UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Check the appropriate box:
[_] Preliminary Proxy Statement
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COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
EASTERN VIRGINIA BANKSHARES, INC
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Notes:
EASTERN VIRGINIA BANKSHARES, INC.
307 Church Lane
Tappahannock, Virginia 22560
March 26, 2001
Dear Shareholder:
You are cordially invited to attend the 2001 Annual Meeting of Shareholders
of Eastern Virginia Bankshares, Inc. to be held on Thursday, April 19, 2001 at
9:30 a.m. at St. Margaret's School, 444 Water Lane, Tappahannock, Virginia.
At the Annual Meeting, you will be asked to elect 11 directors for terms of
one year each. You will also vote to approve the Company's 2000 Stock Option
Plan and to ratify the appointment of independent auditors for the Company for
2001. Enclosed with this letter is a formal notice of the Annual Meeting, a
Proxy Statement and a form of proxy.
Whether or not you plan to attend the Annual Meeting, it is important that
your shares be represented and voted. Please complete, sign, date and return
the enclosed proxy promptly using the enclosed postage-paid envelope. The
enclosed proxy, when returned properly executed, will be voted in the manner
directed in the proxy.
We hope you will participate in the Annual Meeting, either in person or by
proxy.
Sincerely,
/s/ Thomas M. Boyd
Thomas M. Boyd, Jr.
President and Chief Executive Officer
EASTERN VIRGINIA BANKSHARES, INC.
307 Church Lane
Tappahannock, Virginia 22560
PROXY STATEMENT
This Proxy Statement is furnished to holders of the common stock, par
value $2.00 per share ("Common Stock"), of Eastern Virginia Bankshares, Inc.
(the "Company"), in connection with the solicitation of proxies by the Board of
Directors of the Company to be used at the Annual Meeting of Shareholders (the
"Annual Meeting") to be held on Thursday, April 19, 2001, at 9:30 a.m. at St.
Margaret's School, 444 Water Lane, Tappahannock, Virginia, and any duly
reconvened meeting after adjournment thereof.
Any shareholder who executes a proxy has the power to revoke it at any
time by written notice to the Secretary of the Company, by executing a proxy
dated as of a later date, or by voting in person at the Annual Meeting. It is
expected that this Proxy Statement and the enclosed proxy card will be mailed on
or about March 26, 2001, to all shareholders entitled to vote at the Annual
Meeting.
The cost of soliciting proxies for the Annual Meeting will be borne by
the Company. The Company does not intend to solicit proxies otherwise than by
use of the mails, but certain officers and regular employees of the Company or
its subsidiaries, without additional compensation, may use their personal
efforts, by telephone or otherwise, to obtain proxies. The Company may also
reimburse banks, brokerage firms and other custodians, nominees and fiduciaries
for their reasonable out-of-pocket expenses in forwarding proxy materials to the
beneficial owners of shares of Common Stock.
On March 16, 2001, the record date for determining those shareholders
entitled to notice of and to vote at the Annual Meeting, there were 4,921,410
shares of Common Stock issued and outstanding. Each outstanding share of Common
Stock is entitled to one vote on all matters to be acted upon at the Annual
Meeting. A majority of the shares of Common Stock entitled to vote, represented
in person or by proxy, constitutes a quorum for the transaction of business at
the Annual Meeting.
A shareholder may abstain or (only with respect to the election of directors)
withhold his or her vote (collectively, "Abstentions") with respect to each item
submitted for shareholder approval. Abstentions will be counted for purposes of
determining the existence of a quorum. Abstentions will not be counted as
voting in favor of the relevant item.
A broker who holds shares in "street name" has the authority to vote on
certain items when it has not received instructions from the beneficial owner.
Except for certain items for which brokers are prohibited from exercising their
discretion, a broker is entitled to vote on matters put to shareholders without
instructions from the beneficial owner. Where brokers do not have or do not
exercise such discretion, the inability or failure to vote is referred to as a
"broker nonvote." Under the circumstances where the broker is not permitted to,
or does not, exercise its discretion, assuming proper disclosure to the Company
of such inability to vote, broker nonvotes will not be counted for purposes of
determining the existence of a quorum, and also will not be counted as not
voting in favor of the particular matter.
1
The Board of Directors is not aware of any matters other than those described
in this Proxy Statement that may be presented for action at the Annual Meeting.
However, if other matters do properly come before the Annual Meeting, the
persons named in the enclosed proxy card possess discretionary authority to vote
in accordance with their best judgment with respect to such other matters.
PROPOSAL ONE
ELECTION OF DIRECTORS
Eleven directors will be elected at the Annual Meeting. The individuals
listed below are nominated by the Board of Directors for election at the Annual
Meeting.
The election of each nominee for director requires the affirmative vote of the
holders of a plurality of the shares of Common Stock cast in the election of
directors. If the proxy is executed in such manner as not to withhold authority
for the election of any or all of the nominees for directors, then the persons
named in the proxy will vote the shares represented by the proxy for the
election of the 11 nominees named below. If the proxy indicates that the
shareholder wishes to withhold a vote from one or more nominees for director,
such instructions will be followed by the persons named in the proxy.
Each nominee has consented to being named in this Proxy Statement and has
agreed to serve if elected. The Board of Directors has no reason to believe
that any of the nominees will be unable or unwilling to serve. If, at the time
of the Annual Meeting, any nominee is unable or unwilling to serve as a
director, votes will be cast, pursuant to the enclosed proxy, for such
substitute nominee as may be nominated by the Board of Directors. There are no
current arrangements between any nominee and any other person pursuant to which
a nominee was selected. No family relationships exist among any of the
directors or between any of the directors and executive officers of the Company.
The following biographical information discloses each nominee's age, business
experience in the past five years and the year each individual was first elected
to the Board of Directors:
Nominees for Election Whose Terms Expire in 2002
Name (Age) of Date First
Director Elected Principal Occupation During Past 5 Years
-------- ------- ----------------------------------------
W. Rand Cook 1997 Attorney with McCaul, Martin, Evans &
Age 47 Cook, P.C. in Mechanicsville, Virginia
and a Director of Hanover Bank since 2000.
Robert L. Covington 1997 Chairman of the Board of the Company
Age 75 since its formation in December 1997, and
Chairman of the Board of Bank of
Northumberland since 1991 and a Director
of Bank of Northumberland since 1968. He
was the President and Chief Executive
Officer of Bank of Northumberland prior to
1991.
2
L. Edelyn Dawson, Jr. 1997 Secretary of the Board of the Company and
Age 60 Senior Vice President and Secretary of the
Bank of Northumberland since 1991 and a
Director of the Bank of Northumberland
since 1997.
F. L. Garrett, III 1997 Vice Chairman of the Board of the Company
Age 61 and Chairman of the Board of Southside
Bank since 1997 and a Director of
Southside Bank since 1982. Realtor in
Essex County, Virginia.
F. Warren Haynie, Jr. 1997 of counsel, McKerns & McKerns, Attorneys
Age 62 at Law, Heathsville, Virginia and a
Director of Bank of Northumberland since
1987.
Eric A. Johnson 1997 General Manager of Mason Realty, Inc. in
Age 47 Urbanna, Virginia and a Director of
Southside Bank since 1988.
William L. Lewis 1997 Attorney with Lewis & Ware, P.C. in
Age 50 Tappahannock, Virginia and a Director of
Southside Bank since 1989.
Lewis R. Reynolds 1997 Senior Vice President of the Company, and
Age 50 President and Chief Executive Officer of
Bank of Northumberland since 1991, and a
Director of Bank of Northumberland since
1994.
Ned Stephenson new Chief Financial Officer of the Company
Age 47 nominee from 1997 to 2000. Executive Vice
President of the Company since April 20,
2000. Officer of Southside Bank since
1987.
Leslie E. Taylor 2000 CPA with Leslie E. Taylor, CPA, PC,
Age 52 Tappahannock, Virginia and a Director of
Southside Bank since 1989.
Jay T. Thompson, III 2000 Owner of Mechanicsville Drug Store,
Age 44 Mechanicsville, Virginia and Chairman of
Hanover Bank since 2000.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
NOMINEES SET FORTH ABOVE.
Executive Officer Who Is Not a Director
Ned Stephenson (age 47) has served as an officer of Southside Bank from
1987 to present. He was Chief Financial Officer of the Company from 1997 to
2000 and has served as Executive Vice President since April 20, 2000. Mr.
Stephenson will become the Chief Executive Officer of the Company at the
conclusion of the Annual Meeting.
3
Security Ownership of Management
The following table sets forth, as of March 1, 2001, certain information
with respect to beneficial ownership of shares of Common Stock by each of the
members of the Board of Directors and each nominee, by each of the executive
officers named in the "Summary Compensation Table" below and by all directors
and executive officers as a group. Beneficial ownership includes shares, if any,
held in the name of the spouse, minor children or other relatives of a director
living in such person's home, as well as shares, if any, held in the name of
another person under an arrangement whereby the director or executive officer
can vest title in himself at once or at some future time.
Amount and Nature of
Name Beneficial Ownership Percent of Class (%)
---- -------------------- --------------------
Thomas M. Boyd, Jr. 23,772 *
W. Rand Cook 1,423 *
Robert L. Covington 84,234 1.71
L. Edelyn Dawson, Jr. 16,078 *
F. L. Garrett, III 21,350 *
F. Warren Haynie, Jr. 4,215 *
Eric A. Johnson 5,991 *
William L. Lewis 39,610** *
Lewis R. Reynolds 18,447 *
Ned Stephenson 10,729 *
Leslie E. Taylor 1,433 *
Jay T. Thompson, III 10,270 *
All present executive 237,552 4.83
officers and directors
as a group (12 persons)
_____________
* Percentage of ownership is less than one percent of the outstanding shares
of Common Stock.
** Includes 19,275 shares held in estates and trusts for which Director Lewis
has fiduciary responsibility, but not pecuniary interest.
Security Ownership of Certain Beneficial Owners
As of March 1, 2001, to the Company's knowledge, no one person beneficially
owns more than five percent of the outstanding shares of the Company's Common
Stock.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers, and
any persons who own more than 10% of the outstanding shares of Common Stock, to
file with the Securities and Exchange Commission ("SEC") reports of ownership
and changes in ownership of Common Stock. Officers and directors are required
by SEC regulations to furnish the Company with copies of all Section 16(a)
reports that they file. Based solely on review of the copies of such reports
furnished to the Company or written representation that no other reports were
required, the Company believes that, during fiscal year 2000, all filing
requirements applicable to its officers and directors were complied with.
4
The Board of Directors and its Committees
There were 12 meetings of the Board of Directors in 2000. Each director
attended greater than 75% of the aggregate number of meetings of the Board of
Directors and meetings of committees of which the director was a member in 2000.
The Company's Executive Committee, which acts for the Board of Directors
when the Board is not in session, consists of Messrs. Garrett, Haynie, Lewis,
Boyd and Cook. The Executive Committee met 7 times during the year ended
December 31, 2000.
The Company does not have a standing compensation committee or nominating
committee.
Report of the Audit Committee
The Audit Committee consists of Messrs. Taylor, Cook, Johnson and Haynie,
each of whom qualifies as an independent director under current listing
standards of the National Association of Securities Dealers. The Audit Committee
reviews the Company's financial reporting process on behalf of the Board of
Directors. Management has the primary responsibility for the financial
statements and the reporting process. The Company's independent auditors are
responsible for expressing an opinion on the conformity of the Company's audited
financial statements to generally accepted accounting principles. The Audit
Committee held 2 meetings during the year ended December 31, 2000. The Audit
Committee acts pursuant to the Audit Committee Charter adopted by the Board of
Directors in May, 2000, a copy of which is attached as Exhibit B to this proxy
statement.
The Audit Committee has reviewed and discussed with management the
Company's audited financial statements as of and for the year ended December 31,
2000. The Committee also has discussed with the independent auditors for the
Company the matters required to be discussed by Statement on Auditing Standards
No. 61, Communication with Audit Committees, as amended. The Committee has
received the written disclosures and the letter from the independent auditors
for the Company required by Independence Standards Board Standard No. 1,
Independence Discussions with Audit Committees, as amended, and has discussed
with the independent auditors that firm's independence from management and the
Company.
Based on the review and discussions referred to in the above paragraph, the
Committee recommended to the Board of Directors that the year-end audited
financial statements be included in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2000 for filing with the Securities and
Exchange Commission.
The Audit Committee
Leslie E. Taylor, Chairman
W. Rand Cook
Eric A. Johnson
F. Warren Haynie, Jr.
March 15, 2001
5
Fees of Independent Public Accountants
For the year ended December 31, 2000, the Company paid audit fees of
$44,000 and other fees of $11,070 to Yount, Hyde & Barbour, P.C., the Company's
Certified Public Accountants. No fees were paid to Yount Hyde & Barbour, P. C.
for information services consulting.
Director Compensation
As compensation for their services to the Company, each member of the
Board of Directors receives a monthly retainer of $200 and $600 for each Board
meeting attended. Board members who are also officers do not receive any
additional compensation above their regular salary for attending committee
meetings. In 2000, directors received $51,800 in the aggregate as compensation
for their services as directors.
Executive Compensation
The following table shows, for the fiscal years ended December 31, 2000,
1999 and 1998, the cash compensation paid by the Company and its subsidiaries,
as well as certain other compensation paid or accrued for those years, to each
of the named executive officers in all capacities in which they served:
Summary Compensation Table
--------------------------
Annual Compensation
-------------------
Name and Other Annual All Other
Principal Position Year Salary ($) Bonus ($) Compensation ($) Compensation ($) (1)
------------------ ---- ---------- --------- ---------------- --------------------
Thomas M. Boyd 2000 144,485 0 * 2,877
President and Chief Executive 1999 135,616 0 * 2,700
Officer of the Company and 1998 121,045 0 * 3,600
Southside Bank
Lewis R. Reynolds 2000 97,204 19,988 * 1,942
Senior Vice President of the 1999 92,155 21,420 * 1,844
Company and President of Bank 1998 87,200 19,671 * --
of Northumberland
L. Edelyn Dawson, Jr. 2000 86,906 17,798 * 1,734
Secretary of the Company and 1999 82,593 19,072 * 1,643
Senior Vice President and 1998 77,700 17,527 * --
Secretary of Bank of
Northumberland
* All benefits that might be considered of a personal nature did not exceed
the lesser of $50,000 or 10% of total annual salary and bonus.
(1) Amounts presented represent matching contributions by the Company to the
Company's 401(k) plan.
The Company has a defined-benefit pension plan provided through the
Virginia Bankers Association Insurance Trust. Benefits are based on an
employee's salary at the time of retirement, normally at age 65. All active,
full-time employees, except those employed by Hanover Bank (a wholly
6
owned subsidiary of the Company), are eligible at age 25 with two years of
service, at age 36 with one year of service, or at age 41. Employees do not
contribute to the plan, and a participant becomes 100% vested upon completion of
five years of service. Directors who are full-time employees are eligible for
participation. The estimated annual benefits payable upon retirement are as
follows:
Years of Service
----------------
Remuneration 15 20 25 30 35
------------ -- -- -- -- --
$25,000 6,938 9,250 11,563 12,500 13,438
$40,000 11,618 15,490 19,363 21,035 22,708
$55,000 17,468 23,290 29,113 31,910 34,708
$75,000 25,268 33,690 42,113 46,410 50,708
$100,000 35,018 46,690 58,363 64,535 70,708
$125,000 44,768 59,690 74,613 82,660 90,708
$150,000 54,518 72,690 90,863 100,785 110,708
$175,000 62,318 83,090 103,863 115,285 126,708
The estimated credited years of service for Messrs. Boyd, Reynolds, and
Dawson are 19, 29, and 20 years, respectively.
The benefits in the table are calculated on the basis of a 50% joint and
survivor annuity, assuming that at retirement, the age of the employee's spouse
is 62. Benefits are not subject to deduction for Social Security offset amounts.
Benefits are based on an employee's salary for the 5 years that precede
retirement.
Report on Executive Compensation
The following Report on Executive Compensation and the Stock Performance
Graph below shall not be deemed incorporated by reference by any general
statement incorporating this Proxy Statement into any filing under the
Securities Act of 1933, as amended, or under the Exchange Act, except to the
extent the Company specifically incorporates this information by reference, and
shall not otherwise be deemed filed under such Acts.
Each of the named executive officers is an executive officer and full time
employee of one of the Company's bank subsidiaries. Their salaries and bonuses
are set and paid by the respective bank subsidiaries that employ them. The Board
of Directors of the Company monitors the compensation paid to bank officers and
employees for reasonableness, but, to date, has not taken exception with any
decisions of the directors of the subsidiary banks.
Compensation for each of the named officers consists of a base salary and
annual bonus. The bank boards fix base salaries at levels that are competitive
or somewhat below the competitive amounts paid to senior executives with
comparable qualifications, experience, and responsibilities, after comparing
salary ranges of other banks and other large locally headquartered companies.
Compensation levels are not explicitly linked to the performance of the Company.
The Board of Directors
Thomas M. Boyd, Jr. Eric A. Johnson
W. Rand Cook William L. Lewis
Robert L. Covington Lewis R. Reynolds
L. Edelyn Dawson, Jr. Leslie E. Taylor
F. L. Garrett, III Jay T. Thompson, III
March 15, 2001 F. Warren Haynie, Jr.
7
Compensation Committee Interlocks and Insider Participation
The Company's Board of Directors serves as the compensation committee for
all employees of the parent company, Eastern Virginia Bankshares, Inc. Each
subsidiary bank has a separate compensation committee or salary committee for
all employees of that bank, including the CEO of that bank. With the exception
of Company directors Boyd, Reynolds, and Dawson, who are full time employees of
one of the subsidiary banks, none of the members of the Board of Directors of
the Company has served as an employee of Eastern Virginia Bankshares, Inc. or
any of its affiliates.
Shareholder Return On Investment
The following graph compares the yearly percentage change in the Company's
cumulative total shareholder return with that of the S & P 500 Index and with
the SNL $250M-$500M Bank Index, assuming $100 investments in each on 1-2-98,
with dividends reinvested. Prior to 1-2-98, there was no known market in the
Company's stock.
[GRAPH]
Period Ending
Index 01/02/98 06/30/98 12/31/98 06/30/99 12/31/99 06/30/00 12/31/00
Eastern Virginia Bankshares, Inc. 100.00 126.73 103.76 102.20 115.77 92.83 90.54
S&P 500 100.00 117.15 127.93 143.77 154.86 154.20 140.75
SNL $250M-$500M Bank Index 100.00 106.38 89.85 88.17 83.59 76.48 80.48
8
Employment Agreements
The Company's subsidiary Bank of Northumberland has employment agreements
with certain Bank executive officers, including Mr. Reynolds and Mr. Dawson to
serve as officers of Bank of Northumberland. Both contracts are for five-year
terms and expire on November 13, 2001. Each contract also provides for
automatic renewals for successive terms of one year at a time, unless the
contract is terminated by Bank of Northumberland or the employee. Both
officers' salary are determined at the sole discretion of Bank of
Northumberland's Board of Directors, with a minimum 1996 salary of $72,628 for
Mr. Reynolds and $67,450 for Mr. Dawson. In the event that either officer's
employment is terminated under this agreement within six months before or 18
months after a change of control of Bank of Northumberland, the officer is
entitled to receive the greater of (i) his current salary and benefits or (ii)
the level of such salary and benefits in effect over the most recent 12 months
preceding the date of his termination of employment. Each officer would be
eligible to receive this compensation subsequent to his termination in these
circumstances over the longer of (i) an additional 12 months, or (ii) the
remainder of his unexpired original term.
The Company, Southside Bank and Thomas M. Boyd, Jr. entered into an employment
contract assuring his continued employment until his early retirement on April
1, 2002. The contract provides for Southside Bank to pay Mr. Boyd an annual
salary of $144,050 and assures his right to participate in various benefit plans
and to receive certain deferred compensation payments following the termination
of his employment. The agreement contains customary provisions with respect to
its termination by either party and covenants against competition and the
disclosure of confidential information.
Transactions with Management
Some of the directors and officers of the Company are at present, as in the
past, customers of the Company, and the Company has had, and expects to have in
the future, banking transactions in the ordinary course of its business with
directors, officers, principal shareholders and their associates, on
substantially the same terms, including interest rates and collateral on loans,
as those prevailing at the same time for comparable transactions with others.
These transactions do not involve more than the normal risk of collectibility or
present other unfavorable features.
There were no transactions during 2000 between the Company's directors or
officers and the Company's retirement or profit sharing plans, nor are there any
proposed transactions. Additionally, there are no legal proceedings to which any
director, officer or principal shareholder, or any affiliate thereof, is a party
that would be material and adverse to the Company.
PROPOSAL TWO
APPROVAL OF THE 2000 STOCK OPTION PLAN
General
On September 21, 2000, the Board of Directors of the Company approved the 2000
Stock Option Plan (the "Stock Option Plan"). A copy of the Stock Option Plan is
attached as Exhibit A to this proxy statement. The Stock Option Plan is
intended to provide a means for selected key employees and directors of the
Company to increase their personal financial interest in the Company, thereby
stimulating their efforts and strengthening their desire to remain with the
Company. References to the
9
"Company" in this section will include any subsidiary corporation. The principal
features of the Stock Option Plan, as amended, are summarized below.
The Stock Option Plan permits the award of Incentive Stock Options ("ISOs")
and Non-Qualified Stock Options ("NQSOs") to directors and eligible officers and
key employees of the Company and its subsidiaries upon such terms as the Board
of Directors may determine, consistent with the terms of the Stock Option Plan.
The Company will receive no consideration for granting or extending options
under the Stock Option Plan.
The Stock Option Plan
The Stock Option Plan authorizes the issuance of up to 400,000 shares of
Common Stock to assist the Company in recruiting and retaining key management
personnel.
As of March 1, 2001, the market value of the 400,000 shares that are
issuable under the Stock Option Plan, as amended, was $5,600,000.
The Company intends to grant options to purchase shares of Common Stock
under the Stock Option Plan to directors, eligible officers and key employees.
No determination has been made as to which of the persons eligible to
participate in the Stock Option Plan will receive awards under the Stock Option
Plan in the future and, therefore, the future benefits to be allocated to any
individual or to various groups of participants are not presently determinable.
Administration
The Stock Option Plan is administered by the Board of Directors. The Board
of Directors has the sole discretion, subject to certain limitations, to
interpret the Stock Option Plan; to select Stock Option Plan participants; to
determine the type, size, terms and conditions of awards under the Stock Option
Plan; to authorize the grant of such awards; and to adopt, amend and rescind
rules relating to the Stock Option Plan. All determinations of the Board of
Directors are conclusive. All expenses of administering the Stock Option Plan
will be borne by the Company.
Eligibility
Any officer or employee of the Company or its subsidiaries who, in the
judgment of the Board of Directors, has contributed significantly or can be
expected to contribute significantly to the profits or growth of the Company or
a subsidiary is eligible to participate in the Stock Option Plan. Directors of
the Company may also participate in the Stock Option Plan.
Individual Agreements
The Board of Directors has broad authority to fix the terms and conditions
of the individual agreements with participants. All awards granted under the
Stock Option Plan are intended to comply with the applicable requirements of
Rule 16b-3 promulgated under the Exchange Act, which exempts, grants and awards
under qualifying employee benefit plans from certain "short-swing" profit
recovery provisions of the Exchange Act.
Shares Available
10
Subject to the provisions of the Stock Option Plan providing for
proportional adjustments in the event of various changes in the capitalization
of the Company, no more than 400,000 shares of authorized but unissued Common
Stock may be issued pursuant to the Stock Option Plan. Any shares of Common
Stock subject to an Incentive Stock Option or Non-Qualified Stock Option that
are not issued prior to the expiration of such awards will again be available
for award under the Stock Option Plan.
Incentive Stock Options and Non-Qualified Stock Options ("Options")
The Board of Directors may authorize the grant of either ISOs, as defined
under Section 422 of the Internal Revenue Code of 1986, as amended, or NQSOs,
which are subject to certain terms and conditions including the following: (1)
the option price per share will be determined by the Board of Directors, but for
ISOs will not, in any event, be less than 100 percent of the fair market value
of Common Stock on the date that the Option is granted; (2) the term of the
Option will be fixed by the Board of Directors, but the maximum period in which
an ISO may be exercised shall not, in any event, exceed ten years from the date
that the ISO is granted; (3) Options will not be transferable other than by will
or the laws of descent and distribution; (4) the purchase price of Common Stock
issued upon exercise of an Option will be paid in full to the Company at the
time of the exercise of the Option in cash, or at the discretion of the Board of
Directors, by surrender to the Company of previously acquired shares of Common
Stock, which will be valued at the fair market value of such shares on the date
preceding the date that the Option is exercised; (5) an Option may expire upon
termination of employment or within a specified period of time after termination
of employment as provided by the Board of Directors; (6) the aggregate fair
market value (determined on the date of grant) of the shares of Common Stock
with respect to which ISOs are exercisable for the first time by any individual
during any calendar year shall not exceed $100,000; and (7) the Board of
Directors may elect to cash out all or part of the portion of any Option to be
exercised by a participant by payment in cash or Common Stock of an amount
determined in accordance with the Stock Option Plan.
Change of Control
At the discretion of the Board of Directors, in the event of a Change in
Control, any outstanding Option may become fully exercisable and vested to the
full extent of the original grant. Under the Stock Option Plan, a "Change of
Control" shall be deemed to have taken place if (i) a third person, excluding
certain directors of the Company, but including a "group" as defined in Section
13(d)(3) of the Exchange Act becomes the beneficial owner of shares of Common
Stock having 20% or more of the total number of votes that may be cast for the
election of directors of the Company, or (ii) as the result of, or in connection
with, any cash or exchange offer, merger or other business combination, sale of
assets or contested election, or any combination of the foregoing transactions
(a "Transaction"), the persons who were directors of the Company before the
Transaction shall cease to constitute a majority of the Board of Directors of
the Company or any successor to the Company.
Amendment or Termination
The Board of Directors may amend or terminate the Stock Option Plan;
however, no amendment may become effective until shareholder approval is
obtained if the amendment (i) materially increases the aggregate number of
shares that may be issued pursuant to Options, (ii) materially increases the
benefits to participants under the Stock Option Plan, or (iii) materially
changes the requirements as to eligibility for participation in the Stock Option
Plan. No amendment shall, without a participant's consent, adversely affect any
rights of such participant under any Option outstanding at the time that
11
such amendment is made. No amendment shall be made if it would disqualify the
Stock Option Plan from the exemption provided by Rule 16b-3.
Duration of Plan
No Option may be granted under the Stock Option Plan after September 21,
2010. Options granted before September 21, 2010, shall remain valid in
accordance with their terms.
Tax Status
Under current federal income tax laws, the principal federal tax
consequences to participants and to the Company of the grant and exercise of
ISOs and NQSOs, pursuant to the provisions of the Stock Option Plan, are
summarized below.
Incentive Stock Options. An employee will generally not recognize income on
receipt or exercise of an ISO so long as he or she has been an employee of the
Company or its subsidiaries from the date that the Option was granted until
three months before the date of exercise; however, the amount by which the fair
market value of the Common Stock at the time of exercise exceeds the option
price is a required adjustment for purposes of the alternative minimum tax
applicable to the employee. If the employee holds the Common Stock received upon
exercise of the Option for one year after exercise (and for two years from the
date of grant of the Option), any difference between the amount realized upon
the disposition of the stock and the amount paid for the stock will be treated
as long-term capital gain (or loss, if applicable) to the employee. If the
employee exercises an ISO and satisfies these holding period requirements, the
Company may not deduct any amount in connection with the ISO.
In contrast, if an employee exercises an ISO but does not satisfy the
holding period requirements with respect to the Common Stock acquired on
exercise, the employee generally will recognize ordinary income in the year of
the disposition equal to the excess, if any, of the fair market value of the
Common Stock on the date of exercise over the option price; and any excess of
the amount realized on the disposition over the fair market value on the date of
exercise will be taxed as long- or short-term capital gain (as applicable). If,
however, the fair market value of the Common Stock on the date of disposition is
less than on the date of exercise, the employee will recognize ordinary income
equal only to the difference between the amount realized on disposition and the
option price. In either event, the Company will be entitled to deduct an amount
equal to the amount constituting ordinary income to the employee in the year of
the premature disposition.
Non-Qualified Stock Options. NQSOs granted under the Stock Option Plan are
not taxable to a participant at grant but result in taxation at exercise, at
which time the individual will recognize ordinary income in an amount equal to
the difference between the option exercise price and the fair market value of
the Common Stock on the exercise date. The Company will be entitled to deduct a
corresponding amount as a business expense in the year that the participant
recognizes this income.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE IN FAVOR OF
THE 2000 STOCK OPTION PLAN. AN AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES
PRESENT IN PERSON OR REPRESENTED BY PROXY AT THE ANNUAL MEETING IS REQUIRED FOR
APPROVAL OF THIS PROPOSAL.
PROPOSAL THREE
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RATIFICATION OF THE APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed, subject to shareholder approval, the
firm of Yount, Hyde & Barbour, P.C. as independent public accountants to audit
the consolidated financial statements of the Company for the fiscal year ending
December 31, 2001. Yount, Hyde & Barbour, P.C. has audited the financial
statements of the Company for 4 years. A majority of the votes cast by holders
of the Common Stock is required for the ratification of the appointment of the
independent public accountants.
Representatives of Yount, Hyde & Barbour, P.C. are expected to be present
at the Annual Meeting, will have an opportunity to make a statement, if they
desire to do so, and are expected to be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
APPOINTMENT OF YOUNT, HYDE & BARBOUR, P.C. AS INDEPENDENT PUBLIC ACCOUNTANTS FOR
THE FISCAL YEAR ENDING DECEMBER 31, 2001.
PROPOSALS FOR 2002 ANNUAL MEETING OF SHAREHOLDERS
Under the regulations of the Securities and Exchange Commission, any
shareholder desiring to make a proposal to be acted upon at the 2002 annual
meeting of shareholders must cause such proposal to be received, in proper form,
at the Company's principal executive offices at 307 Church Lane, Tappahannock,
Virginia 22560, no later than November 27, 2001, in order for the proposal to be
considered for inclusion in the Company's Proxy Statement for that meeting. The
Company presently anticipates holding the 2002 annual meeting of shareholders on
Thursday, April 18, 2002.
The Company's Bylaws also prescribe the procedure a shareholder must follow
to nominate directors or to bring other business before shareholders' meetings.
For a shareholder to nominate a candidate for director at the 2002 annual
meeting of shareholders, notice of nomination must be received by the Secretary
of the Company not less than 60 days and not more than 90 days prior to the date
of the 2002 annual meeting. The notice must describe various matters regarding
the nominee and the shareholder giving the notice. For a shareholder to bring
other business before the 2002 annual meeting of shareholders, notice must be
received by the Secretary of the Company not less than 60 days and not more than
90 days prior to the date of the 2001 annual meeting. The notice must include a
description of the proposed business, the reasons therefor, and other specified
matters. Any shareholder may obtain a copy of the Company's Bylaws, without
charge, upon written request to the Secretary of the Company. Based upon an
anticipated date of April 18, 2002 for the 2002 annual meeting of shareholders,
the Company must receive any notice of nomination or other business no later
than February 19, 2002 and no earlier than January 18, 2002.
OTHER MATTERS
THE COMPANY'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000,
INCLUDING FINANCIAL STATEMENTS, IS BEING MAILED TO SHAREHOLDERS WITH THIS PROXY
STATEMENT. A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR 2000 FILED
WITH THE COMMISSION, EXCLUDING EXHIBITS, MAY BE OBTAINED WITHOUT CHARGE BY
WRITING TO RONALD L. BLEVINS, WHOSE ADDRESS IS P.O. Box 1455, TAPPAHANNOCK,
VIRGINIA 22560.
13
EXHIBIT A
EASTERN VIRGINIA BANKSHARES, INC.
2000 STOCK OPTION PLAN
ARTICLE I
Definitions
1.01 Affiliate means any entity that is a subsidiary corporation of
---------
the Company. For this purpose, "subsidiary corporation" means any corporation
(other than the Company) in an unbroken chain of corporations beginning with the
Company if, at the time of the granting of the Option one or more of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50 percent or more of the total combined voting power of all classes
of stock in such corporation.
1.02 Agreement means a written agreement (including any amendment or
---------
supplement thereto) between the Company and a Participant specifying the terms
and conditions of an Option granted to such Participant.
1.03 Board means the Board of Directors of the Company.
-----
1.04 Code means the Internal Revenue Code of 1986 and any amendments
----
thereto.
1.05 Common Stock means the common stock of the Company.
------------
1.06 Company means Eastern Virginia Bankshares, Inc.
-------
1.07 Fair Market Value means, on any given date, (i) the last sale
-----------------
price of the Common Stock for such date or, if the Common Stock was not traded
on such day, then on the next preceding day that the Common Stock was so traded,
or (ii) in the event the Board determines that the last sale price for the
Common Stock are not available to do not provide an accurate measure of Fair
Market Value, such other amount as the Board shall determine based upon a good
faith method of valuation to be the Fair Market Value.
1.08 Option means a stock option that entitles the holder to
------
purchase from the Company a stated number of shares of Common Stock at the price
set forth in an Agreement.
1.09 Participant means an employee of the Company or of an Affiliate
-----------
who satisfies the requirements of Article IV and is selected by the Board to
receive an Option.
1.10 Plan means the Eastern Virginia Bankshares, Inc. 2000 Stock
----
Option Plan.
ARTICLE II
Purposes
The Plan is intended to foster and promote the long-term growth and
financial success of the Company and its Affiliates by assisting the Company in
recruiting and retaining directors and key employees with ability and initiative
by enabling individuals who contribute significantly to the
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Company or an Affiliate to participate in its future success and to associate
their interests with those of the Company. The proceeds received by the Company
from the sale of Common Stock pursuant to this Plan shall be used for general
corporate purposes. The Plan is not expected to have any material effect on the
value of issued and outstanding shares of the Company's Common Stock.
The Plan is intended to enable stock options granted under the Plan to
qualify as incentive stock options ("Incentive Stock Options") under Section
422A of the Internal Revenue Code of 1986, as amended (the "Internal Revenue
Code").
ARTICLE III
Administration
The Plan shall be administered by the Board. The Board shall have authority
to grant Options upon such terms (not inconsistent with the provisions of this
Plan) as the Board may consider appropriate. Such terms may include conditions
(in addition to those contained in the Plan) on the exercisability of all or any
part of an Option. In addition, the Board shall have complete authority to
interpret all provisions of this Plan; to prescribe the form of Agreements; to
adopt, amend and rescind rules and regulations pertaining to the administration
of the Plan; and to make all other determinations necessary or advisable for the
administration of this Plan. The express grant in the Plan of any specific power
to the Board shall not be construed as limiting any power or authority of the
Board. Any decision made, or action taken, by the Board in connection with the
administration of this Plan shall be final and conclusive. No member of the
Board shall be liable for any act done with respect to this Plan or any
Agreement or Option. All expenses of administering this Plan shall be borne by
the Company.
ARTICLE IV
Eligibility
4.01 General. Any director of the Company and any employee of the
-------
Company or of any Affiliate (including any corporation that becomes an Affiliate
after the adoption of this Plan) who, in the judgment of the Board, has
contributed significantly or can be expected to contribute significantly to the
profits or growth of the Company or an Affiliate may receive one or more
Options.
4.02 Grants. The Board shall designate individuals to whom Options
------
are to be granted and will specify the number of shares of Common Stock subject
to each grant. All Options granted under this Plan shall be evidenced by
Agreements which shall be subject to applicable provisions of this Plan and to
such other provisions as the Board may adopt.
ARTICLE V
Shares Subject to Plan
Upon the exercise of any Option, the Company shall deliver to the
Participant authorized but unissued shares of Common Stock. The maximum
aggregate number of shares of Common Stock that may be issued pursuant to the
exercise of Options under this Plan is 400,000, subject to the adjustment as
provided in Article XII. If an Option is canceled by mutual agreement of the
Company and a Participant or terminated, in whole or in part, for any reason
other than its exercise, the number of shares of Common Stock allocated to the
Option or portion thereof may be reallocated to other Options to be granted
under this Plan.
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ARTICLE VI
Tax Character of Options
The Board shall have the discretion to designate whether Options shall be
Incentive Stock Options or non-statutory options. To the extent that an Option
exceeds the limitation described in Article X, the Option shall not be an
Incentive Stock Option.
ARTICLE VII
Price
The price per share paid by a Participant for Common Stock purchased on the
exercise of an Incentive Stock Option shall be equal to the Fair Market Value
per share of the Company's Common stock on the date the Option is granted. In
the discretion of the Board, the price per share paid by a Participant in
connection with a non-statutory stock Option may be less then at the Fair Market
Value per share of the Company's Common Stock on the date the Option is granted.
ARTICLE VIII
Exercise of Options
8.01 Maximum Option Period. No Option shall be exercisable after
---------------------
the expiration of ten years from the date Option was granted. The Board, at the
time of grant, may direct that an Option be exercisable for a period of less
than such maximum period.
8.02 Nontransferability. Any Option granted under this Plan shall be
------------------
nontransferable except by will or by the laws of descent and distribution.
During the lifetime of the Participant to whom the Option is granted, the Option
may be exercised only by the Participant. No right or interest of the
Participant in any Option shall be liable for, or subject to, any lien,
obligation, or liability of such Participant.
8.03 Employee Status. In the event that the terms of any Option
---------------
provide that it may be exercised only during employment or within a specified
period of time after termination of employment, the Board may decide in each
case to what extent leaves of absences for governmental or military service,
illness, temporary disability, or other reason shall not be deemed interruptions
of continuous employment.
ARTICLE IX
Method of Exercise of Options
9.01 Exercise. Subject to the provision of Articles VIII and XIII, an
--------
Option may be exercised in whole at any time or in part from time to time at
such times and in compliance with such requirements as the Board shall
determine. An Option granted under this Plan may be exercised with respect to
any number of whole shares less then the full number for which the Option could
be exercised. Such partial exercise of an Option shall not affect the right to
exercise the Option from time to time in accordance with this Plan with respect
to remaining shares subject to the Option.
9.02 Payment. Unless otherwise provided by the Agreement, payment of the
-------
Option price shall be made in cash or a cash equivalent acceptable to the Board.
If the Agreement provides, payment of all or part of the Option price may be
made by surrendering shares of Common Stock to the Company. If Common Stock is
used to pay all or part of the Option price, the shares surrendered must have a
Fair
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market Value (determined as of the day preceding the date of exercise) that is
not less than such price or part thereof.
9.03 Shareholder Rights. No Participant shall, as a result of
------------------
receiving an Option, have any rights as a shareholder until the date he
exercises such Option.
ARTICLE X
Limitations on Incentive Stock Options
No Incentive Stock Option shall be granted to any optionee which would
cause the aggregate Fair Market Value of the stock with respect to which
Incentive Stock Options are exercisable by such optionee for the first time
during any calendar year to exceed $100,000. For the purposes of this Article,
Incentive Stock Options include all Incentive Stock Options under plans of the
Company and its Affiliates.
ARTICLE XI
Change in Control
11.01 Options. An Agreement may provide that an Option that is
-------
outstanding on a Change in Control Date shall be exercisable in whole or in part
on that date and thereafter during the remainder of the option period stated in
the Agreement.
11.02 Change in Control. A Change in Control occurs if, after the date of
-----------------
the Agreement, (i) any person who is not a Director of the Company on the date
that this Plan is adopted by the shareholders of the Company, including a
"group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934,
becomes the owner or beneficial owner of Company securities having 20% or more
of the combined voting power of the then outstanding Company securities that may
be cast for the election of the Company's directors (other than as a result of
an issuance of securities initiated by the Company, or open market purchases
approved by the Board, as long as the majority of the Board approving the
purchases is a majority at the time the purchases are made); or (ii) as the
direct or indirect result of, or in connection with, a cash tender or exchange
offer, a merger or other business combination, a sale of assets, a contested
election, or any combination of these transactions, the persons who were
Directors of the Company before such transactions cease to constitute a majority
of the Company's Board, or any successor's board, within two years of the last
of such transactions; or (iii) with respect to a Participant employed by an
Affiliate, an event occurs with respect to the employer such that, after the
event, the employer is no longer an Affiliate and the Participant is not longer
employed by the Company or an Affiliate. For purposes of this Agreement, the
Control Change Date is the date on which an event described in (i), (ii) or
(iii) occurs. If a Change in Control occurs on account of a series of
transactions, the Control Change Date is the date of the last of such
transactions.
ARTICLE XII
Adjustment Upon Change in Common Stock
Should the Company effect one or more stock dividends, stock split-ups,
subdivisions or consolidations of shares, the number of shares as to which
Options may be granted under this Plan shall be proportionately adjusted and the
terms of Options shall be adjusted as the Board shall determine to be equitably
required. Any determination made under this Article XII by the Board shall be
final and conclusive.
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The issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, for cash or property or for labor
or services, either upon direct sale or upon the exercise of rights or warrants
to subscribe therefore, or upon conversion of shares or obligations of the
Company convertible into such shares or other securities, shall not affect, and
no adjustment by reason thereof shall be made with respect to, Options.
ARTICLE XIII
Compliance with Law and
Approval of Regulatory Bodies
No Option shall be exercisable, no Common Stock shall be issued, no
certificates for shares of Common Stock shall be delivered, and no payment shall
be made under this Plan except in compliance with all applicable federal and
state laws and regulations (including, without limitations, withholding tax
requirements) and the rules of all domestic stock exchanges on which the
Company's shares may be listed. The Company shall have the right to rely on an
opinion of its counsel as to such compliance. Any share certificate issued to
evidence Common Stock for which an Option is exercised may bear such legends and
statements as the Board may deem advisable to assure compliance with federal and
state laws and regulations. No Option shall be exercisable, no Common Stock
shall be issued, no certificate for shares shall be delivered, and no payment
shall be made under this Plan until the Company has obtained such consent or
approval as the Board may deem advisable from regulatory bodies having
jurisdiction over such matters.
ARTICLE XIV
General Provisions
14.01 Effect of Employment. Neither the adoption of this Plan, nor any
--------------------
Agreement or other document describing or referring to this Plan (or any part
thereof) shall confer upon any employee any right to continue in the employ of
the Company or an Affiliate or in any way affect any right and power of the
Company or an Affiliate to terminate the employment of any employee at any time
with or without assigning a reason therefor.
14.02 Unfunded Plan. The Plan, insofar as it provides for grants shall be
-------------
unfunded, and neither the Company nor any Affiliate shall be required to
segregate any assets that may at any time be represented by grants under this
Plan. Any liability of the Company or an Affiliate to any person with respect to
any grant under this Plan shall be based solely upon any contractual obligations
that may be created pursuant to this Plan. No such obligation of the Company or
an Affiliate shall be deemed to be secured by any pledge of, or other
encumbrance on, any property of the Company or an Affiliate.
14.03 Rules of Construction. Headings are given to the articles of this
---------------------
Plan solely as a convenience to facilitate reference. The reference to any
statute, regulations, or other provision of law shall be construed to include
any amendment to or successor of such provision of law.
ARTICLE XV
Amendment
The Board may amend or terminate this Plan from time to time; provided,
however, that if this Plan is approved by the Company's shareholders, no
amendment may become effective until shareholder approval of such amendment is
obtained if the amendment (i) materially increases the aggregate number of
shares that may be issued pursuant to Options, (ii) materially increases the
benefits accruing to
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Participants under the Plan, or (iii) materially changes the class of employees
eligible to become Participants. No amendment shall, without a Participant's
consent, adversely affect any rights of such Participant under an Option
outstanding at the time such amendment is made.
ARTICLE XVI
Duration of Plan
No Option may be granted under this Plan after September 21, 2010. Options
granted before such date shall remain valid in accordance with their terms.
A-6
EXHIBIT B
EASTERN VIRGINIA BANKSHARES, INC.
BOARD OF DIRECTORS
AUDIT COMMITTEE CHARTER
-----------------------
Statement of Policy
The Audit Committee shall provide assistance to the corporate directors in
fulfilling their responsibilities to the shareholders, potential shareholders,
and investment community relating to corporate accounting, reporting practices
of the corporation, and the quality and integrity of the financial reports of
the corporation. In so doing, it is the responsibility of the Audit Committee
to maintain free and open means of communication between the directors, the
independent auditors, the internal auditors, and the financial management of the
corporation.
ORGANIZATION
- ------------
There shall be a committee of the Board of Directors known as the Audit
Committee. This committee shall be composed of at least three directors who are
independent of the management of the corporation and are free of any
relationship that, in the opinion of the Board of Directors, would interfere
with their exercise of independent judgment as a committee member.
Responsibilities
- ----------------
1. In carrying out its responsibilities, the Audit Committee believes its
policies and procedures should remain flexible in order to best react to
changing conditions and to ensure to the directors and shareholders that
the corporate accounting and reporting practices of the corporation are in
accordance with all requirements.
2. Holding such regular meetings as may be necessary and such special meetings
as may be called by the Chairman of the Audit Committee or at the request
of the independent accountants, the internal auditors or corporate
management.
3. Maintaining minutes for all meetings to document the committee's discharge
of its responsibilities. The minutes shall provide an accurate record of
the proceedings and shall be read at the next meeting of the committee.
4. Submit the minutes of all meetings of the Audit Committee to, or review the
matters discussed at each Committee meeting with the Board of Directors.
5. Review and recommend to the Board the appointment of the independent
auditor and approve the fees paid to such independent auditor.
6. Meet with the independent auditors and financial management of the
corporation to review the scope of the proposed audit for the current year
and the audit procedures to be utilized.
7. Review the financial statements contained in the annual report to
shareholders with management and the independent auditors to determine that
the independent auditors are satisfied with the disclosure
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and content of the financial statements to be presented to the
shareholders.
8. Review the internal audit function of the corporation including the
independence and authority of its reporting obligations, the proposed audit
plans for the coming year, and the coordination of such plans with the
independent auditors.
9. Receive prior to each meeting, summary of findings from completed internal
audits and a progress report on the proposed internal audit plan, with
explanations for any deviations from the original plan.
10. Provide sufficient opportunity for the internal and independent auditors to
meet with the members of the Audit Committee without members of management
present. Among the items to be discussed in these meetings are the
independent auditors' evaluation of the corporation's financial accounting
personnel and the cooperation that the independent auditors received during
the course of the audit .
11. While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the corporation's financial statements are
complete and accurate and are in accordance with generally accepted
accounting principles. This is the responsibility of management and the
independent auditor. It is not the duty of the Audit Committee to conduct
investigations, to resolve disagreements, if any, between management and
the independent auditor or to assure compliance with laws and regulations
and the company's code of conduct. However, at the discretion of the Audit
Committee, it may investigate any matter brought to its attention within
the scope of its duties, with the power to retain outside counsel for this
purpose if, in its judgment, that is appropriate.
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PROXY
EASTERN VIRGINIA BANKSHARES, INC.
307 Church Lane, Box 1455
Tappahannock, Virginia 22560
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoint(s) F. Warren Haynie, Jr. and William L. Lewis,
any one or more of whom may act, and hereby authorize them to represent and to
vote, as designated below, all the shares of common stock of Eastern Virginia
Bankshares, Inc. held on record by the undersigned on March 16, 2001, at the
annual meeting of shareholders to be held on April 19, 2001, at Saint
Margaret's School, 444 Water Lane, Tappahannock, Virginia, at 9:30 A.M. or any
adjournment thereof.
1. TO ELECT AS DIRECTORS ALL ELEVEN nominees listed below.
INSTRUCTION: To withhold authority to vote for any or all nominee(s), strike
a line through the nominee's name(s) in the list below.
W. Rand Cook William L. Lewis
Robert L. Covington Lewis R. Reynolds
L. Edelyn Dawson Ned Stephenson
F. L. Garrett, III Leslie E. Taylor Thompson,
F. Warren Haynie, Jr J. T. Thompson, III
Eric A. Johnson
[_] FOR [_] AGAINST [_] ABSTAIN
2. TO APPROVE THE COMPANY'S 2000 STOCK OPTION PLAN;
[_] FOR [_] AGAINST [_] ABSTAIN
3. TO RATIFY THE APPOINTMENT BY THE BOARD OF DIRECTORS OF YOUNT, HYDE &
BARBOUR, P.C., independent public accountants, as auditors for the Company for
the ensuing year.
[_] FOR [_] AGAINST [_] ABSTAIN
4. To act upon such other matters as may properly come before the meeting or
any adjournment thereof. As of the date of this Proxy, management has no
knowledge of any matters to be presented for consideration at the Annual
Meeting other than those referred to above. If any other matter properly comes
before the Annual Meeting, the persons named in the accompanying proxy intend
to vote such proxy, to the extent entitled, in accordance with their best
judgment.
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholders. If no direction is made, this proxy
will be voted for proposals 1, 2 and 3.
Please sign exactly as stock is registered. When shares are held by joint
tenants, both should sign. When signing as executor, administrator, trustee,
or guardian, please give full title as such. If a corporation, please sign in
full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
_________________________ Signature
_________________________ Signature
(if held jointly)
Date:________________________, 2001
PLEASE MARK, SIGN, DATE AND RETURN
THE PROXY CARD USING THE ENCLOSED
ENVELOPE.