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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:
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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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[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by
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4. Date Filed:
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[COMMUNITY FINANCIAL CORP. LETTERHEAD]
AN OPEN LETTER TO STOCKHOLDERS
FROM WAYNE H. BENSON
April 5, 2000
DEAR FELLOW STOCKHOLDER:
As we move closer to our annual meeting and in light of
the personal attacks made against me, I want to express to you
my personal views regarding the proxy contest currently being
waged by a speculator in Community Financial stock, Mr. Barrett
Rochman. By this time, Mr. Rochman has made multiple mailings
and contacted many of you by telephone painting an incomplete,
inaccurate and misleading picture. Mr. Rochman has clearly
caused many of you to express your concern. I want to set the
record straight.
A CLOSER LOOK AT BARRETT ROCHMAN
I met personally with Mr. Rochman on January 11, 2000, as
I would with any other stockholder requesting a meeting. Mr.
Rochman's self-serving account of that meeting, however, omits
many important details that you should know about.
When Mr. Rochman visited my office, he demonstrated his
confrontational intentions, bad faith and true motivation by
bringing his personal attorney to the meeting, although he
failed to mention this fact when we scheduled the meeting. I
had anticipated that the meeting would not be adversarial but
would rather be a constructive exchange of ideas. Even though
he had his attorney present, I continued the meeting in good
faith with the expectation that I might hear some constructive
ideas for our Company and with the hope that we might be able to
avoid an expensive proxy contest. INSTEAD, WHAT I HEARD LEFT ME
VERY UNEASY.
At the meeting, Mr. Rochman stated that his vision was for
your Company to quickly reach at least $750 million in assets
and possibly as much as $1 billion in assets, more than triple
our current size. This rapid growth, according to Mr. Rochman,
was to be accomplished through various acquisitions of
unspecified banks. Mr. Rochman also recommended that we
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establish new (and expensive) branches in Indianapolis (out of
state) and Chicago (more than a four hour drive away), both of
which are highly competitive markets where we have no
established business contacts. I asked the obvious question any
experienced banker would ask: WHERE DID HE PROPOSE THAT WE
OBTAIN THE CAPITAL TO SUPPORT THIS RAPID EXPANSION? BOTH MR.
ROCHMAN AND HIS ATTORNEY HAD NO ANSWER TO THAT SIMPLE QUESTION.
Since I am sure Mr. Rochman will attempt to refute this,
you should look at the Schedule 13D he filed on January 14, 2000
which states "Mr. Rochman also discussed his thoughts on what
direction the corporate strategy of the Issuer should take. . .
and to have the Issuer grow in asset size through start-up
operations in other markets and/or acquisitions of other
financial institutions." Mr. Rochman concluded our meeting by
demanding that he be awarded three Board seats even though he
knew that there were only two seats up for election. TO DO SO
WOULD HAVE RESULTED IN MR. ROCHMAN'S CONTROLLING 33.3% OF YOUR
BOARD, FAR IN EXCESS OF HIS 5.8% STAKE IN YOUR COMPANY.
I reported to your Board of Directors Mr. Rochman's demand
that he take over 1/3 of your Board of Directors. In
considering Mr. Rochman's demand, the Board took into account
all relevant factors. The Board considered, among other things,
Mr. Rochman's lack of experience in the banking industry and the
reckless, uninformed and ill thought out nature of his so-called
growth plan. We also suspected that Mr. Rochman was a
short-term speculator given that nearly half of his ownership
position was financed with borrowed money, requiring expensive
interest payments. Your Board further considered the fact that
at the time, we were putting the finishing touches on our own
Strategic Plan, a plan that we considered far more realistic,
and far more likely to increase long-term stockholder value. We
also considered the fact that the U.S. Securities and Exchange
Commission had instituted enforcement proceedings against Mr.
Rochman recently, resulting in a Consent Decree being signed by
Mr. Rochman only 13 months earlier. Incidentally, that consent
decree makes for interesting reading, and I suggest you review
it by visiting the SEC's world wide web site at:
http://www.sec.gov/enforce/adminact/34-41061.txt.
Based on these factors, the Board of Directors concluded
that Mr. Rochman had no positive contribution to make to your
Board, but instead would be a negative and disruptive influence,
particularly since we were about to implement our Strategic Plan
to maximize stockholder value. Accordingly, the Board
unanimously decided to proceed with its own experienced,
competent and locally based nominees, rejecting Mr. Rochman's
demand for three Board seats. WE REMAIN CONVINCED THAT OUR
ACTIONS ARE IN THE BEST INTEREST OF THE COMPANY AND YOU, OUR
STOCKHOLDERS.
TAKE A CLOSER LOOK AT THE FACTS
Since Mr. Rochman no longer voices his disagreement with
our Strategic Plan, he has chosen to attack me personally on the
issue of compensation, which he wants you to believe
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is excessive. WE URGE YOU NOT TO BE MISLED. INSTEAD, LOOK AT
THE FACTS:
FACT: My salary for 2000 is $130,000. My 1999 compensation
included a salary of $100,000 and a $9,000 bonus (earned
in 1998 and paid in 1999) resulting in a total increase
in my compensation of $21,000. For this increase, I
assumed the duties of the retired President and CEO of
Community Bank & Trust in addition to the previous duties
I performed. The retired President and CEO received
total comparable compensation of $147,500 during 1999.
Mr. Rochman fails to mention the fact that because I
assumed these duties rather than having the Company hire
a new person, the Company saved a total of $126,500.
DON'T BE MISLED BY MR. ROCHMAN. WE HAVE SAVED YOUR
COMPANY $126,500 IN ANNUAL COMPENSATION EXPENSES.
FACT: MY SALARY IS WELL BELOW MY PEERS, BASED ON INDEPENDENT
STUDIES. In fact, one study by the Illinois Bankers
Association indicates that my salary is approximately 36%
below the average salary for Illinois-based banks of
comparable size, many of which are less complex, private
companies.
FACT: The same studies show that your Company's directors fees
are well within the averages paid to directors of other
companies of comparable size.
Mr. Rochman also criticizes your Company's Management
Recognition Plan - A PLAN WHICH HE CONVENIENTLY FAILS TO TELL
YOU HAS BEEN TERMINATED. AGAIN, LOOK AT THE FACTS:
FACT: No awards have been made under that plan since January
1996, except to two independent directors upon joining
the Board. In January 2000, the Board terminated the MRP
and no further awards will be made.
FACT: The only Plan activity is the "vesting" of awards. In
1996, the Board decided to vest awards over five years
(instead of vesting immediately) so as to require
additional service before awards are earned, and
criticism of that action now is misleading and unfounded.
FACT: No new awards were made in 1999 or 2000. MR. ROCHMAN'S
STATEMENTS IN HIS LETTER DATED MARCH 22 TO THE CONTRARY
ARE ABSOLUTELY FALSE.
______________________
WE URGE YOU NOT TO BE MISLED BY MR. ROCHMAN. Since most
of my wealth is invested in Community Financial stock, no one is
motivated more than me to enhance the value of our stock and we
have adopted a Strategic Plan designed to do just that. I urge
you to act in what I believe is in your own best interest by
signing, dating and mailing your WHITE proxy. And
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remember, please do not return any blue cards sent to you by Mr.
Rochman. If you have already done so, to change your vote please
sign, date and mail the enclosed WHITE proxy card.
Finally, you should know that your Board of Directors does
not relish this proxy contest started by Mr. Rochman and views
it as a waste of Company resources. Having only just been
promoted to the position of President and Chief Executive
Officer, I am diligently implementing our new Strategic Plan to
enhance the value of your investment. This contest is an
expensive distraction. But we will continue to oppose Mr.
Rochman and his hand-picked nominee because it is the right
thing to do and, even more importantly, because it is in the
best long-term interests of our Company and all of our
stockholders. I urge you to support your Board of Directors.
YOUR VOTE IS IMPORTANT, SO PLEASE SIGN, DATE AND MAIL YOUR WHITE
PROXY CARD AT YOUR EARLIEST CONVENIENCE.
I am grateful for this opportunity to set the record
straight, and I thank you for your support.
Sincerely,
/s/ Wayne H. Benson
Wayne H. Benson
President and
Chief Executive Officer
IMPORTANT
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 you have
already returned a blue card, you can change your vote simply by
signing, dating and mailing the enclosed WHITE proxy card. We
urge you to act today.
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 us at (618)
395-8676. You may also call D.F. King, which is assisting us,
at:
D.F. KING & CO., INC.
77 WATER STREET
NEW YORK, NY 10005
CALL TOLL-FREE-1-888-242-8155
