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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 Section 240.14a-11(c) or Section
240.14a-12
PALFED, INC.
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(Name of Registrant as Specified In Its Charter)
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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 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.
/ / 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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[LOGO]
PALFED, INC.
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MID-ATLANTIC UNDERVALUES PALFED'S POTENTIAL
VOTE AGAINST PROPOSAL #2
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April 3, 1997
Dear Fellow Shareholders:
At PALFED's April 22 Annual Meeting, you have an opportunity to
send a clear message to Mid-Atlantic Investors by voting AGAINST its
"Sell the Company" proposal. We urge you to join us in our effort to put
a stop to the type of opportunism represented by Mid-Atlantic's
campaign against PALFED.
Shareholder value is PALFED's number one priority. Here are the
reasons we think you should vote AGAINST Mid-Atlantic's proposal.
- MID-ATLANTIC'S STATEMENTS CANNOT BE TRUSTED. Mid-Atlantic's
March 25 letter to PALFED shareholders deliberately misrepresents
the historical performance of our company. Mid-Atlantic knows just
as well as you do that in 1993 PALFED was recapitalized and that
significant changes were made in our management and business
strategy. 1993 was the starting point for the strategic plan that
has produced impressive results during the past four years. Measured
from 1993, PALFED has outperformed industry and market
averages, as outlined in our Annual Report.
Mid-Atlantic not only distorts our performance, it also fails
to point out that PALFED's market capitalization has grown from
approximately $5 million in 1992, when the stock traded as low
as $3.50, to more than $85 million at the end of the first
quarter of 1997, at a stock price of $16.25.
Mid-Atlantic is flat wrong and seriously misleads PALFED
shareholders when it states that PALFED "has missed opportunities to
sell the company at a higher price than the current market price." No
such offer has ever been made for PALFED.
In contrast to the statements in his letter, Jerry Shearer told
us in documented personal discussions on March 14, 1996 that
Mid-Atlantic had a target price for PALFED between $15 and $16. Even
though we have already exceeded its goal, Mid-Atlantic now ignores
that performance.
- MID-ATLANTIC DOES NOT REPRESENTED THE INTERESTS AND GOALS OF ALL
PALFED SHAREHOLDERS. Mid-Atlantic is a professional "destabilizer"
-- an opportunist that buys into companies, regardless of their
performance, solely for the purpose of putting them "in play"
and generating short term profit through a sale or buyout.
Mid-Atlantic's activities produce no long-term value and certainly
do not help the companies who are victimized, the employees
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whose jobs are sacrificed, the customers and communities whose services
are affected, or the shareholders who are deprived of future value.
- MID-ATLANTIC UNDERVALUES OUR COMPANY. Because Mid-Atlantic is playing an
investment game, it lacks understanding of PALFED's fundamentals, its
growth potential, and the business opportunities available in community
banking. Our management has a very different vision of both the company
and the potential of our industry. We think the past few years have
clearly demonstrated that our vision is right and that Mid-Atlantic's
narrow, short-term strategy is wrong.
- MID-ATLANTIC'S APPROACH TO SELLING PALFED IS ILLOGICAL AND COULD REDUCE
THE VALUE OF A FUTURE SALE OR MERGER. No one seriously interested in
maximizing value through the sale of a business would simply hoist a
"for sale" sign. Sales negotiations are a complex process and should
reflect the needs and opportunities of the buyer as much as the value
of the seller. PALFED's board and management believe that our strategy
for building value through growth is also the correct path to
obtaining maximum value through a sale or merger of the company if
such an opportunity were to arise.
Your board has not chosen a path of independence just for the sake of
independence. We are always willing to consider any legitimate offer for the
company at a meaningful premium. Our shareholders know this; Mid-Atlantic
knows this. There is nothing to be gained from a proposal that can only
interfere with a business strategy that has already demonstrated its
effectiveness. We urge you to support us and send a message to Mid-Atlantic
by voting AGAINST their proposal.
Sincerely,
/s/ John C. Troutman
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John C. Troutman
President and
Chief Executive Officer
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If your shares of Common Stock are held in the name
of a bank or brokerage firm, only that firm
can execute a proxy card on your behalf.
Please contact the person responsible for your account
and give instructions for a WHITE proxy card to be voted
FOR Proposal 1 and AGAINST Proposal 2.
If you have questions or need assistance in voting your shares, please
contact the firm assisting us in the solicitation of proxies:
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NY 10005
TOLL-FREE: 1-800-223-2064
BANKS & BROKERS CALL: 212-440-8600
Internet: http://www.georgeson.com
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HOW TO VOTE YOUR PROXY CARD
IN SUPPORT OF PALFED'S BOARD AND MANAGEMENT
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1. Sign and date your proxy and check the boxes FOR item #1, the
election of directors, and AGAINST item #2, the Mid-Atlantic
proposal.
OR
2. Simply sign and date the proxy. If you do not check any of the
boxes, your shares will be voted as management recommends.
TO CHANGE YOUR VOTE,
SIMPLY EXECUTE, SIGN, DATE AND MAIL THIS PROXY,
IT WILL REVOKE ANY PRIOR PROXY YOU SENT TO PALFED OR TO MID-ATLANTIC.
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PALFED, INC.
Dear Shareholder:
Please accept our thanks for sending in your WHITE Proxy Card.
To avoid the possibility of the validity of your WHITE Proxy Card being
challenged or disqualified for the reason(s) indicated below, we are
requesting that you sign, date and mail the enclosed new WHITE Proxy Card
with the correction indicated below in the self-addressed envelope provided
for your convenience. This WHITE Proxy Card will automatically revoke any
previous WHITE Proxy Card when it is returned to us.
/ / Your previous WHITE Proxy was unsigned. (If signing as attorney,
executor, administrator, personal representative of the estate, corporate
officer, partner, trustee, custodian or guardian, please sign and give your
full title as such.)
/ / Your previous WHITE Proxy was undated. (Please date, sign and return the
new proxy in the enclosed envelope.)
/ / Your previous WHITE Proxy omitted your title or authority. (If signing as
attorney, executor, administrator, personal representative of the estate,
corporate officer, partner, trustee, custodian or guardian, please sign and
give your full title as such such.)
/ / Your previous WHITE Proxy, as signed, did not conform to the name shown
on the Proxy. (Please date and sign this WHITE Proxy Card exactly as the
registration appears on the revocation, including your full title if signing
other than in an individual capacity.) If the registration is in the name of
a custodian for the benefit of a minor, the custodian must sign and indicate
their capacity. If you are a beneficiary 18 years or older, you may sign as
long as you indicate your age.
/ / Your previous WHITE Proxy, as marked, did not clearly specify your
instructions. Please sign, date and clearly mark your proxy.
/ / Other ____________________________________________________________________
__________________________________________________________________________
Since time is of the essence, we would greatly appreciate your signing,
dating and mailing the enclosed WHITE Proxy Card as soon as possible. Please
mail it in the envelope provided for your convenience. Once again, we greatly
appreciate your support.
Sincerely,
PALFED, INC.
