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DEFINITIVE PROXY MATERIAL
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Definitve Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
COMMERCIAL FEDERAL CORPORATION
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(Name of Registrant as Specified In Its Charter)
CAI CORPORATION
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(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(1)(2) or
Item 22(a)(2) of Schedule 14A.
[X] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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<CAPTION>
TITLE OF EACH
CLASS OF PROPOSED
SECURITIES AGGREGATE NUMBER MAXIMUM
TO WHICH OF SECURITIES TO PRICE AGGREGATE AMOUNT
TRANSACTION WHICH TRANSACTION PER VALUE OF OF FILING
APPLIES APPLIES SHARE TRANSACTION FEE
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<S> <C> <C> <C> <C>
</TABLE>
[X] 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:
$500 Fee Paid on September 14, 1995
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(2) Form, Schedule or Registration Statement No.:
Schedule 14A
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(3) Filing Party:
Same as above
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(4) Date Filed:
September 14, 1995
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CAI CORPORATION
12770 Colt Road, Suite 902
Dallas, Texas 75251
214-991-7720
Fax: 214-991-8922
October 17, 1995
Dear Fellow Stockholder:
All of us, as stockholders of Commercial Federal Corporation, now have the
unique opportunity to help make an important decision regarding the future of
our investment in the Company. CAI Corporation, CFC's largest stockholder,
has nominated two persons to serve on the nine-member Board and has proposed
a resolution requesting the Board to promptly seek a sale or merger of CFC.
The issues in this proxy contest are well-defined, and we believe the choice
is clear.
A CLEAR CHOICE FOR THE FUTURE:
SALE OR MERGER VS. BUSINESS AS USUAL
CAI WANTS ALL CFC STOCKHOLDERS TO HAVE THE CHANCE TO MAXIMIZE THE VALUE OF
THEIR SHARES THROUGH A SALE OR MERGER OF THE COMPANY. The CFC Board, as we
see it, remains unwilling to recognize the current unprecedented consolidation
in the bank and thrift industry at historically high prices. They also ignore
the risks associated with increased competition and other changes in the thrift
industry. IT IS OBVIOUS TO US THAT CFC'S BOARD IS COMMITTED TO MAINTAINING THE
STATUS QUO AND CONTINUING WITH BUSINESS AS USUAL.
In deciding whether your interests as a CFC stockholder are more aligned
with CAI or with CFC's Board and management, consider the following:
o All of CFC's current directors and executive officers taken as a whole -- a
total of 24 persons -- own less than 3% of CFC's outstanding shares. In
sharp contrast, CAI owns 1,250,100 shares, representing 8.75% of CFC's
outstanding stock.*
o In fiscal 1994, the market value of your CFC shares declined by 10.48%.
That same year, CFC Chairman and Chief Executive William Fitzgerald's total
cash compensation (salary plus bonus) increased by 10.73%, and his bonus
alone increased by 29.18%, in each case over fiscal 1993. THIS IS HARDLY AN
ALIGNMENT OF YOUR ECONOMIC INTERESTS AND THOSE OF THE COMPANY'S SENIOR
EXECUTIVE OFFICER.
o Between June 30, 1993 and June 30, 1995, the value of CFC's shares
increased by only 3.81%. But during that same two-year period, Mr.
Fitzgerald's total cash compensation and bonus increased by 26.38% and
50.71%, respectively.
It's no surprise that CFC's Board and management want to continue with
their "ongoing evaluation of strategic alternatives." Given the substantial
salaries, bonuses, fees and other benefits they receive from CFC, we expect
they would like to do so for quite some time. AS STOCKHOLDERS OF CFC, ALL OF
US SHOULD LET THE BOARD AND MANAGEMENT KNOW THAT BUSINESS AS USUAL IS JUST
NOT ACCEPTABLE ANY LONGER.
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A CLOSE LOOK AT MR. FITZGERALD'S RECORD:
MEDIOCRE RESULTS -- MEDIOCRE RETURNS
In an effort to obtain your vote, CFC's Board recently told you that
things have gone well since June 30, 1990. BUT THEY FAILED TO TELL YOU THAT
CFC SUFFERED SUBSTANTIAL LOSSES AND SEVERE FINANCIAL SETBACKS IN THE LATE
1980'S AND THAT ALMOST ANYTHING LOOKS GOOD IN COMPARISON TO 1990. Mr.
Fitzgerald became CFC's Chief Executive Officer in 1983 and presided over the
financial disaster of the late 1980's. Six of the nine current CFC directors
have been on the Board since 1988 or earlier.
Let's look at what really happened to CFC under their leadership:
o On June 30, 1986, the price of a CFC share was $19.38. By August 31,
1990, the price had plunged to $1.63--A LOSS IN VALUE PER SHARE OF MORE
THAN 90%!
o Over the nine-year period from June 30, 1986 to June 30, 1995, the
AVERAGE COMPOUND ANNUAL RATE OF RETURN ON CFC'S SHARES WAS ONLY 3.86% -
less than the average yield on a federally-guaranteed one-year treasury
bill during the same period.
o During the same nine-year period, the average annual return on the S&P
500 index was 12.51%.
o In fiscal 1987, CFC's earnings per share** were $2.99. In the eight
subsequent fiscal years, earnings per share** averaged less than $.75.
WHY SHOULD YOU RISK A REPEAT OF THE FINANCIAL SETBACKS OF THE LATE 1980'S
WHEN INSTEAD THE COMPANY COULD SEEK TO MAXIMIZE THE VALUE OF YOUR SHARES IN A
SALE OR MERGER?
CFC BOARD'S WILL HEAR YOU ONLY IF THE
MESSAGE IS LOUD AND CLEAR
The CFC Board would like you to believe that it is in your interest to
permit them to continue the Company's "strategic business plan" -- but they
say nothing about what this business plan is or what it means to you. And to
make matters worse, the CFC Board has made it clear that it has no interest
in listening to any views concerning the Company's strategic direction which
are contrary to their own. In its efforts to preserve the status quo, the CFC
Board has:
o Declared that even if stockholders--the true owners of the
Company--approve CAI's Sell or Merge Resolution, THE BOARD DOES NOT INTEND
TO FOLLOW THE STOCKHOLDERS' RECOMMENDATION.
o Declared that they may RESIST putting CAI's nominees, if elected, on the
Board of the Company's principal bank subsidiary--even though, at
present, every single member of CFC's Board also serves as a director of
the bank.
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o Told you that they may seek to CHALLENGE CAI's nomination of its two
candidates and TRY TO DENY YOU THE OPPORTUNITY to elect them as directors.
IF THE CFC BOARD DOESN'T SEEM TO CARE WHAT YOU HAVE TO SAY--HOW CAN YOU
BELIEVE THEM WHEN THEY SAY THEY ARE LOOKING OUT FOR YOUR BEST INTERESTS?
----------------
WE AT CAI HAVE ONE GOAL IN MIND -- TO MAXIMIZE THE VALUE OF ALL OF CFC'S
SHARES FOR ALL STOCKHOLDERS. We believe that the consolidation of the thrift
industry into the banking industry is inevitable, and do not believe that the
current historically high prices will remain available to stockholders of
thrifts. OUR MUTUAL INTERESTS AS STOCKHOLDERS OF CFC WILL NOT BE SERVED BY
BUSINESS AS USUAL AND FURTHER DELAY IN MAKING A SERIOUS EFFORT TO SELL OR
MERGE.
We have no interests that differ from yours. We are not seeking to acquire
CFC, we are not working on behalf of any potential acquiror and we are not
seeking control of CFC. Our nominees, if elected, will be only two of CFC's
nine directors and they intend to make every effort to work cooperatively
with the other Board members.
THIS IS THE TIME FOR YOU TO JOIN WITH US IN SENDING A STRONG AND CLEAR
MESSAGE TO THE CFC BOARD TO ACTIVELY PURSUE A SALE OR MERGER NOW. You can do
this by voting on the BLUE proxy card FOR CAI's nominees for director, FOR CAI's
Sell or Merge resolution (Proposal 2 on the BLUE proxy card) and AGAINST the CFC
Board's resolution (Proposal 3 on the BLUE proxy card). Please sign, date and
mail the enclosed BLUE proxy card today.
Finally, since the issues in this proxy contest are so clear and so
well-defined, both CAI and the CFC Board have the opportunity to present
their competing views to stockholders in an open, candid and constructive
manner. We urge CFC's Board to join us in this effort.
We thank you for your support and interest.
On behalf of CAI Corporation,
/s/ ROBIN R. GLACKIN
ROBIN R. GLACKIN
President and Chief
Executive Officer
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* CAI's ownership of 8.75% of CFC's outstanding stock is calculated on
the basis of 14,288,705 shares reported by CFC to be outstanding on
October 3, 1995, which includes shares issued by CFC on October 2,
1995 in connection with the acquisition of Railroad Financial
Corporation. Prior to such issuance of shares by CFC, the 1,250,100
shares owned by CAI represented 9.68% of CFC's outstanding stock.
** Earnings per share is calculated before extraordinary items and
before cumulative effect of changes in accounting principles.
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IMPORTANT
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1. Be sure to VOTE ONLY ON THE BLUE PROXY CARD. We urge you not to sign
the white proxy card which is sent to you by CFC, even as a protest
against the Board of Directors. Remember, each properly executed proxy
you submit revokes all prior proxies.
2. If any of your shares are held in the name of a bank, broker or other
nominee, please contact the party responsible for your account and
direct him to vote on the BLUE proxy card "FOR" CAI's nominees, "FOR"
CAI's Sell or Merge Resolution and "AGAINST" the CFC Board's business
as usual resolution.
3. 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.
(CALL TOLL-FREE (800) 223-2064)
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