SCHEDULE 14A
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:
[ ] 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
Massachusetts Fincorp, 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:
---------------------------------------------------------------
MASSACHUSETTS FINCORP, INC.
70 Quincy Avenue
Quincy, Massachusetts 02169
(617) 825-5555
March 22, 2000
Fellow Shareholders:
An activist outsider group is attempting to solicit proxies in order to
elect their own slate of Directors to the Board in place of the slate
recommended by the Company. The outsider group has attempted to
characterize recent actions taken by the Directors to amend the Bylaws of
the Company as intended "to entrench current management."
It is irresponsible to suggest that all actions taken to protect the
company are taken for the selfish benefit of the current board of directors
or management. The decision to amend the Bylaws of the Company was
intended to codify existing practices of the Bank in selecting and electing
Directors who will successfully represent the interests of a majority of
shareholders and who will assist the Company in its role as a local
community bank.
THE BYLAW CHANGES
The activists have characterized as a "Residency Bylaw" a bylaw which
states that "except for members of the incumbent board, no person shall be
eligible for election or appointment to the Board of Directors unless such
person has been, for a period of at least one year immediately prior to his
or her election, nomination or appointment, a resident of a county in which
the Company or its subsidiaries maintains a banking office or of a county
contiguous to any such county."
The Bylaw modification codified an existing practice of the Bank. All
incumbent directors meet the standard set by the bylaw modification. We
compete successfully as a local community bank and the substantial majority
of our customers and revenues come from the local areas surrounding our
offices. The new director qualifications were an attempt to promote, among
other things, our local business connections and were reasonably related to
our core business operations.
The activists have attempted to characterize as a "No Experience" Bylaw a
bylaw which stated that, "Except for members of the incumbent board, no
person may serve on the Board of Directors and at the same time be a
director or other officer of another co-operative bank, credit union,
savings bank, state or federally-chartered savings and loan association,
trust company, bank holding company or state or national banking
association that engages in business activities in the same market area as
the Corporation or any of its subsidiaries."
All incumbent Directors meet the standard of the Bylaw modification. THE
ATTEMPT TO REPRESENT A NON-COMPETE BYLAW AS A "NO EXPERIENCE" BYLAW
DISGUISES THE CONFLICT OF INTEREST INHERENT IN THE ACTIONS OF THE OUTSIDER
ACTIVISTS. MR. JAINDL IS THE CHIEF EXECUTIVE OFFICER OF A FINANCIAL
INSTITUTION WHOSE OBJECTIVE IS TO COMPETE NATIONALLY FOR THE SAME TYPES OF
CUSTOMERS AS THE COMPANY VIA THE INTERNET. We believe the Board has an
obligation to protect its business plan and other proprietary information
from all competitors. The success or lack thereof of Mr. Jaindl's ability
to implement his strategic objectives should not be a consideration in the
Board's decision to protect the Company.
The activists have characterized as "The Imputed Disqualification Bylaw" a
Bylaw which states that "No person shall be eligible for election to the
Board of Directors if such person is the nominee or representative of a
person who is ineligible for election to the Board of Directors under the
above provisions."
It only makes sense that if a party is disqualified as a nominee for
directorship under the bylaws of the Company, that individuals nominated by
that party for the sole purpose of serving in the place of that party
should also be disqualified.
The Board firmly believed that the bylaw changes codified existing
practices and were in the best interest of a majority of shareholders. The
Board also believes that since its actions were taken for the benefit of a
majority of shareholders, it should protect the assets of the Company by
avoiding spending unnecessary funds in protection of shareholder rights
when those same shareholders will have an opportunity to voice their
support for the Board's actions by voting in favor of the Company's
recommended nominees for Director.
The Company believes that the attempt to make issue of the Bylaw
modifications is an obvious attempt to deflect the attention of
shareholders from the true objectives of the outsider activist group.
OTHER CHARGES MADE REGARDING PERFORMANCE
The outsider group makes a vague reference to having made a "careful
analysis of the operations, management, and financial and stock price
performance of Massachusetts Fincorp, Inc.," BUT NEGLECTS TO MENTION THAT
THE STOCK PRICE HAS INCREASED SINCE OUR INITIAL PUBLIC OFFERING AND
EXCEEDED THAT OF MOST PEER PERFORMANCE INDICES DURING AN ECONOMIC
ENVIRONMENT WHICH HAS CAUSED MOST THRIFT STOCK PRICES TO DECLINE.
The outsider group also fails to give credit for the Company's demonstrated
successful ability to implement the leverage and growth strategy described
in the conversion documents. The Company described the specific components
of our operating strategy to include: Enhancing net income by emphasizing
loan volume and creating an infrastructure which can support increased loan
volume; Placing increased emphasis on attracting retail deposits; and
Increasing loan and deposit market share by offering competitive rates and
opening new branch offices in and around our primary market area.
IN SPITE OF A SIGNIFICANT INCREASE IN INTEREST RATES WHICH HAS HAD AN
ADVERSE IMPACT ON THE MARKET VALUES OF A SIGNIFICANT MAJORITY OF THE
BANKING INDUSTRY, DURING 1999 THE BANK MAINTAINED ITS PORTFOLIO LOAN
ORIGINATION VOLUMES, RESULTING IN LOAN BALANCES GROWTH OF $22.7 MILLION,
AN INCREASE OF ALMOST 47%, AND OVER FOUR TIMES THE DOLLAR AMOUNT RECEIVED
FROM OUR PUBLIC OFFERING. TOTAL ASSETS HAVE INCREASED BY OVER 34%. THE
SUCCESSFUL ABILITY OF THE COMPANY TO USE ITS LOAN ORIGINATION CAPACITY TO
INCREASE LOAN BALANCES HAS INCREASED INTEREST INCOME FROM $2.15 MILLION IN
1998 TO $3.18 MILLION IN 1999. This and future growth will provide a more
stable income stream and lessen the bank's dependency on non-interest income.
THE OUTSIDER GROUP THEN DESCRIBES WHAT WOULD APPEAR TO BE ITS TRUE
INTENTIONS: TO ATTEMPT TO FORCE THE DIRECTORS TO SPEND INAPPROPRIATE TIME
AND MONEY TO ATTEMPT TO SELL THE INSTITUTION FOR A QUICK PROFIT DURING A
TIME WHEN THE DIRECTORS FIRMLY BELIEVE THAT THE COMPANY COULD NOT RECEIVE A
FAIR PRICE FOR ITS SHARES.
The Directors firmly understand their responsibility to act in the interest
of the majority of shareholders. The Board believes that the depressed
valuation of Bank and Thrift stocks will not allow Massachusetts Fincorp to
receive a fair price in the event of a sale. The Directors will continue to
assess the value of a sale of the institution against the value of
continuing to operate as a community financial institution, providing
services to the depositors that supported us before, during and after the
conversion to stock.
If it fails in its objective of selling the Company at an unfair price, the
outsider group has stated as its objective to attempt to implement a stock
repurchase program.
The Directors of the Company have frequently considered a stock repurchase
program as one of a number of tools to enhance shareholder value. The
Directors have undertaken a thorough review with the assistance of an
investment-banking firm to determine the potential value of a stock
repurchase program. The analysis clearly identified that, since the
Company is not excessively capitalized, at this time, the minimal potential
temporary impact on share price did not sufficiently offset the negative
impact on the ability to implement its growth and leverage strategy for the
long-term benefit of all shareholders.
The Directors and Management of the Company urge you not to be misled by
the unsubstantiated assertions of the outsider group. We believe that the
actions of the Directors and Management have been and continue to be in the
best interest of a majority of shareholders. The goals of the Directors
and Management are to continue to implement the strategic plan and
objectives described in the conversion documents.
THE DIRECTORS AND MANAGEMENT DIRECTLY OWN OVER 11% OF THE OUTSTANDING
SHARES OF THE COMPANY. WHEN COMBINED WITH THE EMPLOYEE STOCK OWNERSHIP
PLAN AND THE INCENTIVE PLAN, THE DIRECTORS, MANAGEMENT AND EMPLOYEES OF THE
COMPANY HAVE A VESTED INTEREST IN OVER 30% OF THE COMBINED SHARES. WE
BELIEVE OUR INVESTMENT IN THE COMPANY DEMONSTRATES OUR CONVICTION AS TO THE
POTENTIAL OF THE COMPANY. WE FIRMLY BELIEVE THAT SUCCESSFUL IMPLEMENTATION
OF A LEVERAGE AND CONTROLLED GROWTH STRATEGY WILL RESULT IN THE MAXIMUM
ENHANCEMENT OF SHAREHOLDER VALUE.
DON'T SELL THE FUTURE OF YOUR COMPANY SHORT BY VOTING FOR MESSRS. JAINDL,
BUCK AND SCHANTZ. DO NOT RETURN ANY WHITE PROXY CARD YOU RECEIVE.
VOTE FOR YOUR BOARD'S NOMINEES BY COMPLETING AND RETURNING THE ENCLOSED
BLUE PROXY CARD TODAY EVEN IF YOU HAVE ALREADY RETURNED ANOTHER CARD
PREVIOUSLY!
Sincerely,
/s/ Paul C. Green /s/ John P. O'Hearn, Jr.
- ---------------------- ------------------------------
Paul C. Green John P. O'Hearn, Jr., Director
Chairman of the Board,
President and CEO
/s/ John R. Byrne /s/ Robert H. Quinn
- ----------------------- -------------------------
John R. Byrne, Director Robert H. Quinn, Director
/s/ Richard F. Cahill /s/ John J. Sousa, Jr.
- --------------------------- ----------------------------
Richard F. Cahill, Director John J. Sousa, Jr., Director
/s/ W. Craig Dolan /s/ Joseph W. Sullivan
- ------------------------ ----------------------------
W. Craig Dolan, Director Joseph W. Sullivan, Director
/s/ John E. Hurley, Jr. /s/ Diane Valle
- ----------------------------- ---------------------
John E. Hurley, Jr., Director Diane Valle, Director
/s/ Robert E. McGovern
- ----------------------------
Robert E. McGovern, Director
Important
If you own shares in the name of a bank, Broker or other nominee, please
contact the person responsible for your account and direct them to vote
'FOR' your Board's Nominees on the BLUE proxy card.
If you have any questions on how to vote your shares, please call our proxy
solicitor, Regan & Associates, Inc. at 1-800-737-3426 or call the Bank at
(617) 825-5555 and ask the operator to transfer you to your local branch
manager.
