<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Community Bankshares Incorporated
- --------------------------------------------------------------------------------
(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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
COMMUNITY BANKSHARES INCORPORATED
April 14, 2000
Dear Shareholder:
You are invited to attend the Annual Meeting of Shareholders of
Community Bankshares Incorporated ("CBI") to be held at the Holiday Inn Select,
1021 Koger Center Boulevard, Richmond, Virginia on Tuesday, May 23, 2000 at 4:00
p.m.
At the Meeting, you will vote on the election of three directors for a
term of three years. Your Board of Directors unanimously supports these
individuals and recommends that you VOTE FOR them as directors.
Whether or not you plan to attend the meeting, please complete, sign
and date the enclosed proxy card and return it promptly in the enclosed
envelope. Your vote is important regardless of the number of shares that you
own. We look forward to seeing you at the Meeting.
/s/ Nathan S. Jones, 3rd
------------------------------------
Nathan S. Jones, 3rd
President and Chief Executive Officer
Community Bankshares Incorporated
200 North Sycamore Street
Petersburg, Virginia 23804
<PAGE>
COMMUNITY BANKSHARES INCORPORATED
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS To
be held on May 23, 2000 at 4:00 p.m.
The Annual Meeting of Shareholders of Community Bankshares Incorporated
("CBI") will be held on Tuesday, May 23, 2000 at 4:00 p.m., at the Holiday Inn
Select, 1021 Koger Center Boulevard, Richmond, Virginia for the following
purposes:
1. To elect three directors to serve for a three-year term or
until their successors are elected and qualify.
2. To transact such other business as may properly come before
the Meeting or any adjournments or postponements of the
Meeting.
The Board of Directors has fixed March 31, 2000 as the record date for
the Meeting and only holders of record of Common Stock at the close of business
on that date are entitled to receive notice of and to vote at the Meeting or any
adjournments or postponements of the Meeting.
By Order of the Board of Directors
/s/ Nathan S. Jones, 3rd
------------------------------
Nathan S. Jones, 3rd
President and Chief Executive Officer
April 14, 2000
PLEASE MARK, SIGN, DATE AND RETURN YOUR PROXY PROMPTLY,
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING.
<PAGE>
COMMUNITY BANKSHARES INCORPORATED
200 North Sycamore Street
Petersburg, Virginia 23803
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 23, 2000
This Proxy Statement is being furnished to shareholders of Community
Bankshares Incorporated ("CBI") in connection with the solicitation of proxies
by the Board of Directors of CBI for use at the Annual Meeting of Shareholders
(the "Annual Meeting") to be held at the Holiday Inn Select, 1021 Koger Center
Boulevard, Richmond, Virginia on Tuesday, May 23, 2000 at 4:00 p.m. or any
postponements or adjournments of the Annual Meeting.
The shareholder giving a proxy may revoke it at any time before it
is voted by (i) giving notification in person or by writing to CBI, (ii)
submitting to CBI a subsequently dated proxy or (iii) attending the Annual
Meeting and withdrawing the proxy before it is voted. All shares represented by
a proxy, when executed and not so revoked, will be voted, and, if the proxy
contains any specific instructions, it will be voted in accordance with such
instructions. If no contrary instructions are given, each proxy received will be
voted FOR the slate of director nominees.
The cost of the solicitation of proxies will be borne by CBI. In
addition to solicitation by use of the mail, officers and employees of CBI (who
will not be compensated in addition to their regular salaries) may solicit
proxies from shareholders personally or by telephone. CBI will reimburse banks,
brokerage firms and other custodians, nominees and fiduciaries for reasonable
expenses incurred by them in sending proxy materials to beneficial owners of
Common Stock of CBI. This Proxy Statement and the related proxy are being mailed
to shareholders of record as of March 31, 2000 (the "Record Date") on or about
April 14, 2000.
CBI has 20,000,000 authorized share of Common Stock, par value $3.00
per share. On the Record Date, there were 2,733,329 issued and outstanding
shares of Common Stock. Holders of Common Stock will vote as a single class at
the Annual Meeting. Each outstanding share of Common Stock will entitle its
holder to one vote on each matter presented at the Annual Meeting.
A shareholder may abstain or (only with respect to the election of
directors) withhold his or her vote (collectively, "Abstentions") with respect
to each item submitted for shareholder approval. Abstentions will be counted for
purposes of determining the existence of a quorum. Abstentions will not be
counted as voting in favor of the relevant item.
A broker who holds shares in "street name" has the authority to vote
on certain items when it has not received instructions from the beneficial
owner. Except for certain items for which brokers are prohibited from exercising
their discretion, a broker is entitled to vote on matters put to shareholders
without instructions from the beneficial owner. Where brokers do not have or do
not exercise such discretion, the inability or failure to vote is referred to as
a "broker nonvote." Under the circumstances where the broker is not permitted
to, or does not, exercise its discretion, assuming proper disclosure to CBI of
such inability to vote, broker nonvotes will not be counted for purposes of
determining the existence of a quorum and will not be counted as not voting in
favor of the particular matter.
<PAGE>
PROPOSAL I
ELECTION OF DIRECTORS
CBI's Board of Directors is divided into three classes. At the
Annual Meeting, three directors are expected to be elected to Class III to hold
office for a term of three years or until their respective successors are duly
elected and qualify. Unless authority to do so is withheld, shares represented
by properly executed proxies in the enclosed form will be voted for the election
of the three persons named below. All nominees have consented to be named and
have indicated their intent to serve if elected. If nominees become unavailable,
the Board of Directors will designate substitutes for whom the proxies in the
enclosed form are to be voted, or will reduce the size of the Board to the
number of remaining nominees for whom the proxies will be voted. At this time,
the Board knows of no reason why any of the nominees listed below may not be
able to serve as a director if elected. The proxy also confers discretionary
authority upon the persons named or their substitutes, with respect to any other
matter that may properly come before the Annual Meeting.
In the election of directors, those persons receiving the greatest
number of votes will be elected even if they do not receive a majority.
Class III (to serve until the 2003 Annual Meeting of Shareholders)
<TABLE>
<CAPTION>
Principal Occupation or Employment Director
Name During Last Five Years Since Age
- ---- ---------------------- ----- ---
<S> <C>
David E. Hudgins David E. Hudgins and Associates, Inc. - 1996 67
Insurance and Real Estate Appraiser;
Director of Commerce Bank of Virginia,
Richmond, Virginia
H.E. Richeson President and Director of County Bank 1997 58
of Chesterfield, Midlothian, Virginia
Alvin L. Sheffield Retired President, L.A. Sheffield Transfer 1984 68
and Storage, Incorporated, Petersburg,
Virginia; Chairman and Director of The
Community Bank, Petersburg, Virginia
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS
VOTE FOR THE NOMINEES SET FORTH ABOVE.
2
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Directors Continuing in Office
There are six directors whose present term of office will continue
after the Annual Meeting until 2001 or 2002, as indicated below, or until their
respective successors are duly elected and qualify. The remaining directors have
served continuously since the year that they joined the Board.
Class I (to serve until the 2001 Annual Meeting of Shareholders)
<TABLE>
<CAPTION>
Principal Occupation or Employment Director
Name During Last Five Years Since Age
- ---- ---------------------- ----- ---
<S> <C>
Nathan S. Jones, 3rd President and Chief Executive Officer, 1984 54
Community Bankshares Incorporated,
Petersburg and Chief Executive Officer
and Director of The Community Bank,
Petersburg, Virginia
Harold L. Vaughn President-Southern Hardware and Building 1984 69
Corporation, Incorporated, Petersburg,
Virginia; Director of The Community Bank,
Petersburg, Virginia
Jack W. Miller, Jr. Chairman and Chief Executive Officer, Roller 1997 68
Bearing Industries, Incorporated; Director of
County of Bank of Chesterfield, Midlothian,
Virginia
Class II (to serve until the 2002 Annual Meeting of Shareholders)
Principal Occupation or Employment Director
Name During Last Five Years Since Age
- ---- ---------------------- ----- ---
Sam T. Beale Lawyer- Beale, Balfour, Davidson & 1996 62
Etherington, P.C., Richmond, Virginia;
Chairman of the Board of Community
Bankshares Inc., Petersburg, Virginia;
Director of Commerce Bank of Virginia,
Richmond, Virginia
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Richard C. Huffman Retired President and Chief Executive 1996 60
Officer, Commerce Bank of Virginia,
Richmond, Virginia; Director of
Commerce Bank of Virginia
Vernon E. LaPrade, Jr. President, Model Realty, Inc., Midlothian, 1997 67
Virginia; Director of County Bank
Chesterfield, Midlothian, Virginia
</TABLE>
Board of Directors and Certain Committees
There were six meetings of the Board of Directors of CBI in 1999.
Each director attended more than 75% of the meetings of the Board of Directors
and meetings of committees of which the director was a member in 1999.
The Audit Committee consists of Messrs. Hudgins, Vaughn and Miller
and is responsible for reviewing the scope and results of CBI's annual audit,
reviewing the internal accounting and control systems, and reviewing and
recommending the auditors to be appointed by the Board of Directors. The
Auditing Committee met four times during the year ended December 31, 1999.
The Compensation Committee consists of Messrs. LaPrade, Hudgins and
Sheffield and is responsible for establishing policies with regard to the
compensation packages for the Chief Executive Officers of the respective banks.
The Compensation Committee met four times during the year ended December 31,
1999.
Director Compensation
Directors of CBI receive no compensation from CBI. However, all
directors of CBI are directors of either The Community Bank, Commerce Bank of
Virginia or County Bank of Chesterfield, each of which compensates its
directors.
The Community Bank. Each director of The Community Bank receives a
monthly retainer of $500 and a fee of $500 for each meeting attended. In 1999,
directors of The Community Bank received in the aggregate $119,500 as
compensation for their services as directors. In July 1993, pursuant to CBI's
Incentive Stock Option and Nonstatutory Stock Option Plan, each director of The
Community Bank, except Mr. Jones, was granted a nonstatutory option to purchase
10,000 shares of Common Stock. The options were granted at a price of $6.25 per
share and are exercisable at anytime before July 20, 2003, on which date such
options expire.
4
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Commerce Bank of Virginia. Each director of Commerce Bank of
Virginia receives a monthly retainer of $350 and a fee of $500 for each meeting
attended. In 1999, directors of Commerce Bank of Virginia received in the
aggregate $99,300 as compensation for their services as directors.
Commerce Bank of Virginia also maintains a Deferred Compensation
Plan for the benefit of its directors. Contributions to the plan for the years
ended December 31, 1999, 1998 and 1997 amounted to $13,431 per year. The
Deferred Compensation Plan provides each director with an annual benefit payment
upon attaining 70 years of age. In addition, benefit payments are available upon
early retirement, termination and death as defined by the plan.
County Bank of Chesterfield. Each director of County Bank of
Chesterfield receives a monthly retainer of $500 and a fee of $500 for each
monthly board meeting attended. In addition, in 1994, each director of County
Bank of Chesterfield was granted an option to purchase 8,000 shares of the
common stock of County Bank of Chesterfield at a price of $8.19 per share. In
1996, two additional directors who were not directors in 1994 each were granted
an option to purchase 2,000 shares of the common stock of County Bank of
Chesterfield at a price of $13.50 per share. In July, 1997, in connection with
CBI's acquisition of County Bank of Chesterfield, the options granted in 1994
were converted into options to purchase 8,843 shares of CBI Common Stock at a
price of $7.41 per share and the options granted in 1996 were converted into
options to purchase 2,211 shares of CBI Common Stock at a price of $12.21 per
share, respectively. These options expire on August 9, 2004 and September 10,
2006, respectively. In 1999, directors of County of Bank of Chesterfield
received in the aggregate $90,500 as compensation for their services as
directors.
Security Ownership of Certain Beneficial Owners and Management
The table below presents certain information as of March 31, 2000,
regarding beneficial ownership of shares of Common Stock by all directors and
nominees for director, by each of the executive officers named in the "Summary
Compensation Table", by all directors and executive officers as a group. No
shareholder owns more than five percent of the outstanding shares of CBI's
Common Stock. For the purposes of this table, beneficial ownership has been
determined in accordance with the provisions of Rule 13d-3 under the Securities
and Exchange Act of 1934, as amended (the "Exchange Act"), under which, in
general, a person is deemed to be a beneficial owner of a security if he has or
shares the power to vote or direct the voting of the security or the power to
dispose of to direct disposition of the security, or if he has the right to
acquire beneficial ownership of the security within 60 days.
5
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<TABLE>
<CAPTION>
Amount and Nature of
Name of Beneficial Owner Beneficial Ownership (1) Percent of Class (2)
- ------------------------ ------------------------ --------------------
<S> <C>
Directors and Executive Officers
Sam T. Beale 105,846 3.87
David E. Hudgins 31,679 1.16
Richard C. Huffman 57,069 2.09
Nathan S. Jones, 3rd 135,060 4.91
Vernon E. LaPrade, Jr. 42,009 1.54
Jack W. Miller, Jr. 17,077 0.62
H.E. Richeson 39,542 1.45
Alvin L. Sheffield 54,540 1.99
Harold L. Vaughn 28,118 1.03
All executive officers and 510,940 18.23
directors as a group (9 persons)
Other
Community Bankshares Incorporated 233,740 8.55
Employee Stock Ownership Plan
P.O. Box 2166
Petersburg, VA 23804
</TABLE>
- -------------------------------
(1) Includes presently exercisable options to purchase Common Stock granted in
1993 to The Community Bank's directors under CBI's Incentive Stock Option and
Nonstatutory Stock Option Plan and in 1994 and 1996 to County Bank of
Chesterfield's directors.
(2) Based on 2,733,329 shares of Common Stock issued and outstanding as of March
31, 2000 and assumes the exercise of options to purchase shares of Common Stock.
(3) Does not include unallocated shares held in trust pursuant to CBI's Employee
Stock Ownership Plan by Mr. Jones as trustee. Shares that have not been
allocated to participants are voted by the trustees.
Executive Compensation
The following table sets forth the annual compensation paid or
accrued by CBI and its subsidiaries to Nathan S. Jones, 3rd, President and Chief
Executive Officer of CBI and the Community Bank, to H.E. Richeson, President and
Chief Executive of County Bank of Chesterfield and to John M. Wiatt, Jr.,
President and Chief Executive Officer of Commerce Bank of Virginia, for the
three fiscal years ended December 31, 1999.
6
<PAGE>
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation
Long Term
Compen-
sation
Number of
Securities All Other
Name and Other Annual Underlying Compensation
Principal Position Year Salary(1) Bonus Compensation Options (3)(4)(5)
- ------------------ ---- --------- ----- ------------ ------- ---------
<S><C>
Nathan S. Jones, 3rd 1999 $174,051 $30,360 (2) -0- $14,525
President and Chief 1998 $168,006 $27,846 (2) -0- $18,370
Executive Officer, 1997 $162,000 $27,840 (2) -0- $21,250
CBI and The
Community Bank
H. E. Richeson 1999 $153,500 $35,000 (2) -0- $93,518
President and Chief 1998 $147,500 $20,000 (2) -0- $26,185
Executive Officer, 1997 $118,000 $15,000 (2) 10,000 $16,000
County Bank of
Chesterfield
John M. Wiatt, Jr. 1999 $93,500 $21,600 (2) -0- $30,436
President and Chief 1998 $82,500 $17,092 (2) -0- $30,276
Executive Officer, 1997 $76,500 $29,840 (2) -0- $31,280
Commerce Bank of
Virginia
</TABLE>
- ------------------------------
(1) Includes directors' fees.
(2) The value of perquisites and other personal benefits did not exceed the
lessor of $50,000 or ten percent of total annual salary and bonus.
(3) For Mr. Jones includes: (i) $13,350, $16,839 and $19,790 in contributions by
The Community Bank to its ESOP and 401-K Plan, and (ii) $1,175, $1,531 and
$1,460 paid by The Community Bank on Mr. Jones' behalf for term life insurance,
in each of 1999, 1998 and 1997, respectively.
(4) For Mr. Richeson includes: $78,165, $26,185 and $16,000 in contributions by
County Bank of Chesterfield for a Non-Qualified Deferred Compensation Plan (the
"Plan") in each of 1999, 1998 and 1997, respectively. 1999 represented the final
contribution to the Plan. Includes for 1999, contributions by County Bank of
Chesterfield to its ESOP- $6,586, to its 401-K Plan - $6,148 and $2,619 for term
life insurance.
(5) For Mr. Wiatt includes: (i) $1,817, $2,908 and $6,330 in contributions by
Commerce Bank of Virginia to its ESOP, and (ii) $3,884, $3,713 and $2,295 in
contributions by Commerce Bank of Virginia to its 401(k) plan for 1999, 1998 and
7
<PAGE>
1997, respectively. Also includes $12,278, $11,199 and $10,198 accrued in
connection with an executive supplemental retirement agreement for 1999,
1998 and 1997, respectively, and the value of premiums advanced by Commerce
Bank of Virginia under a split-dollar life insurance agreement in the amount
of $12,457 for 1999, 1998 and 1997.
Supplemental Retirement Agreement
Commerce Bank of Virginia and Mr. Wiatt are parties to a
supplemental retirement agreement dated December 23, 1994, which provides
benefits in the even of retirement or death prior to retirement. Under the
agreement, Mr. Wiatt will be entitled to an annual benefit of $34,831 for a
period of 10 years if he retires after attaining age 65. All benefits under the
agreement are conditioned upon Mr. Wiatt's continuous employment by Commerce
Bank of Virginia.
Deferred Compensation Plan
During 1995, Commerce Bank of Virginia adopted a Deferred
Compensation Plan for the benefit of certain of its officers, including Mr.
Wiatt. Contributions of $34,572, $34,572 and $29,234 were made to the plan
during the years ended December 31, 1999, 1998, 1997, respectively. This
Deferred Compensation Plan provides each covered officer with an annual benefit
payment upon retirement. In addition, benefit payments are available upon death
or early termination as defined by the plan.
Employment Contracts
CBI and Mr. Jones are parties to an employment contract for a term
beginning July 1, 1995 and ending June 30, 1998, with automatic renewals at the
ending date for successive terms of one year, which provides for his employment
as President and Chief Executive Officer, Under the contract Mr. Jones is
entitled to annual base compensation of $112,500. Any increases in base
compensation are at the discretion of the Board of Directors. The contract will
renew for successive terms of one year each if it is not expressly terminated by
Mr. Jones or CBI. If during the term of the contract, CBI terminates Mr. Jones'
employment without cause, CBI must continue Mr. Jones' salary and benefits for
six months. The contract provides for increased severance pay if Mr. Jones'
employment terminates within three years after a change of control of CBI. In
that case, Mr. Jones is entitled to a payment equal to 2.99 times his cash
compensation for the twelve months that precede the termination of his
employment and a continuation of fringe benefits. However, the payments to Mr.
Jones under the contract following a change of control will be reduced, if
necessary so that no such payments would constitute an "excess parachute
payment" under Section 280G of the Internal Revenue Code. As of January 1, 2000,
the cash amount payable to Mr. Jones if his employment is terminated after a
change of control would be $575,309.00
CBI and Mr. Richeson are parties to an employment contract for a
term beginning June 1, 1994 and ending June 1, 1998, with automatic renewals at
the ending date for successive terms of one year, which provides for his
employment as President and Chief Executive Officer of County Bank of
Chesterfield. Under the contract, Mr. Richeson is entitled to annual base
compensation of $92,500. Any increases in base compensation are at the
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<PAGE>
discretion of the Board of Directors of County Bank of Chesterfield. The
contract will continue to renew for successive terms of one year each if it is
not expressly terminated by Mr. Richeson or County Bank of Chesterfield. If,
during the term of the contract, County Bank of Chesterfield terminates Mr.
Richeson's employment without cause, it must continue Mr. Richeson's salary and
benefits for six months. The contract provides for increased severance pay if
Mr. Richeson resigns for good reason (as defined in his agreement) or Mr.
Richeson's employment terminates within one year after a change of control of
CBI. In such case, Mr. Richeson is entitled to a payment equal to 2.99 times his
cash compensation for the twelve months that precede the termination of his
employment and a continuation of fringe benefits for three years. Mr. Richeson's
employment contract also provides for deferred compensation of $5,000 per month
for a period of five years, beginning at age 65. As of January 1, 2000, the cash
amount payable to Mr. Richeson if his employment is terminated after a change of
control would be $527,735.00.
CBI and Mr. Wiatt are parties to an employment contract for a term
beginning January 1, 1995 and ending December 31, 1995, with automatic renewals
at the ending date for successive terms of one year. Under the contract, Mr.
Wiatt is entitled to annual base compensation of $76,995. Any increases in base
compensation are at the discretion of the Board of Directors of Commerce Bank of
Virginia. The contract will continue to renew for successive terms of one year
each if it is not expressly terminated by Mr. Wiatt or Commerce Bank of
Virginia. If, during the term of the contract, Commerce Bank of Virginia
terminates Mr. Wiatt's employment without cause, it must continue Mr. Wiatt's
salary and benefits for three months. The contract provides for increased
severance pay if Mr. Wiatt's employment terminates within one year after a
change of control of CBI. In that case, Mr. Wiatt is entitled to a payment equal
to his cash compensation for the twelve months that precede the termination of
his employment and a continuation of fringe benefits. As of January 1, 2000, the
cash amount payable to Mr. Wiatt if his employment is terminated after a change
of control would be $109,100.
Option Exercises and Holdings
All options held by the named executive officers at December 31,
1999 were exercisable. The following tables set forth information with respect
to exercised and unexercised options held by such officers as of the end of the
fiscal year.
<TABLE>
<CAPTION>
Fiscal Year End Option Values
Number of Securities Underlying Value of Unexercised
Unexercised Options on In-The-Money Options on
December 31, 1999 December 31, 1999 (1)
----------------- ---------------------
Shares
Acquired on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C>
Nathan S. Jones, 3rd 1,000 $15,750 19,000 -0- $299,250 -0-
H.E. Richeson -0- -0- 30,000 -0- $414,300 -0-
</TABLE>
- ----------------------------
(1) The value of unexercised in-the-money options at fiscal year end was
calculated by determining the difference between the market value per share of
Common Stock at December 31, 1999 ($22.00) and the per share exercise price of
the options.
9
<PAGE>
Interest of Management in Certain Transactions
Certain directors and officers and their associates were customers
of and had transactions with CBI and its subsidiaries during 1999 and up to the
present time. All loans and commitments to loan by CBI and its subsidiaries to
directors and officers were made in the ordinary course of business and on
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 the normal risk of collectibility or present other
unfavorable features. CBI expects to have, in the future, similar banking
transactions with directors and officers. The aggregate balance of loans
outstanding to directors and officers of CBI and its subsidiaries and their
associates was 11.2 million (33% of Shareholders' Equity) on December 31, 1999.
In addition, the real property at the location of Commerce Bank of
Virginia's Hanover County branch is owned by The Atlee Station Co., of which Sam
T. Beale, a director of CBI, is the principal shareholder. This lease has a term
of ten years and expires on December 31, 2005. The lease provides for rent in
the amount of $3,400 per month beginning January 1, 2000, with an annual
increase of three percent through the end of the term.
Section 16 (a) Beneficial Ownership Reporting Compliance
Under Section 16(a) of the Exchange Act, directors and executive
officers of CBI are required to file reports with the Securities and Exchange
Commission and CBI of their beneficial ownership and changes in ownership of
Common Stock.
Based on a review of the forms that were filed and representations
of the directors and executive officers, CBI believes that all required forms
were timely filed for the year ended December 31, 1999.
RELATIONSHIP WITH INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Mitchell, Wiggins and Company LLP has been CBI's independent
certified public accountants since 1984. CBI's consolidated financial statements
for the year ended December 31, 1999 were examined by Mitchell, Wiggins and
Company LLP.
CBI anticipates that Mitchell, Wiggins and Company LLP will be
selected as CBI's auditors for fiscal year 2000. Representatives of Mitchell,
Wiggins and Company LLP are expected to be present at the Annual Meeting and
will be available to respond to appropriate questions.
SHAREHOLDER NOMINATIONS AND PROPOSALS
The Bylaws of CBI permit any shareholder entitled to vote to submit
nominations for directors and proposals for business at annual meetings. Such
nominations and proposals must be made in writing and must be mailed or
delivered to the Secretary of CBI not less than 60 days no more than 90 days
prior to the annual meeting of shareholders. A written notice of nomination must
10
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include (a) the nominee's name, age, business address and residence address, (b)
the nominee's principal occupation and (c) the number of shares of CBI that the
nominee owns. A written notice of nomination must also include the name and
address of the nominating shareholder and the number of shares of CBI that the
nominating shareholder owns. Nominations not made in accordance with the above
procedure may, in the sole discretion of the chairman of the meeting, be
disregarded.
A written notice of proposal for business must include (a) a brief
description of the business desired to be brought at the meeting and the reasons
for conducting such business at the meeting, (b) the name and address of the
proposing shareholder, (c) the number of shares of CBI that the proposing
shareholder owns, and (d) any material interest of the shareholder in the
proposal. Proposals not made in accordance with the above procedure may, in the
sole discretion of the chairman of the meeting, be disregarded.
Shareholders having director nominations or other proposals which
they desire to present at next year's annual meeting should, if they desire that
such proposals be included in the Board of Director's proxy statement relating
to such meeting, submit such proposals in time to be received by CBI at its
principal executive office in Petersburg, Virginia not later than January 7,
2001. All such submissions must comply with the requirements of Rule 14(a)-8 of
the Securities and Exchange Commission under the Exchange Act, and the Board of
Directors directs the attention of interested shareholders to that Rule.
ANNUAL REPORT AND FINANCIAL STATEMENTS
A copy of CBI's Annual Report to Shareholders for the year ended
December 31, 1999 accompanies this Proxy Statement. The Annual Report includes
consolidated financial statements as of and for the three years ended December
31, 1999, 1998 and 1997, together with related notes, and the report of
Mitchell, Wiggins and Company LLP, independent certified public accountant for
such years. Additional copies may be obtained by written request to the
Secretary of CBI at the address indicated below. Such Annual Report is not a
part of the proxy solicitation materials.
UPON RECEIPT OF A WRITTEN REQUEST OF ANY PERSON, WHO, ON THE RECORD
DATE, WAS RECORD OWNER OF COMMON STOCK OR WHO REPRESENTS IN GOOD FAITH THAT HE
OR SHE WAS ON SUCH DATE THE BENEFICIAL OWNER OF SUCH STOCK ENTITLED TO VOTE AT
THE ANNUAL MEETING OF SHAREHOLDERS, CBI WILL FURNISH TO SUCH PERSON, WITHOUT
CHARGE, A COPY OF ITS ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1999 AND THE EXHIBITS REQUIRED TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER THE EXCHANGE ACT. ANY SUCH REQUEST SHOULD BE MADE IN
WRITING TO, NATHAN S. JONES, 3rd, PRESIDENT, COMMUNITY BANKSHARES INCORPORATED,
200 NORTH SYCAMORE STREET, PETERSBURG, VIRGINIA 23803. THE FORM 10-K IS NOT A
PART OF THE PROXY SOLICITATION MATERIALS.
OTHER MATTERS
At the date of this Proxy Statement, the Board of Directors knows of
no matter to come before the meeting other than those stated in the notice of
the meeting. As to other matters, if any, that may properly come before the
meeting, it is intended that proxies in the accompanying form will be voted in
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accordance with the best judgment of the person or persons named in the proxy.
We hope that you will be able to attend this meeting. If you cannot
be present, please execute the enclosed proxy and return it in the accompanying
envelope (no postage required) as promptly as possible.
By Order of the Board of Directors
/s/ Nathan S. Jones, 3rd
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Nathan S. Jones, 3rd
President and Chief Executive Officer
April 14, 2000
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Community Bankshares Incorporated
Proxy Solicited on Behalf of the Board of Directors
The undersigned appoints Sam T. Beale, Richard C. Huffman and Jack
W. Miller jointly and severally, proxies, with full power to act alone, and with
full power of substitution, to represent the undersigned and to vote, as
designated below and upon all other matters that may properly be brought before
the Annual Meeting of Shareholders of Community Bankshares Incorporated ("CBI"),
all shares of Common Stock which the undersigned would be entitled to vote at
such meeting to be held at the Holiday Inn Select, 1021 Koger Center Boulevard,
Richmond, Virginia, on Tuesday, May 23, 2000 at 4:00 p.m., local time, or any
adjournment, for the following purposes:
1. To elect as directors the three nominees listed below.
[ ] FOR nominees listed below [ ] WITHHOLD AUTHORITY to
(except as written on the line below) vote for all nominees
listed below
David E. Hudgins
H. E. Richeson
Alvin L. Sheffield
(INSTRUCTION: To withhold authority to vote for any individual nominee listed
above, write that nominee's name on the space provided below.)
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2. In their discretion, the proxies are authorized to vote upon any
other business that may properly come before the meeting or any adjournment of
the meeting.
THE PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED IN THIS
PROXY BY THE SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR
ALL NOMINEES LISTED ABOVE.
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Signature
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Signature
Date:
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(If signing as an Attorney,
Administrator, Executor or
Trustee, please add your title.)
PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY
