March 29, 2002
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of Old Point Financial Corporation. The meeting
will be held on Tuesday, April 23, 2002 at 6:00 p.m. at The
Williamsburg Marriott Hotel, 50 Kingsmill Road, Williamsburg,
Virginia.
You will be asked to vote on the election of directors, and the
ratification of our independent certified public accountants.
During the meeting, we will report to you on the condition and
performance of the Company and its subsidiaries. You also will
have an opportunity to question management on matters that
affect the interest of all stockholders.
We hope to see you on April 23, 2002. Whether you plan to
attend the Annual Meeting in person or not, please complete,
sign, date and return the enclosed proxy card as soon as
possible in the postage-paid envelope provided or follow the
instructions on your proxy card to vote by telephone or over
the internet. Your vote is important. We appreciate your
continued loyalty and support.
Sincerely,
/s/Robert F. Shuford
Robert F. Shuford
Chairman of the Board and President
Enclosure
OLD POINT FINANCIAL CORPORATION
1 West Mellen Street
Hampton, Virginia 23663
NOTICE OF 2002 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 23, 2002
TO OUR STOCKHOLDERS:
The 2002 Annual Meeting of Stockholders of Old Point
Financial Corporation will be held at The Williamsburg Marriott
Hotel, 50 Kingsmill Road, Williamsburg, Virginia, on Tuesday,
April 23, 2002, at 6:00 p.m. for the following purposes:
1. To elect 12 directors to serve for the ensuing year, or
until their successors have been elected and qualified;
2. To ratify the appointment of Eggleston Smith P.C., Certified
Public Accountants, as independent accountants and auditors for
2002; and
3. To transact such other business as may properly come before
the meeting.
Stockholders of record at the close of business on March 15,
2002, will be entitled to notice of and to vote at the Annual
Meeting and any adjournments thereof.
By Order of the Board of Directors
/s/Louis G. Morris
Louis G. Morris
Secretary to the Board
March 29, 2002
Please complete, sign, date and mail the enclosed proxy card
promptly. No postage is required if the return envelope is used
and mailed in the United States or per instructions on your proxy
card you may also vote by telephone or by internet. If you attend
the meeting, you may, if you desire, revoke your proxy and vote
in person.
OLD POINT FINANCIAL CORPORATION
1 West Mellen Street
Hampton, Virginia 23663
PROXY STATEMENT
2002 ANNUAL MEETING OF STOCKHOLDERS
To Be Held April 23, 2002
GENERAL
The enclosed proxy is solicited by the Board of Directors of
Old Point Financial Corporation (the "Company") for the 2002
Annual Meeting of Stockholders (the "Annual Meeting") of the
Company to be held Tuesday, April 23, 2002, at 6:00 p.m. at The
Williamsburg Marriott Hotel, 50 Kingsmill Road, Williamsburg,
Virginia. The approximate mailing date of this Proxy Statement
and accompanying Proxy is March 29, 2002.
Voting Rights and Solicitation
Only those stockholders of record at the close of business
on March 15, 2002, are entitled to notice of and to vote at the
Annual Meeting or any adjournments thereof. The number of shares
of common stock of the Company outstanding and entitled to vote
as of March 15, 2002 was 2,602,577. The Company has no other
class of stock outstanding. A majority of the shares entitled to
vote, represented in person or by proxy, will constitute a quorum
for the transaction of business.
Each share of Company common stock entitles the record
holder thereof to one vote upon each matter to be voted upon at
the Annual Meeting, except that in the election of directors
cumulative voting entitles a stockholder to give one nominee as
many votes as is equal to the number of directors to be elected,
multiplied by the number of shares owned by such stockholder or
to distribute his or her votes on the same principle between two
or more nominees as he or she sees fit. The Board of Directors
will instruct the proxyholders to use cumulative voting, if
necessary, to elect all or as many of the nominees as possible.
If a stockholder specifies how the proxy is to be voted with
respect to any proposals for which a choice is provided, the
proxy will be voted in accordance with such specifications. If a
stockholder fails to specify with respect to such proposals, the
proxy will be voted FOR proposals 1 and 2, as set forth in the
accompanying Notice of Annual Meeting and as further described
herein.
The cost of solicitation of proxies will be borne by the
Company. Solicitation is being made by mail, and if necessary
may be made in person or by telephone, telegram, or special
letter by officers and regular employees of the Company or its
subsidiary, acting without compensation other than their regular
compensation. It is contemplated that brokerage houses and other
nominees, custodians, and fiduciaries will be requested to
forward the Company's proxy soliciting material to the beneficial
owners of the stock held of record by such persons, and the
Company will reimburse them for their charges and expenses in
this connection.
-1-
Security Ownership of Certain Beneficial Owners
Mr. Robert F. Shuford, a director of the Company and its
wholly-owned subsidiaries, The Old Point National Bank of Phoebus
(the "Bank") and Old Point Trust & Financial Services, N.A. (the
"Trust Company"), and the VuBay Foundation, and James Reade
Chisman, and Ann DeVenny Wallace are the only shareholders who
beneficially own 5% or more of the Company's common stock. Mr.
Shuford's beneficial ownership of the Company common stock as of
March 15, 2002 is shown in the beneficial ownership table below
under "Election of Directors." The address of Mr. Shuford is the
same as the Company's principal offices. The VuBay Foundation
has beneficial ownership of 193,584 shares or 7.4% of the
Company's common stock as of March 15, 2002, and the address of
the VuBay Foundation is VuBay Foundation, c/o Cyrus A. Dolph, IV,
Assistant Secretary, P.O. Box 13109, Norfolk, Virginia 23506-
3109. VuBay Foundation is a charitable foundation of which Mr.
Robert F. Shuford is one of three foundation directors without
sole voting power. Finally, the Trust Company holds as trustee of
various trust accounts a total of 421,874 shares or 16.2% of
Company common stock as of February 28, 2002. The Trust Company
possesses sole voting and/or investment power with respect to
307,586 of these shares, but as to which, as a matter of state
law, it must refrain from voting unless a co-fiduciary is
appointed for the sole purpose of voting such shares. Mr. Chisman
has beneficial ownership of 228,456 shares or 8.8% of the
Company's common stock as of March 15, 2002, and the address of
Mr. Chisman is 1700-B George Washington Highway, Yorktown,
Virginia 23693-3109. Ms. Wallace has beneficial ownership of
197,648 shares or 7.6% of the Company's common stock as of March
15, 2002, and the address of Ms. Wallace is 2626 South Lynn
Street, Arlington, Virginia 22202-2708. Beneficial ownership for
the VuBay Foundation, Mr. Shuford, Mr. Chisman, and Ms. Wallace
is based on a draft Schedule 13D expected to be filed jointly
with the Securities & Exchange Commission reflecting shares owned
as of March 15, 2002 (the "VuBay Schedule 13D"). There are no
other persons known by the Company to be owners of more than 5%
of the Company's common stock.
Mr. Chisman has sole voting power with respect to 17,372 of
these shares, shared voting power with respect to 211,084 of
these shares, sole dispositive power with respect to 17,372 of
these shares and shared dispositive power with respect to 211,084
of these shares; Mr. Shuford has sole voting power with respect
to 86,884 of these shares, shared voting power with respect to
269,174 of these shares, sole dispositive power with respect to
86,884 of these shares and shared dispositive power with respect
to 269,174 of these shares; and Ms. Wallace has sole voting power
with respect to 4,064 of these shares, shared voting power with
respect to 193,584 of these shares, sole dispositive power with
respect to 4,064 of these shares and shared dispositive power
with respect to 193,584 of these shares. Mr. Chisman, Mr.
Shuford and Ms. Wallace each disclaim any beneficial interest in
193,584 of the shares reported, which he or she may be deemed to
beneficially own by virtue of his or her position as a director
of VuBay Foundation, the holder of record of the 193,584 shares.
In their capacities as directors of VuBay Foundation, Mr.
Chisman, Mr. Shuford and Ms. Wallace each share voting and
dispositive power with respect to the shares held by VuBay
Foundation with the other two directors.
As of March 15, 2002, the persons nominated as directors of
the Company, and the executive officers of the Company and its
subsidiaries, beneficially owned as a group 660,168 shares
(approximately 24.5%) of Company common stock outstanding
(including shares for which they hold presently exercisable stock
options).
-2-
PROPOSAL 1
ELECTION OF DIRECTORS
The twelve persons named below, all of whom currently serve
as directors of the Company, will be nominated to serve as
directors until the 2003 Annual Meeting, or until their
successors have been duly elected and have qualified.
Amount and Nature of
Principal Beneficial Ownership
Director Occupation For as of March 15, 2002
Name (Age) Since(1) Past Five Years (Percent of Class)(2)(3)
---------- -------- --------------- ------------------------
Dr. Richard F. Clark (69) 1981 Pathologist (retired) 65,369 (4)
Sentara Hampton General Hospital (2.5%)
Russell Smith Evans Jr. (59) 1993 Assistant Treasurer and 4,650 (4)
Corporate Fleet Manager *
Ferguson Enterprises
G. Royden Goodson, III (46) 1994 President 8,873 (4)
Warwick Plumbing & Heating Corp. *
Dr. Arthur D. Greene (57) 1994 Surgeon - Partner 5,319 (4)
Tidewater Orthopaedic Associates *
Gerald E. Hansen (60) 2000 President 4,840 (4)
Chesapeake Insurance Services, Inc. *
Stephen D. Harris (60) 1988 Attorney-at-Law - Partner 11,690 (4)
Geddy, Harris, Franck & Hickman, L.L.P. *
John Cabot Ishon (55) 1989 President 18,788 (4)
Hampton Stationery *
Eugene M. Jordan (78) 1964 Attorney-at-Law 21,000 (4)
Jordan, Ishon & Jordan, P.C. *
John B. Morgan, II (55) 1994 President 5,385 (4)
Morgan Marrow Insurance *
Louis G. Morris (47) 2000 President & CEO 28,900 (4)
Old Point National Bank (1.1%)
Dr. H. Robert Schappert (63) 1996 Veterinarian - Owner 91,740 (4)
Beechmont Veterinary Hospital (3.5%)
Robert F. Shuford (64) 1965 Chairman of the Board,
President & CEO 356,058 (4)(5)
Old Point Financial Corporation (13.5%)
Chairman of the Board
Old Point National Bank
-3-
*Represents less than 1.0% of the total outstanding shares.
(1) Refers to the year in which the individual first became a
director of the Bank. Dr. Richard F. Clark, Eugene M.
Jordan, and Robert F. Shuford became directors of the
Company upon consummation of the Bank's reorganization on
October 1, 1984. All present directors of the Company are
directors of the Bank. Dr. Richard F. Clark, Dr. Arthur D.
Greene, Mr. John C. Ishon and Mr. Robert F. Shuford are
directors of the Trust Company.
(2) For purposes of this table, beneficial ownership has been
determined in accordance with the provisions of Rule 13d-3 of the
Securities Exchange Act of 1934 under which, in general, a person
is deemed to be the beneficial owner of a security if he or she
has or shares the power to vote or direct the voting of the
security or the power to dispose of or direct the disposition of
the security, or if he or she has the right to acquire beneficial
ownership of the security within sixty days.
(3) Includes shares held (i) by their close relatives or held
jointly with their spouses, (ii) as custodian or trustee for the
benefit of their children or others, or (iii) as attorney-in-fact
subject to a general power of attorney - Dr. Clark, 200 shares;
Mr. Evans, 650 shares; Dr. Greene, 1,968 shares; Mr. Hansen, 628
shares; Mr. Harris, 417 shares, Mr. Ishon, 7,488 shares; Mr.
Jordan, 5,000 shares; Mr. Morgan, 2,985 shares; Dr. Schappert,
81,370 shares; and Mr. Shuford, 75,590 shares.
(4) Includes shares that may be acquired within 60 days pursuant
to the exercise of stock options granted under the 1989 and 1998
Old Point Stock Option Plans - Dr. Clark 2,000, Mr. Evans 2,000,
Mr. Goodson 2,000, Dr. Greene 2,000, Mr. Hansen 1,000, Mr. Harris
2,000, Mr. Ishon 2,000, Mr. Jordan 2,000, Mr. Morgan 2,000, Mr.
Morris 13,610, Dr. Schappert 2,000, and Mr. Shuford 28,958.
(5) Mr. Shuford is one of three directors of the VuBay
Foundation, a charitable foundation organized under 501(c)(3) of
the Internal Revenue Code of 1986, as amended. A majority of the
Directors have the power to vote shares of Company common stock
owned by the foundation. The foundation owned 193,584 shares of
stock as of March 15, 2002. Mr. Shuford disclaims any beneficial
ownership of these shares.
There are two family relationships among the directors and
executive officers. Mr. Jordan is the father-in-law of Mr.
Ishon. Mr. Shuford and Dr. Schappert are married to sisters.
None of the directors serve as a director of any other company
with a class of securities registered pursuant to Section 12 of
the Securities Exchange Act of 1934.
The Board of Directors recommends that the stockholders vote
FOR the election of each of the nominees for director listed
above.
Board Committees and Attendance
During 2001, there were fourteen meetings of the Company's
Board of Directors. Each director attended at least 75% of all
meetings of the Board and committees on which he served. The
Company's Board has standing Executive, Audit and Compensation
Committees.
-4-
In 2001, the Company's Executive Committee was comprised of
Messrs. Shuford (Chairman), Morris, Jordan, Harris, and Dr.
Clark. It serves in an advisory capacity, reviewing matters and
making recommendations to the Board of Directors. The Executive
Committee met four times in 2001.
The Company's Compensation Committee is described below
under "Report on Executive Compensation."
In 2001, the Company's Audit Committee was comprised of
Messrs. Jordan (Chairman), Greene, Hansen, Harris, Ishon, and
Morgan. The Audit Committee reviews on a regular basis the work
of the internal audit department. It also reviews and approves
the scope and detail of the continuous audit program, which is
conducted by the internal audit staff to protect against improper
and unsound practices and to furnish adequate protection for all
assets and records. Subject to the approval of the Board of
Directors, it engages a firm of certified public accountants to
conduct such audit work as is necessary and receives written
reports, supplemented by such oral reports as it deems necessary,
from the audit firm. During 2001, the Audit Committee held four
meetings.
The Board has no separate nominating committee. The
Executive Committee reviews any director nominations or
recommendations obtained and gives its recommendations to the
Board. The entire Board reviews, on an as needed basis, the
qualifications of candidates for membership to the Board.
Following appropriate review, the Board ascertains the
willingness of selected individuals to serve and extends
invitations to serve as a Board member.
In its capacity as the nominating committee, the Executive
Committee will accept for consideration stockholders' nominations
for directors if made in writing by a stockholder entitled to
vote in the election of directors. Stockholder nominations must
be received by the Company's President at the Company's principal
office in Hampton, Virginia, no later than April 7, 2003 nor
earlier than March 3, 2003 in order to be considered for the 2003
annual election of directors; provided, however, that if less
than 21 days' notice of the 2003 Annual Meeting is provided to
the stockholders, such nominations must be received by the
Company's President no later than the close of business on the
seventh day after the day notice of the 2003 Annual Meeting is
mailed.
Audit Committee Report
The Audit Committee of the Board of Directors (the
"Committee") is composed of six directors and operates under a
written charter adopted by the Board of Directors. The members of
the Committee meet the independence requirements of Rule
4200(a)(15) of the National Association of Securities Dealers'
listing standards.
Management is responsible for the Company's internal
controls, financial reporting process and compliance with the
laws and regulations and ethical business standards. The
Company's independent accountants are responsible for performing
an independent audit of the Company's consolidated financial
statements in accordance with generally accepted auditing
standards and to issue a report thereon. The Committee's
responsibility is to monitor and oversee these processes.
-5-
In this context, the Committee has met and held discussions
with management and the independent accountants. Management
represented to the Committee that the Company's audited
consolidated financial statements were prepared in accordance
with generally accepted accounting principles, and the Committee
has reviewed and discussed the audited consolidated financial
statements with management and the independent accountants. The
Committee discussed with the independent accountants matters
required to be discussed by Statement on Auditing Standards No.
61 (Communication with Audit Committee).
The Company's independent accountants also provided to the
Committee the written disclosures and letter required by
Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committee), and the Committee discussed
with the independent accountants that firm's independence.
Based upon the Committee's discussions with management and
the independent accountants and the Committee's review of the
representation of management and the report of the independent
accountants to the Committee, the Committee recommended to the
Board of Directors that the audited consolidated financial
statements be included in the Company's Annual Report on Form 10-
K for the year ended December 31, 2001, filed with the Securities
and Exchange Commission.
/s/ Eugene M. Jordan, Chairman
/s/ Dr. Arthur D. Greene
/s/ Gerald E. Hansen
/s/ Stephen D. Harris
/s/ John Cabot Ishon
/s/ John B. Morgan, II
-6-
Fees Paid To Independent Auditors
1. Audit Fees
The aggregate fees billed for professional services rendered
for the audit of the Company's annual financial statements for
2001 and the reviews of the Company's financial statements
included in its Forms 10-K and 10-Q for 2001 totals $43,609.40.
2. Financial Information System Design and Implementation Fees
The aggregate fees billed by the Company's principal
accountant for information system services and products for 2001
totals $0.00. The Company has used other consultants for
information system services.
3. All Other Fees
The aggregate fees billed for services rendered by the
Company's principal accountant other than those outlined in 1 and
2 above totals $10,465.00
4. The Audit Committee considers the provision of services
covered in 2 and 3 above to be compatible with the maintenance of
the independence of the Company's principal accountants,
Eggleston Smith P.C.
5. The percentage of hours expended on the principal auditors'
engagement by persons other than the principal auditors' full-
time permanent employees was less than 50% of the total hours
expended on the audit engagement.
Directors' Compensation
Directors of the Bank and Trust Company receive $400 and
$250, respectively for each board meeting they attend. The
directors of the Bank and Trust Company receive $150 for each
committee meeting they attend. In addition, outside directors of
the Bank and Trust Company are paid an annual retainer fee of
$4,000 and $2,500, respectively. Directors serving on the Bank
board who also serve on the Trust Company board receive an
additional $1,000 annual retainer for serving on the Trust
Company board. All Company directors have been elected as
directors of the Bank, but there is no assurance that this
practice will continue. Not all Company directors serve as
directors of the Trust Company.
Directors who are employees of the Company and its
subsidiaries are compensated for attendance at board meetings,
but do not receive any fees for committee meetings and are not
paid annual retainer fees.
Certain Relationships and Other Transactions
Some of the Company's directors, executive officers, and
members of their immediate families, and corporations,
partnerships and other entities of which such persons are
-7-
officers, directors, partners, trustees, executors or
beneficiaries, are customers of the Bank. All loans and
commitments to lend to such individuals were made in the ordinary
course of business, upon substantially the same terms, including
interest rates and collateral, as those prevailing at the time
for comparable transactions with other persons and did not
involve more than normal risk of collectibility or present other
unfavorable features. It is the policy of the Bank to provide
loans to employees who are not directors or executive officers at
more favorable rates than those prevailing at the time for
comparable transactions with other persons. These loans do not
involve more than the normal risk of collectibility or present
other unfavorable features.
The law firm of Troutman Sanders Mays & Valentine LLP serves
as legal counsel to the Company and Jordan, Ishon & Jordan serve
as legal counsel to the Bank and Trust Company. Mr. Eugene M.
Jordan is a member of the firm. During 2001, the firm received a
retainer and fees totaling $50,588. Morgan Marrow Insurance of
which John B. Morgan, II is President, provided insurance for
which the Company paid $232,228 during 2001. The 2001 amount paid
includes $179,207 in three year premiums for coverage through
2003. Hampton Stationery, of whom John Cabot Ishon is President,
Geddy, Harris, Franck & Hickman LLP, of which Stephen D. Harris
is a partner, and Warwick Plumbing & Heating Corp., of which G.
Royden Goodson, III is President provide products and services to
the Company.
EXECUTIVE COMPENSATION
Cash and Certain Other Compensation
The following table presents a three-year summary of all
compensation paid or accrued by the Company and its subsidiaries
to the Company's Chief Executive Officer and next four most
highly compensated executive officers.
SUMMARY COMPENSATION TABLE
Annual Compensation
Amount and
Nature of
Beneficial
Ownership
as of March
Name and Principal Compensa- 15,2002
Position Year Salary(1) Bonus(2) tion(3) (Percent of
Class)(4)(5)(6)
------------------ ---- --------- -------- ------- ---------------
Robert F. Shuford, 2001 $158,600 $33,000 $16,006 356,058
Chairman, President 2000 $156,800 $27,000 $15,519 (13.5%)
& CEO (Company) 1999 $153,500 $27,000 $17,556
-8-
Amount and
Nature of
Beneficial
Ownership
as of March
Name and Principal Compensa- 15,2002
Position Year Salary(1) Bonus(2) tion(3) (Percent of
Class)(4)(5)(6)
------------------ ---- --------- -------- ------- ---------------
Louis G. Morris 2001 $130,600 $27,500 $10,729 28,900
President & CEO(Bank) 2000 $129,800 $22,500 $10,241 (1.1%)
1999 $100,267 $18,048 $ 9,220
Cary B. Epes 2001 $107,000 $23,540 $ 9,329 15,635
EVP/CCO (Bank) 2000 $107,000 $19,260 $ 8,948 *
1999 $ 99,267 $17,868 $ 9,340
Margaret P. Causby 2001 $106,000 $23,320 $ 9,532 15,665
EVP/CAO (Bank) 2000 $106,000 $19,080 $ 8,863 *
1999 $ 97,947 $17,630 $ 9,004
Frank E. Continetti 2001 $103,333 $11,160 $ 9,112 6,256
President & CEO 2000 $102,000 $15,000 $ 8,511 *
OPT&FS, NA 1999 $ 83,409 $10,759 $ 7,724
*Represents less than 1.0% of the total outstanding shares.
(1) Salary includes directors' fees as follows: Mr. Shuford -
2001, $8,600, 2000, $6,800 and 1999, $3,900. Mr. Morris -
2001, $5,600, 2000, $4,800. Mr. Continetti - 2001, $3,500,
2000, $2,000.
(2) Bonus consideration for Mr. Shuford is paid in the year
following the year in which the bonus is earned so that the
Compensation Committee can evaluate year-end results. Bonus
consideration for Mr. Morris, Mr. Epes, Mrs. Causby and Mr.
Continetti is paid in the year in which it is earned.
(3) Mr. Shuford has received other compensation as follows:
2001 2000 1999
---- ---- ----
Deferred Profit Sharing $ 4,119 $ 3,896 $ 4,532
Cash Profit Sharing 3,823 3,559 4,210
401(k) Matching Plan 4,500 4,500 4,488
Group Term Insurance 3,564 3,564 4,326
------- ------- -------
Total $16,006 $15,519 $17,556
-9-
Mr. Morris has received other compensation as follows:
2001 2000 1999
---- ---- ----
Deferred Profit Sharing $ 3,433 $ 3,247 $ 3,037
Cash Profit Sharing 3,186 2,966 2,821
401(k) Matching Plan 3,750 3,750 3,008
Group Term Insurance 360 278 354
------- ------- -------
Total $10,729 $10,241 $ 9,220
Mr. Epes has received other compensation as follows:
2001 2000 1999
---- ---- ----
Deferred Profit Sharing $ 2,939 $ 2,779 $ 3,007
Cash Profit Sharing 2,727 2,539 2,793
401(k) Matching Plan 3,210 3,210 2,978
Group Term Insurance 453 420 562
------- ------- -------
Total $ 9,329 $ 8,948 $ 9,340
Mrs. Causby has received other compensation as follows:
2001 2000 1999
---- ---- ----
Deferred Profit Sharing $ 2,911 $ 2,753 $ 2,967
Cash Profit Sharing 2,701 2,516 2,756
401(k) Matching Plan 3,180 3,180 2,938
Group Term Insurance 740 414 343
------- ------- -------
Total $ 9,532 $ 8,863 $ 9,004
Mr. Continetti has received other compensation as follows:
2001 2000 1999
---- ---- ----
Deferred Profit Sharing $ 2,838 $ 2,598 $ 2,527
Cash Profit Sharing 2,634 2,373 2,347
401(k) Matching Plan 3,100 3,000 2,502
Group Term Insurance 540 540 348
------- ------- -------
Total $ 9,112 $ 8,511 $ 7,724
(4) For purposes of this table, beneficial ownership has been
determined in accordance with the provisions of Rule 13d-3
of the Securities Exchange Act of 1934 under which, in
general, a person is deemed to be the beneficial owner of a
security if he or she has or shares the power to vote or
direct the voting of the security or the power to dispose of
or direct the disposition of the security, or if he or she
has the right to acquire beneficial ownership of the
security within 60 days.
(5) Include shares held (1) by their joint relative or held
jointly with their spouses, (2) as custodian or trustee for
the benefit of their children or others, (3) as attorney-in-
fact subject to a general power of attorney-Mr. Shuford,
75,590 shares.
-10-
(6) Include shares that may be acquired within 60 days pursuant
to the exercise of stock options granted under the 1989 and
1998 Old Point Stock Option Plans-Mr. Shuford 28,958 shares,
Mr. Morris 13,610 shares, Mr. Epes 13,730 shares, Mrs.
Causby 13,830 shares and Mr. Continetti, 5,700.
Aggregated Option Exercises in Last
Fiscal Year and December 31, 2001 Option Value
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
12/31/01 (#) 12/31/01 ($)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized($)(1) Unexercisable Unexercisable(1)
----------------- --------------- -------------- ------------- ----------------
Robert F. Shuford 0 $0 28,958/4,336 $233,560/$19,200
Louis G. Morris 0 $0 13,610/3,744 $ 84,792/$17,971
Cary B. Epes 0 $0 13,730/2,500 $ 87,147/$12,000
Margaret P. Causby 0 $0 13,830/2,500 $ 87,002/$12,000
Frank E. Continetti 0 $0 5,700/2,500 $ 38,250/$12,000
(1) Market value of underlying securities at exercise or year-
end, minus the exercise or base price.
-11-
OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table shows all grants of options to Executive
Officers in 2001.
OPTIONS GRANTED IN LAST FISCAL YEAR
Individual Grants Hypothetical
Value at Assumed
Annual Rates for Stock
Price Appreciation
For Option Term (3)
----------------------------------------------------------------------------------------------
Number of
Securities % of Total Exercise
Underlying Options Grant Price Per Expiration
NAME Options(1) Employees Share (2) Date 5% 10%
----------------------------------------------------------------------------------------------
Robert F. Shuford 4,000 6.1% $24.20 8/14/12 $60,880 $154,280
Louis G. Morris 3,744 5.7% $24.20 8/14/12 $56,984 $144,406
Cary B. Epes 2,500 3.8% $24.20 8/14/12 $38,050 $ 96,425
Margaret P. Causby 2,500 3.8% $24.20 8/14/12 $38,050 $ 96,425
Frank E. Continetti 2,500 3.8% $24.20 8/14/12 $38,050 $ 96,425
(1) All grants were made under the Company's 1998 Stock Option
Plan. Options were granted August 14, 2001 and become
exercisable August 14, 2002.
(2) Exercise price is average of the high and low trading prices
of the Company's common stock on the five trading days
immediately preceding the date of the grant.
(3) To realize the potential values of an assumed 5% and 10%
annual stock price appreciation rate, the price per share of the
Company's common stock would be approximately $39.42 and $62.77,
respectively, at the end of the ten year term for options granted
on August 14, 2001.
Employee Benefit Plans
Pension Plan. The Company has a noncontributory defined
benefit pension plan, which covers substantially all full-time
employees of the Company and its subsidiaries that have completed
one year of service. A participant's monthly retirement benefit
(if he or she has 25 years of benefit service at his normal
retirement date) is 20% of his final average pay plus 15% of final
average pay in excess of the participant's Social Security Covered
Pay. The Social Security Covered Pay is the average pay of the
calendar year prior to the year the participant attains his Social
Security Retirement Age. If the participant has less than 25
years of benefit service at his Normal Retirement Date, the
participant's monthly retirement benefit will be actuarially
reduced by 1/25 for each year of benefit service less than 25
years. Cash benefits under the plan generally commence on
retirement, death or other termination of employment and are
payable in various forms at the election of the participant.
-12-
Thrift Plan. The Company has a contributory 401(k) profit-
sharing and thrift plan. Employees of the Company and its
subsidiaries are eligible to participate if they have completed 90
days of service and are at least 18 years old. Participants may
elect to defer between 1% to 15% of their base compensation as
defined in the plan, which will be contributed to the plan. The
Bank will contribute 50 cents for each dollar deferred by an
employee on the first 6% of the employee's compensation, provided
the employee completes 1,000 hours of service in the year, and is
employed on the last day of the year. Participants may also elect
to make additional deferrals subject to certain limitations, which
are not matched by the Bank.
Distributions to participants are made at death, retirement
or other termination of employment in a lump sum payment, unless a
participant or his beneficiary elects to receive payments in
installments. The plan permits certain in-service withdrawals.
All employee contributions are fully vested and the Bank's
contributions become fully vested when a participant reaches age
65, becomes totally and permanently disabled or dies. If a
participant leaves the Bank before the occurrence of one of these
events, the Bank's contributions will become 10% vested per year
for the first four years of service and 20% vested per year for
the next three years of service, becoming 100% vested after seven
years of service.
Employee Stock Purchase Plan. The Company concluded the 1996
Employee Stock Purchase Plan (the "1996 Plan"). The term of the
1996 Plan was for five consecutive years ending on June 30, 2001.
Stock Option Plans. The Company has two stock option plans -
the 1989 Stock Option Plan and the 1998 Stock Option Plan (the
"Plans"). The Plans provide for the award of nonqualified stock
options and incentive stock options to directors and employees of
the Company and its subsidiaries selected by the Board of
Directors to participate in the Plans. The Board of Directors
makes awards under the Plans and establishes the terms and
conditions of each award in the option agreement entered into with
each optionee. The price of shares of stock to be issued upon the
exercise of options will be at least 100% of the fair market value
on the date of award. Options may not be granted more than ten
years after the adoption of the Plans by the Board and are
exercisable only during the term specified in the option
agreement, which in the case of incentive stock options shall not
exceed ten years. The options are not transferable other than by
will or the laws of descent and distribution.
Options totaling 66,604 shares under the 1989 Plan have been
granted. Options covering 175,744 shares have been granted under
the 1998 Plan under which 325,000 shares of Company common stock
have been reserved. The 1989 Plan did not permit grants of option
to non-employees, whereas, the 1998 Plan permits grants of options
to non-employee directors.
Other Benefit Plans. Life, medical, dental, and disability
insurance is provided to all
officers and employees of the Company and its subsidiaries.
-13-
Report on Executive Compensation
Compensation for executive officers is administered by the
Compensation Committee (the "Committee"). The Committee is
comprised of four non-employee directors, Messrs. Goodson
(Chairman), Clark, Evans, and Morgan. It met two times in 2001.
All decisions of the Committee are recommended to the entire Board
of Directors, which makes the final decision.
In an environment characterized by change, regulatory
oversight and increased competition, total executive compensation
is designed to attract and retain qualified personnel by providing
competitive levels of compensation as compared to similarly sized
financial institutions. Executive compensation consists of the
several elements specified in the Summary Compensation Table under
"Executive Compensation;" namely, base salary and annual and long-
term incentive compensation.
In making its recommendation to the Board, the Committee
obtains from market and economic research companies information
pertaining to salary levels at other comparable financial
institutions. Annual compensation is determined by evaluating
several factors. The primary factor considered in evaluating the
level of executive compensation is the progress the Company made
during the year in achieving performance goals. The performance
goals evaluated include, but are not limited to, return on average
assets, return on average equity, net income, asset quality, and
deposit and loan growth. Secondary factors considered by the
Committee include comparing the Company's performance with other
local institutions and comparable executive compensation packages.
Lastly, the Committee gives some consideration to the expected
future contributions of the executive, general economic
conditions, the executive's length of service and standing within
the local banking communities, and other factors. Bonuses are
awarded based on evaluation of the foregoing factors relating to
the Company's financial performance. Decisions regarding
compensation, however, are mostly subjective in nature, and no
specific formulas are used to calculate an executive's
compensation.
The asset growth, loan growth and earnings increase resulted
in an overall positive financial performance of the Company and
its subsidiaries in fiscal year 2001.
The committee recommended to the Board a bonus be granted to
Mr. Shuford in the amount of $33,000, to Mr. Morris in the amount
of $27,500, to Mr. Epes in the amount of $23,540, to Mrs. Causby
in the amount of $23,320 and to Mr. Continetti in the amount of
$11,160.
The foregoing report was furnished to the Committee, and
approved by the directors of the Company: G. Royden Goodson,
III, Chairman; Dr. Richard F. Clark; Russell S. Evans, Jr.; and
John B. Morgan, II
Section 16(a) - Beneficial Ownership Reporting Compliance
Based on a review of the reports of changes in beneficial
ownership of the Company's common stock and written
representations made to the Company, the Company believes that its
officers and directors have filed on a timely basis all of the
reports which they were required to file under Section 16(a) of
the Securities Exchange Act of 1934 during the fiscal year ended
December 31, 2001.
-14-
FIVE YEAR STOCK PERFORMANCE
Management provides below a line graph, which compares the
Company's shareholder return with the return of the NASDAQ Bank
Index and the Russell 2000 Index.
This performance graph was created by comparing the
percentage change in stock prices for the Company and the indices
on a year to year basis, factoring in dividend payments, and
looking only at the closing price of the stock as of December 31
of each year surveyed. This graph may be affected by unusually
high or low prices at December 31, 1996 or by temporary swings in
stock price at December 31 of any given year. Accordingly, this
is not necessarily the best measure of the Company's performance.
The index reflects the total return on the stock that is
shown, including price appreciation, all stock splits and stock
dividends, and reinvestment of cash dividends at time of payment,
relative to the value of the stock at the beginning of the time
period. Thus a move from 100 to 150 on the index scale indicates
a 50% increase in the value of the investment. The NASDAQ Bank
Index contains all non-holding company banking institutions
traded on the NASDAQ exchange. In addition to traditional banks
this includes thrifts but does not include other non-regulated
finance companies. The Russell 2000 index is comprised of the
smallest 2000 companies in the Russell 3000 Index, which tracks
almost 99 percent of the stocks included in portfolios of
institutional investors.
Old Point Financial Corporation Five Year Performance
1996 1997 1998 1999 2000 2001
NASDAQ Bank Composite 100.00 165.94 149.08 140.55 164.73 185.36
Old Point Financial Corp 100.00 105.00 170.59 131.98 113.41 187.64
Russell 2000 Index 100.00 122.06 119.31 144.50 140.37 143.95
-15-
PROPOSAL 2
RATIFICATION OF SELECTION OF ACCOUNTANTS
On the recommendation of the Audit Committee, the Board of
Directors has appointed Eggleston Smith P.C., certified public
accountants, as the Company's independent auditors for 2002,
subject to ratification by stockholders at the Annual Meeting.
Eggleston Smith P.C. rendered audit services to the Company
during 2001. These services consisted primarily of the
examination and audit of the Company's financial statements, tax
reporting assistance, and other audit and accounting matters.
Representatives of Eggleston Smith P.C. are expected to be
present at the Annual Meeting and are expected to be available to
respond to your questions.
The Board of Directors recommends that the stockholders vote
FOR ratification of Eggleston Smith P.C., as the Company's
independent auditors for 2002.
2003 ANNUAL MEETING OF STOCKHOLDERS
In accordance with the bylaws of the Company as currently in
effect, the 2003 Annual Meeting of Stockholders will be held on
April 22, 2003.
If any stockholder intends to present a proposal to be
considered for inclusion in the Company's proxy materials in
connection with the 2003 Annual Meeting, the proposal must be in
proper form and must be received by the Company at its main
office in Hampton, Virginia, on or before November 28, 2002. In
addition, if a stockholder intends to present a proposal for
action at the 2003 Annual Meeting, the stockholder must provide
the Company with notice thereof on or before February 12, 2003,
by delivering such notice to the Company at its main office.
-16-
ANNUAL FINANCIAL DISCLOSURE STATEMENT
A copy of the Company's Annual Report on Form 10-K (including
exhibits) as filed with the Securities and Exchange Commission for
the year ended December 31, 2001, will be furnished without charge
to shareholders upon written request directed to:
Laurie D. Grabow
Senior Vice President/Finance
The Old Point National Bank of Phoebus
1 West Mellen Street
Hampton, Virginia 23663
(757) 728-1251
The Company's Annual Report on Form 10-K (including
exhibits) can also be reviewed on the Investors Relations link on
the Company's Internet web site at http://www.oldpoint.com
OTHER MATTERS
Management knows of no other business to be brought before the
Annual Meeting. Should any other business properly be presented for
action at the meeting, the shares represented by the enclosed proxy
shall be voted by the persons named therein in accordance with their
best judgment and in the best interests of the Company.
-17-
OLD POINT FINANCIAL CORPORATION
P.O. BOX 3392, HAMPTON, VIRGINIA 23663
PROXY CARD FOR
ANNUAL MEETING OF SHAREHOLDERS
APRIL 23, 2002
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The
undersigned hereby appoints William L. Wood and Hedley N. Mendez, III, MD
as Proxies, each with full power to appoint his substitute and hereby
authorizes them to represent and to vote, as designated below, all of the
shares of voting common stock, $5.00 par value, of Old Point Financial
Corporation held of record by the undersigned on March 15, 2002 at the
Annual Meeting of Shareholders, to be held on April 23, 2002, and at any
and all adjournments thereof.
This proxy will be voted in the manner directed by the undersigned. If no
direction is made, this proxy will be voted FOR Items 1 and 2.
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PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
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Please sign exactly as your names(s) appear(s) hereon. When shares are
held by joint tenants, both must sign.
When signing in a representative capacity, please provide full title.
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HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
------------------------- -------------------------
------------------------- -------------------------
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X PLEASE MARK VOTES
AS IN THIS EXAMPLE
----------------------------------- 1.Election of Directors. For All With- For All
OLD POINT FINANCIAL CORPORATION (1) Richard F. Clark, Nominees hold Except
----------------------------------- (2) Russell S. Evans, Jr.,
(3) G. Royden Goodson, III, _____ _____ _____
(4) Arthur D. Greene,
(5) Gerald E. Hansen, (6) Stephen D. Harris,
(7) John Cabot Ishon, (8) Eugene M. Jordan,
Mark box at right if you plan to (9) John B. Morgan, II, (10) Louis G. Morris,
attend the Annual Meeting. (11) H. Robert Schappert, (12) Robert F. Shuford
Mark box at right if an address INSTRUCTION: To withhold
change or comment has been noted on authority to vote for any
the reverse side of this card. nominee, mark the "For All
Except" box and strike a line
through the nominee's name in
CONTROL NUMBER: the list above.
RECORD DATE SHARES:
For Against Abstain
Please be sure to sign and date 2.Ratification of the
this Proxy. Date appointment of
Shareholder sign here Eggleston Smith, P.C., ___ ___ ___
Co-owner sign here Certified Public
Accountants, as
DETACH CARD independent auditors for 2002.
In their discretion, the
Proxies are authorized to vote
upon such other business as
may properly come before the
meeting and at any
adjournment(s) thereof.
DETACH CARD
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------------------------------------- ------------------------------------
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Proxy Statement/Prospectus Proxy Statement/Prospectus
and Proxy Card. and Proxy Card.
2. Call the toll-free number 2. Go to the Website
1-877-PRX-VOTE (1-877-779-8683). http://www.eproxyvote.com/opof
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