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SCHEDULE 14A INFORMATION
(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. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
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)
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:
____________________________________________
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[COMMUNITY FINANCIAL CORP. LETTERHEAD]
IMPORTANT ANNUAL MEETING
April 27, 2000
Dear Fellow Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of Community Financial Corp. which will be held on
Thursday, April 27, 2000, at the Holiday Motel located at 1300
S. West Street, Olney, Illinois at 11:00 a.m., local time. Your
Board of Directors and management look forward to greeting
personally those stockholders able to be present.
Accompanying this letter, please find your 1999 Annual
Report to Stockholders, Notice of Annual Meeting and Proxy
Statement and your WHITE proxy card. You are urged to give them
your prompt and careful attention. THEN, PLEASE TAKE A MOMENT
TO SUPPORT YOUR BOARD OF DIRECTORS BY SIGNING, DATING AND
MAILING YOUR WHITE PROXY CARD.
PROXY CONTEST COMMENCED -- CAUTION
This year's annual meeting is of particular importance to
your investment in Community Financial Corp. As we recently
warned you, a dissident stockholder, Mr. Barrett Rochman, owner
of various non-banking businesses including Fred's Barn, Rochman
Rentals and Boo Noz Corp., has now commenced a proxy contest in
opposition to your Board of Directors. In assessing Mr.
Rochman's fitness to serve as a director of your Company, you
should know that in 1999, after the United States Securities and
Exchange Commission instituted proceedings against him, Mr.
Rochman signed a consent decree.* THE FOLLOWING DISCLOSURE IS
FROM MR. ROCHMAN'S OWN PROXY STATEMENT. CONSIDER IT CAREFULLY:
"The SEC instituted proceedings against me in 1998
alleging that I violated Section 13 (d) of the
Securities Exchange Act of 1934 and certain rules
thereunder (collectively the "Laws"). These
proceedings were settled on February 17, 1999 without
me having to admit or deny any of the alleged
violations. As part of the settlement, the SEC
ordered me to cease and desist from committing or
causing any violation or any future violation of the
Laws. The proceedings of the SEC related to certain
reports that I was required to file with the SEC
because I owned more than 5% of the outstanding shares
of common stock of Heartland Bancshares, Inc. I was
not required to pay any fine or penalty in connection
with the settlement."
___________
* SEE UNITED STATES OF AMERICA BEFORE THE SECURITIES AND
EXCHANGE COMMISSION, ADMINISTRATIVE PROCEEDING FILE NO. 3-9829,
IN THE MATTER OF BARRETT R. ROCHMAN, RESPONDENT. Available on
the internet at:
http://www.sec.gov/enforce/adminact/34-41061.txt.
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Now, and only 13 months after signing an SEC consent
decree, Mr. Rochman wants your support to elect himself and
another dissident, M. Nadler, to your Board in place of the two
highly qualified and dedicated nominees proposed for election by
your Directors. What's more, Mr. Rochman has revealed that his
expenses for this proxy contest are estimated at $75,000, and he
wants Community Financial stockholders to pick up the tab. Mr.
Rochman's own proxy statement discloses, "...I intend to seek
reimbursement of these expenses from Community Financial." WE
DON'T BELIEVE SHAREHOLDERS SHOULD FOOT HIS BILL AND WE DON'T
BELIEVE MR. ROCHMAN DESERVES YOUR SUPPORT.
Mr. Rochman also wants your support for his non-binding
stockholder proposal which, among other things, calls for your
Company to retain a consultant or other advisor to make
recommendations to the Board to improve earnings, and enhance
stockholder value.
THE FACT IS THAT YOUR BOARD OF DIRECTORS, WITH THE
ASSISTANCE OF A NATIONALLY RECOGNIZED CONSULTING FIRM, HAS
RECENTLY COMPLETED AN ANALYSIS OF YOUR COMPANY AND ADOPTED A
COMPREHENSIVE STRATEGIC PLAN TO IMPROVE YOUR COMPANY'S
PERFORMANCE AND ENHANCE STOCKHOLDER VALUE.
Your Board of Directors has unanimously determined to
oppose the election of B. Rochman and his hand picked candidate
as not in the best interest of the Company and all of its
stockholders. We urge you to reject B. Rochman -- do not sign
any blue card that he may send to you. INSTEAD, WE ASK YOU TO
SUPPORT YOUR BOARD OF DIRECTORS - DIRECTORS COMMITTED TO
MAXIMIZING VALUE FOR ALL COMMUNITY FINANCIAL STOCKHOLDERS - BY
SIGNING, DATING AND MAILING YOUR WHITE PROXY.
STRATEGIC PLAN ADOPTED
More than 5 months ago and long before Barrett Rochman made
his intentions known, it became clear to your Board of
Directors, including me, that change was necessary at Community
Financial Corp. Your Company's 1999 financial performance was
mediocre and, even more importantly, our stock price has
suffered like many others in the banking industry. Accordingly,
we began a process of critical self-evaluation and determined
that a new Strategic Plan was required to dramatically improve
financial performance. THE DRIVING FORCE AND VISION BEHIND THIS
PLAN WAS THE NEED TO MAXIMIZE VALUE FOR ALL OF OUR STOCKHOLDERS.
To assist us in this process your Board of Directors
retained a nationally recognized bank consulting firm,
Professional Bank Services. Our work began by defining our
vision and mission for your bank and included a candid
assessment of our strengths and weaknesses, as well as the
opportunities and challenges facing your Company. Having
completed this initial analysis, we then devoted ourselves to
defining our objectives and strategies.
On March 6, your Company announced that it had adopted a
comprehensive Strategic Plan which contains initiatives in
virtually all areas of our business. Community Financial's
Strategic Plan will allow us to capitalize on our strengths -
community and service focuses and geographic diversity to name a
few - and address areas for improvement. HIGHLIGHTS OF THE
STRATEGIC PLAN INCLUDE:
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. INCREASE OPERATING EFFICIENCIES AND REDUCE COSTS
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We intend to merge all of our existing banks under
one umbrella in a major step to control costs and
increase operating efficiencies. 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.
In addition to our planned bank consolidation,
Community Financial plans to implement other
initiatives to reduce or limit expenses and to
better employ technology to enhance efficiencies.
. IMPROVE RETURNS THROUGH BALANCE SHEET RESTRUCTURING
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In order to improve your Company's returns, we
plan to take steps to alter the current 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 also intend to significantly grow
non-interest income through service and other
fee-based income, while reducing and tightly
controlling costs as described above. 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
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Successful 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. At present, it is our intention to
conduct a significant repurchase of the Company's
outstanding common stock which will reduce excess
capital and enhance future returns on equity.
Your Board of Directors strongly believes that the
Strategic Plan as outlined will substantially improve your
Company's financial performance and maximize value for all of
our stockholders. We look forward to reporting to you on our
progress and pledge our dedication to seeing the plan through to
its successful conclusion. Please support our efforts by
returning your WHITE proxy card today.
______________________
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It is unfortunate that at a time when all of our energies
should be devoted to implementing our new Strategic Plan to
enhance stockholder value that we must devote precious time and
resources to fending off the proxy fight started by Mr. Rochman.
Your Board of Directors is unanimous in its view that the
election of Mr. Rochman and his nominee is not in the best
interests of your Company and we urge you to reject his efforts.
Please do not sign any blue proxy you receive from Mr. Rochman.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES
YOU OWN. ON BEHALF OF YOUR BOARD OF DIRECTORS, WE URGE YOU TO
SIGN, DATE AND MAIL THE ENCLOSED WHITE PROXY CARD AS SOON AS
POSSIBLE EVEN IF YOU CURRENTLY PLAN TO ATTEND THE ANNUAL
MEETING. This will not prevent you from voting in person but
will assure that your vote is counted if you are unable to
attend the meeting.
On behalf of the Board of Directors and all the employees
of your Company, thank you for your continued interest and
support.
Sincerely,
/s/ Wayne H. Benson
Wayne H. Benson
President & Chief
Executive Officer
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Your vote is important. Please take a moment to sign, date
and promptly mail your WHITE proxy in the postage paid envelope
provided. Remember, DO NOT return any blue proxy card sent to
you by B. Rochman, not even as a vote of protest.
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 contact the
person responsible for your account and direct him or her to
execute a WHITE proxy on your behalf today. Then mail your
WHITE proxy at once in the envelope provided. Please do so for
each separate account you maintain. If you have any questions
or need further assistance in voting, please call:
D. F. KING & CO., INC.
77 Water Street
New York, NY 10005
CALL TOLL-FREE - 1-888-242-8155
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