Chesapeake Financial Shares : 2021 Proxy Statement

Chesapeake Financial Shares, Inc.

_________________________________________________________

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

_________________________________________________________

To Our Shareholders:

The Annual Meeting of Shareholders of Chesapeake Financial Shares, Inc. (the "Company") will be held on Friday, April 1, 2022, at 4:00 P.M. Eastern Time at the Indian Creek Yacht and Country Club, 362 Club Drive, Kilmarnock, Virginia, for the following purposes:

1. To elect ten (10) directors to serve for the ensuing year; and
2. To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.

Shareholders of record at the close of business on February 28, 2022, will be entitled to notice of and to vote at the Annual Meeting or any adjournment or postponement thereof.

By Order of the Board of Directors

Rebecca A. Foster

Secretary

March 4, 2022

Even if you plan to attend the Annual Meeting, please sign, date, and return the enclosed proxy in the postage- paid envelope provided. Or if you wish, you may vote your shares electronically via the Internet or phone. Please see your proxy card for instructions. If you attend the Annual Meeting you may withdraw your proxy and vote your own shares in person at the meeting.

This proxy statement and our 2021 annual report to shareholders are available for viewing, printing, and downloading at https://www.cstproxy.com/chesapeakefinancialshares/2022. To view these materials, please follow the instructions on the website. On this website, you can also elect to receive future distributions of our proxy statements and annual reports to shareholders by electronic delivery.

Chesapeake Financial Shares, Inc.

97 North Main Street

Post Office Box 1419

Kilmarnock, Virginia 22482

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS

APRIL 1, 2022

GENERAL

The enclosed proxy is solicited by the Board of Directors of Chesapeake Financial Shares, Inc. (the "Company") for the Annual Meeting of Shareholders of the Company to be held on Friday, April 1, 2022, at 4:00 P.M. Eastern Time at the Indian Creek Yacht and Country Club, 362 Club Drive, Kilmarnock, Virginia, and for the purposes set forth in the accompanying Notice of Annual Meeting of Shareholders. The approximate mailing date of this Proxy Statement and accompanying proxy is March 4, 2022.

Revocation and Voting of Proxies

Execution of a proxy will not affect a shareholder's right to attend the Annual Meeting and to vote in person. Any shareholder who has executed and returned a proxy may revoke it by attending the Annual Meeting and requesting to vote in person. A shareholder may also revoke his or her proxy at any time before it is exercised by filing a written notice with the Company or by submitting a proxy bearing a later date. Proxies will extend to, and will be voted at, any adjourned or postponed session of the Annual Meeting.

Voting Rights of Shareholders

Only shareholders of record at the close of business on February 28, 2022, the record date, are entitled to notice of and to vote at the Annual Meeting or any adjournment or postponement thereof. As of the close of business on February 28, 2022, 4,722,620 shares of the Company's common stock, par value $5.00 per share, were outstanding and entitled to vote at the Annual Meeting. The Company has no other class of stock outstanding. A majority of the votes entitled to be cast, represented in person or by proxy, will constitute a quorum for the transaction of business. Shares for which the holder has elected to abstain or to withhold the proxies' authority to vote (including broker non-votes) on a matter will count toward a quorum, but will not be included in determining the number of votes cast with respect to such matter.

Each share of the Company's common stock entitles the record holder thereof to one vote upon each matter to be voted upon at the Annual Meeting.

ELECTION OF DIRECTORS

The current Bylaws of the Company provide that the Board shall consist of not less than five nor more than 13 directors, with the exact number within such limits to be fixed or changed from time to time by the shareholders or by the Board of Directors. The Board is nominating 10 persons as directors of the Company for 2022. The persons named below will be nominated for election to serve until the next annual meeting and until their successors have been duly elected and have qualified.

It is the intention of the persons named in the proxy to vote for the election of the 10 nominees named below. The election of each nominee requires the affirmative vote of the holders of a plurality of the shares of common stock cast in the election of directors. If for any reason any of the persons named below should become unavailable to serve, then the proxies will be voted for such substitute nominees as the Board of Directors may designate. Management has no reason to believe any of the nominees will be unavailable.

1

			Number of Shares
	Director	Principal Occupation	Beneficially Owned as
Nominee (Age)	Since	For the Last Five Years	of February 28, 2022 (1)
R. Blaine Altaffer (58)	2018	President and Chief Executive	3,424*
		Officer ("CEO") of Green Top
		Sporting Goods,
		Ashland, Virginia
Thomas E. Kellum (51)	2006	President of	11,854*
		W. Ellery Kellum, Inc.,
		seafood processor,
		Weems, Virginia
Craig J. Kelly (76)	2013	Managing Director of	14,515*
		Creekside Consultants,
		Kilmarnock, Virginia
Douglas D. Monroe, Jr. (88)	1982	Vice Chairman of the Board	1,144,541 (24.2%)	(2)
		of the Company; Chairman
		Emeritus of Chesapeake Bank (the
		"Bank") since 2001
Susan P. Quinn (63)	2021	President and CEO of circle S	220*
		studio, consulting, branding and
		digital agency,
		Richmond, Virginia;
		President and CEO of worQ
		Coach since July 2020,
		Richmond, Virginia
Dee Ann Remo (58)	2021	CEO of Heritage Wealth	440*
		Advisors, LLC,
		Richmond, Virginia
William F. Shumadine, Jr. (77)	1997	Retired, Former President of	51,957 (1.1%)
		Central Fidelity Bank,
		Richmond, Virginia
Robert J. Singley (71)	2004	President of	21,290 *
		RJS & Associates, Inc.,
		commercial real estate brokerage,
		Williamsburg, Virginia
Jeffrey M. Szyperski (60)	1999	Chairman of the Board of	196,467 (4.2%)	(3) (4)
		Directors, CEO
		& President of the Company and
		of the Bank

2

			Number of Shares
	Director	Principal Occupation	Beneficially Owned as
Nominee (Age)	Since	For the Last Five Years	of February 28, 2022 (1)
Thomas G. Tingle (64)	2007	Architect,	35,061*
		President of GuernseyTingle,
		Williamsburg, Virginia

• Represents less than 1.0% of the total outstanding shares of common stock.

1. For purposes of this table, a person is deemed to be the beneficial owner of shares of the Company's common stock if he or she has or shares the power to vote or to direct the voting of the security or the power to dispose of or to direct the disposition of the security, or if he has the right to acquire beneficial ownership of the security within 60 days.
2. Includes 461,039 shares held by Mr. Monroe as trustee of several trusts.
3. Includes 3,600 shares of common stock that are restricted stock holdings. The shares are subject to a vesting schedule, forfeiture risk and other restrictions. These shares can be voted at the Annual Meeting.
4. Includes: (i) 79,783 shares which are held by Mr. Szyperski's spouse; (ii) 10,368 shares that may be acquired pursuant to presently exercisable stock options; and (iii) 22,638 shares held in trust for his children, nieces, and nephews for which he serves as trustee.

The Employee Stock Ownership Plan adopted by the Company holds 305,727 shares of common stock for the benefit of the employees participating in the plan, of which all are allocated to participants in the plan and will be voted in accordance with their directions. The trustees have neither voting rights nor any investment or dispositive power with respect to the shares allocated under the plan, other than as directed by plan participants.

INDEBTEDNESS AND CERTAIN TRANSACTIONS

In calendar year 2021 and up to the present time, there were transactions between the Bank and certain officers and directors of the Company and the Bank and their known associates, all consisting of extensions of credit by the Bank in the ordinary course of its business. Each transaction was made on substantially the same terms, including interest rates, collateral, and repayment terms, as those prevailing at the time for comparable transactions with the general public. In the opinion of management, none of the transactions involved more than the normal risk of collectability or presents other unfavorable features. Thus, the Bank has had, and the Bank expects to have in the future, banking transactions in the ordinary course of its business with the officers and directors of the Company and the Bank and their associates on the same terms, including interest rate, collateral, and repayment terms on loans, as those prevailing at the same time for comparable transactions with others.

2023 ANNUAL MEETING OF SHAREHOLDERS

It is contemplated the 2023 Annual Meeting of Shareholders will be held on or about Friday, April 7, 2023. In order for any appropriate shareholder proposal to be included in the proxy materials of the Company for the 2023 Annual Meeting of Shareholders, it must be received by the Secretary at the Company's principal place of business on or before January 7, 2023.

OTHER MATTERS

As of the date of this Proxy Statement, the management of the Company has no knowledge of any matters to be presented for consideration at the Annual Meeting other than those referred to above. If any other matters properly come before the Annual Meeting, the persons named in the accompanying proxy intend to vote such proxy, to the extent entitled, in accordance with the recommendation of the Board of Directors.

By Order of the Board of Directors

Rebecca A. Foster

Secretary

3