OLD POINT FINANCIAL CORPORATION
1996 EMPLOYEE STOCK PURCHASE PLAN
TABLE OF CONTENTS
ARTICLE Page
I. Definition of Terms. . . . . . . . . . . . . . . . . . . . 1
II. Eligibility and Participation. . . . . . . . . . . . . . . . 2
III. Funding. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
IV. Offerings. . . . . . . . . . . . . . . . . . . . . . . . . . 4
V. Options. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
VI. Exercise of Options. . . . . . . . . . . . . . . . . . . . . 6
VII. Cessation of Participation and Distribution of Accounts. . . 6
VIII. Stock Issuance . . . . . . . . . . . . . . . . . . . . . . . 7
IX. Death Beneficiary. . . . . . . . . . . . . . . . . . . . . . 7
X. Plan Administration. . . . . . . . . . . . . . . . . . . . . 8
XI. Amendment and Termination of Plan. . . . . . . . . . . . . . 8
XII. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . 9
XIII. Adoption of the Plan . . . . . . . . . . . . . . . . . . . . 10
OLD POINT FINANCIAL CORPORATION
1996 EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I
Definition of Terms
The following words and terms as used herein shall have the meaning set
forth below, unless a different meaning is clearly required by the context:
1.1 "Account": The account maintained to record a Participant's
Actual Base Pay payroll deduction contributions to the Plan.
1.2 "Actual Base Pay": The amount of a Participant's earned
income, wages, salaries, fees for professional service, and other amounts
received for personal services actually rendered in the course of employment
as an Eligible Employee from the Employer generally including, without
limitation, commissions paid salesmen, compensation for services on the
basis of percentage of profits, commissions on insurance premiums, and tips,
but excluding bonuses, overtime, incentive pay, and ISOP compensation
amounts.
1.3 "Administrator": The Plan Administrator provided for in
ARTICLE X hereof.
1.4 "Affiliate": Any present or future corporation which would be
a "parent corporation" or a "subsidiary corporation" of the Plan Sponsor as
those terms are defined in Section 424 of the Code.
1.5 "Annual Base Pay Rate": With respect to an Offering, a
Participant's annual rate of Actual Base Pay as July 1, determined by
multiplying his normal weekly rate of such base pay (as in effect on the
July 1 of the Plan Year for which the Offering is made) by 52 or the hourly
rate by 2,080, provided that, in the case of a part time employee, such
determination shall be made by multiplying such employee's hourly rate by
the number of his regularly scheduled hours of work as in effect on the
July 1 of the Plan Year for which the Offering is made. For purposes of
determining a Participant's Actual Base Pay Rate, commissions (or any other
contingent or intermittent pay includible in Actual Base Pay) shall be
annualized based on the Participant's commissions (or, as applicable, other
contingent or intermittent pay includible in Actual Base Pay) for the 12
month period ending on the day before the first day of the Plan Year for
which the Offering is made.
1.6 "Beneficiary": The person or persons designated by a
Participant or otherwise entitled pursuant to paragraph 9.2 to receive
benefits under the Plan attributable to such Participant after the death of
such Participant.
1.7 "Board": The present and any succeeding Board of Directors of
the Plan Sponsor, unless such term is used with respect to a particular
Employer and its Employees, in which event it shall mean the present and any
succeeding Board of Directors of that Employer.
1.8 "Common Stock": The common stock, $5.00 par value, of the
Plan Sponsor.
1.9 "Code": The Internal Revenue Code of 1986, as the same may be
amended from time to time, or the corresponding section of any subsequent
Internal Revenue Code, and, to the extent not inconsistent therewith,
regulations issued thereunder.
1.10 "Eligible Employee": Any person who is employed as a common
law employee by the Employer, who is customarily employed for more than 5
months in a calendar year.
1.11 "Employee": Any person considered a common law employee of
the Employer or any Affiliate.
1.12 "Employer": The Plan Sponsor and each other employer
heretofore or hereafter executing or adopting the Plan with the consent of
the Administrator as a participating Employer, collectively unless the
context otherwise indicates, for as long as it remains a participating
Employer; and with respect to any Employee, any one or more of such
Employers by which he is at any time employed. The Administrator shall
maintain a list of all such Employers who are, from time to time,
participating Employers in the Plan.
1.13 "Market Value": The closing price of Common Stock on a
designated date or the nearest prior business day on which trading occurred
on the NASDAQ National Market System; provided, however, that if the Common
Stock is not admitted to trading on any of the aforesaid dates for which
closing prices of the Common Stock are to be determined, then fair market
value of the Common Stock on that date, as determined on such basis as shall
be established or specified for the purpose by the Administrator.
1.14 "Offering": An offering of Common Stock pursuant to the Plan.
1.15 "Offering Commencement Date": July 1 of the Plan Year for
which an Offering is made.
1.16 "Offering Termination Date": June 30 of the Plan Year for
which an Offering is made.
1.17 "Participant": An Eligible Employee who is eligible and who
elects to participate in the Plan for so long as he is considered a
Participant as provided in ARTICLE II hereof.
1.18 "Plan": The Plan as contained herein or duly amended which
shall be known as the "Old Point Financial Corporation 1996 Employee Stock
Purchase Plan".
1.19 "Plan Sponsor": Old Point Financial Corporation, a Virginia
corporation.
1.20 "Plan Year": The fiscal year of the Plan, which commences
July 1 and ends the following June 30.
ARTICLE II
Eligibility and Participation
2.1 Eligibility and Date of Participation.
2.1(a) Each Eligible Employee who has completed a 6 month Period of
Service and is at least age 19 as of the Offering Commencement Date for an
Offering and who is an Eligible Employee on such Offering Commencement Date
shall be eligible to participate in the Offering.
2.1(b) An Eligible Employee who meets the requirements of
subparagraph 2.1(a) with respect to an Offering shall become a Participant
for that Offering by filing an enrollment card with the Administrator on or
before the date set therefor by the Administrator, which date normally shall
be prior to the first pay day in the Offering period. The enrollment card
shall contain either an authorization for payroll deductions from Actual
Base Pay and/or a lump sum contribution election and may contain should
other information as the Administrator may determine. Payroll deductions
from Actual Base Pay for a Participant shall commence on the first pay day
on or after the applicable Offering Commencement Date and shall end on the
last pay day on or before the Offering Termination Date of the Offering in
question to which such authorization is applicable unless sooner terminated
by the Participant as provided in the Plan.
2.1(c) An individual who becomes a Participant shall be or remain a
Participant for so long as he remains an Eligible Employee who has a payroll
deduction authorization in force or a lump sum contribution and purchase
request pending and thereafter while he is entitled to future benefits under
the terms of the Plan.
2.2 Restrictions on Participation. Notwithstanding any provisions
of the Plan to the contrary, no Eligible Employee shall be granted an option
to participate in the Plan:
(i) if, immediately after the grant, such employee would own
stock, and/or hold outstanding options to purchase stock, possessing
5% or more of the total combined voting power or value of all classes
of stock of the Plan Sponsor (for purposes of this paragraph, the rules
of Section 424(d) of the Code shall apply in determining stock
ownership); or
(ii) which permits his rights to purchase stock under all
employee stock purchase plans of the Plan Sponsor and all Affiliates
to accrue at a rate which exceeds $25,000 in fair market value of the
stock (determined at the time such option is granted) for each calendar
year in which such option is outstanding.
2.3 Leave of Absence.
2.3(a) For purposes of participation in the Plan, a person on a Leave
of Absence shall be deemed to be an employee for such Leave of Absence and
such employee's employment shall be deemed to have terminated at the end of
such Leave of Absence unless such employee shall have returned to regular
employment with the Employer at the end of such Leave of Absence.
Termination by the Employer of any employee's Leave of Absence, other than
termination of such Leave of Absence on return to employment, shall
terminate an employee's employment for all purposes of the Plan and shall
terminate such employee's participation in the Plan and right to exercise
any option granted under the Plan.
2.3(b) If a Participant goes on a Leave of Absence, the Participant
shall have the right to elect (i) to discontinue his participation in the
Plan as provided in paragraph 7.1 or (ii) remain a Participant in the Plan
during such Leave of Absence, authorizing deductions to be made from any
payments by the Employer to the Participant during such Leave of Absence.
If the Participant's Leave of Absence ends by his return to employment as
an Eligible Employee and he has not elected to discontinue his participation
in the Plan, his elected payroll deductions shall recommence.
2.3(c) A Participant on a Leave of Absence shall, subject to the
election made by the Participant pursuant to subparagraph 2.3(b), continue
to be a Participant and to be considered an Eligible Employee for purposes
of the Plan so long as he is on continuous Leave of Absence.
2.4 Special Definitions and Rules.
2.4(a) For purposes hereof, the following terms shall have the
following meanings:
(i) "Leave of Absence": A leave of absence authorized by an
Employer. For purposes of participation in the Plan, a leave of
absence shall in any event be considered ended on the 91st day thereof
unless the person's right to reemployment is guaranteed by law or by
contract.
(ii) "Period of Service": A period of continuous employment as
an Employee, including Leaves of Absence.
2.4(b) The Administrator is authorized to treat service with any
organization as service with an Affiliate if substantially all the operating
assets of that organization are acquired by the Plan Sponsor or an
Affiliate.
2.4(c) For purposes hereof, service with any organization which
becomes an Affiliate shall be considered as service with the Affiliate even
though such service occurs before the date the organization becomes an
Affiliate.
ARTICLE III
Funding
3.1 Payroll Deduction and Lump Sum Contributions.
3.1(a) At the time a Participant files his enrollment card for an
Offering, he may elect to have deductions made from his Actual Base Pay on
each payday during the period he is a Participant and an Eligible Employee
with respect to an Offering at a fixed rate of 2% to 15%, inclusive but in
whole percentages, of his Actual Base Pay, but not more than $6,000.
3.1(b) At the time a Participant files his enrollment card for an
Offering, he may make an election to make a lump sum contribution, not in
excess of the lesser of 15% of his Actual Base Pay or $6,000, to the Plan
with respect to the Offering by the Offering Commencement Date (or any
earlier date the Administrator may require) and in such manner as the
Administrator may permit.
3.1(c) A Participant may discontinue his participation in the Plan by
filing a written notice thereof with the Administrator, with such advance
notice as the Administrator may require, but no other change in an elected
contributions can be made by a Participant during an Offering.
3.1(d) Notwithstanding any contrary provision of the Plan, a
Participant's payroll deduction contributions with respect to an Offering
shall cease when the aggregate payroll deduction and lumps sum contributions
by the Participant with respect to such Offering equal the lesser of 15% of
his Actual Base Pay or $6,000.
3.1(e) If the number of shares of Common Stock for which options are
granted to a Participant is limited by reason of the maximum number of
shares which may be issued under paragraph 4.2, the Administrator may reduce
the maximum percentage of Actual Base Pay which may be contributed to the
Plan accordingly.
3.2 Participant Accounts.
3.2(a) All payroll deduction and lump sum contributions made by or
for a Participant shall be credited to his Account under the Plan. A
Participant's Account is a bookkeeping account maintained by one or more
Employers designated by the Administrator to reflect a Participant's
contributions accumulated under the Plan.
3.2(b) Each Participant's Account shall be appropriately credited for
contributions under the Plan and debited for option exercise costs and
distributions from the Account to the Participant or his Beneficiary.
3.2(c) No interest shall be paid or allowed on any money paid into
the Plan or credited to the Account of any Participant.
3.3 Plan Costs and Expenses. All costs of benefits under and
expenses of the Plan, including reasonable legal, accounting, and other fees
and expenses incurred in the establishment, amendment, administration and
termination of the Plan, shall be paid by the Employers from their general
assets in such manner and proportions as the Plan Sponsor shall determine.
3.4 Status of Employer Obligations under the Plan.
3.4(a) The Employers' obligations under the Plan shall be an unfunded
obligation payable solely from the general assets of the Employer and
subject to the claims of the Employer creditors. Each Participant, his
Beneficiary and any other person having or claiming a right to payment
hereunder or to any interest under the Plan shall rely solely on the
unsecured promise of the Employer to make payments or issue Common Stock due
hereunder. Each Participant, his Beneficiary, and any other person having
or claiming a right to payments under the Plan shall have the right to
enforce such claim against the Employer in the same manner as an unsecured
creditor of the Employer. Nothing contained in the Plan shall be deemed to
create a trust of any kind. All amounts received or held by the Employer
under the Plan may be used by the Employer for any corporate purpose and the
Employer shall not be obligated to segregate such amounts.
3.4(b) Nothing contained herein shall be deemed to give any
Participant or Beneficiary any interest in any specific part of the assets
of the Employer or any legal or equitable rights other than his right to
receive benefits in accordance with the provisions of the Plan.
ARTICLE IV
Offerings
4.1 Offerings. Offering shall be made on a Plan Year basis.
4.2 Shares Available for Offerings.
4.2(a) The Administrator shall determine the number of shares, if
any, of Common Stock to be issued in connection with any Offering, subject
to the limits provided in the Plan. If the Administrator takes no action
regarding the number of shares available for an Offering, the maximum number
shall be considered available.
4.2(b) The maximum number of shares of Common Stock which shall be
issued under the Plan and the maximum number of shares issued with respect
to any Offering shall, subject to adjustment upon changes in capitalization
of the Plan Sponsor as provided in paragraph 4.3, be:
From July 1, 1996 to June 30, 1997: 7,500 shares.
From July 1, 1997 to June 30, 1998: 7,500 shares plus shares
available for but unissued after the preceding year's
Offering, whether offered or not.
From July 1, 1998 to June 30, 1999: 7,500 shares plus shares
available for but unissued after prior Offerings, whether
offered or not.
From July 1, 1999 to June 30, 2000: 7,500 shares plus shares
available for but unissued after prior Offerings, whether
offered or not.
From July 1, 2000 to June 30, 2001: 7,500 shares plus shares
available for but unissued after prior Offerings, whether
offered or not.
4.2(c) If the total number of shares for which options are exercised
on any Offering Termination Date exceeds the maximum number of shares for
the applicable Offering, the Administrator shall make a pro rata allocation
of the shares available for delivery and distribution in as nearly a uniform
manner as shall be practicable and as it shall determine to be equitable,
and the balance of each Participant's Account under the Plan shall be
returned to him, without interest, as promptly as possible.
4.3 Adjustment upon Changes in Capitalization or Other Events.
4.3(a) If, while any option is outstanding, the outstanding shares of
Common Stock have increased, decreased, changed into, or been exchanged for
a different number or kind of shares or securities of the Plan Sponsor
through reorganization, merger, recapitalization, reclassification, stock
split, reverse stock split, stock dividend or similar transaction,
appropriate and proportionate adjustments may be made by the Administrator
in the number and/or kind of shares which are subject to purchase under
outstanding options and on the option exercise price or prices applicable
to such outstanding options. In addition, in any such event, the number
and/or kind of shares which may be offered in the Offerings described in
paragraph 4.2 shall also be proportionately adjusted.
4.3(b) Upon the dissolution or liquidation of the Plan Sponsor, or
upon a reorganization, merger or consolidation of the Plan Sponsor with one
or more corporations as a result of which the Plan Sponsor is not the
surviving corporation and the Plan is not continued by corporate succession,
or upon a sale of substantially all of the property or stock of the Plan
Sponsor to another corporation, the holder of each option then outstanding
under the Plan will thereafter be entitled to receive at the next Offering
Termination Date upon the exercise of such option for each share as to which
such option shall be exercised, as nearly as reasonably may be determined,
the cash, securities and/or property which a holder of one share of the
Common Stock was entitled to receive upon and at the time of such
transaction. The Board shall take such steps in connection with such
transactions as it shall deem necessary to assure that the provisions of
this subparagraph shall thereafter be applicable, as nearly as reasonably
may be determined, in relation to the said cash, securities and/or property
as to which such holder of such option might thereafter be entitled to
receive.
ARTICLE V
Options
5.1 Number of Option Shares Granted. On the Offering Commencement
Date of each Offering, a Participant with respect to that Offering shall be
deemed to have been granted an option to purchase a maximum number of whole
shares of Common Stock (rounded to the nearest whole share) equal to (i) 15%
multiplied by (ii) the Participant's Annual Base Pay Rate for the Offering
and then (iii) divided by 95% of the Market Value of the Common Stock on the
applicable Offering Commencement Date. If the aggregate shares to be
purchased by all Participants for an Offering exceeds the maximum number
permitted in paragraph 4.2, the number of shares shall be reduced pro rata
so that the maximum is not exceeded.
5.2 Option Price. The option price of Common Stock purchased with
a Participant's Account for an Offering shall be the lesser of:
(i) 95% of the Market Value of the Common Stock on the Offering
Commencement Date; or
(ii) 95% of the Market Value of the Common Stock on the Offering
Termination Date.
5.3 Non-Transferability of Option. During a Participant's
lifetime, options held by the Participant under the Plan shall not be
transferable and shall only be exercisable by the Participant.
5.4 Participant's Interest in Optioned Stock. The Participant
will have no interest in Common Stock covered by his option until such
option has been exercised and certificates therefor have been issued.
ARTICLE VI
Exercise of Options
6.1 Automatic Exercise. A Participant's option for the purchase
of Common Stock with his Account attributable to his contributions with
respect to any Offering will be deemed to have been exercised automatically
on the Offering Termination Date applicable to such Offering, and there
shall be purchased that number of full shares of Common Stock which the
balance in his Account at that time will purchase at the applicable option
price (but not in excess of the number of shares for which options have been
granted to the him pursuant to paragraph 5.1). Any balance in his Account
which is not used to purchase Common stock at that time will be returned to
him, without interest.
6.2 Fractional Shares. Fractional shares will not be issued under
the Plan for any Offering and any balance in a Participant's Account which
would have been used to purchase fractional shares will be returned to the
Participant or, if the Participant is deceased, to his Beneficiary, promptly
following the termination of the Offering in question, without interest.
6.3 Delivery of Common Stock. As promptly as practicable after
the Offering Termination Date of each Offering, the Plan Sponsor or the
Administrator will deliver to each Participant or his Beneficiary, as
appropriate, the Common Stock purchased upon exercise of his option.
6.4 Cancellation of Options. Options granted to a Participant
which are not exercised at the Offering Termination Date of an Offering
shall thereupon be deemed canceled.
ARTICLE VII
Cessation of Participation and Distribution of Accounts
7.1 Voluntary Cessation of Participation.
7.1(a) By written notice to the Administrator, at any time prior to
the Offering Termination Date applicable to any Offering, a Participant may
elect to discontinue his participation in the Offering and withdraw the
entire balance in his Account at such time. In such event, he shall cease
to be a Participant with respect to the Offering upon the filing of the
written notice.
7.1(b) If a Participant elects to discontinue his participation in an
Offering as provided in subparagraph 7.1(a), the entire balance credited to
his Account will then be paid to him promptly after receipt of his notice
by the Administrator, and no further payroll deductions will be made from
his pay for such Offering.
7.1(c) A Participant's withdrawal from any Offering will not have any
effect upon his eligibility to participate in any succeeding Offering or in
any similar plan which may hereafter be adopted by the Plan Sponsor or any
Affiliate.
7.2 Termination of Employment Generally. Upon termination of the
Participant's employment as an Eligible Employee for any reason (including
death), whether voluntarily or involuntarily, other than for retirement as
provided in paragraph 7.3, or in the event of the Participant's death after
retirement but before the Offering Termination Date for an Offering, the
balance in the Participant's Account will be returned to him or, in the case
of his death, to his Beneficiary, without interest.
7.3 Termination of Employment Due to Retirement. Subject to the
provisions of paragraph 7.2, upon termination of a Participant's employment
because of his retirement under the Plan Sponsor's qualified defined benefit
plan (currently known as the Employees' Retirement Plan of The Old Point
National Bank of Phoebus), the Participant shall have the right to elect,
by written notice given to the Administrator prior to the earlier of the
Offering Termination Date or the expiration of a period of 60 days
commencing with the date of his retirement, either:
(i) to withdraw the entire balance in his Account, or
(ii) to exercise his option for the purchase of Common Stock on
the Offering Termination Date coinciding with or next following the
date of his retirement for the purchase of the number of full shares
of Common Stock which the accumulated balance in his Account at the
Offering Termination Date will purchase at the applicable option price,
and any excess in his Account will be returned to him, without
interest.
In the event that no such written notice of election shall be duly received
by the Administrator, the Participant shall automatically be deemed to have
elected under alternative (ii) to exercise his option.
ARTICLE VIII
Stock Issuance
8.1 Issuance of Common Stock Certificates.
8.1(a) As soon as practicable after the exercise of an option, the
Administrator shall notify the Plan Sponsor and the Plan Sponsor shall
deliver to the Participant or, if the Participant is deceased, his
Beneficiary certificates representing the shares purchased thereunder.
8.1(b) Stock certificates to be delivered to a Participant under the
Plan will be registered in the name of the Participant or, if the
Participant so directs by written notice to the Administrator prior to the
Offering Termination Date applicable thereto, in the names of the
Participant and one such other person as may be designated by the
Participant, as joint tenants with rights of survivorship or as tenants by
the entireties, to the extent permitted by applicable law.
8.2 Restrictions on Exercise. The Board may, in its discretion,
require as conditions to the exercise of any option and issuance of any
shares that the shares of Common Stock reserved for issuance upon the
exercise of the option shall have been duly listed, upon official notice of
issuance, upon a stock exchange, and that either:
(i) a Registration Statement under the Securities Act of 1933,
as amended, with respect to said shares shall be effective, or
(ii) the Participant shall have represented at the time of
purchase, in form and substance satisfactory to the Plan Sponsor, that
it is his intention to purchase the shares for investment and not for
resale or distribution.
ARTICLE IX
Death Beneficiary
9.1 Disposition of Plan Benefits after Death. Upon the death of
a Participant and upon receipt by the Administrator of proof of the
Participant's death and the determination and identity of the Participant's
Beneficiary, the Administrator shall deliver such Common Stock and/or cash
to such Beneficiary as is due under the Plan.
9.2 Beneficiary Designation.
9.2(a) Each Participant shall have the right to notify the
Administrator in writing of any designation of a Beneficiary to receive, if
alive, benefits under the Plan in the event of his death. Such designation
may be changed from time to time by notice as the Administrator may require,
but no other change in an elected contributions can be made by a Participant
during an Offering.
9.2(b) If a Participant dies without having designated a Beneficiary,
if the Beneficiary so designated has predeceased the Participant or cannot
be located by the Administrator within one year after the date when the
Administrator commenced making a reasonable effort to locate such Beneficiary,
then his surviving spouse, or if none, then his estate shall be deemed
to be his Beneficiary.
9.2(c) Any Beneficiary designation may include multiple, contingent
or successive Beneficiaries and may specify the proportionate distribution
to each Beneficiary. If a Beneficiary shall survive the Participant, but
shall die before the entire benefit payable to such Beneficiary has been
distributed, then absent any other provision by the Participant, the unpaid
amount of such benefit shall be distributed to the estate of the deceased
Beneficiary. If multiple Beneficiaries are designated, absent provisions
by the Participant, those named or the survivors of them shall share equally
any benefits payable under the Plan. Any Beneficiary shall be entitled to
disclaim any benefit otherwise payable to him under the Plan.
ARTICLE X
Plan Administration
10.1 Appointment of Plan Administrator. The Plan Sponsor may
appoint three or more persons to serve as the Plan Administrator (the
"Administrator") for the purpose of carrying out the duties specifically
imposed on the Administrator by the Plan and the Code. Upon the death,
resignation or removal of a person serving as, or on a committee which is,
the Administrator, the Plan Sponsor may, but need not, appoint a successor
unless there then be less than three persons serving. The persons shall
form an administrative committee for the Plan. The committeemen serving as
Administrator shall serve for indefinite terms at the pleasure of the Plan
Sponsor, and may, by thirty (30) days prior written notice to the Plan
Sponsor, terminate such appointment. The committee shall be known as the
1996 Employee Stock Purchase Plan Committee.
10.2 Authority of Administrator. Subject to the express provisions
of the Plan, the Administrator shall have plenary authority in its
discretion to interpret and construe any and all provisions of the Plan, to
adopt rules and regulations for administering the Plan, and to make all
other determinations deemed necessary or advisable for administering the
Plan. The Administrator's determination on the foregoing matters shall be
conclusive.
10.3 Rules Governing the Operation of the Administrator. The
Administrator may select one of its members as its Chairman. The
Administrator may appoint a Secretary and shall make such rules and
regulations for the conduct of its business as it shall deem advisable. The
Administrator shall hold its meetings at such times and places as it shall
deem advisable and may hold telephonic meetings. A majority of its members
shall constitute a quorum. All determinations of the Administrator shall
be made by a majority of its members. The Administrator may correct any
defect or omission or reconcile any inconsistency in the Plan, in the manner
and to the extent it shall deem desirable. Any decision or determination
reduced to writing and signed by all of the members of the Administrator
shall be as fully effective as if it had been made by a majority vote at a
meeting duly called and held. No person serving as, or on a committee
constituting, the Administrator who is a Participant shall take any part as
the Administrator in any discretionary action in connection with his
participation as an individual. Such action shall be taken by the remaining
members of the Administrator, if any, or otherwise by the Plan Sponsor.
ARTICLE XI
Amendment and Termination of Plan
11.1 Amendment and Termination.
11.1(a) The Plan may be amended or terminated in whole or in part at
any time by action of the Board; provided, however, that the Board shall
not, without the approval of the stockholders of the Plan Sponsor,
(i) increase the maximum number of shares which may be issued under any
Offering (except pursuant to paragraph 4.3), (ii) increase the maximum
percentage of a Participant's Annual Base Pay Rate or Actual Base Pay or
maximum amount that can be contributed to the Plan, (iii) reduce the price
per share at which Common Stock may be sold, (iv) amend the requirement as
to the class of employees eligible to purchase Common Stock under the Plan
(other than by designating Affiliates which may become participating
Employers), or (v) permit the issuance of Common Stock before payment
therefor in full.
11.1(b) No termination, modification, or amendment of the Plan may,
without the consent of the affected Participant then having an option under
the Plan to purchase Common Stock, adversely affect the rights of such
Participant under such option to use his then Account balance (without
further increase or contribution) to exercise such option in accordance with
the Plan.
11.2 Termination Events with Respect to Employers Other Than the
Plan Sponsor.
11.2(a) The Plan shall terminate with respect to any Employer other
than the Plan Sponsor, and such Employer shall automatically cease to be a
participating Employer in the Plan and its employees shall be cease to be
considered Eligible Employees, upon the happening of any of the following
events:
(i) Action by its Board or the Board terminating the Plan as
to it and specifying the date of such termination. Notice of such
termination shall be delivered to the Administrator and the Plan
Sponsor.
(ii) Its ceasing to be an Affiliate.
11.2(b) Notwithstanding the foregoing provisions of this ARTICLE XII,
the merger or liquidation of any Employer into any other Employer or the
consolidation of two (2) or more of the Employers shall not cause the Plan
to terminate with respect to the merging, liquidating or consolidating
Employers, provided that the Plan has been adopted or is continued by and
has not terminated with respect to the surviving or continuing Employer.
ARTICLE XII
Miscellaneous
12.1 Governing Law. The Plan shall be construed, enforced and
administered in accordance with the laws of the Commonwealth of Virginia,
and any federal law preempting the same.
12.2 Employment Rights. Participation in the Plan shall not give
any Employee the right to be retained in the Employer's employ nor, upon
dismissal or upon his voluntary termination of employment, to have any right
or interest under the Plan other than as herein provided.
12.3 Effect of Plan. The provisions of the Plan shall, in
accordance with its terms, be binding upon, and inure to the benefit of, all
successors of each Participant, including, without limitation, such
Participant's estate and the executors, administrators or trustees thereof,
heirs and legatees, and any receiver, trustee in bankruptcy or
representative of creditors of such Participant.
12.4 Conclusiveness of Employer Records. The records of the
Employer with respect to age, service, employment history, compensation,
absences, illnesses and all other relevant matters shall be conclusive for
purposes of the administration of the Plan.
12.5 Alienation. Except as may be provided in the Plan in the
event of a Participant's death, no Account balance and no option to purchase
Common Stock granted hereunder shall be subject in any manner to alienation,
whether by voluntarily or involuntarily, by sale, anticipation, transfer,
assignment, pledge, encumbrance, garnishment, attachment, execution or levy
of any kind. Any such attempted assignment shall be without effect, except
that the Administrator may in its discretion treat such act as an election
to cease participation and withdraw funds in accordance with paragraph 7.1.
12.6 Notices and Elections. All notices required to be given in
writing and all elections required to be made in writing, under any
provision of the Plan, shall be invalid unless made on such forms as may be
provided or approved by the Administrator and, in the case of a notice or
election by a Participant or Beneficiary, unless dated and executed by the
Participant or Beneficiary giving such notice or making such election.
12.7 Delegation of Authority. Whenever the Plan Sponsor or any
Employer is permitted or required to perform any act, such act may be
performed by its Chief Executive Officer, its President or its Board of
Directors or by any person duly authorized by any of the foregoing.
12.8 Purpose and Construction. The Plan is intended to provide a
method whereby Eligible Employees of the Plan Sponsor and other Employers
an opportunity to acquire a proprietary interest in the Plan Sponsor through
the purchase of shares of Common Stock. It is intended that the Plan
qualify as an "employee stock purchase plan" under Section 423 of the Code.
The provisions of the Plan shall be construed so as to extend and limit
participation in a manner consistent with the requirements of Section 423
of the Code.
ARTICLE XIII
Adoption of the Plan
13.1 Establishment and Effectiveness of the Plan. The Plan shall
become effective as of July 1, 1996, subject to approval by the holders of
the majority of the Common Stock present and represented at a special or
annual meeting of the shareholders of the Plan Sponsor held on or before
May 14, 1997. If the Plan is not so approved, the Plan shall not become
effective and all funds received by the Employer shall be returned to
Participants, without interest.
13.2 Adoption by Additional Employers. Any corporation which is an
Affiliate and which, with the consent of the Administrator and the approval
of its Board of Directors, desires to adopt the Plan, may do so by executing
an adoption agreement in a form authorized by the Administrator.
OLD POINT FINANCIAL CORPORATION
1996 EMPLOYEE STOCK PURCHASE PLAN
Execution Page
IN WITNESS WHEREOF, the Plan Sponsor, pursuant to the resolution duly
adopted by its Board of Directors, has caused its name to be signed to this
Old Point Financial Corporation 1996 Employee Stock Purchase Plan by its
duly authorized officer with its corporate seal hereunto affixed and
attested by its Secretary or Assistant Secretary, as of the day and year
below written.
Date: June 3, 1996 Old Point Financial Corporation,
Plan Sponsor and participating
Employer
By: /s/ Robert F. Shuford (SEAL)
ROBERT F. SHUFORD
Its President
Attest:
/s/ W. Rodney Rosser
W. RODNEY ROSSER
Its Senior Vice President and Secretary
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS
COVERING SECURITIES THAT HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933.
____________________
OLD POINT FINANCIAL CORPORATION
1996 EMPLOYEE STOCK PURCHASE PLAN
____________________
37,500 SHARES OF COMMON STOCK
($5.00 par value)
The Old Point Financial Corporation 1996 Employee Stock Purchase Plan
(the "Plan") provides each eligible employee with an opportunity to acquire
shares of common stock ("Common Stock") of Old Point Financial Corporation
(the "Company") at a discount through payroll deduction from base pay or by
lump sum contribution. A total of 37,500 shares have been set aside for
this purpose. This Prospectus describes the Plan.
All options to purchase Common Stock pursuant to the Plan are
contingent on the approval by an affirmative vote of the holders of a
majority of the outstanding Common Stock no later than one year after date
of Plan's adoption or by May 14, 1997. It is anticipated that the Plan will
be submitted to the Company's Shareholders for approval at the next Annual
Meeting, which is currently scheduled to be held on April 22, 1997. If the
Plan is not approved, each eligible employee's payroll deduction and lump
sum contributions will be returned, without interest.
Directors who are employees and certain corporate executive officers
of the Company should be aware that Section 16(b) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), provides that such officers
may be liable to the Company for profits realized upon any purchase and sale
or sale and purchase of Common Stock within a period of less than 6 months.
The delivery of this Prospectus at any time does not imply that the
information herein is correct as of any time subsequent to the date hereof.
No person is authorized to give any information or to make any
representations other than those contained in this Prospectus. This
Prospectus does not constitute an offering within any state to any person
to whom such offer would be unlawful.
It is recommended that this Prospectus be retained for future
reference.
____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE
____________________
The date of this Prospectus is June 5, 1996.
TABLE OF CONTENTS
Page
Available Information. . . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents . . . . . . . . . . . . . . . . . . 3
Description of the Plan. . . . . . . . . . . . . . . . . . . . . . . . 3
Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Eligibility to Participate. . . . . . . . . . . . . . . . . . . . 4
Enrollment in the Plan. . . . . . . . . . . . . . . . . . . . . . 4
How the Plan Works. . . . . . . . . . . . . . . . . . . . . . . . 5
Stock Purchase and Issuance Procedures. . . . . . . . . . . . . . 5
Statement of Account. . . . . . . . . . . . . . . . . . . . . . . 6
Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Termination of Employment or Death. . . . . . . . . . . . . . . . 6
Death Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . 7
Income Tax Status and Consequences. . . . . . . . . . . . . . . . 7
Alienation of Plan Interest . . . . . . . . . . . . . . . . . . . 8
Stock Dividends, Stock Splits and Similar Adjustments . . . . . . 8
Expenses of the Plan. . . . . . . . . . . . . . . . . . . . . . . 8
Plan Administration . . . . . . . . . . . . . . . . . . . . . . . 8
Amendment or Termination of the Plan. . . . . . . . . . . . . . . 9
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Legal Opinion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Indemnification of Officers and Directors. . . . . . . . . . . . . . . 9
AVAILABLE INFORMATION
The Company's main office is located at 1 West Mellen Street (Mailing
Address: P.O. Box 3392), Hampton, Virginia 23663, telephone (804) 722-7451.
The Company is subject to the informational requirements of the Exchange Act
and, in accordance therewith, files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission").
Such reports, proxy statements and other information can be inspected and
copied at the offices of the Commission at 450 Fifth Street, N. W.,
Washington, D.C. 20549; Room 1204, Everett McKinley Dirksen Building, 219
South Dearborn Street, Chicago, Illinois 60604; and Room 1228, 75 Park
Place, New York, New York 10007. Copies of such material can be obtained
from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549 at prescribed rates.
The Company's Common Stock currently is not regularly traded on any
established securities exchange. Consequently, there is no guarantee that
there will be a ready market (or any market) for Common Stock purchased
under the Plan or that the market values of the Common Stock purchased under
the Plan will be equal to or greater than the purchase price of the Common
Stock.
The Company will provide without charge to any person to whom this
Prospectus is delivered, on the written or oral request of any such person,
a copy of any or all documents incorporated herein by reference (other than
exhibits to such documents). See "INCORPORATION OF CERTAIN DOCUMENTS".
Written requests should be directed to Corporate Secretary, 1 West Mellen
Street (Mailing Address: P.O. Box 3392), Hampton, Virginia 23663.
Telephone requests may be directed to telephone (804) 728-1200.
INCORPORATION OF CERTAIN DOCUMENTS
The following documents filed by the Company with the Commission are
incorporated herein by reference as of their respective dates:
1. Form 10-K Annual Report filed pursuant to Section 13 of the
Exchange Act for the year ended December 31, 1995.
2. The Company's Proxy Statement, dated March 26, 1996, for its
Annual Meeting of Shareholders held on April 23, 1996.
3. Form 10-Q Quarterly Report filed pursuant to Section 13 of the
Exchange Act for the three months ended March 31, 1996.
All documents subsequently filed by the Company pursuant to sections
13, 14, or 15(d) of the Exchange Act, prior to the termination of the
offering of the Common Stock pursuant to the Plan covered by this
Prospectus, shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of the filing of such
documents. Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document, which also is
or is deemed to be incorporated by reference herein, modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
DESCRIPTION OF THE PLAN
Purpose
The Old Point Financial Corporation 1996 Employee Stock Purchase Plan
provides eligible employees with a simple and convenient method for
investing in the Company at a 5% discount. It is anticipated that the Plan
will provide the Company with additional capital funds and will increase
employee interest and productivity through ownership of Common Stock. The
Plan's fiscal year (the "Plan Year") is the 12 month period beginning July 1
and ending the next June 30. The first Plan Year begins July 1, 1996. The
Plan Year is sometimes identified by the calendar year in which the Plan
Year begins (for example, the Plan Year beginning July 1, 1996 and ending
June 30, 1997 is sometimes referred to as the "1996 Plan Year"). The Plan
will be in effect for the 1996 through 2000 Plan Years (that is, through
June 30, 2001).
Overview
The Plan offers eligible employees of the Company and its
participating subsidiaries (collectively or individually "Old Point") the
opportunity to purchase Common Stock through payroll deduction and lump sum
contributions. Currently, the only participating subsidiary is Old Point
National Bank. The price of the shares purchased will be the lesser of 95%
of the market price of the shares as determined under the Plan at July 1 of
the Plan Year of purchase or 95% of the market price of the shares as
determined under the Plan at June 30 of the Plan Year of purchase.
The Plan operates on a Plan Year basis. Eligible employees are
determined at each July 1 and provided with the right to purchase shares of
Common Stock at the following June 30 with their payroll deduction and lump
sum contributions made for the Plan Year.
An eligible employee may enroll in the Plan for a Plan Year as of
July 1 by completing and returning an Enrollment Card to the Human Resources
Department by the date designated by the Plan Administrator. The required
return date for 1996 is June 28, 1996. For 1996, payroll deductions will
become effective with the first pay day in July, 1996.
Payroll deduction and lump sum contributions may be made at any rate
from 2% through 15% of base pay, but the total contributions of a
participant for a Plan Year are limited to $6,000. Base pay does not
include, and thus no contributions may be made from, bonuses, overtime,
incentive pay, or ISOP compensation.
Shares of Common Stock are purchased as of June 30 of each Plan Year
the Plan is in effect, and certificates for purchased shares will be issued
and delivered as soon as practicable after that June 30. Any accumulated
payroll deduction and lump sum contributions which are not used to purchase
shares will be returned, without interest.
A participant in the Plan for a Plan Year may terminate his or her
participation at any time before June 30 and receive a refund of his or her
payroll deduction and lump sum contributions, without interest.
If a participant ceases to be an eligible employee (other than for
retirement) or dies before June 30 of a Plan Year, his or her accumulated
payroll deduction and lump sum contributions for that Plan Year will be
returned, without interest.
The 1996 Employee Stock Purchase Plan Committee, appointed by the
Company's Board of Directors and consisting of at least three persons, will
administer the Plan.
Eligibility to Participate
Eligible employees of Old Point who are age 19 or over with 6
continuous months of service as of the July 1 of a Plan Year may participate
for that Plan Year. An eligible employee is one who is customarily employed
for more than 5 months per year. All officers and directors who are
eligible employees may participate.
Example. Jane White, age 35, is hired as an eligible employee on
April 15, 1995 and remains employed through July 1, 1996. Jane is
eligible to participate in the Plan on July 1, 1996, because she was
employed by Old Point for 6 months continuously prior to July 1, 1996
and is at least age 19 on July 1, 1996.
Example. John Smith, age 21, is hired as an eligible employee on
May 3, 1996 and remains employed through July 1, 1997. John is
eligible to participate in the Plan on July 1, 1997, but he was not
eligible to participate on July 1, 1996, because he was not employed
by Old Point for 6 months continuously prior to July 1, 1996 (even
though he was at least age 19 on July 1, 1996).
Enrollment in the Plan
To enroll in the Plan, an eligible employee must complete and sign an
Enrollment Card and deliver it to the Company's Human Resources Department
by the date designated by the Plan Administrator. For the 1996 Plan Year,
the designated date is June 28, 1996. Eligible employees for future Plan
Years will be notified of the designated date for those years by June of the
preceding Plan Year.
Participation by an eligible employee is voluntary for each Plan Year.
An eligible employee who wishes to participate for a year does so by
electing to contribute from 2% to 15% of his or her base pay by payroll
deduction during the Plan Year and/or by a lump sum contribution by the date
designated by the Plan Administrator for payment of the same on or before
the beginning of the Plan Year. Lump sum contributions for the 1996 Plan
Year must be paid no later than July 1, 1996. A participant's aggregate
contributions for a Plan Year may not exceed $6,000. A participant may not
adjust the rate at which he or she is making payroll deductions for a Plan
Year. For the 1996 Plan Year, payroll deductions will become effective with
the first pay day in July, 1996.
Any participant wishing to cease participation in the Plan for a Plan
Year may do so by filing a written notice to that effect with the Human
Resources Department, before the end of the Plan Year. Generally, 5
workdays advance notice will be required. In such case, all payroll
deductions for the Plan Year will stop and accumulated contributions will
be returned, without interest.
How the Plan Works
Each eligible employee for a Plan Year will be granted an option to
purchase that number of wholes shares (rounded to the nearest share) of
Common Stock equal to 15% of his or her annual base pay rate at July 1
divided by 95% of the per share fair market value at that time.
Example. Assume Sam Jones' annualized base pay at July 1, 1996 is
$20,000. Also assume the fair market value for a share of Common
Stock is $37.50 at July 1, 1996. Sam would be granted options to
purchase 84 shares for 1996 (that is, 15% times $20,000 divided by
95% of $37.50, rounded to the nearest whole share).
A number of limitations could apply to limit the number of shares a
participant may purchase for a Plan Year. First, the maximum number of
shares available for all participants is limited for any Plan Year to 7,500,
plus, in the case of the 1997 through 2000 Plan Years, shares available to
be offered but not purchased by employees under the Plan in prior years.
The Plan Administrator may decide to offer fewer than the maximum available
number. The total maximum for all 5 Plan Years (1996 - 2000) is 37,500.
A pro rata reduction in options granted will be effected whenever necessary
to meet these limits.
Certain additional limitations apply, specifically (1) a $25,000 limit
on the value (at date of grant - that is, as of July 1 of a year) of shares
purchased by any one employee in any calendar year under the Plan (and any
other similar plan of the Company or any of its affiliates) and (2) a
prohibition on the issuance of options to, and hence on participation in the
Plan by, 5% or more stockholders.
The exercise price for each optioned share is 95% of the lesser of
(1) the Common Stock's fair market value at July 1 or (2) the Common Stock's
fair market value at the following June 30. Fair market value means the
price at which a share of stock would be exchanged between a willing buyer
and a willing seller where neither the buyer nor the seller is under any
compulsion to buy or sell. If the Common Stock is regularly traded on an
established exchange, fair market value will be considered to be closing
price of Common Stock on the stated date or the last prior date on which
trading occurred on the exchange. If Common Stock is not traded on an
established exchange (which it is not as of the date of this Prospectus),
then the exercise price will be based on 95% of the fair market value per
share as determined pursuant to the valuation method or procedure determined
by the Plan Administrator in good faith.
Payroll deduction and lump sum contributions for a Plan Year will be
accumulated and used at June 30 to purchase optioned shares. Benefits under
the Plan are claims against and payable from the general assets of Old
Point. Payroll deduction and lump sum contributions accumulated under the
Plan will not be held in trust or escrow and will be subject to the claims
of Old Point's general creditors.
Any investment entails a degree of risk. The market value of stock
and other securities can be volatile and often is not related to the actual
performance of a company but to external factors such as general economic
or business conditions and political events. Neither the Plan Administrator
nor Old Point guarantees that there will be a ready market (or any market)
for Common Stock purchased under the Plan or that the market values of the
Common Stock purchased under the Plan will be equal to or greater than the
purchase price of the Common Stock. A participant assumes all risk of any
decrease in the market value of the Common Stock purchased under the Plan
and of any unavailability of a buyer for the Common Stock purchased under
the Plan.
Stock Purchase and Issuance Procedures
Options will be exercised automatically at each June 30 with a
participant's accumulated payroll deduction and lump sum contributions at
the applicable exercise price (that is, 95% of the lower of the July 1 or
the June 30 fair market value). Any options granted for a Plan Year which
are not exercised at June 30 of that year will expire at that time.
Since a participant's accumulated payroll deduction and lump sum
contributions will seldom be an amount that will purchase an exact number
of shares, purchases will be only for whole shares. Accumulated payroll
deduction and lump sum contributions which are less than the exercise price
will be returned without interest as soon as practicable after the Plan
Year.
Example. Assume that Sam Jones' payroll deductions for 1996 are
$3,000 and that Sam was granted options to purchase 84 shares for
1996. Also assume the fair market value for a share of Common Stock
is $37.50 at July 1, 1996 and is $40.00 at June 30, 1997.
The exercise price for Sam's purchase of shares at June 30, 1997 will
be $35.63 per share (that is, 95% of the lower of the July 1 or the
June 30 fair market value). $2,992.92 of Sam's accumulated
contributions of $3,000 would be used to purchase the 84 shares and
$7.08 would be returned to Sam without interest.
Example. Assume in the above example that the fair market value for
a share of Common Stock is $35.00 (instead of $40.00) at June 30,
1997.
The exercise price for Sam's purchase of shares at June 30, 1997
would then be $33.25 per share (that is, 95% of the lower of the
July 1 or the June 30 fair market value). $2,793.00 of Sam's
accumulated contributions of $3,000 would be used to purchase the 84
shares (the options granted as of July 1, 1996) and $207.00 would be
returned to Sam without interest.
If all of a participant's payroll deduction and lump sum contributions
for a Plan Year are not used to purchase shares because of the 7,500 share
annual limit (as adjusted) on the shares available, the unused amount will
be returned to the participant without interest.
The source of shares of Common Stock to be purchased under the Plan
will generally be authorized but unissued shares, but may also include
shares of Common Stock purchased on the open market or in privately
negotiated transactions.
Certificates for the shares purchased under the Plan will be issued
to participants as soon as practicable after each year end. Certificates
will be registered in the name of the participant, unless the participant
files a written request with the Plan Administrator by June 30 to register
a certificate in joint name with another person as joint tenants with rights
of survivorship or as tenants by the entireties.
Statement of Account
After each year, a statement of Plan Account will be provided to each
participant. The statement will show the accumulated payroll deduction and
lump sum contributions, cost of shares purchased and amount refunded from
the Plan Account.
Each participant should keep these statements so as to be able to
establish the cost basis of shares purchased under the Plan for income tax
purposes.
Withdrawals
A participant may voluntarily discontinue his or her participation in
the Plan for a Plan Year at any time before June 30 by written notice filed
with the Human Resources Department. Generally, 5 workdays advance notice
will be required.
In such case, all payroll deduction and lump sum contributions will
be returned, without interest.
Termination of Employment or Death
If a participant ceases to be a eligible employee for reason other
than retirement or if a participant dies before June 30, he or she will
cease to be a participant for that year. A participant will be considered
retired if he or she retires under the Company's Retirement Plan (currently
known as the Employees' Retirement Plan of The Old Point National Bank of
Phoebus). A leave of absence that lasts longer than 90 days will be
considered a termination of employment for this purpose unless the person's
right to reemployment is guaranteed by law or by contract
In any such cases, all payroll deduction and lump sum contributions
will be returned, without interest.
Death Beneficiary
The Plan permits a participant to select or change the beneficiary or
beneficiaries to whom his or her Plan benefit will be paid in the event the
participant dies before receiving all his or her Plan benefit. No
beneficiary designation is effective until received by the Human Resources
Department. If a participant does not designate a beneficiary, if a
designated beneficiary has died before the participant, or if a designated
beneficiary can not be located by the Plan Administrator within one year of
searching, the participant's benefits automatically go to his or her
surviving spouse or, if the participant has no surviving spouse, to his or
her estate.
Income Tax Status and Consequences
The Plan is intended to qualify as an "employee stock purchase plan"
under Section 423 of the Internal Revenue Code, as amended (the "Code").
The tax consequences to participants upon disposition vary depending upon
the circumstances.
To help employees and their beneficiaries understand the tax
implications of the Plan, some of the general Federal tax rules which apply
to the Plan, as long as it meets the requirements of Section 423 of the
Code, are summarized here. This summary is based on laws enacted and in
effect on June 1, 1996. Each employee and beneficiary entitled to Plan
benefits should consult a qualified tax advisor concerning the tax effect
of participation in and dispositions of Common Stock acquired under the
Plan.
The rules governing the tax consequences of participation in and
dispositions of Common Stock acquired under the Plan are quite technical,
so the description of tax consequences contained herein 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. The
consequences, under applicable state or local income tax laws, of
participation in and dispositions of Common Stock acquired under the Plan
may not be the same as under the Federal income tax laws. This summary does
not cover any state or local tax consequences.
Under the Code, participants normally do not realize any income at the
date of grant of options or at the time of exercise and purchase of shares.
Recognition of income normally is postponed until the purchased shares are
disposed of.
If a participant disposes (whether by sale, gift, death or otherwise)
of purchased shares after two years from the July 1 as of which the option
to purchase such shares was granted and after one year from the June 30 as
of which such shares are purchased by him or her, the participant will be
required to include in income, as compensation for the year in which such
disposition occurs, an amount equal to the lesser of (i) the excess of the
fair market value of such shares at the time of disposition over the
exercise price or (ii) 5% of the fair market value of such shares at the
July 1 as of which the option to purchase such shares was granted. The
participant's basis in the shares disposed of will be increased by an amount
equal to the amount so includible in his or her income as compensation, and
any gain or loss computed with reference to such adjusted basis which is
recognized at the time of the disposition will be long-term capital gain or
loss.
If a participant disposes of purchased shares within such two year or
one year period (that is, within two years from the July 1 as of which the
option to purchase such shares was granted or within one year from the
June 30 as of which such shares are purchased by him or her), the
participant will be required to include in income, as compensation for the
year in which such disposition occurs, an amount equal to the excess of the
fair market value of such shares on the date of purchase over the exercise
price. The participant's basis in such shares disposed of will be increased
by an amount equal to the amount includible in his or her income as
compensation, and any gain or loss computed with reference to such adjusted
basis which is recognized at the time of disposition will be capital gain
or loss, either short-term or long-term, depending on the holding period for
such shares.
Notwithstanding the normal rules stated in the preceding paragraphs,
if a participant retires during a Plan Year more than 3 months before the
end of the Plan Year as of which his or her options for the Plan Year are
exercised and Common Stock purchased by him or her, then the participant
will be required to include in income, as compensation for the Plan Year in
which such purchase occurs, an amount equal to the excess of the fair market
value of such shares on the date of purchase over the exercise price. The
participant's basis in such shares disposed of will be increased by an
amount equal to the amount includible in his or her income as compensation,
and any gain or loss computed with reference to such adjusted basis which
is recognized at the time of disposition will be capital gain or loss,
either short-term or long-term, depending on the holding period for such
shares.
Alienation of Plan Interest
The Plan does not permit a participant to create liens on funds or
securities held for or distributable to him or her under the Plan or to
assign or alienate his or her Plan account or Plan benefit in any manner.
Any such attempted assignment or alienation shall be without effect, except
that the Plan Administrator may in its discretion treat such attempted
assignment or alienation as an election to cease participation in the Plan
and withdraw funds in accordance with the Plan.
Stock Dividends, Stock Splits and Similar Adjustments
If the Company should declare a stock dividend or split or otherwise
adjust its capital stock through reorganization or otherwise, the number of
each optioned shares, as well as the 7,500 and 37,500 share limits on
purchases under the Plan, will be appropriately adjusted.
Expenses of the Plan
Participants will incur no brokerage commissions, service charges or
other fees for purchases made under the Plan. All costs of administration
of the Plan will be paid by the Company.
Plan Administration
The Plan provides for its administration by a Plan Administrator,
which is the 1996 Employee Stock Purchase Plan Committee appointed by the
Company's Board of Directors. The Plan Administrator may designate
additional subsidiaries to participate in the Plan. The Plan Administrator
is empowered to adopt rules and regulations for the administration of the
Plan and to interpret the Plan.
Notices and other written forms should be filed with the Plan
Administrator, care of the Human Resources Department, 1 West Mellen Street
(Mailing Address: P.O. Box 3392), Hampton, Virginia 23663, telephone (804)
722-7451.
All notices from the Plan Administrator to a participant will be
addressed to the participant at his or her last address of record with Old
Point or the Plan Administrator. The mailing of a notice to a participant's
last address of record will satisfy the Plan Administrator's duty of giving
notice to such participant. Therefore, participants must promptly notify
the Plan Administrator of any change of address.
Neither the Plan Administrator nor the Company shall have any
responsibility beyond the exercise of ordinary care for any reasonable and
prudent actions taken or omitted pursuant to the Plan including, without
limitation, any claim for liability arising from failure to take appropriate
action upon a participant's death or adjudicated incompetency prior to
receipt of notice in writing of such death or adjudicated incompetency, nor
shall the Plan Administrator have any duties, responsibilities or
liabilities except such as are expressly set forth in the Plan.
All transactions in connection with the Plan are governed by laws of
the Commonwealth of Virginia and any Federal laws preempting the same.
Amendment or Termination of the Plan
While the Company hopes to continue the Plan for its stated term (that
is, through June 30, 2001), the Company's Board of Directors reserves the
right to amend or terminate the Plan at any time. However, the Company may
not, without shareholder approval, increase the number of shares which may
be issued, increase the 15% of base pay or $6,000 limit on contributions for
a Plan Year, reduce the exercise price, change the class of employees
eligible to participate in the Plan, or permit issuance of stock before
payment in full.
The Plan will continue for 5 years unless terminated earlier. The
Board may terminate the Plan at any time, in which case each participant's
then accumulated payroll deduction and lump sum contributions will be used
for exercising outstanding options as though the termination date were
June 30.
Participants will be notified of any such amendment or termination.
USE OF PROCEEDS
The Company has no basis for estimating either the number of shares
that will ultimately be sold under the Plan or the price at which such
shares will be sold. The Company intends to apply funds derived from the
Plan to its general funds for general corporate use, including investments
in or the extension of credit to its and its subsidiaries banking and non-
banking subsidiaries activities.
EXPERTS
The financial statements incorporated in this prospectus by reference
to the Company's Annual Report on Form 10-K have been incorporated in
reliance upon the reports of Eggleston Smith PC, certified public
accountants, given upon their authority as experts in accounting and
auditing.
LEGAL OPINION
Legal matters in connection with the Common Stock to be issued or sold
by the Company pursuant to the Plan, and other legal matters in regard to
the Plan, including tax consequences appearing under "Income Tax Status",
have been passed upon by Mays & Valentine, Richmond, Virginia.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Articles of Incorporation of the Company, as well as the statutes
of Virginia, contain provisions providing for the indemnification of the
directors and officers of the Company against certain liabilities including
liabilities under the Securities Act of 1933. In addition, the Company
carries insurance protecting those persons against such liability.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the registrant pursuant to the foregoing provisions, the Company
has been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is therefore unenforceable.
(Proxy Summary)
Proposed 1996 Employee Stock Purchase Plan
On May 14, 1996, the Board authorized the adoption, subject to shareholder
approval, of the Old Point Financial Corporation 1996 Employee Stock
Purchase Plan (the "Plan"), to be effective July 1, 1996 through June 30,
2001. This action was taken to foster Old Point Financial Corporation stock
ownership by employees.
Eligibility and Participation. Eligible employees of Old Point Financial
Corporation and those of its subsidiaries designated by the Plan
Administrator who are at least age 19 with 6 months of service as of the
July 1 of a plan year (July 1 through the following June 30) may participate
for that plan year. An eligible employee is one who is customarily employed
for more than 5 months per year. Approximately 220 employees were eligible
to participate as of July 1, 1996, which number represents substantially all
of the eligible employees at that time. All officers and directors who are
eligible employees may participate.
Participation by an eligible employee is voluntary for each plan year. An
eligible employee who wishes to participate for a plan year does so by
electing to contribute from 2% to 15% of his or her base pay by payroll
deduction. during the plan year and/or by making a lump sum contribution by
the beginning of the plan year. The aggregate contributions by any
participant are limited to $6,000 for a plan year.
Offerings of Common Stock and Price. Each eligible employee for a plan year
will be granted an option to purchase that number of whole shares of Common
Stock equal to 15% of his or her annual base pay rate at July 1 (annualized
base pay) divided by 95% of the per share trading price at that time.
However, the maximum number of shares is limited for any plan year to 7,500
plus, in the case of the 1997 through 2000 plan years, shares available to
be offered but not purchased by employees under the Plan in prior years.
The Plan Administrator may decide to offer fewer than the maximum available
number. The total maximum for all 5 years (1996 - 2000) is 37,500. Certain
additional limitations apply, such as (1) a $25,000 limit on the value (at
date of grant) of shares purchased by any one employee in any calendar year
under the Plan (and any other similar plan of Old Point Financial
Corporation or any of its affiliates) and (2) a prohibition on the issuance
of options to 5% or more stockholders.
The exercise price for a plan year is 95% of the lesser of (1) the Common
Stock's fair market value at July 1 or (2) the Common Stock's fair market
value at the following June 30.
Fair market value means the closing price of Common Stock on the stated date
or the last prior date on which trading regularly occurred on an established
securities exchange or, if none, the value determined by the Plan
Administrator.
Withdrawals from the Plan. A participant may discontinue his or her
participation in the Plan for a plan year at any time before June 30 by
written notice to the Plan Administrator. If a participant ceases to be an
eligible employee for reason other than retirement or dies before June 30,
he will cease to be a participant for that plan year.
In any such case, all payroll deduction amounts will be returned, without
interest.
Option Exercise and Stock Issuance. Options will be automatically exercised
at each June 30 with a participant's accumulated payroll deductions at the
applicable exercise price. Any options granted for a plan year which are
not exercised at June 30 of that plan year will expire then. If all of a
participant's payroll deductions amounts for a plan year are not used to
purchase shares because of any applicable limit on the shares available, the
unused amount will be returned to the participant, without interest.
Plan Administration. The Plan provides for its administration by a Plan
Administrator, which is a committee of at least three persons appointed by
the Board. The Plan Administrator may designate additional subsidiaries to
participate in the Plan. The Plan Administrator is empowered to adopt rules
and regulations for the administration of the Plan and to interpret the
Plan.
Plan Amendment and Termination. The Board of Old Point Financial
Corporation may amend the Plan at any time, except that it may not, without
shareholder approval, increase the number of shares which may be issued,
increase the 15% of base pay limit on contributions for a plan year, reduce
the exercise price, change the class of employees eligible to participate
in the Plan, or permit issuance of stock before payment in full.
The Plan will continue for 5 years unless terminated earlier. The Board may
terminate the Plan at any time, in which case each participant's then
accumulated payroll deductions will be used for exercising outstanding
options as though the termination date were a June 30.
Tax Treatment. The Plan is intended 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 of options or at the time of exercise and
purchase of shares. Recognition of income normally is postponed until the
purchased shares are disposed of. The tax consequences to participants upon
disposition vary depending upon the circumstances.
If a participant disposes (whether by sale, gift, death or otherwise) of
purchased shares after two years from the July 1 as of which the option to
purchase such shares was granted and after one year from the June 30 as of
which such shares are purchased by him or her, the participant will be
required to include in income, as compensation for the year in which such
disposition occurs, an amount equal to the lesser of (i) the excess of the
fair market value of such shares at the time of disposition over the
exercise price or (ii) 15% of the fair market value of such shares at the
July 1 as of which the option to purchase such shares was granted. The
participant's basis in the shares disposed of will be increased by an amount
equal to the amount so includible in his or her income as compensation, and
any gain or loss computed with reference to such adjusted basis which is
recognized at the time of the disposition will be long-term capital gain or
loss. In such event, Old Point Financial Corporation (or the subsidiary by
which the participant is employed) will not be entitled to any deduction for
income tax purposes.
If a participant disposes of purchased shares within such two year or one
year period (that is, within two years from the July 1 as of which the
option to purchase such shares was granted or within one year from the
June 30 as of which such shares are purchased by him or her), the
participant will be required to include in income, as compensation for the
year in which such disposition occurs, an amount equal to the excess of the
fair market value of such shares on the date of purchase over the exercise
price. The participant's basis in such shares disposed of will be increased
by an amount equal to the amount includible in his or her income as
compensation, and any gain or loss computed with reference to such adjusted
basis which is recognized at the time of disposition will be capital gain
or loss, either short-term or long-term, depending on the holding period for
such shares. In the event of a disposition within such two year or one year
period, Old Point Financial Corporation (or the subsidiary by which the
participant is employed) will be entitled to a deduction for income tax
purposes equal to the amount the participant is required to include in
income as a result of such disposition.
Notwithstanding the normal rules stated in the preceding paragraphs, if a
participant retires during a plan year more than 3 months before the end of
the year as of which his options for the year are exercised and Common Stock
purchased by him, then the participant will be required to include in
income, as compensation for the year in which such purchase occurs, an
amount equal to the excess of the fair market value of such shares on the
date of purchase over the exercise price. The participant's basis in such
shares disposed of will be increased by an amount equal to the amount
includible in his or her income as compensation, and any gain or loss
computed with reference to such adjusted basis which is recognized at the
time of disposition will be capital gain or loss, either short-term or long-
term, depending on the holding period for such shares. In the event of
such a taxable purchase, Old Point Financial Corporation (or the subsidiary
by which the participant is employed) will be entitled to a deduction for
income tax purposes equal to the amount the participant is required to
include in income as a result of his or her purchase.
Old Point Financial Corporation's (or any subsidiary corporation's)
entitlement to an income tax deduction for compensation income taxable to
an employee is contingent on its satisfying certain federal income tax
withholding requirements.
Adoption of this proposal requires an affirmative vote by the holders of a
majority of the outstanding Common Stock. The Board of Directors recommends
a vote FOR the approval of the 1996 Employee Stock Purchase Plan.
OLD POINT FINANCIAL CORPORATION
1996 EMPLOYEE STOCK PURCHASE PLAN
Adoption Agreement for Participating Affiliate
This ADOPTION AGREEMENT, executed the date indicated below, by the
affiliate named below (hereinafter generally referred to as the "Employer")
with the consent of the Plan Administrator (the "Administrator") of the Old
Point Financial Corporation 1996 Employee Stock Purchase Plan (the "Plan"),
provides:
1. Adoption of the Plan. The Employer does hereby evidence its
adoption of the Plan as a participating employer for the benefit of its
employees who are or from time to time will be eligible under the provisions
of the Plan to participate therein, commencing as of the Effective Date of
the Plan as to the Employer.
2. Agreement to Be Governed by the Plan. The Employer agrees that it
shall be an Employer, as defined in the Plan, and as such it shall
henceforth comply with and be governed by the provisions of the Plan as they
pertain to an Employer, as now contained in the Plan or as hereafter altered
or added by amendment to the Plan.
3. Effective Date of Adoption as to the Employer. The Employer agrees
that this adoption of the Plan shall be effective for all purposes of the
Plan as of and from July 1, 1996.
IN WITNESS WHEREOF, the undersigned named affiliate of Old Point
Financial Corporation has caused its name to be signed to this Adoption
Agreement for the Old Point Financial Corporation 1996 Employee Stock
Purchase Plan by its duly authorized officer with its corporate seal
hereunto affixed and attested by its Secretary or Assistant Secretary, as
of the day and year below written; and the Administrator hereby evidences
its consent hereto.
Date: June 3, 1996 Old Point National Bank,
participating Employer
By: /s/ John G. Sebrell (SEAL)
JOHN G. SEBRELL
Its President
Attest:
/s/ W. Rodney Rosser
W. RODNEY ROSSER
Its Senior Vice President and Secretary
Date: June 3, 1996 1996 Employee Stock Purchase
Plan Committee,
Plan Administrator
By: /s/ G. Royden Goodson III (SEAL)
G. ROYDEN GOODSON III
Its Chairman
CONSENT OF MEMBERS OF
THE 1996 EMPLOYEE STOCK PURCHASE PLAN COMMITTEE
IN LIEU OF MEETING
____________________________
June 3, 1996
____________________________
The undersigned, being all of the members of the 1996 Employee
Stock Purchase Plan Committee of Old Point Financial Corporation, a
Virginia corporation, acting in its capacity as the plan administrator of
the 1996 Old Point Financial Corporation Employee Stock Purchase Plan, by
written consent without a meeting hereby take the following action in
lieu of a meeting of said committee:
First: The following subsidiary of Old Point Financial
Corporation is authorized to participate in the 1996 Old
Point Financial Corporation Employee Stock Purchase Plan (the
"Plan") effective July 1, 1996:
Old Point National Bank
Second: The 7,500 shares of common stock of Old Point
Financial Corporation available under the Plan for 1996 shall
be offered under the Plan for 1996.
This consent was executed by each of the undersigned on the date(s)
specified below, and the action taken hereby is effective on the date
first specified above.
Date: June 3, 1996 /s/ G. Royden Goodson III
G. ROYDEN GOODSON III
Date: June 3, 1996 /s/ Louis G. Morris
LOUIS G. MORRIS
Date: June 3, 1996 /s/ Margaret P. Causby
MARGARET P. CAUSBY
Date: June 3, 1996 /s/ W. Rodney Rosser
W. RODNEY ROSSER
Date: June 3, 1996 /s/ Mark A. Dulaney
MARK A. DULANEY