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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
February 4, 1999 (January 28, 1999)
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COMMUNITY BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Delaware 000-16461 630868361
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification
Number)
Main Street, P.O. Box 1000
Blountsville, Alabama 35031
(Address of principal executive offices) (Zip Code)
(205) 429-1000
(Registrant's telephone number, including area code)
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ITEM 6. RESIGNATION OF REGISTRANT'S DIRECTORS
Effective January 28, 1999, Bryan A. Corr resigned as a director of
Community Bancshares, Inc. (the "Company"). In his letter of resignation, Mr.
Corr cited his disagreement with certain actions he alleged were or should have
been taken by the Company's Board of Directors. Specifically, Mr. Corr indicated
his disagreement with the practice of management not to provide a "Board Book"
for each Board meeting, inadequate examination of related-party transactions,
adoption of a shareholders rights plan and amendments to the Company's Bylaws,
failure to respond to proposals submitted by a group of shareholders for
inclusion in the Company's 1999 proxy statement, misrepresentations made in a
letter to shareholders, and the conduct of Board meetings. A copy of Mr. Corr's
letter of resignation is filed as an exhibit to this report.
The Company believes that Mr. Corr's allegations are without merit.
Further, the Company believes that Mr. Corr's allegations are either patently
false or based on criticisms of management style, rather than management
quality.
ITEM 7. EXHIBITS
Exhibit No. 17 Letter dated January 28, 1999 from Bryan A. Corr to
the Board of Directors of the Company.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
COMMUNITY BANCSHARES, INC.
By: /s/ Kennon R. Patterson, Sr.
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Kennon R. Patterson, Sr.
Chairman of the Board, President
and Chief Executive Officer
By: /s/ Bishop K. Walker, Jr.
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Bishop K. Walker, Jr.
Vice Chairman, Director
and General Counsel
By: /s/ Roy B. Jackson
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Roy B. Jackson
Director
By: /s/ Hodge Patterson, III
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Hodge Patterson, III
Director
By: /s/ Robert Summerford
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Robert Summerford
Director
By: /s/ Glynn Debter
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Glynn Debter
Director
By: /s/ John J. Lewis, Jr.
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John J. Lewis, Jr.
Director
By: /s/ Loy McGruder
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Loy McGruder
Director
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By: /s/ Denny Kelly
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Denny Kelly
Director
By: /s/ Merritt Robbins
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Merritt Robbins
Director
By: /s/ Wayne Washam
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Wayne Washam
Director
Dated: February 4, 1999
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EXHIBIT 17
BRYAN A. CORR
POST OFFICE BOX 1500
505 THIRD AVENUE, EAST
ONEONTA, ALABAMA 35121-0017
(205) 625-3581
January 28, 1999
VIA FEDERAL EXPRESS
The Board of Directors
Community Bancshares, Inc.
68149 Main Street
Blountsville, Alabama 35031
Attn: Mr. Kennon R. Patterson, Sr.,
Chairman of the Board, President and Chief
Executive Officer
RE: RESIGNATION AS A DIRECTOR OF COMMUNITY BANCSHARES, INC.
Gentlemen:
The actions of the Board of Directors (the "Board") of Community
Bancshares, Inc. (the "Company") since I became a Director in 1997, have
increasingly troubled me. More importantly, the actions of the Board and
management of the Company since the beginning of this year are both astounding
and disappointing to me. Accordingly, I hereby tender my resignation as a
Director of the Company effective immediately.
Although I tender my resignation with great regret, it is nevertheless
a resignation that has been compelled by the actions of the Board and
management. Those actions include, but are not limited to, the following:
l. The practice of management in failing to provide the members of the
Board with a "Board Book" or similar information for each of the Board's
meetings. Such preparatory materials should include full, complete and accurate
information
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respecting the Company's operations in order that the members of the Board might
be fully informed and carry out effectively their respective responsibilities
and duties.
2. The refusal by the Board, a majority of which is composed of members
of management, to adequately examine related-party transactions to which certain
members of both the Board and management are parties. As you know, each time
that I attempted to raise a question in connection with any related-party
transaction, Ken Patterson, who is a party to many such transactions, refused to
permit any meaningful discussion to take place concerning it.
3. The policy of the Board in failing to place the interests of the
stockholders of the Company ahead of their own as evidenced by the various
related-party transactions referenced above as well as the actions taken by the
Board at its meeting on January 7, 1999. The "anti-takeover" measures adopted at
that Board meeting will only have the ultimate effect of entrenching the Board
and management and of making both unresponsive to the Company's stockholders.
4. The failure of the Board and management to respond to the proposals
made by Jimmy C. Smith, J.R. Whitlock, Sr., A. Lee Hanson, William S. Wittmeier,
Jr., and R.C. Corr, Jr. As I believe you know, these individuals and I met with
Ken and B.K. Walker on December 17, 1998. At that meeting, each of the
proponents voiced the concerns giving rise to his respective proposal. At the
conclusion of the meeting, Ken assured us that he would endeavor to respond to
the concerns voiced at the meeting within a short period of time. No response
has yet been made, unless management's attempt to exclude the proposals from
Company's proxy materials relating to the 1999 annual meeting of stockholders
and the actions taken by the Board on January 7, 1999 are to be deemed to be the
intended response.
5. The numerous misrepresentations made by Ken in his letter to the
stockholders of the Company dated January 8, 1999. In that letter, under the
guise of informing the Company's stockholders of a dividend payment, Ken made
numerous misrepresentations, including claiming that (i) the proponents are
attempting to gain control of the Company; (ii) the proponents intend to sell
the Company; (iii) the proposals are a "first step" towards such efforts; (iv)
the adoption of the proposals would somehow facilitate such efforts and are so
intended; and (v) the Board is "united" in opposition to the proposals. There is
no basis in fact for any of those representations. Nothing in the proposals
themselves or the proponents' statements in support of the proposals, and
nothing in the Schedule 13D which I have filed with the Securities and Exchange
Commission could remotely be interpreted as supporting such claims. Ken himself
is aware that the Board of the Company is not "united" in its opposition to the
proposals.
In addition to the foregoing grounds, I am compelled to tender my
resignation as a Director of the Company because there is no doubt that I am
unable to
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effectively function as a member of the Board due to several ongoing practices
of management in relation to the Board. Specifically, Board meetings continue to
be called without providing any agenda for such meetings or any preparatory
materials. More importantly, it appears that Board action has been scripted in
advance, thus discouraging open discussion among Board members. Accordingly, I
believe that the discharge of my responsibilities as a Director of the Company
is now impossible.
Because of my disagreement with the Company on the matters described
above which relate to the Company's operations, policies and practices, I hereby
request that the Company file a Current Report on Form 8-K with the Securities
and Exchange Commission disclosing my resignation from the Board of the Company
and describing the reasons therefor, and attach this letter thereto.
Sincerely,
/s/ Bryan A. Corr
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BAC/lm
cc: Bishop K. Walker, Esq.
