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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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Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[X ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
COMMUNITY FINANCIAL CORP.
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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)
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[ ] Fee computed on table below per Exchange Act
Rules 14a-6(i)(1) and 0-11.
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transaction applies:
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forth the amount on which the filing fee is calculated and state
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[LETTERHEAD OF COMMUNITY FINANCIAL CORP.]
INDEPENDENT, NATIONALLY RESPECTED EXPERT
RECOMMENDS A VOTE "FOR" YOUR DIRECTORS
April 11, 2000
Dear Fellow Stockholder:
I promised to keep you apprised of developments and there
is important news to share with you, particularly since Mr.
Rochman has again tried to distort the facts.
A few days ago, your Board of Directors won an important
endorsement from an independent, leading shareholder advisor who
recommended that Community Financial stockholders vote on the
Company's WHITE card "FOR" the Company's nominees and "AGAINST"
Mr. Rochman's shareholder proposal. WE ARE PLEASED THAT AN
OUTSIDE, EXPERIENCED OBSERVER, AFTER CONSIDERING CAREFULLY THE
FACTS, HAS ENDORSED COMMUNITY FINANCIAL'S POSITION.
The independent advisor, Institutional Shareholder Services
(ISS), the nation's most respected independent proxy advisory
firm, is retained by institutional investors (including some of
the largest, most sophisticated investors in the U.S.)to advise
on proxy contests, corporate governance and related issues.
It comes as no surprise that Mr. Rochman now criticizes ISS
and its analysis and wants you to disregard the views of an
independent expert. Thinking stockholders will ask themselves
one simple question: Would Mr. Rochman criticize the findings of
an independent expert if he had been endorsed? We think it's a
clear case of "sour grapes" and urge you not to be misled.
SINCE IT'S PLAIN TO US THAT YOU CAN'T TRUST MR. ROCHMAN TO TELL
YOU THE TRUTH, WE URGE YOU TO LOOK AT THE FACTS.
Both I and Barrett Rochman talked separately with ISS to
explain our respective positions. I had no input into the
writing of ISS's report and, in fact, I didn't know what
position ISS had taken until the report was final and published.
AS I SAID, ISS OVERWHELMINGLY ENDORSED COMMUNITY FINANCIAL'S
POSITION.
CONSIDER FOR YOURSELF WHY THE EXPERT RECOMMENDED THAT
STOCKHOLDERS VOTE "FOR" COMMUNITY FINANCIAL'S BOARD OF
DIRECTORS:
. "...ISS believes management has taken the necessary
steps to put Community Financial back on track."
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. "(Community Financial) has retained a nationally
recognized bank consulting firm to consider a variety
of alternatives - including exploring a sale - and
has put into place a strategic plan designed to
transform the company into a fully integrated national
bank."
. "The officers and directors have their own stake in this
strategy - to the tune of 13.6 percent of the stock - and
it is in their interest to invigorate earnings and bolster
the stock price rather than conduct an immediate fire
sale."
. "(Community Financial) has also taken measures to tie
employee compensation to performance, to remove the MRP,
and to align directors' interests with shareholders
through stock rather than cash retainers."
. "In our view, the dissidents have not put forth any viable
plan for turning the company around..."
. "Mr. Rochman admits that he has a limited background in
banking..."
IN RECOMMENDING A VOTE "AGAINST" MR. ROCHMAN'S SHAREHOLDER
PROPOSAL, ISS HAD THIS TO SAY:
. "The board has already hired PBS to evaluate alternatives,
including a sale of the Company, and has adopted a
strategic plan for improving Shareholder value." In
contrast, ISS called Mr. Rochman's shareholder resolution
"a superfluous resolution."
. "TO FOLLOW ISS'S VOTE RECOMMENDATIONS, EXECUTE YOUR VOTES
FOR MANAGEMENT'S' SLATE OF DIRECTORS AND AGAINST THE
SHAREHOLDER PROPOSAL ON MANAGEMENT WHITE PROXY CARD."
I have one last fact for you to consider. Mr. Rochman has
based his campaign on negative attacks on me and your Board in
his desperate and mean-spirited attempt to confuse the issues
and get your vote. FACT: IF YOU GO BACK AND LOOK AT ALL OF HIS
LETTERS, YOU WILL DISCOVER ONE REMARKABLE AND MOST SIGNIFICANT
OMISSION. MR. ROCHMAN HAS FAILED TO OFFER EVEN ONE POSITIVE,
WORKABLE IDEA TO IMPROVE YOUR COMPANY'S PERFORMANCE - NOT EVEN
ONE!
Thinking stockholders should ask themselves two final
questions: Do you want Mr. Rochman to represent you and your
investment? What, if anything, can Mr. Rochman contribute to
your Board? We are confident that stockholders who examine the
facts will disregard his venomous attacks and conclude that
there is no reason for Mr. Rochman to serve on the Board of
Community Financial, your Company.
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OUR SOLE FOCUS IS TO ENHANCE STOCKHOLDER VALUE
While pleased to receive ISS's endorsement, we know that
we must "roll up our sleeves" and get to work implementing our
Strategic Plan to maximize stockholder value. We expect to
increase earnings while decreasing interest rate risk through
numerous initiatives. Most importantly, a stock repurchase plan
of significant size is expected to be undertaken in the future
once the Strategic Plan produces results. IN DIRECT CONTRAST TO
MR. ROCHMAN, WE HAVE A CONCRETE, WELL THOUGHT OUT PLAN TO
INCREASE THE VALUE OF YOUR STOCK. REMEMBER, YOUR DIRECTORS,
OFFICERS AND EMPLOYEES OWN OVER 15% OF YOUR COMPANY'S STOCK -
OUR INTERESTS ARE THE SAME AS YOURS. AND, YOUR BOARD OF
DIRECTORS IS CONFIDENT THAT WITH YOUR SUPPORT, ITS EFFORTS WILL
----
ENHANCE THE VALUE OF YOUR INVESTMENT IN COMMUNITY FINANCIAL
CORP.
_____________
In closing, I would like to remind you of the importance
of your vote this year because of the proxy contest. Every
single vote is significant, SO PLEASE SUPPORT YOUR BOARD OF
DIRECTORS BY SIGNING, DATING AND MAILING YOUR WHITE PROXY CARD.
TIME IS SHORT, SO PLEASE VOTE TODAY.
On behalf of your Board of Directors, thank you for your
many expressions of support.
Sincerely,
/s/ Wayne H. Benson
Wayne H. Benson
President &
Chief Executive Officer
IMPORTANT
YOUR VOTE IS IMPORTANT. Please sign, date and promptly
mail your WHITE proxy in the enclosed envelope. Remember, DO NOT
return any blue proxy sent to you by B. Rochman, not even as a
vote of protest. YOU CAN CHANGE YOUR EARLIER VOTE SIMPLY BY
SIGNING, DATING AND MAILING THE ENCLOSED WHITE PROXY.
If your shares are registered in the name of a broker,
only your broker can execute a proxy and vote your shares and
only after receiving your specific instructions. Please call
the person responsible for your account and direct him/her to
execute a WHITE proxy on your behalf today. You should also
mail your WHITE proxy at once in the envelope provided. Do so
for each separate account you maintain. If you have questions
or need assistance, please call us at (618) 395-8676. You may
also call:
D. F. KING & CO., INC.
CALL TOLL-FREE - 1-888-242-8155
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COMPARE THE PLANS -- THEN YOU DECIDE
Mr. Rochman has virtually no experience in banking - and it
shows. Compare your Board of Directors' comprehensive Strategic
Plan to Mr. Rochman's so-called "plan" as presented to Mr.
Benson in their meeting. Apart from mean-spirited attacks, Mr.
Rochman offers nothing. Who will better represent your
interests?
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YOUR BOARD OF DIRECTORS' COMPREHENSIVE MR. ROCHMAN'S "PLAN"
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STRATEGIC PLAN
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. INCREASE OPERATING EFFICIENCIES AND REDUCE . Open expensive branches in far away
COSTS. Merge all of our existing banks under one umbrella in cities where we can't possibly
a major step to control costs and increase operating efficiencies. compete.
The merger of our bank subsidiaries will permit consolidation of
accounting and lending functions thereby promoting operating
consistencies, efficiencies and lower costs. An application to
merge two of our banks has already been filed and we are
preparing another application to submit to federal regulators to
merge two other subsidiary banks. The final step, which we
expect to finish next year, will merge all of the existing charters
into one common commercial bank charter. In addition to
significant cost savings, we expect to reap benefits from
standardization of products and services and an improved image
and presence in the marketplace.
Community Financial also plans to implement other initiatives to
reduce or limit expenses and to better employ technology to
enhance efficiencies.
. IMPROVE RETURNS THROUGH BALANCE SHEET RESTRUCTURING. To improve . Double or Triple your Company's
your Company's returns, we plan to take steps to alter the current asset size by acquisitions.*
asset and liability mix, maximize loan volume and lower our cost
of funds. Specifically, we will implement marketing programs to
increase construction, agricultural and commercial real estate
loans while decreasing our emphasis on real estate lending.
We plan to significantly grow non-interest income through service
and other fee-based income, while reducing and tightly controlling
costs. Further, marketing programs will be utilized to realign
and increase the deposit mix with an emphasis on transactions
and savings deposits. Finally, lower yielding investment securities
will be sold and proceeds will be invested to fund higher
yielding loans and improve net interest margins.
. IMPLEMENT SIGNIFICANT STOCK REPURCHASE PROGRAM. Successful . No other plans.
implementation of the Company's planned initiatives and realization
of benefits will enable Community Financial to undertake a
significant stock repurchase program in the future. It is our
intention to conduct a significant repurchase of the Company's
outstanding common stock to reduce excess capital and enhance
future returns on equity.
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* Mr. Rochman has failed to tell us
how the acquisitions could possibly
be paid for.
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THE CHOICE IS CLEAR-VOTE YOUR WHITE PROXY
