<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
COMMUNITY BANCSHARES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[LOGO]
COMMUNITY BANCSHARES, INC.
To the Shareholders of
Community Bancshares, Inc.:
In connection with a Special Meeting of Shareholders of Community
Bancshares, Inc. (the "Company") to be held at 9:00 A.M., local time, on
Thursday, September 10, 1998, we enclose a Notice of Meeting and Proxy Statement
containing information concerning those matters which are to be considered at
the meeting.
You are cordially invited to attend the Special Meeting in person. We
will appreciate your signing and returning the form of proxy in the enclosed
postage-prepaid envelope so that your shares can be voted in the event you are
unable to attend the meeting. Your proxy will, of course, be returned to you if
you are present at the meeting and so request.
We look forward to seeing you on September 10th.
Sincerely yours,
/s/ Kennon R. Patterson, Sr.
Kennon R. Patterson, Sr.
Chairman and President
PLEASE FILL IN, DATE, SIGN AND MAIL PROMPTLY THE ACCOMPANYING PROXY IN THE
RETURN ENVELOPE FURNISHED FOR THAT PURPOSE, WHETHER OR NOT YOU PLAN TO ATTEND
THE MEETING.
<PAGE> 3
COMMUNITY BANCSHARES, INC.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
----------------------------
A Special Meeting of the shareholders of Community Bancshares, Inc.
(the "Company"), will be held at the headquarters of the Company at Highway 231
South, Blountsville, Alabama, on Thursday, September 10, 1998 at 9:00 A.M.,
local time, for the following purpose:
To amend Article IV of the Certificate of Incorporation of the
Company increasing the number of shares of authorized Common Stock of
the Company, from 5,000,000 shares, with a par value of $.10 per share,
to 20,000,000 shares, with a par value of $.10 per share, as more fully
described in the accompanying Proxy Statement.
The enclosed Proxy Statement explains the proposal. We urge you to read
these materials carefully.
You are cordially invited to attend the meeting. WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING IN PERSON, YOU ARE REQUESTED TO COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. If you
need assistance in completing your proxy, please call the Company at telephone
number (205) 429-1000.
THE CORPORATION'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
APPROVAL OF THE PROPOSAL PRESENTED.
By Order of the Board of Directors
/s/ Bishop K. Walker, Jr.
Secretary
Blountsville, Alabama
August 28, 1998
<PAGE> 4
DEFINITIVE PROXY FILING
COMMUNITY BANCSHARES, INC.
PROXY STATEMENT FOR SPECIAL MEETING
OF SHAREHOLDERS TO BE HELD SEPTEMBER 10, 1998
-------------------------------------
INTRODUCTION
This Proxy Statement is furnished to shareholders of Community
Bancshares, Inc., a Delaware corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company for use at a
Special Meeting of Shareholders to be held September 10, 1998 at 9:00 a.m. local
time, and at any adjournment thereof (the "Meeting"), for the purpose of
amending Article IV of the Certificate of Incorporation of the Company to
increase the number of shares of authorized common stock of the Company, from
5,000,000 shares, with a par value of $.10 per share, to 20,000,000 shares, with
a par value of $.10 per share.
The executive offices of the Company are located at Highway 231 South,
P.O. Box 1000, Blountsville, Alabama 35031. This Proxy Statement was mailed to
shareholders of the Company on or about August 20, 1998.
SHAREHOLDERS ENTITLED TO VOTE
Each holder of record of the Company's current $.10 par value common
stock (herein sometimes referred to as "Shares") as of the close of business on
August 10, 1998, (the "Record Date") will be entitled to vote at the Meeting.
Each shareholder will be entitled to one vote on each proposal for each Company
Share held as of the Record Date. At the close of business on the Record Date,
there were 4,142,924 Shares issued and outstanding, and these were held by 1304
Shareholders of record. Notwithstanding the Record Date specified above, the
Company's stock transfer books will not be closed and Shares may be transferred
subsequent to the Record Date, although all votes must be cast in the names of
shareholders of record as of the Record Date.
VOTES REQUIRED
The affirmative vote of a majority of the outstanding Shares is
required for approval of the proposed Amendment to the Certificate of
Incorporation.
PROXIES
If the enclosed form of proxy is executed and returned, it may
nevertheless be revoked at any time before it has been exercised; but if it is
not revoked, the Shares represented thereby will be voted by the persons
designated in such proxy. Shares represented by the proxies received will be
voted in favor of amending Article IV of the Certificate of Incorporation of the
Company to increase the number of shares of authorized Common Stock of the
Company, from 5,000,000 shares, with a par value of $.10 per share, to
20,000,000 shares, with a par value of $.10 per share.
<PAGE> 5
PROPOSAL
AMENDMENT TO THE CERTIFICATE
OF INCORPORATION TO INCREASE
AUTHORIZED COMMON STOCK
The Board of Directors of the Company has adopted a resolution recommending
that paragraph 4.01 of Article IV of the Certificate of Incorporation of the
Company be amended to increase the authorized number of shares of common stock
from 5,000,000 shares, par value $.10 per share, to 20,000,000 shares, par value
$.10 per share. Under the Certificate of Incorporation, the holders of the
Common Stock are not entitled to preemptive rights.
The affirmative vote of the majority of the outstanding shares of Common
Stock is required for the adoption of the proposed amendment. If the proposed
amendment is adopted , the additional authorized shares may be issued by the
Board of Directors without any further action or approval by the stockholders of
the Company.
The Company may issue the additional authorized shares of Common Stock in
connection with stock dividends or splits, employee benefit plans, or the sale
of such shares to raise additional capital for the Company or issue shares of
stock to finance acquisitions. The Company has no current plans in that regard.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSED AMENDMENT TO
THE CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED COMMON STOCK OF
THE COMPANY.
<PAGE> 6
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of January 31, 1998, certain information
with respect to all those known by the Company to be beneficial owners of more
than 5% of the Company's outstanding common stock, all Company directors, all
nominees for directors, and all directors, nominees for directors and officers
of the Company as a group.
<TABLE>
<CAPTION>
Number of
Shares of
Common Stock Percent of
Beneficially Outstanding
Name and Address Owned Common Stock
---------------- ----- ------------
<S> <C> <C>
Bryan A. Corr 151,586(1) 3.6
Oneonta, AL
Glynn Debter 6,936 0.1
Horton, AL
Edward Ferguson 8,952 0.2
Blountsville, AL
Denny Kelly 56,729 (2)(3) 1.3
Blountsville, AL
John J. Lewis, Jr. 9,044 0.2
Blountsville, AL
Stacey W. Mann 23,845 (2)(4) 0.5
Oneonta, AL
Loy McGruder 25,283 (2)(5) 0.60
Huntsville, AL
Hodge Patterson, III 49,635 (2)(6) 1.1
Hartselle, AL
Kennon R. Patterson, Sr. 442,381 (2)(7) 10.6
BLountsville, AL
Kennon R. (Chip) Patterson, Jr. 34,289 (2)(8) 0.8
Blountsville, AL
Merritt Robbins 142,000 3.4
New Hope, AL
Robert O. Summerford 70,200 (9) 1.6
Falkville, AL
Henry Sims 2,100 0.01
Pulaski, TN
</TABLE>
<PAGE> 7
<TABLE>
<S> <C> <C>
Bishop K. Walker, Jr. 247,889 (2)(10) 5.9
Union Grove, AL
R.Wayne Washam 10,402 0.2
Arab, AL
First National Bank of Commerce 498,222 (11) 12.0
as Trustee of the Community
Bancshares, Inc. Employee
Stock Ownership Plan ("ESOP")
All Company directors 1,281,271 30.9
and officers as
a group
</TABLE>
- -------------------------
(1) Includes 120,000 shares held by Oneonta Telephone Co. Inc., Mr. Corr
is President and a controlling shareholder.
(2) Includes 5,323 shares as a fractional portion of shares held by
Community Investments, a partnership composed of ten individuals, of
which the director is a partner
(3) Includes 11,736 shares allocated to Mr. Kelly's ESOP account through
December 31, 1996.
(4) Includes 10,276 shares allocated to Mr. Mann's ESOP account through
December 31, 1996.
(5) Includes 6,910 shares allocated to Mr. McGruder's ESOP account through
December 31, 1996.
(6) Includes 8,308 shares allocated to Mr. Patterson's ESOP account through
December 31, 1996.
(7) Includes 30,344 shares allocated to Mr. Patterson's ESOP account
through December 31, 1996.
(8) Includes 4,046 shares allocated to Mr. Patterson's ESOP account through
December 31, 1996.
(9) Includes 42,200 shares held by Summerford Nursing Home and 14,000
shares held by Summerford Drugs of which Mr. Summerford is Chairman,
President and a controlling shareholder.
(10) Includes 10,400 shares allocated to Mr. Walker's ESOP account through
December 31, 1996.
(11) Voting power for shares allocated to participants in the ESOP is
exercised by the participants. The ESOP Committee directs the voting of
unallocated shares.
<PAGE> 8
DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
DIRECTOR
NAME, AGE AND POSITION HELD IN OF COMPANY PRINCIPAL EXPERIENCE
THE COMPANY AND ITS SUBSIDIARIES SINCE DURING PAST FIVE YEARS (1)
- -------------------------------- ---------- ---------------------------
<S> <C> <C>
Kennon R. Patterson, Sr. (56) 1983 Chairman, Chief Executive Officer and
Chairman, President, and Chief Executive President of the Company since 1983;
Officer of the Company; Chairman and Chief Executive Officer and President
Chief Executive Officer of Community Community Bank since 1983; Chairman
Bank; Director of Community of Community Bank since 1984;
Appraisals, Inc.; Director of Community Chairman of Community Bank
Insurance Corp.; Director of 1st since 1993 - 1997.
1st Community Credit Corporation;
Director of Southern Select Insurance
Inc.
Denny Kelly (58) 1986 Director of Community Bank
Director of the Company; Director, since 1985: President of Community
Vice Chairman and President of Bank since 1993; Executive
Community Bank; Director of Vice President of Community Bank
1st Community Credit Corporation; 1985 - 1993.
Director of Community Appraisal, Inc;
Director of Community Insurance, Corp.
Bishop K. Walker, Jr. (67) 1983 Director of the Company since 1983; Director
Director, Vice Chairman, Secretary, of Community Bank since 1984; Vice
Executive Vice President, General President and General Counsel of the
Counsel of the Company; Director, Company since 1987; Senior Vice President
Sr. Executive Vice President and and General Counsel of Community Bank;
Secretary of Community Bank; Director 1987 - 1993; President and Director
of Community Insurance Corp; of Community Insurance Corp., 1987 - 1997.
Director of Southern Select
Insurance, Inc.
Hodge Patterson, III (42) 1993 Director of the Company since 1993; Sr.
Director of the Company; Vice President of Community Bank
Director and Executive 1988 - 1993; Vice-Chairman, Chief
Vice President of Community Bank; Executive Officer and President
Director of Community Appraisals, Inc. of Community Bank (Tennessee) 1993 - 1997;
Director of Southern Select Executive Vice President of Community
Insurance, Inc. Bank 1997 to present.
Glynn Debter (63) 1996 Owner - Operator Debter Farms.
Director of the Company;
Director of Community Bank;
Director of Community
Appraisals, Inc; Director of
Community Insurance Corp.
</TABLE>
<PAGE> 9
<TABLE>
<S> <C> <C>
Loy McGruder (58) 1996 Director of Community Bank since 1995;
Director of the Company; Executive Vice President of Community
Director and Executive Vice Bank since 1994; Sr. Vice President
President of Community Bank; of Community Bank 1993-94, City
Director of Community Insurance President of Community Bank -- New Hope,
Corp. 1987 - 1993.
Merritt Robbins (60) 1996 Owner-Operator of Piggly Wiggly Stores.
Director of the Company; Director
of Community Bank; Director
of 1st Community Credit Corporation
Robert O. Summerford (67) 1996 Owner-operator of Summerford Nursing Home;
Director of the Company; Director Owner-operator of Summerford Drugs.
of Community Bank; Director
of Community Appraisals, Inc.
Wayne Washam (62) 1996 Retired; Assistant Superintendent of Arab City
Director of the Company; Director Schools 1992 - 1996; Director of Community of
Community Bank; Director of Bank since 1993.
1st Community Credit Corporation
Bryan A. Corr (38) 1997 Director and President Oneonta Telephone
Director of the Company; Director Company, 1987 - present; Director and
Community Bank; Director of President of North Alabama Cellular,
Community Insurance Corporation 1992 - present.
Edward Ferguson (55) 1997 President of 1st Community Credit Corp.
Director of the Company; Director since 1995; Vice President of Security
of Community Bank; Chairman Mutual Financial Services, Inc. 1993 - 1995;
and President of 1st Community Senior Manager of Security Mutual Finance
Credit Corporation Corp., Inc., 1976 - 1993.
John J. Lewis, Jr. (51) 1997 Various positions with Tyson Foods,
Director of the Company; Director Inc., 1986 - present
of Community Bank; Director
of Community Appraisals, Inc.
Stacey W.Mann (45) 1997 Sr. Vice President of Community Bank
Director of the Company; Director 1986 - 1996; Executive Vice
and Executive Vice President of President of Community Bank
Community Bank; Director 1997-present
of 1st Community Credit Corporation
</TABLE>
<PAGE> 10
<TABLE>
<S> <C> <C>
Kennon R. (Chip) Patterson, Jr. (32) 1997 Sr. Vice President of Community Bank
Director of the Company; Director 1996 - 1997; Executive
and Executive Vice President of Vice President of Community Bank
of Community Bank; Director 1997-present
of 1st Community Credit Corporation
Henry Sims (75) 1997 Retired, Director of Tennessee Technology
Director of the Company; Director Center, Pulaski, Tennessee 1982 - 1997;
of Community Bank Director of Community Bank (Tennessee)
1993 - 1997.
</TABLE>
- ------------------------------------------------
The individuals listed above have been employed during the past five
years either in the principal occupations shown or in other executive positions
with the Company or one of its Subsidiaries.
All directors of the Company hold office for three year terms unless
they sooner resign, become disqualified, or are removed. The officers of the
Company are elected annually by the directors and serve until their successors
are elected and qualified or until their earlier resignation, removal or
disqualification.
Messrs. Kennon R. Patterson, Sr., Bishop K. Walker, Jr., and Denny
Kelly are executive officers of the Company.
<PAGE> 11
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The independent public accounting firm selected by the shareholders for
the calendar year 1998 is Dudley, Hopton-Jones, Sims & Freeman ("Dudley").
SHAREHOLDER PROPOSALS
Any proposal which a shareholder of the Company intends to be presented at
the annual meeting of shareholders to be held in 1999 must be received by the
Company on or before November 25, 1998. Only proper proposals which are timely
received will be included in the proxy statement and form of proxy.
EXPENSES OF SOLICITATION
The cost of soliciting proxies in the accompanying form will be borne by
the Company. In addition to the use of the mails, proxies may be solicited by
directors, officers or other employees of the Company or its subsidiaries
personally, by telephone or by telegraph. The Company does not expect to pay any
compensation for the solicitation of proxies, but may reimburse brokers,
custodians or other persons holding stock in their names or in the names of
nominees for their expenses in sending proxy materials to principals and
obtaining their instructions.
FINANCIAL AND OTHER INFORMATION
Information required by this item is incorporated by reference from the
Annual Report and Form 10-K for the year ended December 31, 1997 and Form 10-Q
for the six month period ended June 30, 1998, copies of which may be obtained
without charge from the Company by any shareholder, by writing Mr. Bishop K.
Walker, Jr., Community Bancshares, Inc., P.O. Box 1000, Blountsville, Alabama
35031, or calling (205) 429-1000.
<PAGE> 12
Appendix A
--------------------------------------------
PROXY
COMMUNITY BANCSHARES, INC.
BLOUNTSVILLE, ALABAMA
SPECIAL MEETING OF SHAREHOLDERS
---------------------------------------------
The undersigned shareholder of Community Bancshares, Inc. (the
"Company"), Blountsville, Alabama, hereby constitutes and appoints Bishop K.
Walker, Jr., and Dicey Childers, or any of them, each with full power of
substitution to vote the number of shares of Company common stock which the
undersigned would be entitled to vote if personally present at the Special
Meeting of Shareholders to be held at the Company's headquarters in
Blountsville, Alabama on September 10, 1998 at 9:00 A.M., local time, or at any
adjournments thereof (the "Meeting") upon the proposal described in the Proxy
Statement, the receipt of which is acknowledged, in the manner specified below.
To amend Article IV of the Certificate of Incorporation of the Company
increasing the number of shares of authorized Common Stock of the Company, from
5,000,000 shares, with a par value of $.10 per share, to 20,000,000 shares, with
a par value of $.10 per share.
FOR________ AGAINST________ ABSTAIN________
This Proxy, when properly executed, will be voted in the manner directed by
the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE PROPOSAL.
Please sign exactly as your name appears on your stock certificate and date.
Where shares are held jointly, each shareholder should sign. When signing
as executor, administrator, trustee or guardian, please give full title as such.
If a corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
------------------------------------------------
Signature of Shareholder
------------------------------------------------
Signature of Other Shareholder (if held jointly)
Dated:____________________________________, 1998
Month Day
THIS PROXY IS SOLICITED ON BEHALF OF COMMUNITY BANCSHARES, INC.'S BOARD OF
DIRECTORS AND MAY BE REVOKED BY THE SHAREHOLDER PRIOR TO ITS EXERCISE.