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COMMUNITY FINANCIAL CORP.
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(Name of Registrant as Specified In Its Charter)
BARRETT R. ROCHMAN
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<PAGE>
Man files suit against local corporation
By Kevin Ryden
A Carbondale man filed a lawsuit against Community Financial Corp. Wednesday,
alleging the company has not allowed him to examine corporate minutes from a
variety of committee meetings. According to court documents, Barrett R. Rochman,
Carbondale, alleges the corporation has "failed and refused to provide or allow"
him to examine the corporate minutes of each Board of Director's meeting, each
Management Recognition Plan Committee meeting and each Compensation Committee
meeting from and after January 1, 1999. Community Financial Corp. has its
principal place of business located in Olney and serves Southern Illinois
through its five bank subsidiaries.
"It's becoming very uncomfortable," Rochman said from his office in Carbondale
Thursday afternoon.
Rochman, who said he owns 128,740 shares in Community Financial Corp., more than
any other stockholding member, and who has worked in the real estate investment
business for more than 30 years, claims he has stated proper purpose in seeking
to examine the corporate minutes. Rochman also said he has experience in serving
on the Board of Directors of Heartland Bankshares, Inc., a bank holding company,
located in Herrin.
Heartland Bankshares, Inc. was sold to Banterra Corp. last year.
The suit alleges Community Financial Corp. feels Rochman did not state a proper
purpose in trying to obtain the corporate minutes. Rochman said his reasons of
obtaining the corporate minutes include communicating with Community Financial
Corp. stockholders about the "business affairs of the corporation, the 2000
annual meeting of the stockholders...or if directors are not elected at that
meeting, the next meeting of stockholders at which directors are elected...and
the solicitation of proxies in connection with the stockholders' meeting."
The stockholders meeting is scheduled to occur on April 27. The suit alleges
Rochman would "be prejudiced if the relief sought in this complaint is delayed
until after the stockholders' meeting." The suit also alleges the examination
and copying of the corporate minutes is "a simple and inexpensive matter,
provides information concerning the business affairs of (Community Financial
Corp.) With respect to management decisions, practices and policies." Allowing
Rochman to look over the minutes would "provide valuable information for
(Rochman) and fellow stockholders regarding business affairs of (Community
Financial Corp.) and provide necessary information to stockholders relative to
the solicitation of proxies" from the corporate stockholders, according to court
documents.
Rochman alleges that the "failure of (Community Financial Corp.) to comply with
his request to examine and make extracts from the corporate minutes" is harmful
in his attempt to communicate with other corporate stockholders about the
business affairs of the corporation and with the solicitation of proxies.
Rochman said the corporation faces approximately $126,000 in penalties plus
court costs.
<PAGE>
Wayne Benson, Community Financial Corp. President and Chief Executive Officer,
would not comment on the lawsuit. Rochman, who emphasized that all comments are
his own, said he feels the corporation is keeping something from shareholders.
"The question is, what are they hiding?" He said. "It bedevils me...If they have
nothing to hide, they have nothing to lose." Rochman said the corporation is
publicly owned and that approximately 400 Olney residents have shares in the
company. However, Community Financial Corp. is not doing anything illegal,
Rochman said.
"They have every legal right to do it," he said, adding he feels the corporation
is engaging in what he describes as "management entrenchment."
He added he has a proper purpose and "particular need" in trying to obtain the
corporate minutes and therefore has a right to view them. Rochman also alleges
Community Financial Corp. stock prices have decreased significantly in value
since it first began being sold to the public in March 1995.
According to Rochman, the initial subscription price was $10 per share in 1995.
The last stock trade was reported at $9 3/16 on Jan. 27. According to a proxy
statement from Rochman, he is soliciting proxies for use at the stockholders
meeting to vote in favor of the election of Michael B. Nadler and himself to the
Board of Directors of Community Financial Corp., to vote in favor of his
stockholder proposal, to vote in favor of the independent auditors of the
corporation recommended by management (if presented for a vote) and to vote for
his discretion on such other matters that may be presented at the stockholders
meeting.
Rochman decided to seek a position on the corporation's Board of Directors to
"improve the financial performance of Community Financial, enhance stockholder
value...and reduce directors fees at Community Financial."
Rochman also said he agrees with the corporation's strategic plan to maximize
shareholder value, but criticized its timing. "Now they have a plan after five
years? Why?" he asked. "I agree they need a plan, but quantitate the damn thing.
Put numbers to it." According to a press release from Community Financial Corp.,
the company is taking a variety of actions to "increase operating efficiency,
including consolidating the charters of its subsidiary banks, reducing or
limiting operating expenses, and using technology to enhance efficiency." The
strategic plan, which also states a "significant feature of the plan relates to
changes in the asset and liability mix," began in October, according to the
release.
The press release also states the company will seek to "increase construction,
agricultural and commercial real estate loans while decreasing its emphasis on
residential lending" and calls for the "sale of some of the company's lower
yielding investment securities and deployment of the proceeds into higher
yielding loans." Various actions in the "area of personnel management intended
to enhance productivity are also planned," the release stated.
<PAGE>
Community Financial Corp. "reported consolidated assets of approximately $309.90
million, consolidated loans of approximately $179.50 million and consolidated
deposits of approximately $225.20 million based on Dec. 31, 1999 financial
information," according to the press release.
