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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. )
<TABLE>
<CAPTION>
<S> <C>
Filed by the Registrant |_|
Filed by a Party other than the Registrant |X|
Check the appropriate box:
| | Preliminary Proxy Statement |_| Confidential. For use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
|_| Definitive Proxy Statement
|X| Definitive Additional Materials
| | Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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Community Bancshares, Inc.
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(Name of Registrant as Specified in Its Charter)
Stockholders for Integrity and Responsibility
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(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 the table below per Exchange Act Rules 14a-6(i)(1)
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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[LOGO] STOCKHOLDERS FOR INTEGRITY & RESPONSIBILITY
Post Office Box 668
Blountsville, AL 35031
Dear Fellow Stockholders,
Recently, Ken Patterson, Sr. has questioned the honesty and integrity of me, my
family and the other stockholders who disputed his management of Community
Bank. He has publicly challenged my motivation for seeking to improve the
performance of Community Bank. We represent the interest of the stockholders.
We are not a renegade group of stockholders. Our group includes FOUR former
Directors of the Bank. If you check the Bank's proxy statement, you'll also
find that other stockholders are suing the Bank and the Board of Directors over
the same issues that concern us.
We have concerns about Mr. Patterson's financial responsibility. In 1998,
according to the Bank's Form 10-K, Wal-Mart branches of Community Bank made $9.3
million in loans outside the Bank's lending policy. An investigation is
proceeding. At the end of the year, $3.4 million in loans were in default. We
understand that Mr. Patterson's son was responsible for the Wal-Mart branches
during the time in question. The Bank also has twice as many loans 90 days past
due as they did in 1997. Finally, Mr. Patterson admits to taking a very costly
hunting trip to Alaska at the Bank's expense. With 1998 salary of $778,246, can
he not afford to pay for his own vacation?
We are not trying to make a "Power Grab." If anyone is desperate for power, we
believe it is Mr. Patterson. On January 7, 1999, Mr. Patterson and the other
members of the Board of Directors amended the Bank's by-laws to require an 80%
supermajority vote of the stockholders to pass stockholder-proposed changes to
the by-laws. Since management already owns more than 20% of the stock, they can
block any stockholder proposal. Incredibly, the 80% supermajority requirement
does not apply to amendments of the by-laws proposed by the Board.
We want to protect the value of our investment, just like you. The issue is
profitability, not what Mr. Patterson says the stock is worth. The Huntsville
Times quotes Benton Gup, who holds the Robert Hunt Cochrane/Alabama Banking
Chair at the University of Alabama, as saying the value of Community Bank's
stock "is not relevant. The question is 'How profitable is this institution?'
and that number appears to be low. By any measure it appears to be low." He
says even when you consider the Bank's expansion, the Bank's profitability is
still low.
We paid for our stock with our own hard-earned money. Like you, we expect the
highest return we can get. With proper management of the Bank, what could all of
our investments be worth?
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We are not trying to sell Community Bank; we want to list it on a major
exchange. The Bank is an important part of our community. Our purpose is not to
sell the Bank, as Mr. Patterson would have you believe. In fact, Mr. Patterson
last fall offered to buy my family's shares in the Bank and we declined his
offer. We believe a national stock exchange will not consider Community Bank
until the questionable "insider" transactions are cleaned up.
We want Community Bank to grow PROFITABLY. Community Bank has grown, but by
using your money to start new branches. This growth is more expensive than
stock-based acquisitions and is reflected in the Bank's declining earnings. We
believe Community Bank cannot acquire other banks using its stock because the
stock has little value in the eyes of other bankers. By improving the Bank's
financials, and eliminating "insider transactions," we believe management can
turn the Bank's stock into fuel for future growth.
Vote the blue card. We urge you to vote the BLUE proxy card today to protect
your stockholder rights and to restore integrity and responsibility to the
management of Community Bank.
Sincerely,
/s/ Bryan Corr
Bryan Corr
Stockholders for Integrity and Responsibility
THE SECURITIES AND EXCHANGE COMMISSION REQUIRES
THE FOLLOWING ADDITIONAL INFORMATION:
Stockholders for Integrity and Responsibility (the "Committee") will be
soliciting proxies in connection with the 1999 Annual Meeting of Stockholders of
Community Bancshares, Inc. (the "Company") for its nominees for Director and its
proposals and against the proposals of the Company. The following stockholders
are deemed to be participants in the solicitation of proxies by the Committee
as of the date hereof. R. C. Corr, Jr. is deemed to own beneficially (as that
term is defined in Rule 120-S promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended) 280,346 shares
of Common Stock of the Company, which constitutes approximately 6.0% of the
outstanding shares of Common Stock. Doris J. Corr is deemed to own beneficially
322,172 shares of Common Stock of the Company, which constitutes 6.9% of the
outstanding shares of Common Stock. Bryan A. Corr is deemed to own beneficially
190,205 shares of Common Stock of the Company, which constitutes 4.1% of the
outstanding shares of Common Stock. Joan M. Currier is deemed to own
beneficially 234,334 shares of Common Stock of the Company, which constitutes
5.0% of the outstanding shares of Common Stock. John Davis Currier is deemed to
own beneficially 7,340 shares of Common Stock of the Company, which constitutes
less than 1.0% of the outstanding shares of Common Stock. Corr, Inc. is deemed
to own beneficially 120,000 shares of Common Stock of the Company, which
constitutes 2.6% of the outstanding shares of Common Stock. A. Ive Manson is
deemed to own beneficially 73,642 shares of Common Stock of the Company, which
constitutes 2.6% of the outstanding shares of Common Stock. Jimmy C. Smith is
deemed to own beneficially 4,850 shares of Common Stock of the Company, which
constitutes less than 1.0% of the outstanding shares of Common Stock. J.R.
Whitlock, Sr. is deemed to own beneficially 8,230 shares of Common Stock of the
Company, which constitutes less than 1.0% of the outstanding shares of Common
Stock. William S. Wittmeier, Jr. is deemed to own beneficially 2,260 shares of
Common Stock of the Company, which constitutes less than 1.0% of the outstanding
shares of Common Stock. Percentages are determined on the basis of 6,456,847
shares of Common Stock reported by the Company as being outstanding on
March 15, 1999.
