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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. )
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<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
[ ] Definitive Additional Materials
[X] 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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[ ] Fee paid previously with preliminary materials.
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[ ] 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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[GRAPHIC OMITTED]
Dear Community Bank Stockholder:
We are concerned about the health of Community Bank and know your investment in
the bank is also important to you. We believe Kennon Patterson is taking
advantage of his position as Chairman of the Board and CEO of Community Bank to
line his pockets and those of his family at the expense of shareholders. It's
time for a change to preserve your investment.
As a stockholder of the Bank, you will have an opportunity to vote on a number
of proposals at the annual meeting scheduled for April 22. These proposals can
restore responsible management practices to the bank and preserve your
investment. Why are we concerned about the bank's profitability and the poor
management practices fostered by Mr. Patterson?
- - Community Bank's return on assets is less than half that of banks of
similar size. Community Bank's return on assets is below 0.75%, a full
1.25% below the industry average of approximately 2.0%. This is a
standard measure of profitability for banks and widely recognized as a
sign of how well management uses its resources to earn a profit. Why is
it so low?
- - Mr. Patterson's salary and bonus were $778,246 in 1998, significantly
higher than CEOs of similar institutions. We believe his salary is an
outrageous amount for the CEO of a bank whose profitability is less
than half that of its peers.
- - Mr. Patterson's perks are extensive and are robbing shareholders of a
full return on their investment. We believe the Bank pays his country
club dues at the exclusive Old Overton Country Club in Birmingham; we
believe the Bank also paid $38,000 for a hunting trip to Alaska for Mr.
Patterson, his son, and others. Mr. Patterson also drives a $92,100 BMW
750iL that we believe the bank pays for. These perks come out of the
profits of the bank and deny the stockholders of higher dividends.
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- - Nepotism is widespread at Community Bank. At least six family members
of Mr. Patterson work for the bank and are draining the bank's profits
with unreasonably high salaries. The total compensation for the
Patterson family members has risen unreasonably. In 1993, the
Patterson's received $500,000 in salaries and bonuses; in 1997 they
received total payments of more than $2.2 million in salaries, vendor
payments, bonuses and Bank-provided perks. This is more than a 40%
annual increase in Community Bank's profits paid to the Patterson
family. In sharp contrast, Community Bank's net income grew only about
8% per year during the same time.
We know and trust the many fine managers and employees at Community Bank. We
want to protect their jobs and protect our investment. Your careful
consideration of the proxy material that will be mailed to you in the near
future will play an important part in preserving the integrity of Community Bank
in the future.
You can be assured that Mr. Patterson will fight the truth in every way
possible. Please note that he has all the money in the bank to wage the battle.
We are spending our own money because we want to preserve our investment in
Community Bank and preserve the Bank for our community. Don't let Mr.
Patterson's smooth talk change the facts.
1) Community Bank's profitability is suffering under Mr.
Patterson. He is jeopardizing your investment and the jobs of
the Bank's employees.
2) Mr. Patterson is denying you a fair return on your investment
through his high salary and the perks that are lining his
pockets at shareholders' expense.
As a stockholder of Community Bank, you have a right to vote at the annual
stockholders meeting to stop these practices. We hope you will join us in
supporting changes that can improve the Bank's performance and the return on
your investment. Vote yes to return integrity and responsibility to the top
management of Community Bank.
Sincerely,
/s/ Stockholders
Stockholders for Integrity and Responsibility
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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 13d-3 promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended) 280,356 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 138,334
shares of Common Stock of the Company, which constitutes 3.0% of the outstanding
shares of Common Stock. John David Currier is deemed to own beneficially 7,880
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. Lee Hanson is deemed to own beneficially
73,648 shares of Common Stock of the Company, which constitutes 1.6% of the
outstanding shares of Common Stock. Jimmy C. Smith is deemed to own 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 6,230 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 1,260 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 4,656,847 shares of Common Stock
reported by the Company as being outstanding on March 15, 1999.
