SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the Commission
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
INDEPENDENT COMMUNITY 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)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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[ ] Fee paid previously with preliminary materials:
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[ ] Check box if any part of the fee is offset as provided in Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
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(1) Amount previously paid:
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(4) Date Filed:
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[DEFINITIVE PROXY STATEMENT]
INDEPENDENT COMMUNITY BANKSHARES, INC.
Dear Shareholder:
You are cordially invited to attend the 2002 Annual Meeting of
Shareholders of Independent Community Bankshares, Inc. (the "Company") to be
held on Wednesday, April 17, 2002 at 10:00 a.m. at the Middleburg Community
Center, 300 West Washington Street, Middleburg, Virginia.
At the Annual Meeting, you will be asked to elect 12 directors for
terms of one year each. In addition, you will be asked to approve an amendment
to the Company's Articles of Incorporation to change the name of the Company to
"Middleburg Financial Corporation." Enclosed with this letter are 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/ Joseph L. Boling
Joseph L. Boling
Chairman and Chief Executive Officer
Middleburg, Virginia
March 15, 2002
INDEPENDENT COMMUNITY BANKSHARES, INC.
111 West Washington Street
Middleburg, Virginia 20117
___________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
___________________
The Annual Meeting of Shareholders (the "Annual Meeting") of
Independent Community Bankshares, Inc. (the "Company") will be held on
Wednesday, April 17, 2002 at 10:00 a.m. at the Middleburg Community Center, 300
West Washington Street, Middleburg, Virginia, for the following purposes:
1. To elect 12 directors to serve for terms of one year each
expiring at the 2003 annual meeting of shareholders;
2. To approve an amendment to the Company's Articles of
Incorporation to change the name of the Company to "Middleburg
Financial Corporation;" and
3. To act upon such other matters as may properly come before the
Annual Meeting.
Only holders of shares of Common Stock of record at the close of
business on March 6, 2002, the record date fixed by the Board of Directors of
the Company, are entitled to notice of, and to vote at, the Annual Meeting.
By Order of the Board of Directors
/s/ Alice P. Frazier
Alice P. Frazier
Senior Vice President and Chief Financial Officer
March 15, 2002
INDEPENDENT COMMUNITY BANKSHARES, INC.
111 West Washington Street
Middleburg, Virginia 20117
PROXY STATEMENT
This Proxy Statement is furnished to holders of the common stock, par
value $5.00 per share ("Common Stock"), of Independent Community Bankshares,
Inc. (the "Company"), in connection with the solicitation of proxies by the
Board of Directors of the Company to be used at the 2002 Annual Meeting of
Shareholders (the "Annual Meeting") to be held on Wednesday, April 17, 2002 at
10:00 a.m. at the Middleburg Community Center, 300 West Washington Street,
Middleburg, 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 15, 2002 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 6, 2002, the record date for determining those shareholders
entitled to notice of and to vote at the Annual Meeting, there were 1,752,558
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 presented 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 voting in favor of the particular matter.
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
Twelve 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. Gary D. LeClair is standing for election for the first time.
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 12 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 and
business experience in the past five years and the year that each individual was
first elected to the Board of Directors of the Company or previously to the
Board of Directors of The Middleburg Bank (the "Bank"), the predecessor to and
now a wholly owned subsidiary of the Company.
Nominees for Election for Terms Expiring in 2003
Howard M. Armfield, 59, has been a director since 1984.
Mr. Armfield is President and owner of Armfield, Harrison & Thomas,
Inc., an independent insurance agency in Leesburg, Virginia.
Joseph L. Boling, 57, has been a director since 1993.
Mr. Boling has been the Chairman, President and Chief Executive Officer
of the Company and the Bank since 1997. From 1993 to 1997, he was
President and Chief Executive Officer of the Company and the Bank.
Childs Frick Burden, 51, has been a director since 1997.
Mr. Burden is a partner with Secor Group, an investment firm in
Washington, D.C.
2
J. Lynn Cornwell, Jr., 77, has been a director since 1984.
Mr. Cornwell is currently retired. Until August 2000, he had served as
President and was owner of J. Lynn Cornwell, Inc., a real estate
development company in Loudoun County.
William F. Curtis, 73, has been a director since 1962.
Mr. Curtis is currently retired. Until February 1993, he had served as
President and Chief Executive Officer of the Bank for 25 years.
Robert C. Gilkison, 66, has been a director since 1999.
Mr. Gilkison is President of Gilkison Patterson Investment Advisors,
Inc. ("GPIA"), an investment advisory firm based in Alexandria,
Virginia.
C. Oliver Iselin, III, 72, has been a director since 1975.
Mr. Iselin is owner and operator of the Wolver Hill Farm.
Gary D. LeClair, 46, has been a director since 2001.
Mr. LeClair is Chairman of the law firm of LeClair Ryan, A Professional
Corporation, in Richmond, Virginia.
Thomas W. Nalls, 60, has been a director since 1997.
Mr. Nalls is a partner with the law firm of Reed Smith LLP (formerly
Hazel & Thomas, P.C.) in Leesburg, Virginia.
John Sherman, 61, has been a director since 1997.
Mr. Sherman is owner and operator of The Ashby Inn in Paris, Virginia.
Millicent W. West, 80, has been a director since 1975.
Ms. West has served in many volunteer positions in the Garden Club of
America and Garden Club of Virginia.
Edward T. Wright, 65, has been a director since 1972.
Mr. Wright retired as Senior Vice President of the Bank in 1998 after
42 years of service.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
NOMINEES SET FORTH ABOVE.
Executive Officers Who Are Not Directors
John Mason L. Antrim (Age 52) has served as President and Chief
Executive Officer of The Tredegar Trust Company, a subsidiary of the Company
("Tredegar"), since May 2001. From 1995 to May 2001, he served as Vice President
- - Trust Administration of Tredegar.
Alice P. Frazier (Age 37) has served as Executive Vice President and
Chief Financial Officer of the Company and the Bank since May 2001. From 1993 to
2001, she was Senior Vice President and Chief Financial Officer of the Company
and the Bank.
Arch A. Moore, III (Age 50) has served as Executive Vice President and
Senior Loan Officer of the Bank since May 2001. From 1995 to 2001, he was Senior
Vice President and Senior Loan Officer of the Bank.
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Security Ownership of Management
The following table sets forth, as of February 22, 2002, certain
information with respect to beneficial ownership of shares of Common Stock by
each of the members of the Board of Directors, by each of the executive officers
named in the "Summary Compensation Table" below (the "named executive officers")
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.
Name Number of Shares Percent of Class (%)
- ---- ---------------- --------------------
John Mason L. Antrim (1) 6,672 *
Howard M. Armfield 17,004 *
Joseph L. Boling (1) 51,901 2.96
Childs Frick Burden 9,860 *
J. Lynn Cornwell, Jr. 4,144 *
William F. Curtis (2) 112,128 6.40
Alice P. Frazier (1) 20,744 1.18
Robert C. Gilkison 3,000 *
C. Oliver Iselin, III 45,733 2.62
Gary D. LeClair 2,789 *
Arch A. Moore, III (1) 20,173 1.15
Thomas W. Nalls 850 *
John Sherman 1,008 *
Millicent W. West 230,376 13.15
Edward T. Wright 50,810 2.90
Directors and executive officers
as a group (15 persons) (1) 577,192 32.93
________________
* Percentage of ownership is less than one percent of the outstanding shares
of Common Stock.
(1) Amounts disclosed include shares of Common Stock issuable upon the exercise
of stock options exercisable within 60 days of February 22, 2002.
(2) Amount disclosed include shares of Common Stock beneficially owned by a
trust of which Mr. Curtis serves as trustee.
4
Security Ownership of Certain Beneficial Owners
The following table sets forth, as of February 22, 2002, certain
information with respect to the beneficial ownership of shares of Common Stock
by each person who owns, to the Company's knowledge, more than five percent of
the outstanding shares of Common Stock.
Name and Address Number of Shares Percent of Class (%)
- ---------------- ---------------- --------------------
Millicent W. West 230,376 13.15
P.O. Box 236
Upperville, Virginia
William F. Curtis (1) 112,128 6.40
3618 Zulla Road
The Plains, Virginia
_________________________
(1) Amounts disclosed include shares of Common Stock beneficially owned by a
trust of which Mr. Curtis serves as trustee.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended,
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. Directors and executive officers 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 2001, all filing requirements
applicable to its officers and directors were complied with, except that each of
Gary D. LeClair, a director, and John Mason L. Antrim, the President and Chief
Executive Officer of Tredegar, inadvertently failed to file a report on Form 3.
Corrective filings will be made.
The Board of Directors and its Committees
There were 12 meetings of the Board of Directors in 2001. Each
incumbent 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 2001.
The Company's Executive Committee, which acts for the Board of
Directors when the Board is not in session, consists of Mrs. West and Messrs.
Armfield, Boling, Burden, Cornwell and Nalls. The Executive Committee met seven
times during the year ended December 31, 2001.
The Company's Audit Committee consists of Mrs. West and Messrs.
Armfield, Burden, Iselin, Sherman and Wright. The Audit Committee is responsible
for examining the affairs of the Company and its subsidiaries at least annually,
reporting the results of examinations and recommending changes in the manner of
doing business. The Audit Committee held four meetings during the year ended
December 31, 2001. Additional information with respect to the Audit Committee is
discussed below under "Audit Information."
5
The Company's Nominating Committee consists of Mrs. West and Messrs.
Boling, Curtis, Iselin and Sherman and nominates the individuals proposed for
election as directors. Shareholders entitled to vote for the election of
directors may nominate candidates for consideration by the Nominating Committee
under procedures that the Company has established. See "Proposals for 2003
Annual Meeting of Shareholders." The Nominating Committee met two times during
the year ended December 31, 2001.
The Company does not have a standing compensation committee.
Director Compensation
As compensation for his or her service to the Company, each member of
the Board of Directors receives a fee of $400 for each meeting of the Board and
$300 for each committee meeting attended. Board members who are also officers do
not receive any additional compensation above their regular salary for attending
committee meetings. In 2001, directors received $106,400 in the aggregate as
compensation for their services as directors.
Executive Compensation
The following table shows, for the fiscal years ended December 31,
2001, 2000 and 1999, the cash compensation paid by the Company and its
subsidiaries, as well as certain other compensation paid or accrued for those
years, to each of the named executive officers in all capacities in which he or
she served:
Summary Compensation Table
Long Term
Compensation
Annual Compensation ------------
------------------- Securities
Name and Other Annual Underlying
Principal Position Year Salary ($) Bonus ($) Compensation ($) Options (#)
------------------ ---- ---------- --------- ---------------- -----------
Joseph L. Boling 2001 258,500 50,000 * --
Chairman, President and 2000 235,000 25,000 * 10,000
Chief Executive Officer 1999 213,990 35,000 * 10,075
John Mason L. Antrim (1) 2001 107,115 -- * --
President and Chief Executive
Officer, The Tredegar Trust
Company
Alice P. Frazier 2001 123,386 18,068 * --
Executive Vice President and 2000 115,259 5,868 * 4,000
Chief Financial Officer 1999 83,825 5,334 * 4,075
Arch A. Moore, III 2001 139,895 18,870 * --
Executive Vice President and 2000 126,881 8,213 * 4,000
Senior Loan Officer, The 1999 117,497 8,224 * 4,075
Middleburg Bank
__________________
* All benefits that might be considered of a personal nature did not exceed
the lesser of $50,000 or 10% of total annual salary and bonus.
(1) Mr. Antrim became an executive officer of the Company in May 2001. The
amounts shown for 2001 include all compensation paid to Mr. Antrim by the
Company from January 1, 2001.
6
Stock Options
The Company did not grant any stock options to the named executive
officers in the year ended December 31, 2001. In addition, the named executive
officers did not exercise any stock options during 2001. The following table
sets forth the amount and value of stock options held by the named executive
officers as of December 31, 2001:
Fiscal Year End Option Values
Number of
Securities Underlying Value of Unexercised
Unexercised Options at In-the-Money Options
Fiscal Year End (#) at Fiscal Year End ($)(1)
------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
Joseph L. Boling 44,775 5,300 669,430 71,395
John Mason L. Antrim 3,015 1,060 36,546 14,279
Alice P. Frazier 19,955 2,120 305,267 28,558
Arch A. Moore, III 19,955 2,120 305,267 28,558
______________________
(1) The value of in-the-money options at fiscal year end was calculated by
determining the difference between the closing price of a share of Common
Stock as reported on the Nasdaq SmallCap Market on December 31, 2001 and
the exercise price of the options.
Employment Agreements
Effective as of January 1, 1998, the Company and Joseph L. Boling
entered into an employment contract that provides for Mr. Boling's service as
Chairman, President and Chief Executive Officer of both the Company and the
Bank. Mr. Boling's employment contract is for five years at an initial base
annual salary of $191,408, and he is eligible for base salary increases and
bonuses as determined by the Executive Committee of the Board of Directors. Mr.
Boling's employment may be terminated by the Company with or without cause. If
he resigns for "good reason" or is terminated without "cause" (as those terms
are defined in the employment agreement), however, he is entitled to salary and
certain benefits for the greater of the remainder of his contract or three
years. Mr. Boling's contract also contains a covenant not to compete if his
employment terminates for any reason other than a change in control of the
Company.
A deferred compensation plan has been adopted for the Chairman and
Chief Executive Officer. Benefits are to be paid in monthly installments for 15
years following retirement or death. The agreement provides that, if employment
is terminated for reasons other than death or disability prior to age 65, the
amount of benefits would be reduced. The deferred compensation expense for 2001,
2000 and 1999, based on the present value of the retirement benefits, was
$23,687, $18,716 and $16,936, respectively. The plan is unfunded. However, life
insurance has been acquired on the life of the employee in an amount sufficient
to discharge the obligation.
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Transactions with Management
Robert C. Gilkison, a director of the Company, is President of GPIA and
the owner of 49.5% of its capital stock. On August 9, 1999, the Company
purchased 100 shares of the capital stock of GPIA, which represents one percent
of the issued and outstanding capital stock of GPIA. In connection with this
purchase, the Company also purchased the option to acquire GPIA on or after July
1, 2001. The Company paid $1.2 million for the option to acquire GPIA. If the
option to acquire GPIA is exercised, the Company will purchase all of the
remaining issued and outstanding shares of GPIA's capital stock for an
additional $4.8 million in cash and shares of Common Stock.
Some of the directors and officers of the Company are at present, as in
the past, customers of the Company and its subsidiaries, and the Company and its
subsidiaries 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. The
balance of loans to directors, executive officers and their associates totaled
$2,550,486 at December 31, 2001, or 12.98% of the Company's equity capital at
that date.
There were no transactions during 2001 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 AN AMENDMENT
TO THE ARTICLES OF INCORPORATION
The Board of Directors has approved, subject to shareholder approval,
an amendment to the Company's Articles of Incorporation to change the name of
the Company to "Middleburg Financial Corporation." The amendment amends Article
I of the Company's Articles of Incorporation in its entirety to read as follows:
ARTICLE I
NAME
The name of the corporation is Middleburg Financial Corporation.
The Board of Directors believes that the proposed name change is
appropriate at this time based on the direction of the Company over the past 10
years and the expected direction of the Company in the future. The Company's
current name, which was adopted when the Bank reorganized into a holding company
structure in 1994, is consistent with the name of a single or multi-bank holding
company. Through Tredegar, its affiliation with GPIA and the expansion of the
Bank's services, however, the Company has seen growth outside of the traditional
products and services of a bank and now provides a wide range of financial
services. The Company expects to offer additional financial products in the
future, through Tredegar, GPIA and the Bank, and will continue to explore growth
opportunities in that direction. The new name is intended to reflect the
operational position and organizational focus of the Company and to be
consistent with the strengths of the Company's subsidiaries and affiliations.
The adoption of the "Middleburg" name specifically is designed to strengthen the
link of the Company's name
8
to its commitment to personal service and financial integrity, as reflected in
the Company's commitment to its market area over the past 78 years.
The proposed amendment of the Company will not affect the rights of
shareholders. Shareholders will not need to exchange any of their stock
certificates in connection with the name change. Certificates representing
shares of Common Stock of "Independent Community Bankshares, Inc." will
represent the same number of shares of Common Stock of "Middleburg Financial
Corporation" after the name change is effective.
The Company has applied to change the trading symbol of the Common
Stock on the Nasdaq SmallCap Market from "ICBX" to "MBRG," subject to
shareholder approval of the proposed amendment.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE IN FAVOR
OF THE AMENDMENT TO THE ARTICLES OF INCORPORATION. AN AFFIRMATIVE VOTE OF A
MAJORITY OF THE OUTSTANDING SHARES OF COMMON STOCK IS REQUIRED FOR APPROVAL OF
THIS PROPOSAL.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed 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, 2002. Yount,
Hyde & Barbour, P.C. has audited the financial statements of the Company and the
Bank for over 25 years.
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 from shareholders.
AUDIT INFORMATION
The Audit Committee operates under a written charter that the Board of
Directors has adopted. The members of the Audit Committee are independent as
that term is defined in the listing standards of the National Association of
Securities Dealers.
Fees of Independent Public Accountants
Audit Fees
The aggregate amount of fees billed by Yount, Hyde & Barbour, P.C. for
professional services rendered for the audit of the Company's annual financial
statements for the fiscal year ended December 31, 2001, and the review of the
financial statements included in the Company's Quarterly Reports on Form 10-QSB
for that fiscal year was $38,900.
Financial Information System Design and Implementation Fees
There were no fees billed by Yount, Hyde & Barbour, P.C. for
professional services rendered to the Company for the fiscal year ended December
31, 2001, for the design and implementation of financial information systems.
9
All Other Fees
The aggregate amount of fees billed by Yount, Hyde & Barbour, P.C. for
all other non-audit services rendered to the Company for the fiscal year ended
December 31, 2001 was $12,338. Other non-audit services generally include
tax-related filings, specialized audits required for the Federal Home Loan Bank
and the fiduciary audit of Tredegar.
Audit Committee Report
Management is responsible for the Company's internal controls,
financial reporting process and compliance with laws and regulations and ethical
business standards. The independent auditor is responsible for performing an
independent audit of the Company's consolidated financial statements in
accordance with generally accepted auditing standards and issuing a report
thereon. The Audit Committee's responsibility is to monitor and oversee these
processes on behalf of the Board of Directors.
In this context, the Audit Committee has reviewed and discussed with
management and the independent auditors the audited financial statements. The
Audit Committee has discussed with the independent auditors the matters required
to be discussed by Statement on Auditing Standards No. 61 (Communication with
Audit Committees). In addition, the Audit Committee has received from the
independent auditors the written disclosures required by Independence Standards
Board Standard No. 1 (Independence Discussions with Audit Committees) and
discussed with them their independence from the Company and its management.
Moreover, the Audit Committee has considered whether the independent auditor's
provision of other non-audit services to the Company is compatible with
maintaining the auditor's independence.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 2001, for filing with the SEC. By recommending to
the Board of Directors that the audited financial statements be so included, the
Audit Committee is not opining on the accuracy, completeness or presentation of
the information contained in the audited financial statements.
Audit Committee
Howard M. Armfield, Jr., Chairman
Childs Frick Burden
C. Oliver Iselin, III
John Sherman
Millicent W. West
Edward T. Wright
Middleburg, Virginia
February 21, 2002
PROPOSALS FOR 2003 ANNUAL MEETING OF SHAREHOLDERS
Under the regulations of the SEC, any shareholder desiring to make a
proposal to be acted upon at the 2003 annual meeting of shareholders must cause
such proposal to be received, in proper form, at the Company's principal
executive offices at 111 West Washington Street, Middleburg, Virginia 20117, no
later than November 15, 2002, 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 2003 annual meeting of shareholders on April
16, 2003.
10
The Company's Bylaws also prescribe the procedure that a shareholder
must follow to nominate directors or to bring other business before
shareholders' meetings outside of the proxy statement process. For a shareholder
to nominate a candidate for director at the 2003 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 2003 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 2003 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 2003 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 16, 2003 for the 2003 annual meeting of shareholders, the Company must
receive any notice of nomination or other business no later than February 15,
2003 and no earlier than January 16, 2003.
OTHER MATTERS
THE COMPANY'S 2001 ANNUAL REPORT TO SHAREHOLDERS (THE "ANNUAL REPORT"),
WHICH INCLUDES A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE
FISCAL YEAR ENDED DECEMBER 31, 2001 (EXCLUDING EXHIBITS) AS FILED WITH THE SEC,
IS BEING MAILED TO SHAREHOLDERS WITH THIS PROXY STATEMENT. A COPY OF THE ANNUAL
REPORT MAY ALSO BE OBTAINED WITHOUT CHARGE BY WRITING TO ALICE P. FRAZIER,
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, WHOSE ADDRESS IS P.O. BOX
5, MIDDLEBURG, VIRGINIA 20118. THE ANNUAL REPORT IS NOT PART OF THE PROXY
SOLICITATION MATERIALS.
11
[DEFINITIVE FORM OF PROXY]
Independent Community Bankshares, Inc.
Proxy Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Arch A. Moore, III and Alice P. Frazier,
jointly and severally, proxies, with full power to act alone, and with full
power of substitution, to represent the undersigned and to vote, as designated
below and upon any and all other matters that may properly be brought before
such meeting, all shares of Common Stock that the undersigned would be entitled
to vote at the Annual Meeting of Shareholders of Independent Community
Bankshares, Inc., a Virginia corporation (the "Corporation"), to be held at the
Middleburg Community Center, 300 West Washington Street, Middleburg, Virginia,
on Wednesday, April 17, 2002 at 10:00 a.m., local time, or at any adjournments
thereof, for the following purposes:
(Continued and to be signed on the reverse side.)
Please Detach and Mail in the Envelope Provided
[X] Please mark your
vote as in this
example.
FOR WITHHOLD
nominees listed at AUTHORITY
right (except as written to vote for all
on the line below) nominees listed at right
1. To elect as [ ] [ ] Nominees:
directors the 12
persons listed Howard M. Armfield C. Oliver Iselin, III
as nominees at Joseph L. Boling Gary D. LeClair
right. Childs Frick Burden Thomas W. Nalls
J. Lynn Cornwell, Jr. John Sherman
William F. Curtis Millicent W. West
Robert C. Gilkison Edward T. Wright
(INSTRUCTION: To withhold authority to vote for any
individual nominee listed at right, write that nominee's
name on the space provided below.)
_____________________________________________________
FOR AGAINST ABSTAIN
2. To approve an amendment to the [ ] [ ] [ ]
Corporation's Articles of Incorporation to
change the name of the Corporation to
"Middleburg Financial Corporation."
3. In their discretion, the proxies are authorized to vote upon any other
business that may properly come before the meeting, or any adjourn-
ment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR ALL
NOMINEES LISTED IN ITEM 1 AND FOR ITEM 2.
PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY
Printed name:_____________________Signature_____________________Signature_____________________Date______, 2002
NOTE: (If signing as Attorney, Adminsitrator, Executor, Guardian or Trustee, please add your title as such.)