional rule that often applies whereby an ambiguity in a contract is construed against the drafter
shall not apply to this Agreement.

 

22.         Forum
Selection. The parties agree that the exclusive jurisdiction for any lawsuit related to or arising under this Agreement
shall be in the Circuit Court for Tazewell County, Virginia or the United States District Court for the Western District of Virginia.
Executive consents to the jurisdiction of these courts, and waives any objection to jurisdiction and venue which Executive otherwise
may have to this venue for any such lawsuit.

 

23.         Applicable
Law. This Agreement shall be construed and applied in accordance with the laws of the Commonwealth of Virginia, with the
exception of its conflict of law provisions.

 

24.         Survival.
Subject to any limits on applicability contained therein, the provisions of Sections 11-17 and 20-27 hereof shall survive and continue
in full force in accordance with their terms notwithstanding any termination of this Agreement. Likewise, in the event that the
Corporation is obligated to make payments to Executive under this Agreement, and Executive dies before all such payments are made,
then the Corporation shall make the balance of those payments to Executive’s estate.

 

25.         Successors
and Assigns.

 

(a)          Corporation.
This Agreement shall bind and inure to the benefit of and be enforceable by the Corporation and its successors or assigns. In
the event that a transaction is contemplated that will, upon consummation, result in a Change of Control, then in connection with
the closing of such transaction, the Corporation shall require as a condition of approval of the transaction that the surviving
or successor entity execute an agreement, in a form and substance acceptable to Executive, to expressly assume and agree to honor
and perform this Agreement as if the Corporation were still bound.

 

(b)           Executive.
This Agreement shall inure to the benefit and be enforceable by Executive, Executive’s personal and legal representatives,
and Executive’s executors, administrators, heirs, successors and assigns. Notwithstanding the foregoing, Executive may not
assign any rights or delegate any obligations hereunder without the prior written consent of the Board.

 

26.         Notices.
Any notice provided for in this Agreement shall be in writing and shall be either personally delivered, sent by reputable overnight
carrier or mailed by first class mail, return receipt requested. Notices to the Executive shall be sent to the Executive’s
then current address in accordance with the Corporation’s books and records. Notices to the Corporation shall be sent to:

 

    	15

    	 

    

 

First Community Bancshares, Inc.

Attn: Chairman, Board of Directors

One Community Place

P.O. Box 989

Bluefield, VA 24605

 

Notwithstanding the foregoing, each party
shall send notices to another address or to the attention of another person as the receiving party shall have specified by prior
written notice to the sending party. Any notice under this Agreement will be deemed to have been given when so delivered, sent
or mailed.

 

27.         Entire
Agreement. This Agreement contains all of the understandings and representations between the parties hereto pertaining
to the matters referred to herein, and supersedes any and all undertakings and agreements, whether oral or in writing, previously
entered into by them with respect thereto, including any previous employment, severance and/or non-competition agreements. To the
extent that a separate agreement currently exists which grants Executive stock options or other incentive or deferred compensation,
those agreements remain in full force and effect, except to the extent that those agreements contain restrictive covenants in which
case the provisions of Sections 13-16 shall be deemed applicable and replace all such similar provisions.

 

28.         Document
Review. The Corporation and Executive hereby acknowledge and agree that each (i) has read this Agreement in its entirety
prior to executing it, (ii) understands the provisions and effects of this Agreement, (iii) has consulted with such attorneys,
accountants and financial and other advisors as it or Executive has deemed appropriate in connection with their respective execution
of this Agreement, and (iv) has executed this Agreement voluntarily and knowingly. EXECUTIVE HEREBY UNDERSTANDS, ACKNOWLEDGES AND
AGREES THAT THIS AMENDED AGREEMENT HAS BEEN PREPARED BY LEGAL COUNSEL TO THE CORPORATION AND THAT HE OR SHE HAS NOT RECEIVED ANY
ADVICE, COUNSEL OR RECOMMENDATION WITH RESPECT TO THIS AGREEMENT FROM SUCH COUNSEL.

 

[Remainder of Page Intentionally Blank;
Signatures Follow]

 

    	16

    	 

    

 

WITNESS the following signatures as
of the date first written above:

 

	 	FIRST COMMUNITY BANCSHARES, INC.
	 	 	 
	 	By:	 
	 	 	Lead Independent Director
	 	 	

 

EXECUTIVE:

 

	 	 
	William P. Stafford, II	 
	Chief Executive Officer, First Community Bancshares, Inc.	 
	  	 

 

    	17

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