UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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 240.14a-12
OLD POINT FINANCIAL CORPORATION
_______________________________________________
(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)(4) 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:
<PAGE>
March 31, 2000
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 25, 2000 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,
ratification of independent certified public accountants, and
increasing the number of authorized shares of stock. 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 25, 2000. Whether you plan to
attend or not, please complete, sign, date and return the
enclosed proxy card as soon as possible in the postage-paid
envelope provided. 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
Enclosures
<PAGE>
OLD POINT FINANCIAL CORPORATION
1 West Mellen Street
Hampton, Virginia 23663
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 25, 2000
TO OUR STOCKHOLDERS:
The 2000 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 25, 2000, at 6:00 p.m. for the following purposes:
1. To elect 11 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
2000;
3. To vote upon a proposal to approve an amendment to the
Company's articles of incorporation to increase the number of
shares of Common Stock that it is authorized to issue from 6
million to 10 million; and
4. To transact such other business as may properly come before
the meeting.
Stockholders of record at the close of business on March 14,
2000, 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/ W. Rodney Rosser
W. Rodney Rosser
Senior Vice President & Secretary to the Board
March 31, 2000
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. If you attend the meeting, you
may, if you desire, revoke your proxy and vote in person.
<PAGE>
<PAGE>
OLD POINT FINANCIAL CORPORATION
1 West Mellen Street
Hampton, Virginia 23663
PROXY STATEMENT
2000 ANNUAL MEETING OF STOCKHOLDERS
To Be Held April 25, 2000
GENERAL
The enclosed proxy is solicited by the Board of Directors of
Old Point Financial Corporation (the "Company") for the 2000
Annual Meeting of Stockholders (the "Annual Meeting") of the
Company to be held Tuesday, April 25, 2000, at the time and place
and for the purposes set forth in the accompanying Notice of the
Annual Meeting. Stockholders may revoke proxies at any time
prior to their exercise by written notice to the Company, by
submitting a proxy bearing a later date, or by attending the
Annual Meeting and requesting to vote in person. The approximate
mailing date of this Proxy Statement and accompanying Proxy is
March 31, 2000.
Voting Rights and Solicitation
Only those stockholders of record at the close of business
on March 14, 2000, 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 the record date was 2,583,401. 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.
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 regular
compensation.
-1-
<PAGE>
Recent Developments
It is with deep regret that we report to you the death of
Gertrude S. Dixon who passed away on February 15, 2000. Mrs.
Dixon had served on the Board of Directors of The Old Point
National Bank of Phoebus since 1981 and on the Board of Old Point
Financial Corporation since its organization in 1984. She was
elected a director of Old Point Trust & Financial Services, N.A.
when it was formed in April of 1999. Mrs. Dixon was also a
member of the Executive Committee of the Company. She was an
active participant in the community and a strong supporter of
community banking for many years. She will be missed by all.
Principal Shareholders
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 Estate of Mrs. Gertrude S. Dixon 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 14, 2000 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 Estate of Mrs. Dixon has beneficial ownership of
192,284 shares or 7.4% of the Company common stock as of March
14, 2000, and the address of the Estate of Mrs. Dixon is P.O. Box
6270, Newport News, Virginia 23606. Co-executors of the Estate
of Mrs. Dixon are James R. Chisman and the Trust Company,
although Mr. Chisman holds sole voting power as to Company shares
held by the Estate. Mr. Chisman is also the beneficial owner of
34,754 shares or 1.4% of the Company common stock as of March 14,
2000, which, together with the shares held by the Estate of Mrs.
Dixon, results in Mr. Chisman having voting power over 227,038 or
8.8% of shares of the Company. Under the terms of Mrs. Dixon's
will, the shares held by the Estate of Mrs. Dixon will be
transferred to a charitable foundation of which Mr. Chisman will
be one of three directors without sole voting power. Finally,
the Trust Company holds as trustee of various trust accounts a
total of 394,664 shares or 15.3% of Company common stock. The
Trust Company possesses sole voting and/or investment power with
respect to 283,414 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. There
are no other persons known by the Company to be owners of more
than 5% of the Company's common stock.
As of March 14, 2000, the persons nominated as directors of
the Company, and the executive officers of the Company and its
subsidiaries, beneficially owned as a group 434,327 shares
(approximately 16.8%) of Company common stock outstanding
(including shares for which they hold presently exercisable stock
options).
-2-
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The eleven persons named below, all of whom currently serve
as directors of the Company, will be nominated to serve as
directors until the 2001 Annual Meeting, or until their
successors have been duly elected and have qualified.
<TABLE>
<CAPTION>
Amount and Nature of
Principal Beneficial Ownership
Director Occupation For As of March 14, 2000
Name and (Age) Since (1) Past Five Years (Percent of Class)(2)(3)
<S> <C> <C> <C> <C>
Dr. Richard F. Clark (67) 1981 Pathologist(retired) 63,533 (4)
Sentara Hampton General Hospital (2.5%)
Russell Smith Evans Jr. (57) 1993 Assistant Treasurer and 2,650 (4)
Corporate Fleet Manager *
Ferguson Enterprises
G. Royden Goodson, III (44) 1994 President 4,862 (4)
Warwick Plumbing & Heating Corp. *
Dr. Arthur D. Greene (55) 1994 Surgeon - Partner 3,914 (4)
Tidewater Orthopaedic Associates *
Stephen D. Harris (58) 1988 Attorney-at-Law - Partner 9,000 (4)
Geddy, Harris, Franck *
& Hickman, L.L.P. & Geddy
John Cabot Ishon (53) 1989 President 12,780 (4)
Hampton Stationery *
Eugene M. Jordan (76) 1964 Attorney-at-Law 28,000 (4)
(1.1%)
John B. Morgan, II (53) 1994 President 2,600 (4)
Morgan-Marrow Insurance *
Louis G. Morris (45) 2000 President & CEO 20,729 (4)
Old Point National Bank *
Dr. H. Robert Schappert (61) 1996 Veterinarian - Owner 89,740 (4)
Beechmont Veterinary Hospital (3.5%)
Robert F. Shuford (62) 1965 Chairman of the Board, 156,898 (4)(5)
President & CEO, (6.0%)
Old Point Financial Corporation
Chairman of the Board, President & CEO
Old Point National Bank
- ------------------------
*Represents less than 1.0% of the total outstanding shares.
</TABLE>
-3-
<PAGE>
(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. Harris, 400
shares, Mr. Ishon, 3,480 shares; Mr. Jordan, 14,000 shares; Mr.
Morgan, 2,400 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 1,000, Mr. Evans 1,000,
Mr. Goodson 1,000, Dr. Greene 1,000, Mr. Harris 1,000, Mr. Ishon
1,000, Mr. Jordan 1,000, Mr. Morgan 1,000, Mr. Morris 6,998, Dr.
Schappert 1,000, and Mr. Shuford 24,182.
(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 2,300 shares of
stock as of March 14, 2000. 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.
Board Committees and Attendance
During 1999, 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 or she served.
The Company's Board has standing Executive, Audit and
Compensation Committees.
-4-
<PAGE>
The Company's Executive Committee was comprised of Messrs.
Shuford, Jordan, Harris, Dr. Clark and Mrs. Dixon. It serves in
an advisory capacity, reviewing matters and making
recommendations to the Board of Directors. It met five times in
1999.
The Company's Compensation Committee is described below
under "Report on Executive Compensation."
The Company and Bank Audit Committee is comprised of Messrs.
Jordan, Ishon, Greene, Morgan, Schappert and Harris. The Company
and Trust Company Audit Committee is comprised of Messrs. Jordan,
Greene, Morgan, Schappert and Harris. The Audit Committees
review 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 to 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 1999, the Company and Bank Audit Committee held five
meetings on Bank matters, and the Company and Trust Company Audit
Committee met two times on trust matters.
The Board has no separate nominating committee. The
Executive Committee reviews any recommendations obtained and
gives their 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.
Directors' Compensation
Directors of the Bank and Trust Company receive $300 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. 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 Bank board
meetings, but do not receive any fees for committee meetings and
are not paid annual retainer fees. The Trust Company did not pay
fees for board attendance to directors who are also employees of
the Company or its subsidiaries who served as directors in 1999.
-5-
<PAGE>
Indebtedness 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
officers, directors, partners, trustees, executors or
beneficiaries, are customers of the Bank. All loans and
commitments to lend included in such transactions 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 officers who are not
executive officers and to employees 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 Mays & Valentine L.L.P. serves as legal
counsel to the Company. Cumming, Hatchett and Jordan, P.C. serves
as legal counsel to the Bank and Trust Company. Mr. Eugene M.
Jordan was a member of the firm in 1999. During 1999, the firm
received a retainer and fees totaling $55,358. Morgan Marrow
Insurance of which John B. Morgan, II is President, provided
insurance for which the Company paid $47,749 during 1999. Hampton
Stationery, of whom John Cabot Ishon is President, provided
office furniture and supplies for which the Company paid
$101,023. Geddy, Harris, Franck & Hickman L.L.P. 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.
-6-
<PAGE>
EXECUTIVE COMPENSATION
Cash Compensation
The following table presents a three-year summary of all
compensation paid or accrued by the Company and the Bank to the
Company's Chief Executive Officer and each executive officer
whose salary and bonus for 1999 exceeded $100,000. The table
also presents the number and percentage of shares of the
Company's Common Stock held by these executive officers, who are
all executive officers of the Company.
<TABLE>
SUMMARY COMPENSATION TABLE
Annual Compensation
<CAPTION>
<S> <C> <C> <C> <C> <C>
Amount and
Nature of
Beneficial
Ownership
as of March
14, 2000
Name and Principal All Othere (Percent of
Position Year Salary(1) Bonus(2) Compensation(3) Class)(4)(5)(6)
- ------------------ ---- --------- -------- --------------- ---------------
Robert F. Shuford 1999 $153,500 $27,000 $17,556 156,898
Chairman, President 1998 $151,200 $34,560 $17,765 (6.0%)
& CEO(Company) 1997 $148,500 $26,000 $16,092
Louis G. Morris 1999 $100,267 $18,048 $ 9,220 20,729
President & CEO (Bank) 1998 $ 90,247 $21,600 $ 9,051 *
1997 $ 83,000 $14,400 $ 7,636
Cary B. Epes 1999 $ 99,267 $17,868 $ 9,340 10,039
EVP/CCO (Bank) 1998 $ 89,167 $21,600 $ 9,440 *
1997 $ 82,000 $14,400 $ 7,708
Margaret P. Causby 1999 $ 97,947 $17,630 $ 9,004 10,440
EVP/CAO (Bank) 1998 $ 88,167 $21,600 $ 9,035 *
EVP 1997 $ 78,483 $14,400 $ 7,372
___________________
(1) Salary includes directors' fees as follows: Mr. Shuford -
1999, $3,900, 1998, $4,200, and 1997 $4,500.
</TABLE>
-7-
<PAGE>
(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 and Mrs. Causby is paid in
the year in which it is earned.
(3) Mr. Shuford has received other compensation as follows:
1999 1998 1997
------- ------- -------
Deferred Profit Sharing $ 4,532 $ 5,090 $ 4,342
Cash Profit Sharing 4,210 4,811 4,088
401(k) Matching Plan 4,488 4,410 4,320
Group Term Insurance 4,326 3,454 3,342
------- ------- -------
Total $17,556 $17,765 $16,092
Mr. Morris has received other compensation as follows:
1999 1998 1997
------- ------- -------
Deferred Profit Sharing $ 3,037 $ 3,122 $ 2,551
Cash Profit Sharing 2,821 2,951 2,356
401(k) Matching Plan 3,008 2,705 2,490
Group Term Insurance 354 273 239
------- ------- -------
Total $ 9,220 $ 9,051 $ 7,636
Mr. Epes has received other compensation as follows:
1999 1998 1997
------- ------- -------
Deferred Profit Sharing $ 3,007 $ 3,087 $ 2,520
Cash Profit Sharing 2,793 2,918 2,328
401(k) Matching Plan 2,978 2,675 2,460
Group Term Insurance 562 760 400
------- ------- -------
Total $ 9,340 $ 9,440 $ 7,708
Mrs. Causby has received other compensation as follows:
1999 1998 1997
------- ------- -------
Deferred Profit Sharing $ 2,967 $ 3,053 $ 2,408
Cash Profit Sharing 2,756 2,885 2,224
401(k) Matching Plan 2,938 2,645 2,350
Group Term Insurance 343 452 390
------- ------- -------
Total $ 9,004 $ 9,035 $ 7,372
(4) For purposes of this table, beneficial ownership has been
determined in accordance with the provisions of Rule 13d-3
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<PAGE>
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.
(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 24,182 shares,
Mr. Morris 6,998 shares, Mr. Epes 8,618 shares, Mrs. Causby
8,718 shares.
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last
Fiscal Year and December 31, 1999 Option Value
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
12/31/99(#) 12/31/99($)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized($)(1) Unexercisable Unexercisable(1)
--------------- ------------- ------------- ----------------
<S> <C> <C> <C> <C>
Robert F.Shuford 0 $ 0 24,182/5,112 $28,160/$0
Louis G. Morris 1,440 $ 9,583 6,998/2,612 $ 1,635/$0
Cary B. Epes 0 $ 0 8,618/2,612 $ 4,250/$0
Margaret P. Causby 0 $ 0 8,718/2,612 $ 3,730/$0
</TABLE>
- --------------------
(1) Market value of underlying securities at exercise or year-
end, minus the exercise or base price.
No Stock Options were granted during 1999.
------------------------------------------
-9-
<PAGE>
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 who have completed
one year of service. A participant's monthly retirement benefit
(if he or she has 25 years of Credited 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 service at his Normal Retirement Date, the participant's
monthly retirement benefit will be actuarially reduced by 1/25 for
each year of credited 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.
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 complete 1,000
hours of service for a plan year and are at least 21 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. 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 has one employee
stock purchase plan - the 1996 Employee Stock Purchase Plan (the
"1996 Plan"). The 1996 Plan provides eligible employees with a
simple and convenient method of investing in Company stock at a 5%
discount. The 1996 Plan provides the Company with additional
capital funds, and its aim is to increase employee interest and
productivity through ownership of Company common stock. Regular
employees may voluntarily participate in the 1996 Plan. They may
elect to contribute from 2% to 15% of their base pay to the 1996
Plan by payroll deduction for the purchase of Company common
stock. The 1996 Plan's fiscal year is the twelve month period
beginning July 1st and ending the next June 30th. The term of
the 1996 Plan is for five consecutive fiscal years ending on June
30th from its inception date of July 1st, 1996.
-10-
<PAGE>
In effect, the 1996 Plan grants eligible employees, who
voluntarily participate, an option to purchase Company common
stock at an exercise price equal to 95% of the lesser of (1) the
Fair Market Value of the common stock on the 1st day of the Plan
year (July 1st), or (2) the Fair Market Value of the common stock
on the last day of the Plan year (June 30th).
The 1996 Plan was designed to qualify as an Employee Stock
Purchase Plan under Section 423 of the Internal Revenue Code, as
amended (the "Code"). Under the Code, participants normally do
not realize any income at the date of grant, or the date of
exercise and purchase of shares under the 1996 Plan. Recognition
of income is normally postponed until disposition of the shares.
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 employees and directors 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.
While options covering all of the 84,534 shares under the
1989 Plan have been granted, options covering 64,500 shares have
been granted under the 1998 Plan under which 125,000 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.
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 one time in 1999.
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.
-11-
<PAGE>
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 1999.
The committee recommended to the Board a bonus be granted to
Mr. Shuford in the amount of $27,000, Mr. Morris, $18,048, Mr.
Epes, $17,868 and to Mrs. Causby, $17,630.
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.
John B. Morgan, II
Section 16(a) - Beneficial Ownership Reporting Compliance
Based on a review of the reports of changes in beneficial
ownership of Capital Stock and written representations made to the
Company, the Company believes that its officers and directors have
filed on a timely basis the report which is required to be filed
under Section 16(a) of the Securities Exchange Act of 1934 during
the fiscal year ended December 31, 1999.
-12-
<PAGE>
FIVE YEAR STOCK PERFORMANCE
Management provides on the next page a line graph which
compares the Company's shareholder return with the return of the
National Association of Securities Dealers Automated Quotation
National Market System ("NASDAQ") Composite Index, a market-
weighted average of all over-the-counter stocks traded on NASDAQ,
with the Russell 2000 Index, an index 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, and with the NASDAQ Bank Index, an index of non-holding
company banking institutions traded on NASDAQ.
The Russell 2000 Index has been added, as management believes it
provides a better Comparison of shareholder returns for Small Cap
Stocks. Old Point Financial Corporation common stock is a Small
Cap Stock. The NASDAQ Composite Index is heavily weighted to
technology stocks, many of which are Large Cap issues, in an
industry group that significantly out performed the general stock
market in 1999. Accordingly Management believes the Russell 2000
Index is a better comparison of shareholder return performance for
Small Cap Stocks than the NASDAQ Composite 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, 1994 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 NASDAQ Composite is a market value-
weighted average of all over-the-counter stocks quoted on their
listing service.
-13-
<PAGE>
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
NASDAQ BANK COMPOSITE 100.00 147.36 190.05 315.37 283.33 267.12
NASDAQ Composite 100.00 140.85 173.24 211.56 296.38 551.12
Old Point Financial Corp 100.00 103.00 115.70 119.27 194.84 116.68
Russell 2000 Index 100.00 127.36 148.28 180.98 176.92 214.27
</TABLE>
-14-
<PAGE>
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 2000,
subject to ratification by stockholders at the Annual Meeting.
Eggleston Smith P.C. rendered audit services to the Company
during 1999. 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 2000.
PROPOSAL 3
APPROVAL OF INCREASING THE NUMBER OF AUTHORIZED SHARES
Old Point Financial Corporation is currently authorized to
issue 6,000,000 shares of Common Stock. The Board of Directors
has unanimously approved a proposed amendment to the Old Point
Financial Corporation's Articles of Incorporation to increase the
number of authorized shares of Common Stock from 6,000,000 to
10,000,000.
It is the Company's intention to finance its operations
through, among other things, the issuance from time to time of
equity securities, to consider the acquisition or affiliation of
other community banks or financial service businesses, (possibly
using Company Common Stock as consideration in some instances)
and to consider the issuance of additional shares of common stock
through stock splits and stock dividends in appropriate
circumstances. Accordingly, the continued availability of shares
of Company Common Stock is necessary to provide the Company with
the flexibility to take advantage of business opportunities in
such situations.
The affirmative vote of more than two-thirds of all the
votes entitled to be cast by the holders of outstanding shares of
Company Common Stock at the annual meeting is required to approve
this amendment to the Articles of Incorporation of the Company.
The Board of Directors unanimously recommends that
shareholders vote "FOR" the amendment to increase the authorized
shares.
-15-
<PAGE>
2001 ANNUAL MEETING OF STOCKHOLDERS
In accordance with the By Laws of the Company as currently in
effect, the 2001 Annual Meeting of Stockholders will be held on
April 24, 2001.
The Board of Directors need not include an otherwise
appropriate shareholder proposal in its proxy statement or form of
proxy for that meeting unless the proposal is received by the
Company at its main office on or before December 1, 2000.
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, 1999, 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
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.
-16-
OLD POINT FINANCIAL CORPORATION
P.O. BOX 3392 HAMPTON, VIRGINIA 23663
PROXY CARD FOR
ANNUAL MEETING OF SHAREHOLDERS
APRIL 25, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Crosby C. Forest and
Charles H, Richardson as Proxies, each with full power to appoint
his substitute and hereby authorizes them to represent and to
vote, as designated below, all the shares of voting common stock,
$5.00 par value, of Old Point Financial Corporation held of
record by the undersigned on March 14, 2000 at the Annual Meeting
of Shareholders, to be held on April 25, 2000, and 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, 2 and 3.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
Please sign exactly as your name(s) appear(s) hereon.
When shares are held by joint tenants, both should
sign. When signing in a representative capacity,
please provide full title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- -----------------------------------------------------------
- -----------------------------------------------------------
- -----------------------------------------------------------
<PAGE>
X PLEASE MARK VOTES AS IN THIS EXAMPLE
- -------------------------------
OLD POINT FINANCIAL CORPORATION
- -------------------------------
_
Mark box at right if you plan to attend the Annual Meeting. |_|
Mark box at right if an address change or comment has been _
noted on the reverse side of this card. |_|
CONTROL NUMBER:
RECORD DATE SHARES:
Please be sure to sign and date this proxy. Date_______
_____________________ __________________
Shareholder sign here Co-owner sign here
DETACH CARD
For All With-
Nominee's hold Except
1. Election of Directors
(01)Richard F. Clark, (02)Russell S. Evans,Jr.,
(03)G. Royden Goodson, III, _ _ _
(04)Arthur D.Greene, (05)Stephen D. Harris, |_| |_| |_|
(06)John Cabot Ishon, (07)Eugene M. Jordan,
(08)John B. Morgan, II, (09)Louis G. Morris,
(10)H. Robert Schappert, (11)Robert F. Shuford
INSTRUCTION: To withhold authority to vote for any nominee,
mark the "For All Except" box and strike a line through the
nominee's name in the list above.
For Against Abstain
2. Ratification of the appointment of
Eggleston Smith, P.C., Certified _ _ _
Public Accountants, as independent |_| |_| |_|
auditors for 2000.
3. Approval to increase the number of shares of the _ _ _
Common Stock $5 par value, from 6,000,000 |_| |_| |_|
shares authorized to 10,000,000 shares authorized.
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.
