March 30, 2001
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of Old Point Financial Corporation. The meeting
will be held on Tuesday, April 24, 2001 at 6:00 p.m. at The
Radisson Hotel, 700 Settlers Landing Road, Hampton, Virginia.
You will be asked to vote on the election of directors,
ratification of independent certified public accountants, and
to ratify and approve an amendment to the 1998 Stock Option
Plan. During the meeting, we will report to you on the
condition and performance of the Company and its subsidiaries.
You also will have an opportunity to question management on
matters that affect the interest of all stockholders.
We hope to see you on April 24, 2001. Whether you plan to
attend or not, please complete, sign, date and return the
enclosed proxy card as soon as possible in the postage-paid
envelope provided or per instructions on your proxy card you
may also vote by telephone or by internet. Your vote is
important. We appreciate your continued loyalty and support.
Sincerely,
/s/ Robert F. Shuford
Robert F. Shuford
Chairman of the Board and President
Enclosure
OLD POINT FINANCIAL CORPORATION
1 West Mellen Street
Hampton, Virginia 23663
NOTICE OF 2001 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 24, 2001
TO OUR STOCKHOLDERS:
The 2001 Annual Meeting of Stockholders of Old Point
Financial Corporation will be held at The Radisson Hotel, 700
Settlers Landing Road, Hampton, Virginia, on Tuesday, April 24,
2001, at 6:00 p.m. for the following purposes:
1. To elect 12 directors to serve for the ensuing year, or
until their successors have been elected and qualified;
2. To ratify the appointment of Eggleston Smith P.C., Certified
Public Accountants, as independent accountants and auditors for
2001;
3. To vote upon a proposal to amend the 1998 Stock Option Plan;
and
4. To transact such other business as may properly come before
the meeting.
Stockholders of record at the close of business on March 15,
2001, will be entitled to notice of and to vote at the Annual
Meeting and any adjournments thereof.
By Order of the Board of Directors
/s/ W. Rodney Rosser
W. Rodney Rosser
Senior Vice President & Secretary to the Board
March 30, 2001
Please complete, sign, date and mail the enclosed proxy card
promptly. No postage is required if the return envelope is used
and mailed in the United States or per instructions on your proxy
card you may also vote by telephone or by internet. If you attend
the meeting, you may, if you desire, revoke your proxy and vote
in person.
OLD POINT FINANCIAL CORPORATION
1 West Mellen Street
Hampton, Virginia 23663
PROXY STATEMENT
2001 ANNUAL MEETING OF STOCKHOLDERS
To Be Held April 24, 2001
GENERAL
The enclosed proxy is solicited by the Board of Directors of
Old Point Financial Corporation (the "Company") for the 2001
Annual Meeting of Stockholders (the "Annual Meeting") of the
Company to be held Tuesday, April 24, 2001, at the time and place
and for the purposes set forth in the accompanying Notice of the
Annual Meeting. Stockholders may revoke proxies at any time
prior to their exercise by written notice to the Company, by
submitting a proxy bearing a later date, or by attending the
Annual Meeting and requesting to vote in person. The approximate
mailing date of this Proxy Statement and accompanying Proxy is
March 30, 2001.
Voting Rights and Solicitation
Only those stockholders of record at the close of business
on March 15, 2001, are entitled to notice of and to vote at the
Annual Meeting or any adjournments thereof. The number of shares
of common stock of the Company outstanding and entitled to vote
as of the record date was 2,590,540. The Company has no other
class of stock outstanding. A majority of the shares entitled to
vote, represented in person or by proxy, will constitute a quorum
for the transaction of business.
Each share of Company common stock entitles the record
holder thereof to one vote upon each matter to be voted upon at
the Annual Meeting, except that in the election of directors
cumulative voting entitles a stockholder to give one nominee as
many votes as is equal to the number of directors to be elected,
multiplied by the number of shares owned by such stockholder or
to distribute his or her votes on the same principle between two
or more nominees as he or she sees fit. The Board of Directors
will instruct the proxyholders to use cumulative voting, if
necessary, to elect all or as many of the nominees as possible.
The cost of solicitation of proxies will be borne by the
Company. Solicitation is being made by mail, and if necessary
may be made in person or by telephone, telegram, or special
letter by officers and regular employees of the Company or its
subsidiary, acting without compensation other than regular
compensation.
Principal Shareholders
Mr. Robert F. Shuford, a director of the Company and its
wholly-owned subsidiaries, The Old Point National Bank of Phoebus
(the "Bank") and Old Point Trust & Financial Services, N.A. (the
"Trust Company"), and the VuBay Foundation are the only
shareholders who beneficially own 5% or more of the Company's
-1-
common stock. Mr. Shuford's beneficial ownership of the Company
common stock as of March 15, 2001 is shown in the beneficial
ownership table below under "Election of Directors." The address
of Mr. Shuford is the same as the Company's principal offices.
The VuBay Foundation has beneficial ownership of 193,584 shares
or 7.5% of the Company common stock as of March 15, 2001, and the
address of the VuBay Foundation is VuBay Foundation, c/o Cyrus A.
Dolph, IV, Assistant Secretary, P.O. Box 13109, Norfolk, Virginia
23506-3109. VuBay Foundation is a charitable foundation of which
Mr. Robert F. Shuford is one of three foundation directors
without sole voting power. Finally, the Trust Company holds as
trustee of various trust accounts a total of 391,101 shares or
15.1% of Company common stock. The Trust Company possesses sole
voting and/or investment power with respect to 279,265 of these
shares, but as to which, as a matter of state law, it must
refrain from voting unless a co-fiduciary is appointed for the
sole purpose of voting such shares. There are no other persons
known by the Company to be owners of more than 5% of the
Company's common stock.
As of March 15, 2001, the persons nominated as directors of
the Company, and the executive officers of the Company and its
subsidiaries, beneficially owned as a group 654,332 shares
(approximately 24.5%) of Company common stock outstanding
(including shares for which they hold presently exercisable stock
options).
PROPOSAL 1
ELECTION OF DIRECTORS
The twelve persons named below, all of whom currently serve
as directors of the Company, will be nominated to serve as
directors until the 2002 Annual Meeting, or until their
successors have been duly elected and have qualified.
Amount and Nature of
Principal Beneficial Ownership
Director Occupation For As of March 15, 2001
Name (Age) Since (1) Past Five Years (Percent of Class)(2)(3)
Dr. Richard F. Clark (68) 1981 Pathologist (retired) 63,871 (4)
Sentara Hampton General Hospital (2.5%)
Russell Smith Evans Jr. (58) 1993 Assistant Treasurer and 3,550 (4)
Corporate Fleet Manager *
Ferguson Enterprises
G. Royden Goodson, III (45) 1994 President 7,707 (4)
Warwick Plumbing & Heating Corp. *
Dr. Arthur D. Greene (56) 1994 Surgeon - Partner 4,286 (4)
Tidewater Orthopaedic Associates *
Gerald E. Hansen (59) 2000 President 1,001
Chesapeake Insurance Services, Inc. *
Stephen D. Harris (59) 1988 Attorney-at-Law - Partner 10,453 (4)
Geddy, Harris, Franck & Hickman, L.L.P. *
-2-
Amount and Nature of
Principal Beneficial Ownership
Director Occupation For As of March 15, 2001
Name (Age) Since (1) Past Five Years (Percent of Class)(2)(3)
John Cabot Ishon (54) 1989 President 17,783 (4)
Hampton Stationery *
Eugene M. Jordan (77) 1964 Attorney-at-Law 21,000 (4)
*
John B. Morgan, II (54) 1994 President 4,334 (4)
Morgan Marrow Insurance *
Louis G. Morris (46) 2000 President & CEO 24,511 (4)
Old Point National Bank *
Dr. H. Robert Schappert (62) 1996 Veterinarian - Owner 90,740 (4)
Beechmont Veterinary Hospital (3.5%)
Robert F. Shuford (63) 1965 Chairman of the Board,
President & CEO 160,086 (4)(5)
Old Point Financial Corporation (6.1%)
Chairman of the Board
Old Point National Bank
- -----------------------------------------------------------
*Represents less than 1.0% of the total outstanding shares.
(1) Refers to the year in which the individual first became a
director of the Bank. Dr. Richard F. Clark, Eugene M.
Jordan, and Robert F. Shuford became directors of the
Company upon consummation of the Bank's reorganization on
October 1, 1984. All present directors of the Company are
directors of the Bank. Dr. Richard F. Clark, Dr. Arthur D.
Greene, Mr. John C. Ishon and Mr. Robert F. Shuford are
directors of the Trust Company.
(2) For purposes of this table, beneficial ownership has been
determined in accordance with the provisions of Rule 13d-3 of the
Securities Exchange Act of 1934 under which, in general, a person
is deemed to be the beneficial owner of a security if he or she
has or shares the power to vote or direct the voting of the
security or the power to dispose of or direct the disposition of
the security, or if he or she has the right to acquire beneficial
ownership of the security within sixty days.
(3) Includes shares held (i) by their close relatives or held
jointly with their spouses, (ii) as custodian or trustee for the
benefit of their children or others, or (iii) as attorney-in-fact
subject to a general power of attorney - Dr. Clark, 200 shares;
Mr. Evans, 1,550 shares; Dr. Greene, 1,968 shares; Mr. Hansen,
361 shares; Mr. Harris, 407 shares, Mr. Ishon, 7,483 shares; Mr.
Jordan, 6,000 shares; Mr. Morgan, 2,934 shares; Dr. Schappert,
81,370 shares; and Mr. Shuford, 75,590 shares.
-3-
(4) Includes shares that may be acquired within 60 days pursuant
to the exercise of stock options granted under the 1989 and 1998
Old Point Stock Option Plans - Dr. Clark 1,000, Mr. Evans 1,000,
Mr. Goodson 1,000, Dr. Greene 1,000, Mr. Harris 1,000, Mr. Ishon
1,000, Mr. Jordan 1,000, Mr. Morgan 1,000, Mr. Morris 9,386, Dr.
Schappert 1,000, and Mr. Shuford 26,570.
(5) Mr. Shuford is one of three directors of the VuBay
Foundation, a charitable foundation organized under 501(c)(3) of
the Internal Revenue Code of 1986, as amended. A majority of the
Directors have the power to vote shares of Company common stock
owned by the foundation. The foundation owned 193,584 shares of
stock as of March 15, 2001. Mr. Shuford disclaims any beneficial
ownership of these shares.
There are two family relationships among the directors and
executive officers. Mr. Jordan is the father-in-law of Mr.
Ishon. Mr. Shuford and Dr. Schappert are married to sisters.
None of the directors serve as a director of any other company
with a class of securities registered pursuant to Section 12 of
the Securities Exchange Act of 1934.
Board Committees and Attendance
During 2000, there were thirteen meetings of the Company's
Board of Directors. Each director attended at least 75% of all
meetings of the Board and committees on which he served. The
Company's Board has standing Executive, Audit and Compensation
Committees.
The Company's Executive Committee was comprised of Messrs.
Shuford, Morris, Jordan, Harris, and Dr. Clark. It serves in an
advisory capacity, reviewing matters and making recommendations
to the Board of Directors. It met four times in 2000.
The Company's Compensation Committee is described below
under "Report on Executive Compensation."
In 2000, the previously-separate Audit Committees for the
Company and the Bank and the Company and the Trust Company were
combined into one Audit Committee, serving the Company and its
subsidiaries. The members of the combined Audit Committee are
Messrs. Jordan (Chairman), Greene, Hansen, Harris, Ishon, and
Morgan. The Audit Committee reviews on a regular basis the work
of the internal audit department. It also reviews and approves
the scope and detail of the continuous audit program, which is
conducted by the internal audit staff to protect against improper
and unsound practices and to furnish adequate protection for all
assets and records. Subject to the approval of the Board of
Directors, it engages a firm of certified public accountants to
conduct such audit work as is necessary and receives written
reports, supplemented by such oral reports as it deems necessary,
from the audit firm. During 2000, the Audit Committee held four
meetings.
The Board has no separate nominating committee. The
Executive Committee reviews any recommendations obtained and
gives their recommendations to the Board. The entire Board
reviews, on an as needed basis, the qualifications of candidates
for membership to the Board. Following appropriate review, the
Board ascertains the willingness of selected individuals to serve
-4-
and extends invitations to serve as a Board member.
Audit Committee Report
The Audit Committee of the Board of Directors (the
"Committee") is composed of six directors and operates under a
written charter adopted by the Board of Directors. A copy of
which is attached as appendix A. The members of the Committee
meet the independence requirements contained in the NASD listing
standards.
Management is responsible for the Company's internal
controls, financial reporting process and compliance with the
laws and regulations and ethical business standards. The
independent accountants are responsible for performing an
independent audit of the Company's consolidated financial
statements in accordance with generally accepted auditing
standards and to issue a report thereon. The Committee's
responsibility is to monitor and oversee these processes.
In this context, the Committee has met and held discussions
with management and the independent accountants. Management
represented to the Committee that the Company's consolidated
financial statements were prepared in accordance with generally
accepted accounting principles, and the Committee has reviewed
and discussed the consolidated financial statements with
management and the independent accountants. The Committee
discussed with the independent accountants matters required to be
discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees).
The Company's independent accountants also provided to the
Committee the written disclosures and letter required by
Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committee), and the Committee discussed
with the independent accountants that firm's independence.
Based upon the Committee's discussions with management and
the independent accountants and the Committee's review of the
representation of management and the report of the independent
accountants to the Committee, the Committee recommended that the
Board of Directors include the audited consolidated financial
statements in the Company's Annual Report on Form 10-K for the
year ended December 31, 2000 filed with the Securities and
Exchange Commission.
/s/ Eugene M. Jordan, Chairman
/s/ Dr. Arthur D. Greene
/s/ Gerald E. Hansen
/s/ Stephen D. Harris
/s/ John Cabot Ishon
/s/ John B. Morgan, II
-5-
Fees Paid To Independent Auditors
1. Audit Fees
The aggregate fees billed for professional services rendered
for the audit of the Company's annual financial statements for
2000 and the reviews of the Company's financial statements
included in its Forms 10-Q for 2000 totals $42,665.55.
2. Financial Information System Design and Implementation Fees
The aggregate fees billed by the Company's principal
accountant for information system services and products for 2000
totals $0.00. The Company has used other consultants for
information system services.
3. All Other Fees
The aggregate fees billed for services rendered by the
Company's principal accountant other than those outlined in 1 and
2 above totals $8,500.00
4. The Audit Committee considers the provision of services
covered in 2 and 3 above to be compatible with the maintenance of
the independence of the Company's principal accountants,
Eggleston Smith P.C.
5. All hours expended on the principal accountant's engagement
to audit the Company's financial statements for 2000 were
completed by full-time, permanent employees of the principal
accountants.
Directors' Compensation
Directors of the Bank and Trust Company receive $400 and
$250, respectively for each board meeting they attend. The
directors of the Bank and Trust Company receive $150 for each
committee meeting they attend. In addition, outside directors of
the Bank and Trust Company are paid an annual retainer fee of
$4,000 and $2,500, respectively. However, directors serving on
the Bank and Trust Company board receive a $1,000 annual retainer
for serving on the Trust Company board. All Company directors
have been elected as directors of the Bank, but there is no
assurance that this practice will continue. Not all Company
directors serve as directors of the Trust Company.
Directors who are employees of the Company and its
subsidiaries are compensated for attendance at board meetings,
but do not receive any fees for committee meetings and are not
paid annual retainer fees.
Indebtedness and Other Transactions
Some of the Company's directors, executive officers, and
members of their immediate families, and corporations,
partnerships and other entities of which such persons are
-6-
officers, directors, partners, trustees, executors or
beneficiaries, are customers of the Bank. All loans and
commitments to lend included in such transactions were made in
the ordinary course of business, upon substantially the same
terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other
persons and did not involve more than normal risk of
collectibility or present other unfavorable features. It is the
policy of the Bank to provide loans to officers who are not
executive officers and to employees at more favorable rates than
those prevailing at the time for comparable transactions with
other persons. These loans do not involve more than the normal
risk of collectibility or present other unfavorable features.
The law firm of Troutman Sanders Mays & Valentine LLP serves
as legal counsel to the Company and Jordan, Ishon & Jordan serve
as legal counsel to the Bank and Trust Company. Mr. Eugene M.
Jordan is a member of the firm. During 2000, the firm received a
retainer and fees totaling $51,835. Morgan Marrow Insurance of
which John B. Morgan, II is President, provided insurance for
which the Company paid $59,649 during 2000. Hampton Stationery,
of whom John Cabot Ishon is President, provided office furniture
and supplies for which the Company paid $36,735. Geddy, Harris,
Franck & Hickman LLP of which Stephen D. Harris is a partner, and
Warwick Plumbing & Heating Corp. of which G. Royden Goodson, III
is President provide products and services to the Company.
EXECUTIVE COMPENSATION
Cash Compensation
The following table presents a three-year summary of all
compensation paid or accrued by the Company and its subsidiaries
to the Company's Chief Executive Officer and each executive
officer whose salary and bonus for 2000 exceeded $100,000. The
table also presents the number and percentage of shares of the
Company's Common Stock held by these executive officers, who are
all executive officers of the Company.
SUMMARY COMPENSATION TABLE
Annual Compensation
Amount and
Nature of
Beneficial
Ownership
as of March
15,2001
Name and Principal All Other (Percent of
Position Year Salary(1) Bonus(2) Compensation(3) Class)(4)(5)(6)
- ------------------ ---- --------- -------- --------------- --------------- ---------------
Robert F. Shuford, 2000 $156,800 $27,000 $15,519 160,086
Chairman, President 1999 $153,500 $27,000 $17,556 (6.1%)
& CEO (Company) 1998 $151,200 $34,560 $17,765
-7-
Amount and
Nature of
Beneficial
Ownership
as of March
15,2001
Name and Principal All Other (Percent of
Position Year Salary(1) Bonus(2) Compensation(3) Class)(4)(5)(6)
- ------------------ ---- --------- -------- --------------- --------------- ---------------
Louis G. Morris 2000 $129,800 $22,500 $10,241 24,511
President & CEO (Bank) 1999 $100,267 $18,048 $ 9,220 *
1998 $ 90,247 $21,600 $ 9,051
Cary B. Epes 2000 $107,000 $19,260 $ 8,948 12,679
EVP/CCO (Bank) 1999 $ 99,267 $17,868 $ 9,340 *
1998 $ 89,167 $21,600 $ 9,440
Margaret P. Causby 2000 $106,000 $19,080 $ 8,863 12,941
EVP/CAO (Bank) 1999 $ 97,947 $17,630 $ 9,004 *
1998 $ 88,167 $21,600 $ 9,035
Frank E. Continetti 2000 $102,000 $15,000 $ 8,511 3,586
President & CEO 1999 $ 83,409 $10,759 $ 7,724 *
OPT&FS, NA 1998 $ 67,336 $ 4,665 $ 6,885
- -----------------------------------------------------------
*Represents less than 1.0% of the total outstanding shares.
(1) Salary includes directors' fees as follows: Mr. Shuford -
2000, $6,800, 1999, $3,900 and 1998, $4,200. Mr. Morris -
2000, $4,800. Mr. Continetti - 2000, $2,000.
(2) Bonus consideration for Mr. Shuford is paid in the year
following the year in which the bonus is earned so that the
Compensation Committee can evaluate year-end results. Bonus
consideration for Mr. Morris, Mr. Epes, Mrs. Causby and Mr.
Continetti is paid in the year in which it is earned.
(3) Mr. Shuford has received other compensation as follows:
2000 1999 1998
------- ------- -------
Deferred Profit Sharing $ 3,896 $ 4,532 $ 5,090
Cash Profit Sharing 3,559 4,210 4,811
401(k) Matching Plan 4,500 4,488 4,410
Group Term Insurance 3,564 4,326 3,454
------- ------- -------
Total $15,519 $17,556 $17,765
-8-
Mr. Morris has received other compensation as follows:
2000 1999 1998
------- ------- -------
Deferred Profit Sharing $ 3,247 $ 3,037 $ 3,122
Cash Profit Sharing 2,966 2,821 2,951
401(k) Matching Plan 3,750 3,008 2,705
Group Term Insurance 278 354 273
------- ------- -------
Total $10,241 $ 9,220 $ 9,051
Mr. Epes has received other compensation as follows:
2000 1999 1998
------- ------- -------
Deferred Profit Sharing $ 2,779 $ 3,007 $ 3,087
Cash Profit Sharing 2,539 2,793 2,918
401(k) Matching Plan 3,210 2,978 2,675
Group Term Insurance 420 562 760
------- ------- -------
Total $ 8,948 $ 9,340 $ 9,440
Mrs. Causby has received other compensation as follows:
2000 1999 1998
------- ------- -------
Deferred Profit Sharing $ 2,753 $ 2,967 $ 3,053
Cash Profit Sharing 2,516 2,756 2,885
401(k) Matching Plan 3,180 2,938 2,645
Group Term Insurance 414 343 452
------- ------- -------
Total $ 8,863 $ 9,004 $ 9,035
Mr. Continetti has received other compensation as follows:
2000 1999 1998
------- ------- -------
Deferred Profit Sharing $ 2,598 $ 2,527 $ 2,325
Cash Profit Sharing 2,373 2,347 2,204
401(k) Matching Plan 3,000 2,502 2,020
Group Term Insurance 540 348 336
------- ------- -------
Total $ 8,511 $ 7,724 $ 6,885
(4) For purposes of this table, beneficial ownership has been
determined in accordance with the provisions of Rule 13d-3
of the Securities Exchange Act of 1934 under which, in
general, a person is deemed to be the beneficial owner of a
security if he or she has or shares the power to vote or
direct the voting of the security or the power to dispose of
or direct the disposition of the security, or if he or she
has the right to acquire beneficial ownership of the
security within 60 days.
(5) Include shares held (1) by their joint relative or held
jointly with their spouses, (2) as custodian or trustee for
the benefit of their children or others, (3) as attorney-in-
fact subject to a general power of attorney-Mr. Shuford,
75,590 shares.
-9-
(6) Include shares that may be acquired within 60 days pursuant
to the exercise of stock options granted under the 1989 and
1998 Old Point Stock Option Plans-Mr. Shuford 26,570 shares,
Mr. Morris 9,386 shares, Mr. Epes 11,006 shares, Mrs. Causby
11,106 shares and Mr. Continetti, 3,200.
Aggregated Option Exercises in Last
Fiscal Year and December 31, 2000 Option Value
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
12/31/00(#) 12/31/00($)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized ($)(1) Unexercisable Unexercisable(1)
--------------- --------------- ------------- ----------------
Robert F. Shuford 0 $ 0 26,570/2,724 $0/$0
Louis G. Morris 0 $ 0 9,386/4,224 $0/$0
Cary B. Epes 0 $ 0 11,006/2,724 $0/$0
Margaret P. Causby 0 $ 0 11,106/2,724 $0/$0
Frank E. Continetti 0 $ 0 3,200/2,500 $0/$0
- --------------------
(1) Market value of underlying securities at exercise or year-
end, minus the exercise or base price.
-10-
OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table shows all grants of options to Executive
Officers in 2000.
OPTIONS GRANTED IN LAST FISCAL YEAR
Individual Grants Hypothetical
Value at Assumed
Annual Rates for Stock
Price Appreciation
For Option Term (3)
- -------------------------------------------------------------------------------------------
Number of
Securities % of Total Exercise
Underlying Options Grant Price Per Expiration
NAME Options(1) Employees Share(2) Date 5% 10%
- -------------------------------------------------------------------------------------------
Robert F. Shuford 0 0% $ 0 9/11/10 $ 0 $ 0
Louis G. Morris 4,000 7% $18.40 9/11/10 $46,280 $117,299
Cary B. Epes 2,500 4.4% $18.40 9/11/10 $28,925 $ 73,313
Margaret P. Causby 2,500 4.4% $18.40 9/11/10 $28,925 $ 73,313
Frank E. Continetti 2,500 4.4% $18.40 9/11/10 $28,925 $ 73,313
(1) All grants were made under the Company's 1998 Stock Option
Plan. Options were granted September 12, 2000 and become
exercisable September 12, 2001.
(2) Exercise price is average of the high and low trading prices
of Old Point Financial Corporation common stock on the five
trading days immediately preceding the date of the grant.
(3) To realize the potential values of an assumed 5% and 10%
annual stock price appreciation rate, the price per share of the
common stock would be approximately $29.97 and $47.73,
respectively, at the end of the ten year term for options granted
on September 12, 2000.
Employee Benefit Plans
Pension Plan. The Company has a noncontributory defined
benefit pension plan, which covers substantially all full-time
employees of the Company and its subsidiaries who have completed
one year of service. A participant's monthly retirement benefit
(if he or she has 25 years of Credited Service at his Normal
Retirement Date) is 20% of his final average pay plus 15% of final
average pay in excess of the participant's Social Security Covered
Pay. The Social Security Covered Pay is the average pay of the
calendar year prior to the year the participant attains his Social
-11-
Security Retirement Age. If the participant has less than 25
years of service at his Normal Retirement Date, the participant's
monthly retirement benefit will be actuarially reduced by 1/25 for
each year of credited service less than 25 years. Cash benefits
under the plan generally commence on retirement, death or other
termination of employment and are payable in various forms at the
election of the participant.
Thrift Plan. The Company has a contributory 401(k) profit-
sharing and thrift plan. Employees of the Company and its
subsidiaries are eligible to participate if they have completed 90
days of service and are at least 18 years old. Participants may
elect to defer between 1% to 15% of their base compensation as
defined in the plan, which will be contributed to the plan. The
Bank will contribute 50 cents for each dollar deferred by an
employee on the first 6% of the employee's compensation, provided
the employee completes 1,000 hours of service in the year, and is
employed on the last day of the year. Participants may also elect
to make additional deferrals subject to certain limitations, which
are not matched by the Bank.
Distributions to participants are made at death, retirement
or other termination of employment in a lump sum payment, unless a
participant or his beneficiary elects to receive payments in
installments. The plan permits certain in-service withdrawals.
All employee contributions are fully vested and the Bank's
contributions become fully vested when a participant reaches age
65, becomes totally and permanently disabled or dies. If a
participant leaves the Bank before the occurrence of one of these
events, the Bank's contributions will become 10% vested per year
for the first four years of service and 20% vested per year for
the next three years of service, becoming 100% vested after seven
years of service.
Employee Stock Purchase Plan. The Company has one employee
stock purchase plan - the 1996 Employee Stock Purchase Plan (the
"1996 Plan"). The 1996 Plan provides eligible employees with a
simple and convenient method of investing in Company stock at a 5%
discount. The 1996 Plan provides the Company with additional
capital funds, and its aim is to increase employee interest and
productivity through ownership of Company common stock. Regular
employees may voluntarily participate in the 1996 Plan. They may
elect to contribute from 2% to 15% of their base pay to the 1996
Plan by payroll deduction for the purchase of Company common
stock. The 1996 Plan's fiscal year is the twelve month period
beginning July 1st and ending the next June 30th. The term of
the 1996 Plan is for five consecutive fiscal years ending on June
30th from its inception date of July 1st, 1996.
In effect, the 1996 Plan grants eligible employees, who
voluntarily participate, an option to
purchase Company common stock at an exercise price equal to 95% of
the lesser of (1) the Fair Market Value of the common stock on the
1st day of the Plan year (July 1st), or (2) the Fair Market Value
of the common stock on the last day of the Plan year (June 30th).
The 1996 Plan was designed to qualify as an Employee Stock
Purchase Plan under Section 423 of the Internal Revenue Code, as
amended (the "Code"). Under the Code, participants normally do
not realize any income at the date of grant, or the date of
exercise and purchase of shares under the 1996 Plan. Recognition
of income is normally postponed until disposition of the shares.
-12-
Stock Option Plans. The Company has two stock option plans -
the 1989 Stock Option Plan and the 1998 Stock Option Plan (the
"Plans"). The Plans provide for the award of nonqualified stock
options and incentive stock options to directors and employees of
the Company and its subsidiaries selected by the Board of
Directors to participate in the Plans. The Board of Directors
makes awards under the Plans and establishes the terms and
conditions of each award in the option agreement entered into with
each optionee. The price of shares of stock to be issued upon the
exercise of options will be at least 100% of the fair market value
on the date of award. Options may not be granted more than ten
years after the adoption of the Plans by the Board and are
exercisable only during the term specified in the option
agreement, which in the case of incentive stock options shall not
exceed ten years. The options are not transferable other than by
will or the laws of descent and distribution.
While options covering the 69,384 shares under the 1989 Plan
have been granted, options covering 112,500 shares have been
granted under the 1998 Plan under which 125,000 shares of Company
common stock have been reserved. The 1989 Plan did not permit
grants of option to non-employees, whereas, the 1998 Plan permits
grants of options to non-employee directors.
Other Benefit Plans. Life, medical, dental, and disability
insurance is provided to all officers and employees of the
Company and its subsidiaries.
Report on Executive Compensation
Compensation for executive officers is administered by the
Compensation Committee (the "Committee"). The Committee is
comprised of four non-employee directors, Messrs. Goodson
(Chairman), Clark, Evans, and Morgan. It met two times in 2000.
All decisions of the Committee are recommended to the entire Board
of Directors, which makes the final decision.
In an environment characterized by change, regulatory
oversight and increased competition, total executive compensation
is designed to attract and retain qualified personnel by providing
competitive levels of compensation as compared to similarly sized
financial institutions. Executive compensation consists of the
several elements specified in the Summary Compensation Table under
"Executive Compensation;" namely, base salary and annual and long-
term incentive compensation.
In making its recommendation to the Board, the Committee
obtains from market and economic research companies information
pertaining to salary levels at other comparable financial
institutions. Annual compensation is determined by evaluating
several factors. The primary factor considered in evaluating the
level of executive compensation is the progress the Company made
during the year in achieving performance goals. The performance
goals evaluated include, but are not limited to, return on average
assets, return on average equity, net income, asset quality, and
deposit and loan growth. Secondary factors considered by the
Committee include comparing the Company's performance with other
local institutions and comparable executive compensation packages.
Lastly, the Committee gives some consideration to the expected
future contributions of the executive, general economic
conditions, the executive's length of service and standing within
the local banking communities, and other factors. Bonuses are
awarded based on evaluation of the foregoing factors relating to
the Company's financial performance. Decisions regarding
compensation, however, are mostly subjective in nature, and no
specific formulas are used to calculate an executive's
compensation.
-13-
The asset growth, loan growth and earnings increase resulted
in an overall positive financial performance of the Company and
its subsidiaries in fiscal year 2000.
The committee recommended to the Board a bonus be granted to
Mr. Shuford in the amount of $27,000, Mr. Morris, $22,500, Mr.
Epes, $19,260, Mrs. Causby, $19,080 and Mr. Continetti $15,000.
The foregoing report was furnished to the Committee, and
approved by the directors of the Company.
G. Royden Goodson, III, Chairman
Dr. Richard F. Clark
Russell S. Evans, Jr.
John B. Morgan, II
Section 16(a) - Beneficial Ownership Reporting Compliance
Based on a review of the reports of changes in beneficial
ownership of Capital Stock and written representations made to the
Company, the Company believes that its officers and directors have
filed on a timely basis the report which is required to be filed
under Section 16(a) of the Securities Exchange Act of 1934 during
the fiscal year ended December 31, 2000.
FIVE YEAR STOCK PERFORMANCE
Management provides on the next page a line graph, which
compares the Company's shareholder return with the return of the
NASDAQ Bank Index and the Russell 2000 Index.
This performance graph was created by comparing the
percentage change in stock prices for the Company and the indices
on a year to year basis, factoring in dividend payments, and
looking only at the closing price of the stock as of December 31
of each year surveyed. This graph may be affected by unusually
high or low prices at December 31, 1995 or by temporary swings in
stock price at December 31 of any given year. Accordingly, this
is not necessarily the best measure of the Company's performance.
The index reflects the total return on the stock that is
shown, including price appreciation, all stock splits and stock
dividends, and reinvestment of cash dividends at time of payment,
relative to the value of the stock at the beginning of the time
period. Thus a move from 100 to 150 on the index scale indicates
a 50% increase in the value of the investment. The NASDAQ Bank
Index contains all non-holding company banking institutions
traded on the NASDAQ exchange. In addition to traditional banks
this includes thrifts but does not include other non-regulated
finance companies. The Russell 2000 index is comprised of the
smallest 2000 companies in the Russell 3000 Index, which tracks
almost 99 percent of the stocks included in portfolios of
institutional investors.
-14-
1995 1996 1997 1998 1999 2000
NASDAQ Bank Composite 100.00 128.97 214.01 192.27 181.27 212.45
Old Point Financial Corp 100.00 114.59 119.59 185.19 146.58 128.00
Russell 2000 Index 100.00 116.42 142.10 138.90 168.23 163.41
-15-
PROPOSAL 2
RATIFICATION OF SELECTION OF ACCOUNTANTS
On the recommendation of the Audit Committee, the Board of
Directors has appointed Eggleston Smith P.C., certified public
accountants, as the Company's independent auditors for 2001,
subject to ratification by stockholders at the Annual Meeting.
Eggleston Smith P.C. rendered audit services to the Company
during 2000. These services consisted primarily of the
examination and audit of the Company's financial statements, tax
reporting assistance, and other audit and accounting matters.
Representatives of Eggleston Smith P.C. are expected to be
present at the Annual Meeting and are expected to be available to
respond to your questions.
The Board of Directors recommends that the stockholders vote
FOR ratification of Eggleston Smith P.C., as the Company's
independent auditors for 2001.
PROPOSAL 3
APPROVAL OF AMENDMENT TO THE 1998 STOCK OPTION PLAN
The Board of Directors proposes that the Company's
stockholders approve an amendment to the 1998 Stock Option Plan
(the "Option Plan"). The Option Plan was originally approved by
the stockholders at the 1998 annual meeting. The amendment of
the Option Plan, which the Company's stockholders are being asked
to approve (the "Amendment"), was adopted by the Board of
Directors on February 13, 2001, subject to the approval of the
Company's stockholders.
Proposed Amendment
The proposed Amendment amends Section 4.1 of the Option Plan
to increase the number of shares of the Company's Common Stock
available for Awards under the Option Plan from 125,000 to
325,000.
The Board of Directors believes that amending the Option Plan
will continue to provide the Company a tool to provide an
additional incentive to officers and other key employees and non-
employer directors who are in a position to contribute materially
to the success of the Company and its subsidiaries. The Board of
Directors also believes that the Option Plan, as amended, will
benefit the Company by (i) assisting it in recruiting and
retaining officers and other key employees and non-employee
directors with ability and initiative, (ii) providing greater
incentives for officers and other key employees and non-employee
directors, and (iii) associating the interests of officers and
other key employees and non-employee directors with those of the
Company and its stockholders through opportunities for increased
stock ownership.
The following description of the Option Plan as amended
summarizes the principal features of the Option Plan, as amended,
and is qualified in its entirety by reference to the full text of
the Option Plan, as amended, a copy of which is available by
written request to the Secretary of the Company.
-16-
Summary of the 1998 Stock Option Plan, as Amended
Administration
The Option Plan is administered by a committee of not less
than three non-employee directors appointed in accordance with
the Option Plan (the "Committee"), except for Options to non-
employee directors which are administered by the full Board of
Directors. All members of the Committee are "non-employee
directors" as defined in Rule 16b-3 under the Securities Exchange
Act of 1934 (the "Exchange Act"). The Committee has the power to
determine the key employees to whom Options are granted. The
Board of Directors has the power to determine the non-employee
directors to whom Options are granted.
Each Option under the Option Plan is made pursuant to a
written agreement between the Company and the recipient of the
Option (the "Agreement"). In administering the Option Plan, the
Committee (or the Board in the case of Options to directors) has
the express power, subject to the provisions of the Option Plan,
to determine the terms and conditions upon which Options may be
made and exercised, to determine terms and provisions of each
Agreement, to construe and interpret the Option Plan and the
Agreements, to establish, amend or waive rules or regulations for
the Option Plan's administration, and to make all other
determinations and take all other actions necessary or advisable
for the administration of the Option Plan.
The member of the Committee are indemnified by the Company
against the reasonable expenses incurred by them, including
attorney's fees, in the defense of any action, suit or
proceeding, or any appeal therein to which they may be a party by
reasons of any action taken or failure to act under the Option
Plan.
Subject to the terms, conditions and limitations of the Option
Plan, outstanding Options may be modified, extended or renewed,
or, if authorized by the Board, accept the surrender of
outstanding options and authorizing the award of new Options in
substitution thereof. The Board or Committee may also modify any
outstanding Agreement. No modification may adversely affect the
rights or obligations of the recipient without the consent of the
recipient.
The Board may terminate, amend or modify the Option Plan from
time to time in any respect without stockholder approval,
including amendments necessary to make the Plan conform with Rule
16b-3 under the Exchange Act, unless the particular amendment or
modification requires stockholder approval under the Internal
Revenue Code of 1986, as amended (the "Code"), the rules and
regulations under Section 16 of the Exchange Act, the rules and
regulations of the exchange or system on which the Common Stock
is listed or reported or pursuant to any other applicable laws,
rules or regulations. Currently Rule 16b-3 under the Exchange
Act and the Code regulations governing ISOs taken together
require stockholder approval of any amendments which would (i)
materially increase the benefits accruing to participants, (ii)
materially increase the number of securities which may be issued
or (iii) materially modify the requirements as to eligibility for
participation.
The Option Plan will expire on March 9, 2008, unless sooner
terminated by the Board.
-17-
Eligibility
Employees of the Company and its subsidiaries who are deemed
to be key employees ("Key Employees") by the Committee are
eligible for Options under the Option Plan. Key Employees
include officers or other employees of the Company and its
subsidiaries who, in the opinion of the Committee, can contribute
significantly to the growth and profitability of, or perform
services of major importance to, the Company and its
subsidiaries. Directors who are not also officers or employees
of the Company or its subsidiaries are not Key Employees, but are
eligible for awards under the Plan as described under "Grants to
Non-Employee Directors". The number of employees who may be
eligible for Options under the Option Plan is approximately [35]
(including those persons named in the cash compensation table),
and the nature and extent of their participation, the benefits or
amounts to be received by each of them and any consideration to
be received by the Company for granting or awarding such benefits
will be determined by the Committee. Unless specified below in
the description of the particular Options available under the
Option Plan or in the Option Plan itself, the prices, expiration
dates, consideration to be received by the Company, and other
terms of each Agreement shall be determined by the Committee.
Certain Terms of Options
Options granted under the Option Plan generally may not be
assigned, transferred, pledged or otherwise encumbered by a
participant, other than by will or the laws of descent and
distribution. Options may be exercised during the recipient's
lifetime only by the recipient or, in the case of death or
disability, by the recipient's legal representative. To the
extent required under Rule 16b-3, Options are not exercisable
until at least six months after the grant of the Option (except
in the event of death or disability.
Options
The Option Plan authorizes the grant of incentive stock
options within the meaning of Section 422 of the Code ("ISOs")
and non-qualified stock options ("NQSOs") (collectively,
"Options"). The Option terms applicable to such Options will be
determined by the Committee, but an Option generally will not be
exercisable until at least six months after its grant (except in
cases of death or disability) or after ten years from its grant.
All Options granted as ISOs shall comply with all applicable
provisions of the Code and all other applicable rules and
regulations governing ISOs. All other Option terms will be
determined by the Committee in its sole discretion.
Grants to Non-Employee Directors
Each non-employee director serving on the Board of the Company
and the Bank is eligible to receive non-qualified stock option
grants during the term of the Plan. The Company and its
subsidiaries currently have [12] non-employee directors.
The exercise price of option grants will be 100% of fair
market value of the shares on the Grant Date.
-18-
Except as otherwise described in this subsection, awards to
non-employee directors are subject to same terms and conditions
as other Options made under the Plan.
The entire Board will administer the Plan with respect to
grants to non-employee directors.
Shares Subject to the Option Plan
Up to 325,000 shares of Common Stock may be issued under the
Option Plan. Except as set forth below, shares of Common Stock
issued in connection with the exercise of, or as other payment
for, an Option will be charged against the total number of shares
issuable under the Option Plan. If any Option granted (for which
no material benefits of ownership have been received, including
dividends) terminates, expires or lapses for any reason other
than as a result of being exercised, or if shares issued (for
which no material benefits of ownership have been received,
including dividends) pursuant to an Option are forfeited, Common
Stock subject to such Option will be available for further
Options to participants.
In order to reflect such events as stock dividends, stock
splits, recapitalizations, mergers, consolidations or
reorganizations by the Company, the Committee (or the Board) may,
in their respective sole discretion, adjust the number of shares
subject to each outstanding Option, the exercise price and the
aggregate number of shares from which grants or awards may be
made.
Change in Control
In order to maintain all the participants' rights in the event
of a Change in Control of the Company (as that term is defined in
the Plan), the Committee, as constituted before such Change in
Control, in its sole discretion, may, as to any outstanding Award
either at the time an Award is made or any time thereafter, take
any one or more of the following actions: (i) provide for the
acceleration of any time periods relating to the exercise or
realization of any such Award so that such Award may be exercised
or realized in full on or before a date initially fixed by the
Committee; (ii) provide for the purchase or settlement of any
such Award by the Company, upon a Participant's request, for an
amount of cash equal to the amount which could have been obtained
upon the exercise of such Award or realization of such
Participant's rights had such Award been currently exercisable or
payable; (iii) make such adjustment to any such Award then
outstanding as the Committee deems appropriate to reflect such
Change in Control; or (iv) cause any such Award then outstanding
to be assumed, or new rights substituted therefor, by the
acquiring or surviving corporation in such Change in Control.
Certain Federal Income Tax Consequences
Incentive Stock Options. An optionee will not recognize
income on the grant of an ISO, and an optionee generally will not
recognize income on the exercise of an ISO, except as described
in the following paragraph. Under these circumstances, no
deduction will be allowable to the employer corporation in
connection with either the grant of such Options or the issuance
of shares upon exercise thereof.
However, if the exercise of an ISO occurs more than three
months after the optionee ceased to be an employee for reasons
other than death or disability (or more than one year thereafter
-19-
if the optionee ceased to be an employee by reason of permanent
and total disability), the exercise will not be treated as the
exercise of an ISO, and the optionee will be taxed in the same
manner as on the exercise of a NQSO, as described below. For the
Option to qualify as an ISO upon the optionee's death, the
optionee must have been employed at the Company for at least
three months before his or her death.
To the extent the aggregate fair market value (determined at
the time the Options are granted) of shares subject to an ISO
that become exercisable for the first time by any optionee in any
calendar year exceeds $100,000, the Options will be treated as
Options which are not ISOs, and the optionee will be taxed upon
exercise of those excess Options in the same manner as on the
exercise of NQSO, as described below.
Gain or loss from the sale or exchange of shares acquired upon
exercise of an ISO generally will be treated as capital gain or
loss. If, however, shares acquired pursuant to the exercise of
an ISO are disposed of within two years after the Option was
granted or within one year after the shares were transferred
pursuant to the exercise of the Option, the optionee generally
will recognize ordinary income at the time of the disposition
equal to the excess over the exercise price of the lesser of the
amount realized or the fair market value of the shares at the
time of exercise (or, in certain circumstances, at the time such
shares became either transferable or not subject to a substantial
risk of forfeiture). If, however, such disposition is not a sale
or exchange with respect to which a loss (if sustained) would be
recognized, the ordinary income is the excess of the fair market
value of the shares at the time of exercise (or, in certain
circumstances, at the time they became either transferable or not
subject to substantial risk of forfeiture) over the exercise
price. Gain recognized on the disposition in excess of the
ordinary income resulting therefrom will be capital gain and any
loss recognized on the disposition will be capital loss. If an
optionee recognizes ordinary income as a result of a disposition
as described in this paragraph, the employer corporation will be
entitled to a deduction of the same amount.
The exercise of an ISO may result in a tax to the optionee
under the alternative minimum tax because as a general rule the
excess of the fair market value of stock received on the exercise
of an ISO over the exercise price is defined as an item of "tax
preference" for purposes of determining alternative minimum
taxable income.
Non-qualified Options. A participant will not recognize
income on the grant of a NQSO, but generally will recognize
income upon the exercise of a NQSO. The amount of income
recognized upon the exercise of a NQSO will be measured by the
excess, if any, of the fair market value of the shares at the
time of exercise over the exercise price, provided that the
shares issued are either transferable or not subject to a
substantial risk of forfeiture.
If shares received on the exercise of a NQSO are
nontransferable and subject to a substantial risk of forfeiture
then, unless the optionee elects to recognize income at the time
of receipt of such shares, the optionee will not recognize
ordinary income until the shares become either transferable or
not subject to a substantial risk of forfeiture. For these
purposes, shares will be treated as nontransferable and subject
to a substantial risk of forfeiture for as long as the sale of
the shares at a profit could subject the optionee to suit under
Section 16(b) of the Exchange Act. In the circumstances
described in this paragraph, the amount of income recognized is
-20-
measured with respect to the fair market value of the shares at
the time the income is recognized.
In the case of ordinary income recognized by an optionee as
described above in connection with the exercise of a NQSO, the
employer corporation will be entitled to a deduction in the
amount of ordinary income so recognized by the optionee.
Use of Shares to Exercise Options. Special rules govern the
tax treatment of the use of stock to pay the exercise price of an
ISO or NQSO.
General. The rules governing the tax treatment of Options
that may be granted under the Option Plan are quite technical, so
that the above description of tax consequences is necessarily
general in nature and does not purport to be complete. Moreover,
statutory provisions are, of course, subject to change, as are
their interpretations, and their application may vary in
individual circumstances. In addition, Section 162(m) of the
Code places certain limitations on the Company's ability to
deduct compensation paid to its executive officers under certain
circumstances, including compensation which may be payable
pursuant to the Plan.
Finally, the tax consequences under applicable state laws may
not be the same as under the federal income tax laws.
Effective Date
If approved by the stockholders, the amendment to the Option
Plan will be treated as effective as of February 13, 2001.
Vote Required
The affirmative vote of the holders of a majority of the
Common Stock represented in person or by proxy at the Annual
Meeting, assuming a quorum is present, is required to ratify and
approve the proposed amendment to the Option Plan.
The Board of Directors recommends that the stockholders vote
FOR proposal three and to approve the proposed amendment to the
1998 Stock Option Plan.
2002 ANNUAL MEETING OF STOCKHOLDERS
In accordance with the By Laws of the Company as currently in
effect, the 2002 Annual Meeting of Stockholders will be held on
April 23, 2002.
The Board of Directors need not include an otherwise
appropriate shareholder proposal in its proxy statement or form of
proxy for that meeting unless the proposal is received by the
Company at its main office on or before December 1, 2001.
-21-
ANNUAL FINANCIAL DISCLOSURE STATEMENT
A copy of the Company's Annual Report on Form 10-K (including
exhibits) as filed with the Securities and Exchange Commission for
the year ended December 31, 2000, will be furnished without charge
to shareholders upon written request directed to:
Laurie D. Grabow
Senior Vice President/Finance
The Old Point National Bank of Phoebus
1 West Mellen Street
Hampton, Virginia 23663
(757) 728-1251
Form 10-K (including exhibits) can also be reviewed on the
Investors Relations link on the Company's Internet web site at
http://www.oldpoint.com
OTHER MATTERS
Management knows of no other business to be brought before the
Annual Meeting. Should any other business properly be presented for
action at the meeting, the shares represented by the enclosed proxy
shall be voted by the persons named therein in accordance with their
best judgment and in the best interests of the Company.
-22-
Appendix A
CHARTER OF THE AUDIT COMMITTEE OF
OLD POINT FINANCIAL CORPORATION AND ITS SUBSIDIARIES
Organization and Structure
There shall be a committee of the Board of Directors known as the
Audit Committee ("the Committee"). Committee members shall meet
the requirements of the NASDAQ Exchange. The Committee will be
comprised of at least three members, each of whom shall be
independent of the management of Old Point Financial Corporation
and its Subsidiaries ("the Company") and free of any relationship
that would interfere with their exercise of independent
judgement. All Committee members shall be able to read and
understand fundamental financial statements, including a
company's balance sheet, income statement, and cash flow
statement. At least one director will have past employment
experience in finance or accounting, requisite professional
certification in accounting, or other comparable experience or
background, including a current or past position as a chief
executive or financial officer or other senior officer with
financial oversight responsibilities. Committee members shall be
appointed by the Board of Directors on the Recommendation of the
Executive Committee of the Board.
Primary Purpose
Monitor the integrity of the Company's financial reporting
process and systems of internal controls regarding finance,
accounting, and legal compliance.
Monitor the independence and performance of the Company's
external independent auditors ("Independent Auditors") and
internal auditing department.
Provide an open avenue of communication among the
Independent Auditors, financial and senior management, the
internal auditing department, and the Board of Directors.
Duties and Responsibilities - General
Review and reassess the adequacy of this charter at least
annually. Submit the charter to the Board of Directors for
approval and have a copy of the charter attached to the proxy
statement as an appendix at least once every three years in
accordance with SEC regulations.
Require that the Company's Independent Auditors review the
financial information contained in the Company's Quarterly
Reports on Form 10-Q prior to the Company's filing such reports
with the Securities and Exchange Commission ("SEC"). The
Independent Auditors must follow "professional standards and
procedures for conducting such reviews, as established by
generally accepted auditing standards, as may be modified or
supplemented by the SEC."
Meet at least four times annually or more frequently as
circumstances dictate.
-23-
The Committee chairperson or his designee shall prepare an
agenda in advance of the meeting. The preparation of this agenda
shall derive from consultation with management, other Committee
members, the Independent Auditors and the internal audit
director. The Committee will meet with the internal audit
director, the Independent Auditors and management in separate
executive sessions to discuss any matters that the Committee or
these groups believe should be discussed privately with the
Committee.
Review with the Independent Auditors and the internal audit
director the coordination of audit effort to assure completeness
of coverage, reduction of redundant efforts, and the effective
use of audit resources.
Duties and Responsibilities - Internal Audits
Review internal audit reports completed since the previous
Committee meeting. Discuss those audits with ratings of less than
"Satisfactory".
Review reports of pending internal audit exception items and
the follow-up responses to them.
Review the current internal audit work schedule and the
progress made by the department in adhering to the schedule and
request explanations for any significant deviations from the
schedule; review the basis, i.e. risk-based, for future internal
audit work schedules.
Review audits conducted by contracted specialists, other
than the Independent Auditors.
Duties and Responsibilities - Independent Auditors
Meet with the Independent Auditors and management of the
Company to review the scope and nature of each proposed audit
and, at the conclusion thereof; review such audit, including any
comments or recommendations of the Independent Auditors.
Inform the Independent Auditors that their ultimate
responsibility is to the Board of Directors and the Committee,
which serve as representatives of shareholders. The Board of
Directors and the Committee have the ultimate authority and
responsibility to select, evaluate, and where appropriate,
replace the Independent Auditors (or to nominate the Independent
Auditors to be proposed for shareholder ratification in any proxy
statement).
Confirm and assure the independence of the Independent
Auditors by obtaining a formal written statement from the
Independent Auditors delineating all relationships between the
Independent Auditors and the Company, consistent with
Independence Standards Board Standard 1; actively engage in a
dialogue with the Independent Auditors with respect to any
disclosed relationships or services that may impact the
objectivity and independence of the Independent Auditors; take,
or recommend that the Board of Directors take, appropriate action
to oversee the independence of the Independent Auditors.
-24-
Issue a report above the printed names of the Committee
members for inclusion in all proxy statements that states
whether:
- the Committee has reviewed and discussed the Company's
audited financial statements management;
- the Committee has discussed with the Company's Independent
Auditors the matters required to be discussed by SAS 61, as may
be modified or supplemented;
- the Committee has reviewed the written disclosures and the
letter from the Independent Auditors required by ISB Standard No.
1, as may be modified or supplemented, and has discussed with the
Independent Auditors their independence; and
- based on the three points above, the Committee has
recommended to the Board of Directors that the financial
statements of the Company be included in the Annual Report on
Form 10-K to be filed with the SEC for the Company's last fiscal
year.
-25-
OLD POINT FINANCIAL CORPORATION
P.O. BOX 3392, HAMPTON, VIRGINIA 23663
PROXY CARD FOR
ANNUAL MEETING OF SHAREHOLDERS
APRIL 24, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The
undersigned hereby appoints Harold G. Jackson and Hurley J. Shaw, Jr. as
Proxies, each with full power to appoint his substitute and hereby
authorizes them to represent and to vote, as designed below, all of the
shares of voting common stock, $5.00 par value, of Old Point Financial
Corporation held of record by the undersigned on March 15, 2001 at the
Annual Meeting of Shareholders, to be held on April 24, 2001, and at any
and all adjournments thereof.
This proxy will be voted in the manner directed by the undersigned. If no
direction is made, this proxy will be voted FOR Items 1, 2 and 3.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign exactly as your names(s) appear(s) hereon. When shares are
held by joint tenants, both must sign.
When signing in a representative capacity, please provide full title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
X PLEASE MARK VOTES
AS IN THIS EXAMPLE
- -------------------------------
OLD POINT FINANCIAL CORPORATION
- -------------------------------
_
Mark box at right if you plan to attend the Annual Meeting. [_]
_
Mark box at right if an address change or comment has been [_]
noted on the reverse side of this card.
CONTROL NUMBER:
RECORD DATE SHARES:
Please be sure to sign and date this Proxy. Date_______
_____________________ _________________
Shareholder sign here Co-owner sign here
DETACH CARD
Vote by Telephone
It's fast, convenient, and immediate!
Call Toll-Free on a Touch-Tone Phone
Follow these four east steps:
1. Read the accompanying Proxy Statement/Prospectus and
Proxy Card.
2. Call the toll-free number
1-877-PRX-VOTE (1-877-779-8683).
There is NO CHARGE for this call.
3. Enter your Control Number located on your Proxy Card.
4. Follow the recorded instructions.
Your vote is important!
Call 1-877-PRX-VOTE anytime!
1. Election of Directors.
(1)Richard F. Clark, (2)Russell S. Evans, Jr. For All With- For All
(3)G. Royden Goodson, III, Nominees hold Except
(4)Arthur D. Greene, (5)Gerald E. Hansen, _ _ _
(6)Stephen D. Harris, (7)John Cabot Ishon, [_] [_] [_]
(8)Eugene M. Jordan, (9) John B. Morgan, II,
(10) Louis G. Morris, (11) H. Robert Schappert,
(12) Robert F. Shuford
INSTRUCTION: To withhold authority to vote for any nominee, mark the
"For All Except" box and strike a line through the nominee's name in the
list above.
For Against Abstain
2. Ratification of the appointment of Eggleston _ _ _
Smith, P.C., Certified Public Accountants, as [_] [_] [_]
independent auditors for 2001.
_ _ _
3. To ratify and approve an amendment to the [_] [_] [_]
1998 Stock Option Plan.
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting and at any
adjournment(s) thereof.
DETACH CARD
Vote By Internet
It's fast, convenient, and your vote is immediately
confirmed and posted.
Follow these four easy steps:
1. Read the accompanying Proxy Statement/Prospectus and
Proxy Card.
2. Go to the Website
http://www.eproxyvote.com/opof
3. Enter your Control Number located on your Proxy Card.
4. Follow the instructions provided.
Your vote is important!
Go to http://www.eproxyvote.com/opof anytime!
Do not return your Proxy Card if you are voting by Telephone or Internet