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 Only (as permitted by Rule
14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-12
Citizens Bancorp of Virginia, Inc.
(Name of Registrant as Specified in its Charter)
(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:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(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):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by 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.
(1) Amount Previously Paid:
--------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------------------
(3) Filing Party:
--------------------------------------------------------------------------
(4) Date Filed:
--------------------------------------------------------------------------
CITIZENS BANCORP OF VIRGINIA, INC.
126 South Main Street
Blackstone, Virginia 23824
Dear Shareholder:
You are cordially invited to attend the 2004 Annual Meeting of
Shareholders of Citizens Bancorp of Virginia, Inc. (the "Company") to be held on
May 19, 2004 at 1:00 p.m. at the Company's main office, 126 South Main Street,
Blackstone, Virginia.
At the Annual Meeting, you will be asked to elect ten directors for
terms of one year each. In addition, you will be asked to amend the Company's
articles of incorporation to delete the preemptive rights of shareholders to
purchase shares of the Company's common stock, to increase the authorized shares
of common stock and authorize shares of preferred stock. You also will be asked
to ratify the Board of Directors' selection of Yount, Hyde & Barbour, P.C. as
the Company's independent public accountants for 2004. 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/ Mark C. Riley
Mark C. Riley
President and
Chief Executive Officer
Blackstone, Virginia
April 13, 2004
CITIZENS BANCORP OF VIRGINIA, INC.
126 South Main Street
Blackstone, Virginia 23824
-------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
-------------------
The Annual Meeting of Shareholders (the "Annual Meeting") of Citizens
Bancorp of Virginia, Inc. (the "Company") will be held on May 19, 2004 at 1:00
p.m. at the Company's main office, 126 South Main Street, Blackstone, Virginia,
for the following purposes:
1. To elect ten directors to serve for terms of one year each
expiring at the 2005 annual meeting of shareholders;
2. To amend Article V of the Company's articles of incorporation
to delete shareholders' preemptive rights to purchase shares
of the Company's common stock.
3. To amend Article II of the Company's articles of incorporation
to increase the authorized shares of common stock from
2,500,000 to 10,000,000 and to authorize 1,000,000 shares of
preferred stock.
4. To ratify the Board of Directors' selection of Yount, Hyde &
Barbour, P.C. as independent public accountants to audit the
books and accounts of the Company for fiscal year 2004; and
5. 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 April 1, 2004, 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/ Mark C. Riley
Mark C. Riley
President and
Chief Executive Officer
April 13, 2004
CITIZENS BANCORP OF VIRGINIA, INC.
126 South Main Street
Blackstone, Virginia 23824
PROXY STATEMENT
This Proxy Statement is furnished to holders of the common stock, par
value $0.50 per share ("Common Stock"), of Citizens Bancorp of Virginia, Inc.
(the "Company"), in connection with the solicitation of proxies by the Board of
Directors of the Company to be used at the 2004 Annual Meeting of Shareholders
(the "Annual Meeting") to be held on May 19, 2004 at 1:00 p.m. at the Company's
main office, 126 South Main Street, Blackstone, 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 April 13, 2004 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 directors, 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 April 1, 2004, the record date for determining those shareholders
entitled to notice of and to vote at the Annual Meeting, there were 2,448,000
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 not be counted
as voting in favor of or against 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 as voting
in favor of or against 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
Ten 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 ten 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 Citizens Bank & Trust Co. (the "Bank"), the predecessor to
and now wholly-owned subsidiary of the Company.
Nominees for Election for Terms Expiring in 2005
Irving J. Arnold, 72, has been a director since 1977.
Mr. Arnold serves as the Commissioner of Revenue of Nottoway County,
Virginia and is a farmer and owner of West Creek Farms.
William D. Coleburn, 35, is nominated for the first time.
Mr. Coleburn is Editor of the Courier-Record in Blackstone, Virginia
and is a past President of the Blackstone Chamber of Commerce.
Joseph M. H. Irby, 69, is Chairman of the Company and has been a director since
1968.
Mr. Irby is President of Irby Insurance Agency Inc. and a director and
secretary of Mary Helen Coal Corp.
Roy C. Jenkins, Jr., 60, has been a director since 1982.
Mr. Jenkins is President of Roy C. Jenkins, Inc., an oil distributor.
Joseph F. Morrissette, 62, has been a director since 2002.
Mr. Morrissette is the Mayor of the Town of Burkeville, Virginia and a
retired Vice President of the Federal Reserve Bank of Richmond,
Virginia.
2
E. Walter Newman, Jr., 40, is nominated for the first time.
Mr. Newman is Vice President and General Manager of Newman Tire
Company in Farmville, Virginia and is a Magistrate for Virginia's 10th
Judicial District.
Mark C. Riley, 52, has been a director since 2002.
Mr. Riley has been President and Chief Executive Officer of the Company
since October 15, 2002. Previously, Mr. Riley was the Senior Managing
Officer of Virginia National Bank in Winchester, Virginia from August
2001 to September 2002. Mr. Riley was President and Chief Executive
Officer of F&M Bank-Peoples in Warrenton, Virginia from 1992 to 2001.
Jo Anne Scott Webb, 51, has been a director since 1990.
Mrs. Webb is President of Scott Pallets Inc., a wood pallet company,
and Scott Transport, Inc., a transportation company.
Samuel H. West, 60, has been a director since 1994.
Mr. West is a retired certified public accountant.
Jerome A. Wilson, III, 47, has been a director since 1988.
Mr. Wilson, investor, served as Executive Vice President of the
Bank from 1994 until 2003. Mr. Wilson serves as a member of Nottoway
County Industrial Development Authority.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
NOMINEES SET FORTH ABOVE.
Executive Officers Who Are Not Directors
Joseph D. Borgerding, 46, currently serves as Vice President/Senior
Loan Officer. Prior to joining the bank in 2003, Mr. Borgerding was employed by
BB&T and its predecessors (Central Fidelity, Wachovia and F&M Bank) in Nottoway
County from 1986 - 2003. Mr. Borgerding held a series of offices, including
Branch Manager, Loan Officer and City Executive.
Bruce T. Brockwell, 38, currently serves as Richmond Executive Officer.
Prior to joining the bank in 2004, Mr. Brockwell had been a Commercial Banking
Manager SVP with South Trust Bank from 2002 to 2004. From 1998 - 2002, Mr.
Brockwell had served as City Executive, Business Banking Manager and Business
Banker with BB&T. Prior to 1998, Mr. Brockwell had been a Branch Manager with
NationsBank from 1977 - 1998.
C. B. Cordle, Jr., 55, currently serves as Secretary of the Company and
as Vice President/Cashier of the Bank. From May 1986 to May 1996, he served as
Assistant Vice President and Cashier of the Company.
Eric Roberts, 33, currently serves as Vice President/Credit
Administration of the Bank. From July 2000 to January 2003, he served as
Commercial Banker of First Citizens Bank, South Hill, Virginia. From September
1996 to July 2000, he served as Business Banker of Wachovia Bank, South Boston,
Virginia and Branch Manager of Wachovia Bank, Durham, North Carolina.
Lynn K. Shekleton, 48, currently serves as Vice President/Human
Resources of the Company. From May 2001 to October 2002, she served as Vice
President of the Company, and from May 1994 to April 2001, Mrs. Shekleton served
as Assistant Vice President of the Company.
3
Douglas R. Taylor, 46, currently serves as Vice President/Chief
Administrative Officer and Compliance Officer of the Bank. From July 2000 to
February 2002, he served as Compliance Officer of Commerce Bank in Richmond,
Virginia. From August 1998 to November 1999, he served as Executive Vice
President/Chief Operating Officer of First Federal Savings Bank of Virginia in
Petersburg, Virginia. Prior to August 1998, he served as Senior Examiner for the
Office of Thrift Supervision, Atlanta, Georgia for 14 years.
David E. Whitus, 43, currently serves as Vice President/Farmville
Executive Officer of the Bank. From May 1994 to October 2002, Mr. Whitus served
as Vice President of the Company.
Security Ownership of Management
The following table sets forth, as of March 29, 2004, certain
information with respect to beneficial ownership of shares of Common Stock by
each of the members of the Board of Directors, each nominee, 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 (%)
Raymond L. Adams 2,100 *
Irving J. Arnold(1) 5,233 *
William D. Coleburn 358 *
Joseph M. H. Irby (2) 30,025 1.23%
Roy C. Jenkins, Jr. 37,700 1.54%
Joseph F. Morrissette(3) 7,500 *
E. Walter Newman, Jr. 500 *
Mark C. Riley 500 *
JoAnne Scott Webb (4) 89,880 3.67%
Samuel H. West (5) 70,075 2.86%
Jerome A. Wilson, III(6) 72,400 2.96%
Directors and executive officers
as a group (19 persons) 320,071 13.07%
- ----------------
* Percentage of ownership is less than one percent of the outstanding shares of
Common Stock.
(1) Amount disclosed includes 3,890 shares of Common Stock held individually,
1,343 shares of Common Stock held by his spouse.
(2) Amount disclosed includes 28,275 shares of Common Stock held individually
and 1,750 shares of Common Stock held by his spouse.
(3) Amount disclosed includes 5,500 shares of Common Stock held by Mr.
Morrissette's mother for whom Mr. Morrissette holds a power-of-attorney to
vote such shares of Common Stock.
(4) Amount disclosed includes 5,200 shares of Common Stock held individually,
2,500 shares of Common Stock held jointly with her spouse, 25,805 shares of
Common Stock held by Mrs. Webb's mother for whom Mrs. Webb holds a
power-of-attorney to vote such shares of Common Stock, and 56,375 shares of
Common Stock held by Mrs. Webb's father for whom Mrs. Webb holds a
power-of-attorney to vote such shares of Common Stock.
4
(5) Amount disclosed includes 6,375 shares of Common Stock held individually
and 63,700 shares of Common Stock held by his spouse.
(6) Amount disclosed includes 71,400 shares of Common Stock held individually
and 1,000 shares of Common Stock held as custodian for relatives.
Security Ownership of Certain Beneficial Owners
As of March 26, 2004, there are no persons known to the Company that
beneficially own five percent or more of the outstanding shares of Common Stock.
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 2003, all filing requirements
applicable to its officers and directors were complied with.
CORPORATE GOVERNANCE AND
THE BOARD OF DIRECTORS
General
The business and affairs of the Company are managed under the direction
of the Board of Directors in accordance with the Virginia Stock Corporation Act
and the Company's Articles of Incorporation and Bylaws. Members of the Board are
kept informed of the Company's business through discussions with the President
and Chief Executive Officer and other officers, by reviewing materials provided
to them and by participating in meetings of the Board of Directors and its
committees.
Independence of the Directors
The Board of Directors has determined that the following 7 individuals
of its 9 current members are independent as defined by the listing standards of
the Nasdaq Stock Market ("Nasdaq"): Mrs. Webb and Messrs. Adams, Arnold, Irby,
Jenkins, Morrissette, and West. In reaching this conclusion, the Board of
Directors considered that the Company and its subsidiary bank conduct business
with companies of which certain members of the Board of Directors or members of
their immediate families are or were directors or officers.
5
Code of Ethics
The Company has a Code of Ethics for directors, officers and all
employees of the Company and its subsidiary, and a Code of Ethics applicable
to the Company's chief executive officer, chief financial officer and other
principal financial officers. The Code addresses such topics as protection and
proper use of Company assets, compliance with applicable laws and regulations,
accuracy and preservation of records, accounting and financial reporting and
conflicts of interest. A copy of the Code will be provided, without charge, to
any shareholder upon written request to the Secretary of the Company, whose
address is 126 South Main Street, Blackstone, Virginia 23824.
Board and Committee Meeting Attendance
There were 13 meetings of the Board of Directors in 2003. 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 2003.
Director Nomination Process
The Nominating Committee consists of Mrs. Webb and Messrs. Adams,
Jenkins, Riley and West. The Nominating Committee met three times in 2003. With
the exception of Mr. Riley, the Board in its business judgment has determined
that all members are independent as defined by Nasdaq's listing standards. The
Nominating Committee nominates the individuals proposed for election as
directors in accordance with the Company's Articles of Incorporation and Bylaws.
The Company does not have a separate charter related to the nomination process.
Messrs. Coleburn and Newman were recommended for nomination by incumbent
directors of the Company. Mr. Coleburn was recommended by director West and Mr.
Newman was recommended by director Jenkins.
Shareholders entitled to vote for the election of directors may submit
candidates for consideration by the Company if the Company receives timely
written notice, in proper form, for each such recommended director nominee. If
the notice is not timely and in proper form, the nominee will not be considered
by the Company. To be timely for the 2005 annual meeting, the notice must be
received within the time frame set forth in "Proposals for 2005 Annual Meeting
of Shareholders" on page 15 of this Proxy Statement. To be in proper form, the
notice must include each nominee's written consent to be named as a nominee and
to serve, if elected, and information about the shareholder making the
nomination and the person nominated for election. These requirements are more
fully described in Article III, Section 15 of the Company's Bylaws, a copy of
which will be provided, without charge, to any shareholder upon written request
to the Secretary of the Company, whose address is Citizens Bancorp of Virginia,
Inc., 126 South Main Street, Blackstone, Virginia 23824.
The Nominating Committee considers, at a minimum, the following factors
in recommending to the Board of Directors potential new directors, or the
continued service of existing directors:
* The ability of the prospective nominee to represent the interests
of the shareholders of the Company;
* The prospective nominee's standards of integrity, commitment and
independence of thought and judgment;
* The prospective nominee's ability to dedicate sufficient time,
energy and attention to the diligent performance of his or her
duties, including the prospective nominee's service on other
public company boards;
6
* The extent to which the prospective nominee contributes to the
range of talent, skill and expertise appropriate for the Board of
Directors; and
* The prospective nominee's involvement within the communities the
Company serves.
Compensation Committee
The Compensation Committee consists of Mrs. Webb and Messrs. Adams,
Jenkins, Riley and West. It reviews and recommends to the Board levels and
methods of officer and employee compensation. The Compensation Committee met
twice in 2003.
Director Compensation
As compensation for his or her service to the Company, each outside
member of the Board of Directors receives an annual retainer of $2,400 and a fee
of $500 for each meeting of the Board of Directors attended and $200 for each
committee meeting attended. Board members who are also officers do not receive
fees for serving on the Board or its committees.
Annual Meeting Attendance
The Company encourages members of the Board of Directors to attend the
annual meeting of shareholders. All of the directors attended the 2003 annual
meeting.
Communications with Directors
Any director may be contacted by writing to him c/o Citizens Bancorp of
Virginia, Inc., 126 South Main Street, Blackstone, Virginia 23824.
Communications to the non-management directors as a group may be sent to the
same address, c/o the Secretary of the Company. The Company promptly forwards
all such correspondence to the indicated directors.
AUDIT INFORMATION
The Audit Committee operates under a written charter that the Board of
Directors has adopted. The Audit Committee met five times in 2003. The Board of
Directors has adopted a written charter for the Audit Committee. The Audit
Committee Charter is set forth in Appendix A to this Proxy Statement. The Board
of Directors has determined that Mr. West qualifies as an audit committee
financial expert as defined by SEC regulations.
Fees of Independent Public Accountants
Audit Fees
The aggregate 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 years ended December 31, 2003 and 2002, and for the
review of the financial statements included in the Company's Quarterly Reports
on Form 10-QSB, and services that are normally provided in connection with
statutory and regulatory filings and engagements, for those fiscal years were
$59,074 for 2003 and $47,554 for 2002.
Audit Related Fees
The aggregate fees billed by Yount, Hyde & Barbour, P.C. for
professional services for assurance and related services that are reasonably
related to the performance of the audit or review of the
7
Company's financial statements and not reported under the heading "Audit Fees"
above for the fiscal years ended December 31, 2003 and December 31, 2002 were
$11,784 and $14,930, respectively. During 2003 and 2002, these services included
information technology audit; agreed upon procedures engagement for public
deposit balances; and consultation regarding financial accounting and reporting
standards.
Tax Fees
The aggregate fees billed by Yount, Hyde & Barbour, P.C. for
professional services for tax compliance, tax advice and tax planning for the
fiscal years ended December 31, 2003 and December 31, 2002 were $10,364 and
$4,000, respectively. During 2003 and 2002, these services included preparation
of federal and state income tax returns and consultation regarding tax
compliance issues.
All Other Fees
There were no fees billed by Yount, Hyde & Barbour, P.C. for any other
services rendered to the Company for the fiscal year ended December 31, 2003 and
$34,335 was billed in 2002, which consisted of an agreed upon procedures
engagement related to the internal audit function.
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, as amended, and
Statement on Auditing Standards No. 99. 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, 2003, 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
Samuel H. West, Chairman
Irving J. Arnold
Roy C. Jenkins, Jr.
Joseph F. Morrissette
Jo Anne S. Webb
Blackstone, Virginia
April 1, 2004
8
Pre-Approved Services
All audit related services, tax services and other services were
pre-approved by the Audit Committee, which concluded that the provision of such
services by Yount, Hyde & Barbour, P.C. was compatible with the maintenance of
that firm's independence in the conduct of its auditing functions. The Audit
Committee's Charter provides for pre-approval of audit, audit-related and tax
services. The Charter authorizes the Audit Committee to delegate to one or more
of its members pre-approval authority with respect to permitted services.
EXECUTIVE COMPENSATION
The following table shows, for the fiscal years ended December 31,
2003, 2002 and 2001, the cash compensation paid by the Company, 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 served:
Summary Compensation Table
Long Term
Annual Compensation Compensation
------------------- ------------
Name and Other Annual All Other
Principal Position Year Salary ($) Bonus ($) Compensation ($) Compensation(2)
------------------ ---- ---------- --------- ---------------- ------------
Mark C. Riley(1) 2003 178,150 7,500 * --
President and Chief Executive 2002 39,755 -- * 1,050
Officer
- ----------------
* 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. Riley's employment with the Company began on October 15, 2002 .
(2) The amount reflects payment of Board compensation.
Stock Options
The Company does not have a stock option plan, and no stock options
were granted to, or exercised by, the named executive officers during the fiscal
year ended December 31, 2003. There are no stock options currently outstanding.
Employment Agreements
The Company and Mark C. Riley are parties to an employment agreement
entered into as of March 1, 2004. Mr. Riley's employment agreement provides for
him to serve as President and Chief Executive Officer of the Company and
President of the Bank. The contract provides for a base salary of $185,000. His
employment agreement is for a rolling two-year term.
Mr. Riley's employment agreement may be terminated by the Company with
or without cause. If Mr. Riley resigns for "good reason" or is terminated
without "cause" (as those terms are defined in the
9
employment agreement), however, he is entitled to salary and certain benefits
for the remainder of his contract.
Mr. Riley's employment agreement also contains a covenant not to
compete that is in effect while he is an officer and employee of the Company and
for a 12-month period after the termination of his employment.
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. The balance of loans to directors, executive
officers and their associates totaled $997,138 at December 31, 2003, or 3.11% of
the Company's equity capital at that date.
There were no transactions during 2003 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
AMENDMENT OF ARTICLES OF INCORPORATION
TO DELETE PREEMPTIVE RIGHTS
Under Virginia law, shareholders of a corporation have preemptive
rights unless the articles of incorporation provide otherwise. Our articles of
incorporation specifically provide for preemptive rights. If a corporation's
shareholders have preemptive rights, it means that before the corporation may
issue additional shares, each shareholder must be given the opportunity to
acquire a proportional amount of the additional shares to be issued. The
proposal is to amend Article V of the Articles of Incorporation to read as
follows:
ARTICLE V
PREEMPTIVE RIGHTS
No holder of shares of the stock of any class of the Corporation shall
have any preemptive or preferential right to subscribe to or purchase (i) any
shares of any class of the stock of the Corporation, whether now or hereafter
authorized; or (ii) any securities or obligations of the Corporation convertible
into stock of the Corporation, issued or sold; or (iii) any options, warrants or
rights to purchase such shares or securities convertible into any such shares.
Explanation Of Amendment
Because the Company's articles of incorporation provide for preemptive
rights, if the Company wishes to issue additional shares of its stock, it must
first offer to sell the stock proportionately to the current shareholders on the
same terms. The amendment would allow the Company's Board of Directors to issue
shares of stock without first offering the shares to shareholders.
10
Reasons For Amendment
Preemptive rights originated at a time when companies were small, had
relatively few shareholders and there was little opportunity to purchase shares
except when a new issue of stock was offered. Today, our stock can be purchased
on the open market. Also, in the distant past it was common for the Company's
shareholders to know many or all of its other shareholders. Today, however, a
number of generations have passed and the Company's shareholder base is larger,
with shareholders living both within and outside the community, including many
states other than Virginia. It is uncommon for publicly-held companies to have
preemptive rights.
The Board of Directors does not believe that preemptive rights serve
the best interests of the shareholders. For example, from time to time it may be
advisable for the Company to offer or sell unissued shares of stock to investors
to obtain capital to finance expansion of the Company's operations. Preemptive
rights would delay any sale of stock to the public and, because you could not
determine how many shareholders would exercise preemptive rights, render the
size of a public offering uncertain. These delays and uncertainties might
discourage an underwriter from assisting the Company. The Company, however,
would not be prevented from offering shares to its existing shareholders first
if the Board concluded it was in the Company's best interests to do so.
If the Company wanted to use its stock to acquire another bank,
preemptive rights could make the acquisition impractical or even impossible.
This could adversely affect our ability to grow and the value of our stock. It
is worthwhile to note that under Virginia law, a corporation with preemptive
rights normally has the right to issue shares other than for money, such as in
connection with a merger or exchange or under an employee benefit plan approved
by the shareholders, without according preemptive rights to its shareholders.
However, because of the wording of our articles of incorporation, it isn't clear
that the Company has this power. With the elimination of preemptive rights, the
Company can respond flexibly and more efficiently to market conditions and use
its stock, when appropriate to fund future growth.
Preemptive rights, as set forth in our articles of incorporation, also
would prevent us from adopting a dividend reinvestment plan for our
shareholders, as well as stock-based compensation plans to motivate and reward
our employees.
If Proposal Two is adopted, shareholders of the Company will not have a
preemptive right to purchase unissued shares or rights to purchase securities of
the Company prior to the Company's offer to other persons. This would allow the
Company's Board of Directors to authorize the issuance and sale of stock in a
variety of transactions to persons who may not be existing shareholders of the
Company. Such sales could be issued in any amount authorized by the Board of
Directors and could be made to persons who would, thereafter, acquire
substantial ownership of the Company. The Company, however, has no present plans
to effect any issuances of its stock. The Proposal does not give rise to any
stockholder appraisal rights under Virginia law.
Vote Required
The amendment to our articles of incorporation must be approved by the
affirmative vote of more than two-thirds of all voters entitled to be cast by
holders of record of our common stock. Abstentions and "broker nonvotes" will
have the same effect as a vote against the proposal.
Our Board of Directors unanimously recommends a vote "FOR" this proposed
amendment to our articles of incorporation
11
PROPOSAL THREE
AMENDMENT OF ARTICLES OF INCORPORATION TO INCREASE AUTHORIZED
SHARES OF COMMON STOCK AND AUTHORIZE SHARES OF PREFERRED STOCK
The Board of Directors has approved, and recommends that our
stockholders approve an amendment to our articles of incorporation to increase
the number of authorized shares of common stock that we would have the authority
to issue from 2.5 million to 10 million shares and to authorize 1 million shares
of preferred stock. The complete text of Article II, as amended, is as follows:
ARTICLE II
CAPITAL STOCK
Paragraph A. The aggregate number of shares of stock which the
Corporation shall have the authority to issue and the par value per share is as
follows:
Number of
Class Shares Par Value
----- ------ ---------
Common Stock 10,000,000 $.50
Preferred Stock 1,000,000 $.50
Paragraph B. The holders of the Common Stock shall, to the exclusion of
the holders of any other class of stock of the Corporation, have the sole and
full power to vote for the election of directors and for all other purposes
without limitation except only as otherwise provided in any articles of
amendment applicable to any series of Preferred Stock, and as otherwise
expressly provided by the then existing statutes of Virginia. The holders of the
Common Stock shall have one vote for each share of Common Stock held by them.
Except as may be set forth in any articles of amendment applicable to shares of
Preferred Stock, the holders of the Common Stock shall be entitled to receive
the net assets of the Corporation upon dissolution.
Paragraph C. All elections for directors shall be by plurality vote;
all other questions shall be decided by majority vote of the stockholders
present, provided a quorum of stockholders is present, and except as otherwise
provided by Article VIII of these Articles of Incorporation or the laws of the
Commonwealth of Virginia.
Paragraph D. Authority is expressly vested in the Board of Directors to
divide the Preferred Stock into and issue the same in series and, to the fullest
extent permitted by law, to fix and determine the preferences, limitations and
relative rights of the shares of any series so established, and to provide for
the issuance thereof. Prior to the issuance of any share of a series of
Preferred Stock, the Board of Directors shall establish such series by adopting
a resolution setting forth the designation and number of shares of the series
and the preferences, limitations and relative rights thereof, and the
Corporation shall file with the Commission articles of amendment as required by
law, and the Commission shall have issued a certificate of amendment.
Purposes and Effects of the Increase in Number of Authorized Shares of Common
Stock
Of the 2.5 million shares of common stock currently authorized, as of
March 26, 2004, 2,448,000 shares were issued and outstanding. The additional
shares of common stock for which authorization is sought would be a part of the
existing class of common stock and, if and when issued, would have the same
rights and privileges as the shares of common stock presently outstanding.
Holders of common
12
stock have preemptive rights, but, if Proposal Two is adopted, shareholders no
longer will have preemptive rights. We have no plans for the issuance of any
shares of common stock at the present time.
The Board of Directors believes that an increase in the number of
shares of authorized common stock as contemplated by the amendment to our
articles of incorporation would benefit us and our stockholders by giving us
needed flexibility in our corporate planning and in responding to developments
in our business, including possible acquisition transactions, stock splits or
stock dividends and other general corporate purposes. Having such authorized
shares available for issuance in the future would give us greater flexibility
and allow shares of common stock to be issued without the expense and delay of a
special stockholders' meeting.
Unless otherwise required by applicable law or regulation, the shares
of common stock to be authorized in the amendment to our articles of
incorporation will be issuable without further stockholder action and on such
terms and for such consideration as may be determined by the Board of Directors.
The Board of Directors could use the additional shares of common stock
to discourage an attempt to change control of us by selling a substantial number
of shares of our common stock to persons who have an arrangement with us
concerning the voting of such shares or by distributing common stock or rights
to receive such stock to the stockholders, even though a change in control might
be perceived as desirable by some stockholders. The Board of Directors, however,
has no present intention of issuing any shares of common stock or rights to
acquire common stock for such purposes, and there are no arrangements with any
person for the purchase of shares of common stock in the event of an attempted
change of control.
Purposes and Effects of Authorizing Shares of Preferred Stock
Our Board of Directors has determined that it is advisable to amend our
articles of incorporation to authorize us to issue up to 1,000,000 shares of
preferred stock, in one or more series with each series having such rights and
preferences as our Board may determine when authorizing such series. This type
of class of securities is commonly referred to as "blank check" preferred stock.
If Proposal Three is approved by you, shares of our preferred stock
will be available for issuance from time to time for such purposes and
consideration as our Board of Directors may approve. No further vote of our
shareholders will be required in connection with the authorization of a series
of preferred stock or the issuance of shares of such series, unless otherwise
required by applicable law.
We have no present plans to authorize any series of preferred stock or
to issue any shares within a series of preferred stock.
In the event that our Board of Directors does authorize, designate and
issue shares of preferred stock, our Board may exercise its discretion in
establishing the terms of such preferred stock. In the exercise of such
discretion, our Board may determine the voting rights, if any, of the series of
serial preferred stock being issued, which could include the right to vote
separately or as a single class with our common stock and/or other series of
preferred stock; to have more or less voting power per share than that possessed
by our common stock or other series of preferred stock, and to vote on certain
specified matters presented to our shareholders or on all of such matters or
upon the occurrence of any specified event or condition. On our liquidation,
dissolution or winding up, the holders of serial preferred stock may be entitled
to receive preferential cash distributions fixed by our Board when creating the
particular series of preferred stock before the holders of our common stock are
entitled to receive anything.
13
Preferred stock authorized by our Board could be redeemable or convertible into
shares of any other class or series of our capital stock.
Our Board of Directors believes the authorization of preferred stock is
necessary to provide us with the flexibility to act in the future with respect
to financing programs, acquisitions, stock splits and other corporate purposes
(although no such specific activities currently are contemplated) without the
delay and expense associated with obtaining special stockholder approval each
time an opportunity requiring the issuance of shares of preferred stock may
arise. Such a delay might deny us the flexibility that our Board views as
important in facilitating the effective use of the securities of our company.
The authorization of the preferred stock is not being proposed as a
means of preventing or dissuading a change in control or takeover of our
company. However, use of shares of preferred stock for such a purpose is
possible. Shares of authorized preferred stock, as well as shares of our
authorized but unissued common stock, for example, could be issued in an effort
to dilute the stock ownership and voting power of persons seeking to obtain
control of our company or could be issued to purchasers who would support our
Board of Directors in opposing a takeover proposal. In addition, the existence
of authority to issue preferred stock, as well as the issuance of a series of
our preferred stock, if approved, may have the effect of discouraging a
challenge for control or making it less likely that such a challenge, if
attempted, would be successful.
The authorization of preferred stock pursuant to this proposal will
have no dilutive effect upon the proportionate voting power of our present
shareholders. However, to the extent that shares of our preferred stock having
voting rights are subsequently issued to persons other than our current
shareholders and/or in proportions other than the proportion that presently
exists, such issuance could have a substantial dilutive effect on our current
shareholders.
None of our directors nor executive officers has any financial or other
personal interest in the authorization of serial preferred stock pursuant to
this proposal.
Vote Required
The amendment to our articles of incorporation must be approved by the
affirmative vote of more than two-thirds of all voters entitled to be cast by
holders of record of our common stock. Abstentions and "broker nonvotes" will
have the same effect as a vote against the proposal.
Our Board of Directors recommends a vote "FOR" this proposed amendment
to our articles of incorporation.
PROPOSAL FOUR
RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected 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, 2004. Prior to
2002, Ernst & Young LLP served as the Company's independent public accountant.
On November 13, 2002, Ernst & Young LLP resigned as the Company's independent
public accountant because the Company and Ernst & Young LLP were unable to reach
a mutually acceptable economic arrangement. The Company's Board of Directors
approved the change in accountants.
14
At no time in the previous two years did Ernst & Young LLP's report on
the Company's financial statements contain an adverse opinion or disclaimer of
opinion, or was modified as to uncertainty, audit scope, or accounting
principles. Furthermore, during the Company's two most recent fiscal years ended
December 31, 2001 and during the subsequent period preceding November 13, 2002,
there were no disagreements with Ernst & Young LLP on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction of Ernst &
Young LLP, would have caused Ernst & Young LLP to make reference to the subject
matter of the disagreements in connection with its report.
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.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF YOUNT, HYDE & BARBOUR, P.C. AS INDEPENDENT
PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2004.
PROPOSALS FOR 2005 ANNUAL MEETING OF SHAREHOLDERS
Under the regulations of the SEC, any shareholder desiring to make a
proposal to be acted upon at the 2005 annual meeting of shareholders must cause
such proposal to be received, in proper form, at the Company's principal
executive offices at 126 South Main Street, Blackstone, Virginia 23824, no later
than December 13, 2004, 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 2005 annual meeting of shareholders on May 18, 2005.
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 or to bring other business before a
meeting, notice must be received by the President of the Company not less than
120 days before the first anniversary of the date this meeting notice and proxy
statement was first given to shareholders. Based upon an anticipated date of
April 13, 2004 for the mailing of this notice and proxy statement, the Company
must receive any notice of nomination or other business no later than December
13, 2004. Notice of a nomination for director must describe various matters
regarding the nominee and the shareholder giving the notice. Notice of other
business to be brought before the meeting 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.
15
OTHER MATTERS
THE COMPANY'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31,
2003, INCLUDING FINANCIAL STATEMENTS, IS BEING MAILED TO SHAREHOLDERS WITH THIS
PROXY STATEMENT. A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR 2003,
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION EXCLUDING EXHIBITS, MAY BE
OBTAINED WITHOUT CHARGE BY WRITING TO DOUGLAS R. TAYLOR, CHIEF ADMINISTRATIVE
OFFICER, WHOSE ADDRESS IS 126 SOUTH MAIN STREET, BLACKSTONE, VIRGINIA 23824.
NEITHER ANNUAL REPORT IS PART OF THE PROXY SOLICITATION MATERIALS.
16
APPENDIX A
CITIZENS BANCORP OF VIRGINIA, INC.
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
I. PURPOSE
----------
The primary purpose of the Audit Committee of the Board of Directors is to
provide independent and objective oversight of the accounting functions and
internal controls of the Company, its subsidiaries and affiliates (as
applicable), and to ensure the objectivity of their financial statements. The
Committee and the Board shall have the ultimate authority and responsibility to
select, evaluate and, where appropriate, replace the independent accountants and
the senior internal audit officer, if any. The Committee shall also review and
advise the Board with respect to the Company's risk management policies, and tax
policies.
II. FUNCTIONS
-------------
The Audit Committee shall perform the following functions:
1. Independent Accountants. Recommend to the Board the firm to be
employed by the Bank as its independent accountants, which firm shall be
ultimately accountable to the Board and the Committee as representatives of
shareholders.
2. Plan of Audit. Consult with the independent accountants regarding the
plan of audit. The Committee hall also review with the independent accountants
their report on the audit and review with management the independent
accountants' suggested changes or improvements in the Bank's accounting
practices or controls.
3. Accounting Principles and Disclosure. Review significant developments
in accounting rules. The Committee shall review with management recommended
changes in the Bank's methods of accounting or financial statements. The
Committee also shall review with the independent accountants any significant
proposed changes in accounting principles and financial statements.
4. Internal Accounting Controls. Consult with the independent accountants
regarding the adequacy of internal accounting controls. Where appropriate,
consultation with the independent accountants regarding internal controls shall
be conducted out of management's presence. In connection with this function, the
Committee may require the Bank's counsel to circulate a questionnaire to
evaluate the Bank's compliance with banking, financial disclosure and accounting
laws.
5. Financial Disclosure Documents. Review with management and the
independent accountants the Bank's financial disclosure documents, including all
financial statements and reports filed with the Securities and Exchange
Commission, or sent to stockholders and following the satisfactory completion of
each year-end review recommend to the Board the inclusion of the audited
financial statements in the Bank's filing on Form 10-K (or Form 10-KSB). The
review shall include any significant problems and material disputes between
management and the independent accountants (out of management's presence) of the
quality of the Bank's accounting principles as applied in its financial
reporting, the clarity of the Bank's financial disclosures and degree of
aggressiveness or conservatism of the Bank's accounting principles and
underlying estimates, and a frank and open discussion of other significant
decisions made by management in preparing the financial disclosure.
6. Internal Control System. Review with management and internal auditors
the Bank's internal control systems intended to ensure the reliability of
financial reporting and compliance with applicable codes of conduct,
A-1
laws, and regulations. The review shall include any significant problems and
regulatory concerns. The Committee also shall review internal audit plans in
significant compliance areas.
7. Oversight of Independent Accountant. Evaluate the independent
accountants on an annual basis and where appropriate recommend a replacement for
the independent accounts. In such evaluation, the Committee shall ensure that
the independent accountants deliver to the Committee a formal written statement
delineating all relationships between the accountants and the Company. The
Committee also shall engage in a dialogue with the accountants with respect to
any disclosed relationships or services that may impact the objectivity and
independence of the independent accounts and in response to the independent
accountant's report take, or recommend that the Board take, appropriate action
to satisfy itself of the independent accountant's independence.
8. Adequacy of Personnel. Review periodically the adequacy of the Bank's
accounting, financial, and auditing personnel resources.
9. Tax Policies. Review periodically the Bank's tax policies and any
pending audits or assessments.
10. Charter Amendments. Review this Charter annually, assess its adequacy
and propose appropriate amendments to the Board.
The Committee's function is one of oversight and review, and it is not
expected to audit the Bank, to define the scope of the audit, to control the
Bank's accounting practices, or to define the standards to be used in
preparation of the Bank's financial statements.
III. COMPOSITION AND INDEPENDENCE
---------------------------------
The Committee shall consist of not less than three independent members, who
shall be appointed by the Board of Directors. Members of the Committee shall be
financially literate or become financially literate within a reasonable period
of time after appointment to the Committee and at least one member of the
committee shall have accounting, related financial management expertise, or any
other comparable experience or background that results in the individual's
financial sophistication. No member of the Committee shall be employed or
otherwise affiliated with the Bank's independent accountants.
In the event that a Committee member faces a potential or actual conflict
of interest with respect to a matter before the Committee, that Committee member
shall be responsible for alerting the committee Chairman, and in the case where
the Committee chairman faces a potential or actual conflict of interest, the
Committee Chairman shall advise the chairman of the Board of Directors. In the
event that the Committee Chairman, or the Chairman of the Board of Directors,
concurs that a potential or actual conflict of interest exists, an independent
substitute Director shall be appointed as a Committee member until the matter
posing the potential or actual conflict of interest is resolved.
IV. QUORUM AND MEETINGS
-----------------------
A quorum of the committee shall be declared when a majority of the
appointed members of the Committee are in attendance, except for receiving the
quarterly review report of the independent accountants relating to the interim
financial statements included in the Bank's Form 10-Q (or Form 10-QSB). This
report may be received on behalf of the Committee by the Committee Chair and
reported to the full Committee at its next scheduled meeting. The Committee
shall meet on a quarterly basis. Meetings shall be scheduled at the directions
of the Chairman. Except in emergency situations, notice of the meetings shall be
provided at least ten days in advance. The Committee may ask members of
management or others to attend the meeting and provide pertinent information as
necessary.
A-2
V. REPORTS
----------
The Committee will report to the Board from time to time with respect to
its activities and its recommendations. When presenting any recommendation or
advice to the Board, the Committee will provide such background and supporting
information as may be necessary for the Board to make an informed decision. The
Committee will keep minutes of its meetings and will make such minutes available
to the full Board for its review.
VI. OTHER AUTHORITY
-------------------
The Committee is authorized to confer with Bank management and other
employees to the extent it may deem necessary or appropriate to fulfill its
duties. The Committee is authorized to conduct or authorize investigations into
any matters within the Committee's scope of responsibilities. The committee also
is authorized to seek outside legal or other advice to the extent it deems
necessary or appropriate, provided it shall keep the Board advised as to the
nature and extent of such outside advice.
The Committee will perform such other functions as are authorized for this
Committee by the Board of Directors.
A-3
CITIZENS BANCORP OF VIRGINIA, INC.
126 South Main Street
Blackstone, Virginia 23824
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Citizens Bancorp of Virginia, Inc. (the
"Company") hereby acknowledges receipt of the Notice of the 2004 Annual Meeting
and Proxy Statement attached thereto, and hereby appoints Mark C. Riley and
Douglas R. Taylor, and each of them (with full power to act without the other
and with full power of substitution), as the true and lawful attorneys and
proxies of the undersigned to vote all of the shares of record in the name of
the undersigned, with all of the powers which the undersigned would possess if
personally present at the 2004 Annual Meeting, or any adjournment thereof.
The proxies are hereby further authorized to vote as specified below
upon the following items (THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF
THE ITEMS):
1. Election of Directors.
Nominees: Irving J. Arnold William D. Coleburn Joseph M. H. Irby
Roy C. Jenkins, Jr. Joseph F. Morrissette E. Walter Newman, Jr.
Mark C. Riley Jo Anne Scott Webb Samuel H. West
Jerome A. Wilson, III
[ ] Vote FOR all nominees listed above [ ] Vote WITHHELD from all
(except as indicated to the contrary nominees listed above
below)
Instructions: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided below.
2. To amend the articles of incorporation to terminate shareholders'
preemptive rights.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To amend the articles of incorporation to increase the number of
authorized shares of common stock to 10,000,000, and to authorize
1,000,000 shares of preferred stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. The ratification of the selection of Yount, Hyde & Barbour, P.C. as
independent public accountants for the Company for the fiscal year
2004.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. The transaction of such additional business as properly may come
before the shareholders at the 2004 Annual Meeting, or any adjournment
thereof.
THIS PROXY WILL BE VOTED AS DIRECTED HEREIN BY THE UNDERSIGNED.
IF NO DIRECTIONS ARE GIVEN BY THE UNDERSIGNED, OR IF DIRECTORS
ARE UNCLEAR, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS
1, 2, 3, 4 AND 5 IN
ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS OF
THE COMPANY.
The undersigned hereby revokes all proxies given prior to this
date for the 2004 Annual Meeting of Shareholders of the Company.
Date:_________________________
Signature:___________________________
Please date, sign and return promptly. Only one of several joint
owners need sign. Fiduciaries must state title. If signing for a corporation or
partnership, or as fiduciary, indicate the capacity in which you are signing and
state the name of the business or beneficiary.
SIGNING THIS PROXY WILL NOT PREVENT YOU FROM VOTING IN PERSON
IF YOU DESIRE. SEE THE PROXY STATEMENT FOR FURTHER INFORMATION.