<PAGE>
<PAGE>
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
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Subsection 240.14a-11(c) or
Subsection 240.14a-12
[ ] Confidential, For Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
COMMERCIAL FEDERAL CORPORATION
- - ----------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
N/A
- - ----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Rules 0-11(c)(1)(iii), 14a-6(i)(1), or
14a-6(i)(2). (NO FEE NOW REQUIRED)
[ ] $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.
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:
_________________________________________________________________
4. Proposed maximum aggregate value of transaction:
_________________________________________________________________
[ ] 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:
____________________________________________<PAGE>
<PAGE>
[COMMERCIAL FEDERAL CORPORATION LETTERHEAD]
October 18, 1996
ANNUAL MEETING
NOVEMBER 19, 1996
Dear Fellow Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of Commercial Federal Corporation (the
"Corporation") to be held on Tuesday, November 19, 1996, at 10:00
a.m. at the Holiday Inn Central Convention Centre, "Holiday C"
Meeting Room, 3321 South 72nd Street, Omaha, Nebraska. Your
Board of Directors and Management look forward to greeting
personally those stockholders able to attend.
At this meeting, as set forth in the accompanying Notice of
Annual Meeting and Proxy Statement, stockholders will be asked to
consider and act upon (i) the election of two directors for a
two-year term (the Board having nominated Robert D. Taylor and
Aldo J. Tesi), and the election of three directors for a three-
year term (the Board having nominated Robert F. Krohn, Charles M.
Lillis and Robert S. Milligan), (ii) the approval of a stock
option plan, and (iii) a stockholder proposal which your Board of
Directors unanimously recommends a vote "AGAINST." During the
meeting, we will also report on the operations of the Corporation
and its principal subsidiary, Commercial Federal Bank, a Federal
Savings Bank. Directors and officers of the Corporation will be
present to respond to any questions you may have.
Your vote is important, regardless of the number of shares
you own. We urge you to sign, date and mail the enclosed proxy
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 your Board of Directors, thank you for your
continued support.
Sincerely,
/s/ William A. Fitzgerald /s/ James A. Laphen
William A. Fitzgerald James A. Laphen
Chairman of the Board and President and Chief
Chief Executive Officer Operating Officer
<PAGE>
<PAGE>
_________________________________________________________________
COMMERCIAL FEDERAL CORPORATION
2120 SOUTH 72ND STREET
OMAHA, NEBRASKA 68124
(402) 554-9200
_________________________________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 19, 1996
_________________________________________________________________
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Stockholders (the "Meeting") of Commercial Federal Corporation
(the "Corporation") will be held at the Holiday Inn Central
Convention Centre, "Holiday C" Meeting Room, 3321 South 72nd
Street, Omaha, Nebraska, on Tuesday, November 19, 1996, at 10:00
a.m.
A Proxy Card and a Proxy Statement for the Meeting are
enclosed.
The Meeting is for the purpose of considering and acting
upon:
1. The election of two directors of the Corporation for
two-year terms and the election of three directors of
the Corporation for three-year terms;
2. Approval of the Commercial Federal Corporation 1996
Stock Option and Incentive Plan;
3. A stockholder proposal as described in the
accompanying proxy statement, if properly presented at
the Meeting; and
4. Such other matters as may properly come before the
Meeting or any adjournments or postponements thereof.
NOTE: The Board of Directors is not aware of any other
business to come before the Meeting.
Any action may be taken on the foregoing matters at the
Meeting on the date specified above or on any date or dates to
which, by original or later adjournment or postponement, the
Meeting may be adjourned or postponed. Pursuant to the Bylaws of
the Corporation, the Board of Directors has fixed the close of
business on October 7, 1996, as the record date for determination
of the stockholders entitled to notice of and to vote at the
Meeting and any adjournments or postponements thereof.
You are requested to sign and date the enclosed form of
proxy which is solicited by the Board of Directors and to mail it
promptly in the enclosed postage-paid envelope. The proxy will
not be used if you attend and vote at the Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Gary L. Matter
GARY L. MATTER
SECRETARY
Omaha, Nebraska
October 18, 1996
<PAGE>
<PAGE>
_________________________________________________________________
PROXY STATEMENT
OF
COMMERCIAL FEDERAL CORPORATION
2120 SOUTH 72ND STREET
OMAHA, NEBRASKA 68124
(402) 554-9200
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 19, 1996
_________________________________________________________________
_________________________________________________________________
GENERAL
_________________________________________________________________
This Proxy Statement and the enclosed Proxy Card are
furnished in connection with the solicitation of proxies by the
Board of Directors of Commercial Federal Corporation (the
"Corporation"), to be used at the Annual Meeting of Stockholders
of the Corporation and at any adjournments or postponements
thereof (the "Meeting") which will be held at the Holiday Inn
Central Convention Centre, "Holiday C" Meeting Room, 3321 South
72nd Street, Omaha, Nebraska, on Tuesday, November 19, 1996, at
10:00 a.m. The accompanying Notice of Annual Meeting, this Proxy
Statement and the Proxy Card are being first mailed to
stockholders on or about October 18, 1996.
_________________________________________________________________
VOTING AND REVOCABILITY OF PROXIES
_________________________________________________________________
The close of business on October 7, 1996, has been fixed as
the record date for the determination of stockholders entitled to
notice of and to vote at the Meeting. At that date, the
Corporation had outstanding 14,308,834 shares of common stock,
par value $.01 per share ("Common Stock"). Holders of Common
Stock are entitled to one vote per share for the election of
directors, subject to the right to cumulate votes as described
below, and upon all matters on which stockholders are entitled to
vote.
Proxies solicited by the Board of Directors of the
Corporation which are properly executed and returned to the
Corporation will be voted at the Meeting, and any adjournments or
postponements thereof, in accordance with the directions given
thereon. Executed proxies on which no directions are indicated
will be voted FOR Proposals I and II (the election of the
Corporation's nominees as directors and the approval of the
Commercial Federal Corporation 1996 Stock Option and Incentive
Plan (the "1996 Option Plan")) and AGAINST Proposal III. If any
other matters are properly brought before the Meeting, the
proxies solicited by the Board of Directors will be voted on such
matters as determined by a majority of the Board. Other than the
election of directors to the Board of Directors, consideration of
the 1996 Option Plan and the consideration of Proposal III, the
Board of Directors is not currently aware of any other matters to
be brought before the Meeting.
The presence in person or by proxy of the holders of a
majority of the outstanding shares of Common Stock entitled to
vote at the Meeting is necessary to constitute a quorum thereat.
If a quorum is not present or represented by proxy, the
stockholders entitled to vote, present or represented by proxy,
have the power to adjourn the Meeting from time to time, without
notice other than an announcement at the Meeting, until a quorum
is present or represented. Assuming a quorum is present, under
Nebraska law directors shall be elected by a plurality of votes
cast by stockholders at the Meeting (abstention and broker non-
votes not being considered in determining the outcome of the
election). All other action to be taken at the Meeting requires
the affirmative vote of a majority of the shares represented and
entitled to vote at the Meeting (accordingly, abstentions and
broker non-votes will not affect the outcome of any such action).<PAGE>
<PAGE>
Pursuant to the Bylaws of the Corporation and Nebraska law,
every stockholder entitled to vote for the election of directors
has the right to vote the number of shares owned thereby for as
many persons as there are directors to be elected, or to cumulate
votes by multiplying the number of shares held by such
stockholder by the number of directors to be elected and to cast
such votes for one director or distribute them among any number
of candidates. Unless otherwise indicated by the stockholder, a
vote FOR the Board of Directors' nominees on the accompanying
Proxy Card will give the proxies named therein discretionary
authority to cumulate all votes to which the stockholder is
entitled and to allocate such votes in favor of one or more of
the Board's nominees, as the proxies may determine.
Additionally, executed proxies will confer discretionary
authority on the proxies named therein to vote with respect to
the election of any person recommended by the Board of Directors
as a director where the nominee is unable to serve or for good
cause will not serve (an event not now anticipated).
Execution of a Proxy Card will not affect your right to
attend the Meeting and to vote in person. A stockholder
executing a proxy may revoke such proxy at any time before it is
voted by (i) filing a written notice of revocation with the
Secretary of the Corporation at the address provided above, (ii)
filing a duly executed proxy bearing a later date, or (iii)
attending and voting in person at the Meeting. Attendance at the
Meeting without voting thereat will not revoke a proxy previously
executed and duly submitted by you.
_________________________________________________________________
RECENT DEVELOPMENTS
_________________________________________________________________
On August 21, 1996, the Corporation consummated the
repurchase of 1,250,100 shares (8.3% of the outstanding shares of
Common Stock prior to the repurchase) of Common Stock from CAI
Corporation ("CAI"), a Dallas-based investment company, for an
aggregate purchase price of $48.9 million. Such purchase price,
excluding transaction costs incurred by the Corporation for this
repurchase, consisted of cash of $28.2 million and the surrender
of a warrant (valued at $20.7 million) which would have enabled
the Corporation to purchase 99 shares of non-voting common stock
of CAI. The Corporation also agreed to reimburse certain
expenses of CAI and paid CAI cash in lieu of the pro rata portion
of any dividend CAI otherwise would have received for the quarter
ended September 30, 1996. The cash portion of the repurchase was
financed by a loan from a financial institution. Such loan is
secured by a portion of the outstanding shares of the common
stock of the Bank. Concurrent with the close of the repurchase,
two directors of the Corporation, Robin R. Glackin and Steven M.
Ellis, who also serve as executive officers of CAI, resigned from
the Board of Directors. The Corporation's Board of Directors has
nominated Robert D. Taylor and Aldo J. Tesi to fill the vacancies
created by the resignation of the two directors.
2<PAGE>
<PAGE>
_________________________________________________________________
PRINCIPAL STOCKHOLDERS
_________________________________________________________________
Persons and groups owning in excess of 5.0% of the Common
Stock are required to file certain reports regarding such
ownership pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Based upon such reports, and
certain other available information, management knows of no
persons who owned more than 5.0% of the Corporation's outstanding
shares of Common Stock at October 7, 1996. The following table
sets forth, as of October 7, 1996, certain information as to the
Common Stock beneficially owned by each of the executive officers
listed in the Summary Compensation Table on page 11 and by all
executive officers and directors of the Corporation as a group.
<TABLE>
<CAPTION>
AMOUNT AND PERCENT OF
NATURE OF SHARES OF
BENEFICIAL COMMON STOCK
BENFICIAL OWNER OWNERSHIP(1) OUTSTANDING
- - --------------- --------- ------------
<S> <C> <C>
William A. Fitzgerald 301,296 (2) 2.09%
James A. Laphen 89,884 (2) 0.63
Gary L. Matter 21,832 (2) 0.15
Joy J. Narzisi 21,224 (2) 0.15
Margaret E. Ash 18,980 (2) 0.13
All Executive Officers
and Directors as a
Group (29 persons) 876,145 (2)(3) 6.00%
<FN>
_________________
(1) As to ownership of shares by executive officers and
directors, includes certain shares of Common Stock owned by
businesses in which the director or executive officer is an
officer or major stockholder, or by spouses or as a
custodian or trustee for minor children, over which shares
the named individual or all executive officers and directors
as a group effectively exercise sole or shared voting and
investment power, unless otherwise indicated.
(2) Includes 207,709, 43,707, 9,252, 14,661, 13,817 and 424,769
shares, respectively, which Messrs. Fitzgerald, Laphen and
Matter, Ms. Narzisi and Ms. Ash and all executive officers
and directors as a group have the right to purchase pursuant
to the exercise of stock options, as well as stock held in
retirement accounts or funds for the benefit of the named
individuals or group.
(3) On October 11, 1996, Robert D. Taylor and Aldo J. Tesi were
nominated to stand for election as directors at the Meeting.
As they did not serve as directors on October 7, 1996, their
stock ownership has been excluded from the above table.
</FN>
</TABLE>
3<PAGE>
<PAGE>
_________________________________________________________________
PROPOSAL 1 -- ELECTION OF DIRECTORS
_________________________________________________________________
The Corporation's Board of Directors is composed of nine
members. The Corporation's Articles of Incorporation provide
that directors are to be elected for terms of three years, one-
third of whom are to be elected annually. Three directors will
be elected at the Meeting to serve for a three-year period or
until their respective successors have been elected and
qualified. The Corporation's Board of Directors has nominated to
serve as directors Robert F. Krohn, Charles M. Lillis and Robert
S. Milligan, all of whom are currently members of the Board. In
addition, two directors will be elected at the Meeting to serve
for two-year terms or until their successors are elected and
qualified to fill the vacancies created by the resignations of
Directors Ellis and Glackin in August 1996. The Board of
Directors has nominated Robert D. Taylor and Aldo J. Tesi to fill
these vacancies.
If any nominee is unable to serve, the shares represented by
all valid proxies will be voted for the election of such
substitute as the Board of Directors may recommend. At this
time, the Board knows of no reason why any nominee might be
unavailable to serve.
The Board of Directors intends to vote all of the shares for
which it is given proxies, to the extent permitted thereunder,
FOR the election of the Board's nominees and intends to cumulate
votes so as to maximize the number of such nominees elected to
serve as directors of the Corporation.
The following table sets forth the names of the Board's
nominees for election as directors and of those directors who
will continue to serve as such after the Meeting. Also set forth
is certain other information with respect to each person's age,
the year he or she became a director, the expiration of his or
her term as a director, and the number and percentage of shares
of Common Stock beneficially owned at October 7, 1996. At
present, each director of the Corporation is also a member of the
Board of Directors of the Corporation's wholly owned subsidiary,
Commercial Federal Bank, a Federal Savings Bank (the "Bank").
Messrs. Taylor and Tesi, the Board's nominees to fill the two
vacancies, do not currently serve on the Bank's Board of
Directors. The Board of Directors of the Bank is elected by the
Corporation as the sole stockholder of the Bank. The selection
of nominees for the election of directors of the Bank is within
the discretion of the Board of Directors and director nominees
for the Bank are selected by a majority vote of the Board of
Directors.
4<PAGE>
<PAGE>
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
YEAR FIRST BENEFICIALLY
AGE AT ELECTED OR CURRENT OWNED AT
OCTOBER 7, APPOINTED TERM OCTOBER 7, PERCENT
NAME 1996 DIRECTOR TO EXPIRE 1996 OF CLASS
- - ---------------------------------------------------------------------------------------------
BOARD NOMINEES FOR TERMS TO EXPIRE IN 1998
<S> <C> <C> <C> <C> <C>
Robert D. Taylor 49 N/A (2) N/A 34,289 0.24%
Aldo J. Tesi 45 N/A (2) N/A -- -- %
BOARD NOMINEES FOR TERMS TO EXPIRE IN 1999
Robert F. Krohn 63 1984 1996 84,629 0.59%
Charles M. Lillis 54 1988 1996 4,804 (3) 0.03%
Robert S. Milligan 51 1987 1996 5,621 (3) 0.04%
DIRECTORS CONTINUING IN OFFICE
Talton K. Anderson 59 1991 1997 19,907 0.14%
Carl G. Mammel 63 1991 1997 52,407 0.37%
James P. O'Donnell 48 1991 1997 3,135 0.02%
William A. Fitzgerald 58 1984 1998 301,296 (3) 2.09%
<FN>
______________
(1) Includes certain shares of Common Stock owned by businesses
in which the director is an officer or major stockholder or
by a spouse, or as a custodian or trustee for minor
children, over which shares the named individual effectively
exercises sole or shared voting and investment power, unless
otherwise indicated. Also includes shares held in
retirement accounts or funds for the benefit of the named
individuals.
(2) Messrs. Taylor and Tesi do not currently serve as directors
of the Corporation.
(3) Includes 3,000 and 132,466 shares which may be purchased
pursuant to the exercise of stock options by directors
Milligan and Fitzgerald, respectively.
</FN>
</TABLE>
The principal occupation of each director of the Corporation
for the last five years is set forth below.
ROBERT D. TAYLOR -- Director and Consultant with Taylor
Financial, based in Wichita, Kansas, a provider of financial
consulting services to small- and medium-sized multi-unit
operations. From December 31, 1990 to October 2, 1995, Mr.
Taylor served as Chairman of the Board of Directors and Chief
Executive Officer of Railroad Financial Corporation and its
wholly owned subsidiary, Railroad Savings Bank, F.S.B. Railroad
Financial Corporation was acquired by the Corporation effective
October 2, 1995.
ALDO J. TESI -- President of First Data Resources, an
Omaha, Nebraska-based subsidiary of First Data Corporation, which
provides cardholder services and relational database marketing
services to bank card issuers throughout the world.
ROBERT F. KROHN -- Vice Chairman and Chief Executive
Officer of PSI Group, Inc., a national document processing
company. Mr. Krohn serves as President of Krohn Corporation, a
strategic planning firm. Mr. Krohn served as Chairman of the
Board of the Corporation and the Bank from 1990 through 1994.
CHARLES M. LILLIS -- President and Chief Executive Officer
of U S WEST Media Group, the international, cellular, directory
publishing and cable television units of U S WEST, Inc.
5<PAGE>
<PAGE>
ROBERT S. MILLIGAN -- Chairman of the Board and Chief
Executive Officer of MI Industries, a protein processing company
headquartered in Lincoln, Nebraska, which produces products for
pharmaceutical, biological and research markets throughout the
world.
TALTON K. ANDERSON -- Owner and President of three
automobile dealerships in Omaha, Nebraska, as well as one in
Lincoln, Nebraska. Mr. Anderson is also the President of a
Nebraska-based automobile leasing company and a reinsurance
company.
CARL G. MAMMEL -- Chairman of the Board of Mammel &
Associates, a consulting firm providing services in executive
benefits, employee benefits planning and wealth transfer
planning. He is also a managing partner and Executive Vice
President of M Financial Corporation, a network of financial
service firms throughout the United States.
JAMES P. O'DONNELL -- Senior Vice President and Chief
Financial Officer of ConAgra, Inc., an Omaha, Nebraska-based
international diversified food company with annual sales of
approximately $25 billion.
WILLIAM A. FITZGERALD -- Chairman of the Board and Chief
Executive Officer of the Corporation and the Bank.
_________________________________________________________________
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
_________________________________________________________________
The Board of Directors conducts its business through
meetings of the Board and through its committees, which permits
the Board to more efficiently discharge its duties. During the
fiscal year ended June 30, 1996, the Board of Directors held nine
meetings. No director attended fewer than 75% of the total
meetings of the Board of Directors and committees on which such
directors were members during the periods which such directors
served.
The Corporation's audit committee is currently comprised
entirely of non-employee directors Anderson (Chairman) and Krohn.
Michael T. O'Neil and Sharon G. Marvin, directors of the Bank,
also serve as ex-officio members of the audit committee. This
committee's function is to approve the outside accounting firm
for use by the Corporation and Bank and to review regulatory
examination reports. This committee conducts its business
through the Bank's audit committee and serves as the liaison with
the Bank's internal audit department. The audit committee meets
quarterly or on an as needed basis. During the fiscal year ended
June 30, 1996, the audit committee met seven times.
The Corporation's compensation and stock option committee is
currently comprised entirely of non-employee directors Anderson,
Lillis, Mammel (Chairman) and O'Donnell. This committee is
responsible for developing the Corporation's executive
compensation policies generally, and for implementing those
policies for the Corporation's executive officers and the Bank's
senior executive officers (the Chairman of the Board and Chief
Executive Officer of the Corporation and the Bank and the
President and Chief Operating Officer of the Corporation and
Bank). See "Executive Compensation -- Compensation and Stock
Option Committee Report on Executive Compensation." The
compensation committee met three times during the fiscal year
ended June 30, 1996.
The Corporation's full Board of Directors currently acts as
a nominating committee for the annual selection of its nominees
for election as directors. While the Board of Directors will
consider nominees recommended by stockholders, it has not
actively solicited recommendations from the Corporation's
stockholders for nominees nor, subject to the procedural
requirements set forth in the Corporation's Articles of
Incorporation and Bylaws, are there any formal procedures for
this purpose. The Board of Directors held one meeting in its
capacity as nominating committee during fiscal year 1996.
6<PAGE>
<PAGE>
The Corporation's finance committee is currently comprised
of Directors Fitzgerald, Lillis, Mammel, Milligan and O'Donnell
(Chairman) and met five times during the 1996 fiscal year.
The Corporation's executive committee is comprised of
Directors Anderson, Fitzgerald (Chairman), Krohn and O'Donnell.
This committee transacts necessary business between Board
meetings and met eight times during the fiscal year ended June
30, 1996.
_________________________________________________________________
EXECUTIVE COMPENSATION
_________________________________________________________________
COMPENSATION AND STOCK OPTION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION
Overview and Objectives
Composed exclusively of outside directors, Talton K.
Anderson, Charles M. Lillis, Carl G. Mammel (Chairman) and James
P. O'Donnell, the Compensation and Stock Option Committee (the
"Committee") of the Board of Directors establishes the
Corporation's and the Bank's executive compensation policies.
The Committee is responsible for developing the Corporation's and
the Bank's executive compensation policies generally, and for
implementing those policies for the Corporation's executive
officers and the Bank's senior executive officers (the Chairman
of the Board and Chief Executive Officer of the Corporation and
the Bank and the President and Chief Operating Officer of the
Corporation and Bank). The Chief Executive Officer of the Bank,
under the direction and pursuant to the policies of the
Committee, implements the executive compensation policies for the
remainder of the Bank's executive officers. The Corporation
established structured compensation guidelines recommended by an
outside professional consulting firm in fiscal year 1994. These
guidelines were used in fiscal year 1996 and updated using
professional surveys from the financial services industry. The
results of the study and applicable updates indicated that the
Corporation's existing compensation programs were within
reasonable and appropriate guidelines.
The Committee's overall objectives in designing and
administering the specific elements of the Corporation's and the
Bank's executive compensation program are as follows:
. To align executive compensation to increases in
shareholder value, as measured by favorable long-term
operating results and continued strengthening of the
Corporation's financial condition.
. To provide incentives for executive officers to work
towards achieving successful annual results as a step
in fulfilling the Corporation's long-term operating
results and strategic objectives.
. To link, as closely as possible, executive officers'
receipt of incentive awards with the attainment of
specified performance objectives.
. To maintain a competitive mix of total executive
compensation with particular emphasis on awards
directly related to increases in long-term shareholder
value.
. To attract, retain and motivate top performing
executive officers in a cost effective manner for the
long-term success of the Corporation.
In furtherance of these objectives, the Corporation's
executive compensation program for fiscal year 1996 consisted of
the following components.
. BASE SALARY. The Committee makes recommendations to the
Board concerning executive compensation on the basis of regional
and national surveys of salaries paid to executive officers of
other savings and loan holding companies, non-diversified banks
and other financial institutions similar to the Corporation in
size,
7<PAGE>
<PAGE>
market capitalization and other characteristics. The Committee's
objective is to provide base salaries that are reasonably
competitive with the average salary paid by the Corporation's
peers as identified in such surveys.
. EXECUTIVE INCENTIVE PLAN. The Corporation maintains
an Executive Incentive Plan which provides for annual incentive
compensation based on achieving a combination of Corporation and
individual performance objectives. Under this plan, the
Committee establishes challenging corporate objectives, such as a
targeted level of annual net income, at the beginning of the
fiscal year. If the Corporation meets such objectives, an amount
equal to 4.5 percent of net income is set aside for payment to
executive officers (defined for this purpose as the Bank's Chief
Executive and Chief Operating Officers, Senior and First Vice
Presidents and such other officers as are designated by the
Committee for any fiscal year) as short-term and long-term
compensation. If the Corporation meets less than a designated
percentage (85.0% for fiscal year 1996) of the performance
objectives established for a fiscal year, no funds are made
available for awards under this plan for such fiscal year. If
the Corporation meets between designated percentages (between
85.0% and 100.0% for fiscal year 1996) of the specified
objectives, an amount between 2.25% and 4.5% of net income is set
aside. Additionally, if the Corporation meets or exceeds 100.0%
of the specified objectives, non-incentive stock options, not to
exceed 1.0% of outstanding shares may be issued. During fiscal
year 1996, cash compensation under the short term portion of the
plan was limited to 50.0% of the Chief Executive Officer's and
Chief Operating Officer's salaries and 20% to 40% of the
remaining executive officers' salaries. The remaining dollars in
the pool were allocated to long-term compensation awards in the
form of cash and restricted stock not to exceed 53.0% of the
Chief Executive Officer's and Chief Operating Officer's salaries
and 21% to 42% of the remaining executive officers' salaries.
The excess was allocated to assist with a key manager cash
incentive plan and the balance reverted back to the Corporation.
Non-incentive stock options in the amount of 123,093 shares (.82%
of outstanding shares) were awarded to executives and key
managers upon achievement of 100.0% of performance goals. (See
the Summary Compensation Table on page 11.) Corporate
performance is evaluated without reference to non-recurring or
extraordinary items affecting operating results.
The plan provides that following allocations of cash bonuses
as provided above, the Committee shall inform the Corporation's
Stock Option Committee (the "Stock Option Committee") of such
allocations. Pursuant to a policy adopted in June 1993 by the
Stock Option Committee, whose members are all outside directors,
the Stock Option Committee will determine, in its discretion,
whether, to whom and in what amounts restricted stock and/or non-
incentive stock options will be awarded for any fiscal year.
Shares of restricted stock awarded under this policy will
generally vest over five years, assuming the individual's
continued service with the Corporation or the Bank, thus helping
to retain qualified executives. The vesting of the stock options
awarded under this policy will be determined by the Stock Option
Committee at the time of the award. This policy may be amended
or terminated at any time by action of the Committee.
An individual's eligibility for receiving awards under the
Executive Incentive Plan, and the size of his or her awards, is
dependent on the extent to which he or she achieves certain
individualized performance objectives established at the
beginning of the fiscal year. These objectives vary on the basis
of the individual officer's position with the Corporation and/or
the Bank, and relate both to the officer's individual performance
and the Corporation's corporate performance.
The Committee believes that this plan provides a direct link
between the value created for the Corporation's shareholders and
the compensation paid to executive officers. As previously
mentioned, executive officers are not eligible to receive any
compensation under this plan for a given fiscal year unless the
Corporation's net income for that year exceeds 85.0% of a
predetermined goal. The distribution of awards under the plan is
determined by the relative success of individual executive
officers in meeting specified performance objectives.
Fulfillment of these objectives promotes both the short- and the
long-term success of the Corporation and is in the best interests
of all the shareholders. During fiscal year 1996, executive
officers received awards in the form of cash bonuses under the
short term portion of the plan and received cash and restricted
stock awards pursuant to the long term portion of the plan.
Additionally, stock options which vest partially on the date of
grant and on the next two anniversaries of grant date were
awarded pursuant to the policy of the Stock Option Committee
described below.
8<PAGE>
<PAGE>
. STOCK OPTION AND INCENTIVE PLAN. The Corporation
maintains a Stock Option and Incentive Plan as a means of
providing key employees the opportunity to acquire a proprietary
interest in the Corporation and to align their interests with
those of the Corporation's stockholders. Under this plan,
participants are eligible to receive stock options, stock
appreciation rights ("SARs"), shares of restricted stock or a
cash bonus as an alternate for a portion of, or all of, the
restricted stock award. Awards under the plan are subject to
vesting and forfeiture as determined by the Committee. Options
and SARs are granted at the market value of the Common Stock on
the date of grant. Thus, such awards acquire value only if the
Corporation's stock price increases. Restricted stock is granted
at no cost. In June 1993, the Stock Option Committee adopted a
policy pursuant to which restricted stock, or a cash award in
lieu of restricted stock, may be granted under the Stock Option
and Incentive Plan following the allocation of cash bonuses to
executive officers under the Corporation's Executive Incentive
Plan. Pursuant to this policy, as amended, the Stock Option
Committee awarded a cash bonus limited to 50.0% of the Chief
Executive Officer's and Chief Operating Officer's salaries and
20.0% to 40.0% of the remaining executive officers' salaries (as
an alternate to a portion of the restricted stock award) and an
aggregate of 1,166 shares of restricted stock. For fiscal year
1996, the Stock Option Committee awarded cash compensation under
the long-term portion of the plan to reduce the shortfall which
could be experienced by limitations under the Change in Control
Agreements if a Change in Control were to occur. See "--
Employment and Change in Control Agreements." Also, effective
June 13, 1996, non-incentive stock options to purchase an
aggregate of 80,450 shares were granted to the senior executive
officers and other executive officers of the Corporation and the
Bank. With the exception of Messrs. Fitzgerald and Laphen, such
officers were immediately vested in 60% of such options with the
remaining options to vest over a period of two years in
increments of 20% and 20%. Messrs. Fitzgerald and Laphen were
immediately vested in one-third of the options awarded to them
and will become vested in an additional one-third on the next two
anniversaries of the grant. The value of such awards to the
Chief Executive Officer and certain other executive officers is
reflected in the Summary Compensation Table on page 11. The
Committee believes that this plan aligns shareholders' and
officers' interests and helps to retain and motivate executive
officers to improve long-term shareholder value.
Compensation of the Chief Executive Officer
The Committee determines the Chief Executive Officer's
compensation on the basis of several factors. In determining Mr.
Fitzgerald's base salary for fiscal year 1996, the Committee
conducted surveys of compensation paid to chief executive
officers of similarly situated thrifts and non-diversified banks
both regionally and nationally. Mr. Fitzgerald received both
short- and long-term compensation under the Executive Incentive
Compensation Program in fiscal year 1996 based on his achievement
of objectives established by the Committee in the following
areas:
. Return on Average Assets
. Core Profitability
. Leadership Inside and Outside Corporation
. Capital Compliance and Regulatory Guidelines
Mr. Fitzgerald exceeded all his performance objectives in
these areas during fiscal year 1996. Accordingly, he received a
cash bonus under the short-term portion of the Plan equal to
50.0% of his annual salary. Pursuant to the policy of the Stock
Option Committee adopted in June 1993, as amended for fiscal year
1996, Mr. Fitzgerald received a cash bonus equal to 50.0% of his
annual salary (as an alternate to a portion of the restricted
stock award) and 333 shares of restricted stock (3% of Mr.
Fitzgerald's salary) with a value of $12,737. Also, effective
June 13, 1996, Mr. Fitzgerald received non-incentive stock
options to purchase 20,000 shares of Common Stock at an exercise
price of $38.75 per share. Such options vest in increments of
one-third on the date of grant and on the next two anniversaries
of the date of grant.
9<PAGE>
<PAGE>
The Committee believes that the Corporation's executive
compensation program serves the Corporation and all of its
shareholders by providing a direct link between the interests of
executive officers and those of shareholders generally, and by
helping to attract and retain qualified executive officers who
are dedicated to the long-term success of the Corporation.
COMPENSATION AND STOCK OPTION COMMITTEE
Talton K. Anderson
Charles M. Lillis
Carl G. Mammel, Chairman
James P. O'Donnell
10<PAGE>
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and noncash
compensation for each of the last three fiscal years awarded to
or earned by (i) the Chief Executive Officer, and (ii) the four
highest paid executive officers of the Corporation and the Bank
whose salary and bonus earned in fiscal year 1996 exceeded
$100,000 for services rendered in all capacities to the
Corporation and its subsidiaries.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
-----------------------
ANNUAL COMPENSATION(1) RESTRICTED SECURITIES
NAME AND PRINCIPAL ---------------------- STOCK UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS AWARDS (2) OPTIONS(3) COMPENSATION(4)
- - ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
William A. Fitzgerald 1996 $425,000 $425,000 $ 12,737 20,000 $34,000
Chairman and Chief Executive 1995 372,514 192,500 192,085 5,903 29,801
Officer of the Corporation 1994 330,012 165,000 163,960 -- 24,347
and the Bank
James A. Laphen 1996 300,000 300,000 8,989 15,000 24,000
President and Chief Operating 1995 253,342 135,000 134,697 4,140 20,267
Officer of the Corporation 1994 200,008 100,000 99,382 -- 14,920
and the Bank
Gary L. Matter 1996 151,983 122,400 3,060 4,483 12,159
Senior Vice President, 1995 137,795 49,280 49,159 2,159 11,024
Controller and Secretary of 1994 126,939 64,992 64,578 -- 9,673
the Corporation and the Bank
Joy J. Narzisi 1996 108,887 88,000 2,219 3,223 8,711
Senior Vice President and 1995 93,815 33,827 33,763 1,482 7,418
Treasurer of the Corporation 1994 86,091 43,422 43,146 -- 6,883
and the Bank
Margaret E. Ash 1996 108,723 88,000 2,219 3,223 8,698
Senior Vice President of the 1995 93,681 33,138 33,054 1,452 7,495
Bank 1994 87,977 44,340 44,063 -- 6,891
<FN>
_____________
(1) Does not include certain perquisite and other personal benefits which do not
exceed the lesser of $50,000 or 10.0% of the individual's salary and bonus.
(2) Represents awards under the policy of the Stock Option Committee adopted in
conjunction with the Corporation's Executive Incentive Plan. See
"Compensation and Stock Option Committee Report on Executive Compensation --
Overview and Objectives." Restricted stock granted in fiscal years 1994,
1995 and 1996 vests over a period of five years, at a rate of 20.0% per year,
assuming continued service with the Corporation. As of June 30, 1996, the
number and value, based on the closing sales price of the Common Stock of
$38.25 at June 30, 1996, of the unvested restricted stock holdings for
Messrs. Fitzgerald, Laphen and Matter and Ms. Narzisi and Ms. Ash, were
13,974 shares (value of $534,506), 8,939 shares (value of $341,917), 4,582
shares (value of $175,262), 3,136 shares (value of $119,952) and 3,164 shares
(value of $121,023), respectively. Dividends are payable on these shares if
and to the extent paid on the Common Stock generally. Upon a change in
control of the Corporation, all restrictions on the restricted stock
immediately lapse. For fiscal year 1996, the Stock Option Committee
generally awarded an additional cash bonus with a corresponding reduction in
restricted stock awards. See " -- Compensation and Stock Option Committee
Report on Executive Compensation -- Stock Option and Incentive Plan."
(3) Non-incentive stock options awarded in fiscal year 1996 to Messrs. Fitzgerald
and Laphen vest over two years in increments of one-third on the date of
grant and on the next two anniversaries of the date of grant. Non-incentive
stock options awarded in fiscal year 1996 to Mr. Matter and Ms. Narzisi and
Ms. Ash vest over two years in increments of 60% on the date of grant and 20%
and 20% on the next two anniversaries of the date of grant. Non-incentive
stock options granted in fiscal year 1995 vested immediately.
(4) Includes net contributions to the Bank's 401(k) Plan on behalf of each of the
named executive officers to match elective deferral contributions made by
each to such plan and amounts paid under the Bank's Supplemental Retirement
Plan. Matching contributions under the Bank's 401(k) Plan amounted to
$9,500, $9,500, $9,728, $8,711, and $8,698 while the employer matching
contributions, under the Supplemental Retirement Plan benefits, were $24,500,
$14,500, $2,431, $0 and $0 for Fitzgerald, Laphen, Matter, Narzisi and Ash,
respectively.
</FN>
</TABLE>
11<PAGE>
<PAGE>
OPTION GRANTS TABLE
The following table contains information concerning the
grant of stock options under the Corporation's Stock Option and
Incentive Plan to the Chief Executive Officer and each of the
other executive officers named in the Summary Compensation Table
above during the fiscal year ended June 30, 1996. Stock options
awarded to Messrs. Fitzgerald and Laphen vest over two years in
increments of one-third on the date of grant and on the next two
anniversaries of the grant date. Stock options awarded to Mr.
Matter, Ms. Narzisi and Ms. Ash vest over a three year period in
increments of 60% on the date of grant and 20% on each of the
next two anniversaries of the grant date.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------ POTENTIAL REALIZABLE
NUMBER OF % OF TOTAL VALUE AT ASSUMED ANNUAL
SECURITIES OPTIONS RATES OF STOCK PRICE
UNDERLYING GRANTED TO EXERCISE APPRECIATION FOR OPTION TERM
OPTIONS EMPLOYEES IN OR BASE EXPIRATION ----------------------------
NAME GRANTED FISCAL YEAR PRICE DATE 5% 10%
- - -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
William A. Fitzgerald 20,000 16.25% $38.75 6/13/06 $487,393 $1,235,150
James A. Laphen 15,000 12.19 38.75 6/13/06 365,545 926,363
Gary L. Matter 4,483 3.64 38.75 6/13/06 109,249 276,859
Joy J. Narzisi 3,223 2.62 38.75 6/13/06 78,543 199,044
Margaret E. Ash 3,223 2.62 38.75 6/13/06 78,543 199,044
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR, AND FISCAL YEAR-
END OPTION VALUE
The following table sets forth information concerning the
exercise of options by the Chief Executive Officer and the other
named executive officers during the last fiscal year, as well as
the value of such options held by such persons at the end of the
fiscal year.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING VALUE OF
UNEXERCISED UNEXERCISED
OPTIONS IN-THE-MONEY
AT FISCAL OPTIONS AT
YEAR-END FISCAL YEAR-END
SHARES ACQUIRED VALUE (EXERCISABLE/ (EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE) UNEXERCISABLE)(1)(2)
- - ---- --------------- -------- -------------- -------------------
<S> <C> <C> <C> <C>
William A. Fitzgerald 5,373 $165,404 119,133/13,333 $3,487,895/$--
James A. Laphen 1,800 56,025 30,340/10,000 728,993/ --
Gary L. Matter -- -- 7,459/ 1,793 110,402/ --
Joy J. Narzisi 467 14,127 13,357/ 1,289 338,090/ --
Margaret E. Ash -- -- 12,528/ 1,289 312,793/ --
<FN>
_____________
(1) Based on the closing sales price of the Common Stock as
reported on the New York Stock Exchange on June 30, 1996,
which was $38.25.
(2) The exercise price of all unexercised options held by the
named executive officers at June 30, 1996 exceeded the
closing sales price of the Common Stock at June 30, 1996.
</FN>
</TABLE>
12<PAGE>
<PAGE>
EMPLOYMENT AND CHANGE IN CONTROL AGREEMENTS
Set forth below is a discussion of certain employment and
change in control agreements entered into between the Corporation
and the Bank and those executive officers listed in the Summary
Compensation Table on page 11.
The agreement with William A. Fitzgerald, which became
effective on June 8, 1995, provides for Mr. Fitzgerald's
employment as Chairman of the Board and Chief Executive Officer
of the Corporation and the Bank for a term of three years. The
Boards of Directors of the Corporation and the Bank shall review
the agreement annually to consider extending the agreement for an
additional one-year period beyond the then effective expiration
date. Pursuant to the agreement, Mr. Fitzgerald receives an
annual salary and bonus determined by agreement with the Board of
Directors, but in no event less than the rate of compensation Mr.
Fitzgerald received on June 8, 1995. The base compensation
following his election as Chairman of the Board of Directors was
$385,000. The contract provides for termination for cause or in
certain events specified by regulatory authorities. The contract
is also terminable by the Bank without cause wherein Mr.
Fitzgerald would be entitled to receive all compensation and
benefits through the effective date of termination, plus a
severance payment equal to 36 months' base salary. Mr.
Fitzgerald shall be entitled to the same benefits and severance
in the event he becomes disabled while the agreement is in
effect. In the event Mr. Fitzgerald dies while the agreement is
in effect, his heirs shall receive a severance payment equal to
12 months' base salary. The agreement provides, among other
things, for Mr. Fitzgerald's participation in an equitable manner
in all benefits available to executive officers of the
Corporation and the Bank, including (i) short-term and long-term
incentive compensation and deferred compensation; (ii) health,
disability, life insurance, retirement and vacation benefits; and
(iii) any benefits available under perquisite programs.
The Corporation and the Bank have also entered into change
in control agreements with Messrs. Fitzgerald, Laphen, Matter,
Ms. Narzisi and Ms. Ash. Under these agreements, in the event of
the executive's involuntary termination of employment in
anticipation of, or after, a change in control of the Corporation
or the Bank, other than for "cause," the executive will be paid
in equal monthly installments, the base salary and all
commissions and bonuses (including short- and long-term incentive
compensation awards and stock options granted under the
Corporation's executive incentive plan) in effect at the time of
termination for a period of 35.88 months. During this period,
the executive shall also continue to participate in any health,
disability, life insurance and perquisite plans of any successor
corporation in which he was entitled to participate with the
Corporation prior to the change in control. All benefits and
payments under the agreements shall be reduced, if necessary, to
the largest aggregate amount that will result in no portion
thereof being subject to federal excise tax or being
nondeductible to the Corporation and the Bank for federal income
tax purposes, Mr. Matter, Ms. Narzisi and Ms. Ash's severance
shall be reduced by amounts received by the executive as a result
of alternative employment obtained during the period in which
salary, commissions and bonuses are payable under the change in
control agreements. Further, Mr. Fitzgerald's severance payments
under his change in control agreement shall be reduced by the
amount of severance received under his employment agreement.
A "change in control" shall be deemed to have occurred under
these agreements in each of the following events: (i) at any
time a majority of the directors of the Corporation or the Bank
are not the persons for whom election proxies have been solicited
by the Boards of Directors of the Corporation and the Bank, or
persons then serving as directors appointed by such Boards,
except where such appointments are necessitated by removal of
directors; (ii) at any time 49% or more of the outstanding stock
of the Corporation or the Bank is acquired or beneficially owned
by any person or entity (excluding the Corporation, the Bank or
the executive) or any combination of persons or entities acting
in concert; or (iii) at any time the shareholders of the
Corporation or the Bank approve an agreement to merge or
consolidate the Corporation or the Bank with or into another
corporation, or to sell or otherwise dispose of all, or
substantially all, of the assets of the Corporation or the Bank.
The executive shall also be entitled to receive such payment in
the event of a "constructive involuntary termination," which
under the terms of the agreements shall be deemed to have
occurred if, in anticipation of or following a change in control,
(i) the agreement or the executive's employment is terminated,
(ii) the executive's compensation is reduced, responsibilities
diminished or job title lowered, (iii) the level of the
executive's participation in incentive compensation is reduced or
eliminated,
13<PAGE>
<PAGE>
(iv) the executive's benefit coverage or perquisites are reduced
or eliminated, except to the extent such reduction or elimination
applies to all other employees, or (v) the executive's office
location is changed to a location more than 50 miles from the
location of the executive's office at the time of the change in
control.
Pursuant to the terms of a separate agreement between the
Bank and William A. Fitzgerald, in the event of Mr. Fitzgerald's
termination of employment with the Bank, Mr. Fitzgerald will be
entitled to receive in 120 equal monthly installments an amount
equal to three times his highest annual salary received from the
Bank during the five-year period ending with the close of the
fiscal year in which he attains age 65 (or, in the case of death
or disability prior to age 65, the year in which he became
disabled or died). In the event of his death before the payment
of all installments, all remaining installments shall be paid to
his designated beneficiary. In the event of the death of both
Mr. Fitzgerald and the designated beneficiary, all remaining
unpaid installments shall be paid in one lump sum payment to the
estate of the designated beneficiary. Pursuant to the terms of
the agreement, the right to receive any and all unpaid
installments will be forfeited upon the occurrence of any of the
following events (i) without the approval of the Board of
Directors, Mr. Fitzgerald has or possesses, directly or
indirectly, any interest competing with or inimical to the
interests of the Bank within an area within a 300 mile radius of
Omaha, Nebraska, or (ii) Mr. Fitzgerald engages in any activity
or conduct which, in the opinion of the Board, is inimical to the
interests of the Bank.
_________________________________________________________________
DIRECTORS' COMPENSATION
_________________________________________________________________
Directors receive $1,000 per month for service on the Board
of the Corporation and $1,000 per month plus $750 per meeting
attended for service on the Board of the Bank, with the exception
of William A. Fitzgerald, who does not receive director's
compensation. Board members receiving remuneration are paid
their retainer fees one-half in cash and one-half in Common
Stock. Fees for members of the committees of the Corporation
and the Bank are paid at the rate of $750 per committee meeting
attended. The chairman of the Audit Committee, Compensation and
Stock Option Committee, and the Finance Committee each receive an
additional $2,000 per year.
_________________________________________________________________
TRANSACTIONS WITH MANAGEMENT AND OTHERS
_________________________________________________________________
The Bank offers first and second mortgages, refinance,
equity and various consumer loans to its directors, officers and
employees. Loans to executive officers and directors are made in
the ordinary course of business on substantially the same terms
and collateral, including interest rates and loan fees charged,
as those of comparable transactions prevailing at the time and do
not involve more than the normal risk of collectibility or
present other unfavorable features. At September 30, 1996, loans
to executive officers and directors totalled $621,989.
14<PAGE>
<PAGE>
COMPARATIVE STOCK PERFORMANCE GRAPH
The graph set forth below compares the cumulative total
shareholder return on the Common Stock over the last five years
with the cumulative total return on the S&P 500 Index and an
index comprised of the top 50 publicly traded thrifts in the
United States based on total asset size over the same period.
Cumulative total return on the stock or the index equals the
total increase in value since June 30, 1991, assuming
reinvestment of all dividends paid into the stock or the index,
respectively. The graph was prepared assuming that $100 was
invested on June 30, 1991, in the Common Stock and in the
respective indices.
Line graph appears here depicting the cumulative total
shareholder return of $100 invested in the Common Stock as
compared to $100 invested in the S&P 500 Index and an index
comprised of the top 50 publicly traded thrifts in the United
States. Line graph begins at June 30, 1991 and plots the
cumulative total return at June 30, 1992, 1993, 1994, 1995 and
1996. Plot points are provided below.
<TABLE>
<CAPTION>
Cumulative Total Return
--------------------------------------------
6/91 6/92 6/93 6/94 6/95 6/96
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Commercial Federal
Corporation 100 224 553 495 574 814
Peer Group 100 110 110 113 131 169
S & P 500 100 113 129 131 165 208
</TABLE>
15<PAGE>
<PAGE>
_________________________________________________________________
PROPOSAL II -- APPROVAL OF STOCK OPTION AND INCENTIVE PLAN
_________________________________________________________________
GENERAL
The Board of Directors of the Corporation has adopted the
Commercial Federal Corporation 1996 Stock Option and Incentive
Plan (the "1996 Option Plan"), subject to its approval by the
Corporation's stockholders. The 1996 Option Plan is attached
hereto as Exhibit A and should be consulted for additional
information. All statements made herein regarding the 1996
Option Plan, which are only intended to summarize the 1996 Option
Plan, are qualified in their entirety by reference to the 1996
Option Plan.
PURPOSE OF THE 1996 OPTION PLAN
The purpose of the 1996 Option Plan is to advance the
interests of the Corporation by providing directors and selected
employees of the Corporation and its affiliates with the
opportunity to acquire shares of Common Stock. By encouraging
such stock ownership, the Corporation seeks to attract, retain
and motivate the best available personnel for positions of
substantial responsibility and to provide additional incentive to
directors and employees of the Corporation and its affiliates to
promote the success of the business of the Corporation by
aligning their interests with those of the Corporation's
stockholders.
DESCRIPTION OF THE 1996 OPTION PLAN
Effective Date. The 1996 Option Plan will become effective
on the date of its approval by the Corporation's stockholders
(the "Effective Date"), and prior thereto no awards may be made.
Administration. The 1996 Option Plan is administered by a
committee (the "Committee"), appointed by the Board of Directors,
consisting of at least two non-employee directors (within the
meaning of Rule 16b-3 of the Exchange Act) of the Corporation.
The Committee has discretionary authority to select participants
and grant awards, to determine the form and content of any awards
made under the 1996 Option Plan, to interpret the 1996 Option
Plan, to prescribe, amend and rescind rules and regulations
relating to the 1996 Option Plan, and to make other decisions
necessary or advisable in connection with administering the 1996
Option Plan. All decisions, determinations, and interpretations
of the Committee are final and conclusive on all persons affected
thereby. Members of the Committee will be indemnified to the
full extent permissible under the Corporation's governing
instruments in connection with any claims or other actions
relating to any action taken under the 1996 Option Plan.
Eligible Persons; Types of Awards. Under the 1996 Option
Plan, the Committee may grant stock options ("Options"), stock
appreciation rights ("SARs") and restricted stock ("Restricted
Stock") (collectively, "Awards") to such directors (including
members of the Committee) and employees as the Committee shall
designate. Members of the Committee are eligible to receive
Awards. As of October 7, 1996, the Corporation and its
affiliates had 177 employees and six non-employee directors who
were eligible to participate in the 1996 Option Plan. Non-
employee directors subsequently elected to the Board would also
be eligible to participate in the 1996 Option Plan.
Shares Available for Grants. The 1996 Option Plan reserves
700,000 shares of Common Stock for issuance upon the exercise of
Options or SARs or the grant of Restricted Stock. Such shares
may either be newly-issued shares, treasury shares or shares held
in a grantor trust created by the Corporation. In the event of
any merger, consolidation, recapitalization, reorganization,
reclassification, stock dividend, split-up, combination of
shares, or similar event in which the number or kind of shares is
changed without receipt or payment of consideration by the
Corporation, the Committee will adjust the number and kind of
shares reserved for issuance under the 1996 Option Plan, the
number and kind of shares subject to outstanding Awards and the
exercise prices of such Awards. Generally, the number of shares
as to which SARs are granted are charged against the aggregate
number of shares available for grant under the 1996 Option Plan,
provided that, in the case of an SAR granted in conjunction with
16<PAGE>
<PAGE>
an Option, under circumstances in which the exercise of the SAR
results in termination of the Option and vice versa, only the
number of shares of Common Stock subject to the Option shall be
charged against the aggregate number of shares of Common Stock
remaining available under the 1996 Option Plan. If Awards should
expire, become unexercisable, or be forfeited for any reason
without having been exercised, the shares of Common Stock subject
to such Awards shall, unless the 1996 Option Plan shall have been
terminated, be available for the grant of additional Awards under
the 1996 Option Plan.
Options. Options may be either incentive stock options
("ISOs") as defined in Section 422 of the Internal Revenue Code,
or options that are not ISOs ("Non-ISOs"). The exercise price as
to any Option may not be less than the fair market value
(determined under the 1996 Option Plan) of the optioned shares on
the date of grant. In the case of a participant who owns more
than 10% of the outstanding Common Stock on the date of grant,
such exercise price may not be less than 110% of fair market
value of the shares. Notwithstanding the foregoing, the
Committee may grant discounted Non-ISOs ("Discounted Non-ISOs")
to directors or officers selected by the Committee who have
previously elected to defer cash compensation at a per-share
discounted exercise price equal to the fair market value of the
Common Stock underlying the Discounted Non-ISOs on the date of
grant less the amount of cash compensation deferred during the
calendar year divided by the number of shares that may be
purchased pursuant to the Discounted Non-ISO. As required by
federal tax laws, to the extent that the aggregate fair market
value (determined when an ISO is granted) of the Common Stock
with respect to which ISOs are exercisable by an optionee for the
first time during any calendar year (under all plans of the
Corporation and of any subsidiary) exceeds $100,000, the Options
granted in excess of $100,000 will be treated as Non-ISOs, and
not as ISOs.
SARs. An SAR may be granted in tandem with all or part of
any Option granted under the 1996 Option Plan, or without any
relationship to any Option. An SAR granted in tandem with an ISO
must expire no later than the ISO, must have the same exercise
price as the ISO and may be exercised only when the ISO is
exercisable and when the fair market value of the shares subject
to the ISO exceeds the exercise price of the ISO. An SAR granted
in tandem with an Option may be an alternative right whereby the
exercise of the SAR cancels the participant's right to exercise
the Option to the extent of the number of shares with respect to
which the SAR is exercised and, correspondingly, the exercise of
the Option terminates the SAR to the extent of the number of
shares purchased upon exercise of the Option. Regardless of
whether an SAR is granted in tandem with an Option, exercise of
the SAR will entitle the optionee to receive, as the Committee
prescribes in the grant, all or a percentage of the difference
between (i) the fair market value of the shares of Common Stock
subject to the SAR at the time of its exercise, and (ii) the fair
market value of such shares at the time the SAR was granted (or,
in the case of SARs granted in tandem with Options, the exercise
price). The exercise price as to any particular SAR may not be
less than the fair market value of the optioned shares on the
date of grant.
Exercise of Options and SARs. The exercise of Options and
SARs will be subject to such terms and conditions as are
established by the Committee in a written agreement between the
Committee and the optionee. Unless otherwise provided by the
Committee in a stock option agreement, all Options shall be
immediately exercisable. In the absence of Committee action to
the contrary, an otherwise unexpired ISO shall cease to be
exercisable upon (i) an optionee's termination of continuing
service to the Company for "just cause" (as defined in the 1996
Option Plan), (ii) the date three months (one year in the
instance of Non-ISOs) after an optionee terminates service for a
reason other than just cause, death, or disability, (iii) the
date one year after an optionee terminates service due to
disability, or (iv) the date two years after an optionee
terminates service due to death. Except as otherwise provided in
an agreement, a Non-ISO may be exercised by a participant only
during the period during which he or she has maintained
continuous service from the date of grant, provided that such
Non-ISO shall (i) expire immediately if the participant's
continuous service terminates due to just cause and (ii) continue
to be exercisable for one year following his or her termination
of continuous service for any reason other than death. In the
event of the participant's death, then to the extent that the
participant would have been entitled to exercise the Non-ISO
immediately prior to his or her death, such Non-ISO of the
deceased participant may be exercised within two years from the
date of his or her death (but not later than the date on which
the Non-ISO would otherwise expire) by the personal
representatives of his or her estate or person or person to whom
his or her rights under such
17<PAGE>
<PAGE>
Non-ISO shall have passed by will or by laws of descent and
distribution. In no event, however, may an Option or SAR be
exercised later than the date that it would otherwise expire. An
individual's service as an advisory director or director emeritus
shall be deemed to be service as a director, for purposes of
determining eligibility to exercise an Option or SAR.
An optionee may exercise Options or SARs, subject to provi-
sions relative to their termination and limitations on their
exercise, only by (i) written notice of intent to exercise the
Option or SAR with respect to a specified number of shares of
Common Stock, and (ii) in the case of Options, payment to the
Corporation (contemporaneously with delivery of such notice) in
cash, in Common Stock, or a combination of cash and Common Stock,
of the amount of the exercise price for the number of shares with
respect to which the Option is then being exercised plus
applicable withholding taxes. Common Stock utilized in full or
partial payment of the exercise price for Options shall be valued
at its market value at the date of exercise, and may consist of
shares subject to the Option being exercised. Upon exercise of
an Option, the Corporation may, in the discretion of the
Committee, pay to the participant a cash amount up to but not
exceeding the amount of dividends, if any, declared on the
underlying shares between the date of grant and the date of
exercise of the Option.
Restricted Stock. The Committee has broad discretion at the
time of making a Restricted Stock grant to determined a period
during which the shares granted will be subject to restrictions
(the "Restriction Period") and the conditions that must be
satisfied in order for the shares of Restricted Stock to become
unrestricted (i.e., vested and nonforfeitable). For example, the
Committee may condition vesting upon a grantee's continuous
service to the Corporation or upon the attainment of specific
corporate, divisional or individual standards or goals. The
Restriction Period may be no longer than five years and may
differ among participants and may have different expiration dates
with respect to portions of shares of Restricted Stock covered by
the same Award.
The Committee shall determine the percentage of the award of
Restricted Stock which shall vest in the participant in the event
of death, disability or retirement prior to the expiration of the
Restriction Period or the satisfaction of the restrictions
applicable to an award of Restricted Stock. Notwithstanding the
Restriction Period and the restrictions imposed by the Committee
on the Restricted Stock, the Committee may shorten the
Restriction Period or waive any restrictions if the Committee
concludes that it is in the best interests of the Corporation to
do so.
Until a grantee's interest vests, his or her Restricted
Stock is nontransferable and forfeitable. Nevertheless, the
grantee is entitled to vote the Restricted Stock and to receive
dividends and other distributions made with respect to the
Restricted Stock. To the extent that a grantee becomes vested in
his or her Restricted Stock at any time and has satisfied
applicable income tax withholding obligations, the Corporation
will deliver unrestricted shares of Common Stock to the grantee.
At the end of the Restriction Period, the grantee will forfeit to
the Corporation any shares of Restricted Stock as to which he or
she did not earn a vested interest during the Restriction Period.
Change in Control. Notwithstanding the provisions of any
Award which provide for its exercise or vesting in installments,
all shares of Restricted Stock shall become fully vested upon a
"change in control," and all Options and SARs shall be
immediately exercisable and fully vested. With respect to
Options, at the time of a change in control, the optionee shall,
at the discretion of the Committee, be entitled to receive cash
in an amount equal to the excess of the fair market value of the
Common Stock subject to such Option over the exercise price of
such shares, in exchange for the cancellation of such Options by
the optionee.
For purposes of the Option Plan, "change in control" means
any one of the following events: (1) the ownership, holding or
power to vote more than 20% of the Corporation's voting stock or
the voting stock of the Bank; (2) the acquisition of the ability
to control of the election of a majority of the Corporation's or
the Bank's directors; (3) the acquisition of a controlling
influence over the management or policies of the Corporation or
the Bank by any person or by persons acting as a group within the
meaning of Section 13(d) of the Securities Exchange Act of 1934,
as amended (except in the case of the foregoing, ownership or
control of the Bank or its directors by
18<PAGE>
<PAGE>
the Corporation itself shall not constitute a "change in
control"); or (4) during any period of two consecutive years,
individuals (the "Continuing Directors") who at the beginning of
such period constitute the Board of Directors of the Corporation
or the Bank (the "Existing Board") cease for any reason to
constitute at least two-thirds thereof, provided that any in-
dividual whose election or nomination for election as a member of
the Existing Board was approved by a vote of at least two-thirds
of the Continuing Directors then in office shall be considered a
Continuing Director. For purposes of defining "change in
control," the term "person" refers to an individual or a
corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization
or any other form of entity not specifically listed.
Although these provisions are included in the 1996 Option
Plan primarily for the protection of an employee-optionee in the
event of a change in control of the Corporation, they may also be
regarded as having a takeover defensive effect, which may reduce
the Corporation's vulnerability to hostile takeover attempts and
certain other transactions which have not been negotiated with
and approved by the Board of Directors.
Conditions on Issuance of Shares. The Committee will have
the discretionary authority to impose, in agreements, such
restrictions on shares of Common Stock issued pursuant to the
1996 Option Plan as it may deem appropriate or desirable,
including but not limited to the authority to impose a right of
first refusal or to establish repurchase rights or both of these
restrictions. In addition, the Committee may not issue shares
unless the issuance complies with applicable securities laws, and
to that end may require that a participant make certain
representations or warranties.
Nontransferability. Awards may not be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner
other than by will or by the laws of descent and distribution.
Notwithstanding the foregoing, to the extent permissible under
Rule 16b-3 of the Exchange Act, a participant who receives Non-
ISOs may transfer such Non-ISOs to his or her spouse, lineal
ascendants, lineal descendants, or to a duly established trust,
provided that, except in certain limited circumstances, such Non-
ISOs may not be transferred again. Non-ISOs which are
transferred shall be exercisable by the transferee subject to the
same terms and conditions as would have applied to such Non-ISOs
in the hands of the participant that originally received the
grant.
Effect of Dissolution and Related Transactions. In the
event of (i) the liquidation or dissolution of the Corporation,
(ii) a merger or consolidation in which the Corporation is not
the surviving entity, or (iii) the sale or disposition of all or
substantially all of the Corporation's assets (any of the
foregoing to be referred to herein as a "Transaction"), all
outstanding Awards, together with the exercise prices thereof,
will be equitably adjusted for any change or exchange of shares
for a different number or kind of shares which results from the
Transaction. However, any such adjustment will be made in such a
manner as to not constitute a modification, within the meaning of
Section 424(h) of the Internal Revenue Code, of outstanding ISOs.
Duration of the 1996 Option Plan and Grants. The 1996
Option Plan has a term of 10 years from the Effective Date, after
which date no Awards may be granted. The maximum term for an
Award is 10 years from the date of grant, except that the maximum
term of an ISO (and an SAR granted in tandem with an ISO) may not
exceed five years if the optionee owns more than 10% of the
Common Stock on the date of grant. The expiration of the 1996
Option Plan, or its termination by the Committee, will not affect
any Award previously granted.
Amendment and Termination of the 1996 Option Plan. The
Board of Directors of the Corporation may from time to time amend
the terms of the 1996 Option Plan and, with respect to any shares
at the time not subject to Awards, suspend or terminate the 1996
Option Plan. No amendment, suspension, or termination of the
1996 Option Plan will, without the consent of any affected
holders of an Award, alter or impair any rights or obligations
under any Award previously granted.
Financial Effects of Awards. The Corporation will receive
no monetary consideration for the granting of Awards under the
1996 Option Plan. It will receive no monetary consideration
other than the option price for shares
19<PAGE>
<PAGE>
of Common Stock issued to optionees upon the exercise of their
Options, and will receive no monetary consideration upon the
exercise of SARs. Under current accounting standards,
recognition of compensation expense is not required when Options
are granted at an exercise price equal to or exceeding the fair
market value of the Common Stock on the date the Option is
granted.
The granting of SARs will require charges to the income of
the Corporation based on the amount of the appreciation, if any,
in the market price of the Common Stock to which the SARs relate
over the exercise price of those shares for the particular income
period. If the market price of the Common Stock declines
subsequent to a charge against earnings due to estimated
appreciation in the Common Stock subject to SARs, the amount of
the decline will reverse such prior charges against earnings (but
not by more than the aggregate of such prior charges).
Discounted Non-ISOs will require charges to the income of
the Corporation based on the aggregate difference between the
fair market value of the Common Stock underlying the Discounted
Non-ISO and the total exercise price payable pursuant to such
Discounted Non-ISO.
PROPOSED GRANTS
Neither the Board of Directors nor the Committee has made
any determination as to whom Awards under the 1996 Option Plan
will be made or the amounts or forms thereof.
FEDERAL INCOME TAX CONSEQUENCES
ISOs. An optionee recognizes no taxable income upon the
grant of ISOs. If the optionee holds the Option shares for at
least two years from the date the ISO is granted, and for one
year from the date the ISO is exercised, any gain realized on the
sale of the shares received upon exercise of such ISO is taxed as
long-term capital gain. However, the difference between the fair
market value of the Common Stock at the date of exercise and the
exercise price of the ISO will be treated by the optionee as an
item of tax preference in the year of exercise for purposes of
the alternative minimum tax. If an optionee disposes of the
shares before the expiration of either of the two special holding
periods noted above, the disposition is a "disqualifying
disposition." In this event, the optionee will be required, at
the time of the disposition of the Common Stock, to treat the
lesser of the gain realized or the difference between the
exercise price and the fair market value of the Common Stock at
the date of exercise as ordinary income and the excess, if any,
as capital gain.
The Corporation will not be entitled to any deduction for
federal income tax purposes as a result of the grant or exercise
of an ISO, regardless of whether or not the exercise of the ISO
results in liability to the optionee for alternative minimum tax.
However, if an optionee has ordinary income taxable as
compensation as a result of a disqualifying disposition, the
Corporation will be entitled to deduct an equivalent amount.
Non-ISOs. An optionee will not recognize taxable income
upon the grant of a Non-ISO. In the case of such a Non-ISO, an
optionee will recognize ordinary income upon the exercise of the
Non-ISO in an amount equal to the difference between the fair
market value of the shares on the date of exercise and the option
price (or, if the optionee is subject to certain restrictions
imposed by federal securities laws, upon the lapse of those
restrictions unless the optionee makes a special tax election
within 30 days after the date of exercise to have the general
rule apply). Upon a subsequent disposition of such shares, any
amount received by the optionee in excess of the fair market
value of the shares as of the exercise will be taxed as capital
gain. The Corporation will be entitled to a deduction for
federal income tax purposes at the same time and in the same
amount as the ordinary income recognized by the optionee in
connection with the exercise of a Non-ISO. Although no
assurances can be given, Discounted Non-ISOs are expected to be
treated in the same manner as Non-ISOs for federal income tax
purposes.
SARs. The grant of an SAR has no tax effect on the optionee
or the Corporation. Upon exercise of the SARs, however, any cash
or Common Stock received by the optionee in connection with the
surrender of his or her
20<PAGE>
<PAGE>
SAR will be treated as compensation income to the optionee, and
the Corporation will be entitled to a business expense deduction
for tax purposes for the amounts treated as compensation income.
RECOMMENDATION AND VOTE REQUIRED
The Board of Directors has determined that the 1996 Option
Plan is desirable, cost effective, and produces incentives which
will benefit the Corporation and its stockholders. The Board of
Directors is seeking stockholder approval of the 1996 Option Plan
pursuant to the requirements of the New York Stock Exchange, in
order to satisfy the requirements of the Internal Revenue Code
for favorable tax treatment of ISOs, and to exempt certain option
transactions from the short-swing trading rules of the SEC.
Stockholder approval of the 1996 Option Plan requires the
affirmative vote of the holders of a majority of the votes cast
at the Meeting. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
APPROVAL OF THE 1996 OPTION PLAN.
_________________________________________________________________
PROPOSAL III -- STOCKHOLDER PROPOSAL
_________________________________________________________________
A Corporation shareholder has requested that the proposal
set forth immediately below ("Proposal III") be included in this
Proxy Statement and presented for action at the Meeting. The
Corporation will furnish the name, address and shareholding
information for the shareholder submitting Proposal III to any
person, orally or in writing as requested, promptly upon the
receipt of any oral or written request therefor.
"RESOLVED, that it is the desire of the stockholders
of CFC (as expressed at the 1995 Annual Meeting) that CFC
promptly be sold to or merged with an acquiror so as to
maximize the value of the stockholders' investment in CFC,
and that it is the view of the stockholders that any delay
on the part of the Directors in implementing the expressed
request of the stockholders demonstrates that the Directors
have not "acted in good faith and in a manner . . .
reasonably believed to be in or not opposed to the best
interests of" CFC for purposes of determining whether a
Director shall be entitled to indemnification under Article
VI of CFC's Articles of Incorporation.
At the 1995 Annual Meeting of Stockholders, the
stockholders approved a "sale or merger" resolution,
proposed by stockholder CAI Corporation, requesting that
the Board "promptly proceed to effect such a sale or merger
by (i) retaining a leading investment banking firm to
solicit offers to acquire CFC, and (ii) establishing an
[independent Board committee] to recommend to the Board for
approval of the best available offer to acquire CFC that is
fair to, and in the best interests of, the stockholders of
CFC . . ." As of the date this proposal is being submitted
to CFC for inclusion in the 1996 proxy material, there has
been no indication that the Board of Directors of CFC has
taken any action to implement the clearly expressed request
of CFC's stockholders. We believe that any delay in
finding an acquiror or merger partner is inexcusable and
that any delay could result in erosion in the value of CFC
shares.
As noted, CFC has not disclosed the nature or extent
of any efforts undertaken in response to the CAI
stockholder resolution adopted in 1995 by the CFC
stockholders and Mentor Partners has no direct knowledge of
any such steps. However, without conceding that the
indemnification provisions would otherwise protect the
Directors from any past or continuing failure to carry out
the request of a majority of the CFC stockholders, we
believe the Directors should be put on notice that the
stockholders view any delay in carrying out their
previously expressed request as being inconsistent with the
standard of conduct to which Directors must adhere in order
to receive the benefit of the indemnification provision set
forth in CFC's Articles of Incorporation."
21<PAGE>
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSAL
III.
The Board of Directors of the Corporation believes that, at
the present time, shareholder value will be maximized by
continuing to follow the Corporation's strategic business plan.
The Board believes that its record of achievement speaks for
itself. From July 1, 1990 through June 30, 1996, the stock price
for the Common Stock has risen from $2.75 to $38.25, for a
compounded annual growth rate of 55%. As of June 30, 1996, the
Corporation now has offices in five states. In addition, during
the past fiscal year, the Board established a policy of paying
quarterly cash dividends to provide an additional source of
return to its shareholders. The Board is aware of its fiduciary
obligations to act in shareholders' best interests and,
consequently, the Board remains open to all types of options for
maximizing shareholder value. To this end, the Corporation
recently completed the repurchase of 8.3% of the Corporation's
outstanding Common Stock which the Corporation anticipates will
be accretive to the Company's future annual earnings on a per
share basis by as much as 5.0 to 6.0 percent. As discussed in
response to last year's shareholder proposal, the Board has never
foreclosed the possibility of a possible merger or acquisition at
some point. However, the Board does not believe that putting the
Corporation on the auction block is likely to result in
maximizing shareholder value. Over the past few years and on an
ongoing basis, the Board, together with its financial advisor,
Merrill Lynch, has met extensively to review the Corporation's
strategic business plan and the Corporation's performance
thereunder. In connection with such meetings, the Board and
Merrill Lynch regularly review the status of the merger and
acquisitions market and, in June 1996, after such a review, the
entire Board of Directors (including the two individuals who were
nominated last year by CAI Corporation, the proponent of last
year's shareholder proposal) voted in favor of continuing the
Corporation's present strategy.
Proposal III may create the false impression that the Board
was required to take action under the shareholder proposal
presented at last year's annual meeting. As the proponent of
last year's proposal recognized, that proposal was not binding on
the Board of Directors and did not require the Board to take any
action. Last year's proposal did not alter the Board's basic
duty to manage the Corporation in what it perceives to be the
best interests of the stockholders which the Board believes that
it has done and intends to continue to do. Proposal III also may
be read to inaccurately imply that shareholders may limit
indemnification of the Corporation's directors and officers. The
Corporation's governing documents and Nebraska law require the
Corporation to provide indemnification in appropriate
circumstances. Neither the Board nor the shareholders have the
ability to refuse to indemnify a director if the director is
otherwise entitled to indemnification.
The Board looks forward to the future and the opportunities
that await the Corporation and its shareholders. We ask for your
continued support and recommend that you vote AGAINST Proposal
III.
Under Nebraska law and the Corporation's Bylaws, a majority
of the votes cast at a lawful meeting is generally sufficient to
pass on a transaction or matter. It should be noted that
Proposal III is not binding on the Board of Directors even if
passed by such vote. Proxies marked as abstentions or broker
nonvotes will not be counted as votes cast. Proxies marked as
abstentions or as broker nonvotes, however, will be treated as
shares present for purposes of determining whether a quorum is
present.
_________________________________________________________________
STOCKHOLDER PROPOSALS
_________________________________________________________________
In order to be eligible for inclusion in the Corporation's
proxy materials for next year's Annual Meeting of Stockholders,
any stockholder proposal to take action at such meeting must be
received at the Corporation's executive office at 2120 South 72nd
Street, Omaha, Nebraska 68124, no later than June 20, 1997. Any
such proposal shall be subject to the requirements of the proxy
rules adopted under the Securities Exchange Act of 1934, as
amended.
22<PAGE>
<PAGE>
_________________________________________________________________
INDEPENDENT AUDITORS
_________________________________________________________________
The Board of Directors presently has renewed the
Corporation's arrangements with Deloitte & Touche llp to be its
auditors for the 1997 fiscal year. Deloitte & Touche llp were
the Corporation's independent auditors for the 1996 fiscal year.
Representatives of Deloitte & Touche llp are expected to be
present at the Meeting to respond to appropriate questions from
stockholders and will have the opportunity to make a statement if
they so desire.
_________________________________________________________________
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
_________________________________________________________________
Pursuant to regulations promulgated under the Securities
Exchange Act of 1934, as amended, the Corporation's officers,
directors and persons who own more than 10 percent of the
outstanding Common Stock ("Insiders") are required to file
reports detailing their ownership and changes of ownership in
such Common Stock, and to furnish the Corporation with copies of
all such reports. Based solely on its review of the copies of
such reports or written representations that no such reports were
necessary that the Corporation received during the past fiscal
year or with respect to the last fiscal year, management believes
that during the fiscal year ended June 30, 1996, all of the
Corporation's Insiders complied with these reporting
requirements, except that Officers Gary L. Baugh and R. Hal
Bailey, who became officers of the Bank in connection with the
Corporation's acquisition of Railroad Financial Corporation in
October 1995, failed to timely report correct information as to
the level of their beneficial ownership of the Corporation's
common stock on their initial Statement of Beneficial Ownership.
_________________________________________________________________
EXPENSES OF SOLICITATION
_________________________________________________________________
The cost of soliciting proxies will be borne by the
Corporation. The Corporation will reimburse brokerage firms and
other custodians, nominees and fiduciaries for reasonable
expenses incurred by them in sending proxy materials to the
beneficial owners of Common Stock. In addition to solicitations
by mail, directors, officers and regular employees of the
Corporation may solicit proxies personally or by telegraph,
telephone or other electronic means without additional
compensation. The Corporation has retained D.F. King & Co.,
Inc., a professional proxy solicitation firm, to assist in the
solicitation of proxies by mail, personally or by telephone or
other means of communication, for a fee estimated at $10,000 plus
expenses.
_________________________________________________________________
ADDITIONAL INFORMATION
_________________________________________________________________
The Board of Directors is not aware of any business to come
before the Meeting other than those matters described above in
this Proxy Statement. However, if any other matters should pro-
perly come before the Meeting, it is intended that proxies in the
accompanying form will be voted in respect thereof as determined
by a majority of the Board of Directors.
The Corporation's 1996 Annual Report to Stockholders
("Annual Report"), including financial statements, is being
mailed to all stockholders of record as of the close of business
on October 7, 1996. Any stockholder who has not received a copy
of such Annual Report may obtain a copy by writing to the
Secretary of the Corporation. Such Annual Report is not to be
treated as a part of the proxy solicitation material or as having
been incorporated herein by reference.
23<PAGE>
<PAGE>
_________________________________________________________________
FORM 10-K
_________________________________________________________________
A COPY OF THE CORPORATION'S FORM 10-K FOR THE FISCAL YEAR
ENDED JUNE 30, 1996 AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF
THE RECORD DATE UPON WRITTEN REQUEST TO THE SECRETARY, COMMERCIAL
FEDERAL CORPORATION, 2120 SOUTH 72ND STREET, OMAHA, NEBRASKA
68124.
_________________________________________________________________
_________________________________________________________________
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Gary L. Matter
GARY L. MATTER
SECRETARY
Omaha, Nebraska
October 18, 1996
24<PAGE>
<PAGE>
EXHIBIT A
COMMERCIAL FEDERAL CORPORATION
1996 STOCK OPTION AND INCENTIVE PLAN
1. PURPOSE OF THE PLAN.
The purpose of this Plan is to advance the interests of the
Company through providing select key Employees and Directors of
the Bank, the Company, and their Affiliates with the opportunity
to acquire Shares. By encouraging such stock ownership, the
Company seeks to attract, retain and motivate the best available
personnel for positions of substantial responsibility and to
provide additional incentives to Directors and key Employees of
the Company or any Affiliate to promote the success of the busi-
ness.
2. DEFINITIONS.
As used herein, the following definitions shall apply.
(a) "Affiliate" shall mean any "parent corporation" or
"subsidiary corporation" of the Company, as such terms are
defined in Section 424(e) and (f), respectively, of the Code.
(b) "Agreement" shall mean a written agreement entered
into in accordance with Paragraph 5(c).
(c) "Awards" shall mean, collectively, Options and SARs,
unless the context clearly indicates a different meaning.
(d) "Bank" shall mean Commercial Federal Bank, a Federal
Savings Bank.
(e) "Board" shall mean the Board of Directors of the
Company.
(f) "Change in Control" shall mean any one of the
following events: (i) the acquisition of ownership, holding or
power to vote more than 20% of the Bank's or the Company's voting
stock, (ii) the acquisition of the ability to control the
election of a majority of the Bank's or the Company's directors,
(iii) the acquisition of a controlling influence over the
management or policies of the Bank or the Company by any person
or by persons acting as a "group" (within the meaning of Section
13(d) of the Securities Exchange Act of 1934), or (iv) during any
period of two consecutive years, individuals (the "Continuing
Directors") who at the beginning of such period constitute the
Board of Directors of the Bank or the Company (the "Existing
Board") cease for any reason to constitute at least two-thirds
thereof, provided that any individual whose election or
nomination for election as a member of the Existing Board was
approved by a vote of at least two-thirds of the Continuing
Directors then in office shall be considered a Continuing
Director. Notwithstanding the foregoing, in the case of (i),
(ii) and (iii) hereof, ownership or control of the Bank by the
Company itself shall not constitute a Change in Control. For
purposes of this paragraph only, the term "person" refers to an
individual or a corporation, partnership, trust, association,
joint venture, pool, syndicate, sole proprietorship,
unincorporated organization or any other form of entity not
specifically listed herein.
(g) "Code" shall mean the Internal Revenue Code of 1986,
as amended.
(h) "Committee" shall mean the Stock Option Committee
appointed by the Board in accordance with Paragraph 5(a) hereof.
A-1<PAGE>
<PAGE>
(i) "Common Stock" shall mean the common stock of the
Company.
(j) "Company" shall mean Commercial Federal Corporation.
(k) "Continuous Service" shall mean the absence of any
interruption or termination of service as an Employee or Director
of the Company or an Affiliate. Continuous Service shall not be
considered interrupted in the case of sick leave, military leave
or any other leave of absence approved by the Company, in the
case of transfers between payroll locations of the Company or
between the Company, an Affiliate or a successor, or in the case
of a Director's performance of services in an emeritus or
advisory capacity.
(l) "Director" shall mean any member of the Board, and
any member of the board of directors of any Affiliate that the
Board has by resolution designated as being eligible for
participation in this Plan.
(m) "Disability" shall mean a physical or mental
condition, which in the sole and absolute discretion of the
Committee, is reasonably expected to be of indefinite duration
and to substantially prevent a Participant from fulfilling his or
her duties or responsibilities to the Company or an Affiliate.
(n) "Effective Date" shall mean the date specified in
Paragraph 15 hereof.
(o) "Employee" shall mean any person employed by the
Company, the Bank, or an Affiliate.
(p) "Exercise Price" shall mean the price per Optioned
Share at which an Option or SAR may be exercised.
(q) "ISO" means an option to purchase Common Stock which
meets the requirements set forth in the Plan, and which is
intended to be and is identified as an "incentive stock option"
within the meaning of Section 422 of the Code.
(r) "Market Value" shall mean the fair market value of
the Common Stock, as determined under Paragraph 7(b) hereof.
(s) "Non-Employee Director" shall have the meaning
provided in Rule 16b-3.
(t) "Non-ISO" means an option to purchase Common Stock
which meets the requirements set forth in the Plan but which is
not intended to be and is not identified as an ISO.
(u) "Option" means an ISO and/or a Non-ISO.
(v) "Optioned Shares" shall mean Shares subject to an
Award granted pursuant to this Plan.
(w) "Participant" shall mean any person who receives an
Award pursuant to the Plan.
(x) "Plan" shall mean this Commercial Federal
Corporation Stock Option and Incentive Plan.
(y) "Restricted Stock" means Common Stock which is
subject to restrictions against transfer and forfeiture and such
other terms and conditions determined by the Committee, as
provided in Paragraph 10.
(z) "Rule 16b-3" shall mean Rule 16b-3 of the General
Rules and Regulations under the Securities Exchange Act of 1934,
as amended.
(aa) "Share" shall mean one share of Common Stock.
A-2<PAGE>
<PAGE>
(bb) "SAR" (or "Stock Appreciation Right") means a right
to receive the appreciation in value, or a portion of the
appreciation in value, of a specified number of shares of Common
Stock.
3. TERM OF THE PLAN AND AWARDS.
(a) Term of the Plan. The Plan shall continue in effect
for a term of ten years from the Effective Date, unless sooner
terminated pursuant to Paragraph 17 hereof. No Award shall be
granted under the Plan after ten years from the Effective Date.
(b) Term of Awards. The term of each Award granted
under the Plan shall be established by the Committee, but shall
not exceed 10 years; provided, however, that in the case of an
Employee who owns Shares representing more than 10% of the
outstanding Common Stock at the time an ISO is granted, the term
of such ISO shall not exceed five years.
4. SHARES SUBJECT TO THE PLAN.
(a) General Rule. Except as otherwise required under
Paragraph 12, the aggregate number of Shares deliverable pursuant
to Awards shall not exceed 700,000 Shares. Such Shares may
either be authorized but unissued Shares, Shares held in
treasury, or Shares held in a grantor trust created by the Bank
or the Company. If any Awards should expire, become
unexercisable, or be forfeited for any reason without having been
exercised, the Optioned Shares shall, unless the Plan shall have
been terminated, be available for the grant of additional Awards
under the Plan.
(b) Special Rule for SARs. The number of Shares with
respect to which an SAR is granted, but not the number of Shares
which the Company delivers or could deliver to an Employee or
individual upon exercise of an SAR, shall be charged against the
aggregate number of Shares remaining available under the Plan;
provided, however, that in the case of an SAR granted in
conjunction with an Option, under circumstances in which the
exercise of the SAR results in termination of the Option and vice
versa, only the number of Shares subject to the Option shall be
charged against the aggregate number of Shares remaining
available under the Plan. The Shares involved in an Option as to
which option rights have terminated by reason of the exercise of
a related SAR shall not be available for the grant of further
Options under the Plan.
5. ADMINISTRATION OF THE PLAN.
(a) Composition of the Committee. The Plan shall be
administered by the Committee, which shall consist of not less
than two (2) members of the Board who are Non-Employee Directors.
Members of the Committee shall serve at the pleasure of the
Board. In the absence at any time of a duly appointed Committee,
the Plan shall be administered by those members of the Board who
are Non-Employee Directors.
(b) Powers of the Committee. Except as limited by the
express provisions of the Plan or by resolutions adopted by the
Board, the Committee shall have sole and complete authority and
discretion (i) to select Participants and grant Awards, (ii) to
determine the form and content of Awards to be issued in the form
of Agreements under the Plan, (iii) to interpret the Plan, (iv)
to prescribe, amend and rescind rules and regulations relating to
the Plan, and (v) to make other determinations necessary or
advisable for the administration of the Plan. The Committee
shall have and may exercise such other power and authority as may
be delegated to it by the Board from time to time. A majority of
the entire Committee shall constitute a quorum and the action of
a majority of the members present at any meeting at which a
quorum is present, or acts approved in writing by a majority of
the Committee without a meeting, shall be deemed the action of
the Committee.
(c) Agreement. Each Award shall be evidenced by a
written agreement containing such provisions as may be approved
by the Committee. Each such Agreement shall constitute a binding
contract between the
A-3<PAGE>
<PAGE>
Company and the Participant, and every Participant, upon
acceptance of such Agreement, shall be bound by the terms and
restrictions of the Plan and of such Agreement. The terms of
each such Agreement shall be in accordance with the Plan, but
each Agreement may include such additional provisions and
restrictions determined by the Committee, in its discretion,
provided that such additional provisions and restrictions are not
inconsistent with the terms of the Plan. In particular, the
Committee shall set forth in each Agreement (i) the Exercise
Price of an Option or SAR, (ii) the number of Shares subject to,
and the expiration date of, the Award, (iii) the manner, time and
rate (cumulative or otherwise) of exercise or vesting of such
Award, and (iv) the restrictions, if any, to be placed upon such
Award, or upon Shares which may be issued upon exercise of such
Award.
The Chairman of the Committee and such other Directors and
officers as shall be designated by the Committee are hereby
authorized to execute Agreements on behalf of the Company and to
cause them to be delivered to the recipients of Awards.
(d) Effect of the Committee's Decisions. All decisions,
determinations and interpretations of the Committee shall be
final and conclusive on all persons affected thereby.
(e) Indemnification. In addition to such other rights
of indemnification as they may have, the members of the Committee
shall be indemnified by the Company in connection with any claim,
action, suit or proceeding relating to any action taken or
failure to act under or in connection with the Plan or any Award,
granted hereunder to the full extent provided for under the
Company's governing instruments with respect to the
indemnification of Directors.
6. GRANT OF OPTIONS.
(a) General Rule. The Committee shall have the
discretion to make Awards to Employees and Directors (including
members of the Committee). In selecting those Employees and
Directors to whom Awards will be granted and the number of shares
covered by such Awards, the Committee shall consider the
position, duties and responsibilities of the eligible Employees
and Directors, the value of their services to the Company and its
Affiliates, and any other factors the Committee may deem
relevant.
(b) Special Rules for ISOs. The aggregate Market Value,
as of the date the Option is granted, of the Shares with respect
to which ISOs are exercisable for the first time by an Employee
during any calendar year (under all incentive stock option plans,
as defined in Section 422 of the Code, of the Company or any
present or future Affiliate of the Company) shall not exceed
$100,000. Notwithstanding the foregoing, the Committee may grant
Options in excess of the foregoing limitations, in which case
such Options granted in excess of such limitation shall be
Options which are Non-ISOs.
(c) Discounted Non-ISOs. Notwithstanding any provision
of this Plan to the contrary, the Committee may, at the election
of a Director or Employee selected by the Committee, grant Non-
ISOs to such individual in lieu of cash compensation otherwise
payable by the Company or the Bank. An individual's election
pursuant to this Paragraph 6(c) shall be made prior to the
calendar year for which such election will be deemed effective,
and in accordance with regulations prescribed by the Committee.
Elections shall be approved or disapproved in the discretion of
the Committee and in accordance with the terms of the Plan.
Changes to a Participant's election pursuant to this Paragraph
6(c) shall be prospective only. Pursuant to an election accepted
and approved by the Committee, a Participant may elect to forgo
the receipt of cash compensation otherwise expected from the
Company or the Bank and instead receive, as of the last day of
the calendar year, Non-ISOs with an aggregate difference between
the Market Value of the underlying shares and the Exercise Price
(determined as of the first day of the calendar year) equal to
the amount of cash compensation forgone by the Participant
pursuant to an election covering the calendar year. Such Non-
ISOs will be at all times fully exercisable following their date
of grant, and shall otherwise be subject to the terms of the
underlying Agreement and this Plan. In no event however, may a
Non-ISO be granted pursuant to this Paragraph 6(c) with an
Exercise Price which is less than 50% of the Market Value of the
underlying shares on the date of grant.
A-4<PAGE>
<PAGE>
A Participant's interest in receiving Non-ISOs pursuant to
this Paragraph 6(c) shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge; and the Company shall not be obligated to
make any Awards to persons other than as specifically provided in
the Plan. A Participant shall not have a secured claim against
the assets of the Company, and such Participant shall rely solely
on the unsecured promise of the Company for the payment of any
compensation deferred through an election to receive a Non-ISO
pursuant to the Plan. Nothing herein shall be construed to give
any person any right, title, interest, or claim in or to any
specific asset, fund, reserve, account, or property of any kind
whatsoever owned by them or in which it may have any right, title
or interest now or in the future; but such persons shall have the
right to enforce his or her claim against the Company in the same
manner as any unsecured creditor.
7. EXERCISE PRICE FOR OPTIONS.
(a) Limits on Committee Discretion. Except as provided
in Paragraph 6(c) hereof, the Exercise Price as to any particular
Option shall not be less than 100% of the Market Value of the
Optioned Shares on the date of grant. In the case of an Employee
who owns Shares representing more than 10% of the Company's out-
standing Shares of Common Stock at the time an ISO is granted,
the Exercise Price shall not be less than 110% of the Market
Value of the Optioned Shares at the time the ISO is granted.
(b) Standards for Determining Exercise Price. If the
Common Stock is listed on a national securities exchange
(including the NASDAQ National Market System) on the date in
question, then the Market Value per Share shall be the average of
the highest and lowest selling price on such exchange on such
date, or if there were no sales on such date, then the Exercise
Price shall be the mean between the bid and asked price on such
date. If the Common Stock is traded otherwise than on a national
securities exchange on the date in question, then the Market
Value per Share shall be the mean between the bid and asked price
on such date, or, if there is no bid and asked price on such
date, then on the next prior business day on which there was a
bid and asked price. If no such bid and asked price is
available, then the Market Value per Share shall be its fair
market value as determined by the Committee, in its sole and
absolute discretion.
8. EXERCISE OF OPTIONS.
(a) Generally. Unless otherwise provided by the
Committee pursuant to an applicable Agreement, each Option shall
be fully (100%) exercisable immediately upon the date of its
grant.
(b) Procedure for Exercise. A Participant may exercise
Options, subject to provisions relative to its termination and
limitations on its exercise, only by (1) written notice of intent
to exercise the Option with respect to a specified number of
Shares, and (2) payment to the Company (contemporaneously with
delivery of such notice) in cash, in Common Stock, or a
combination of cash and Common Stock, of the amount of the
Exercise Price for the number of Shares with respect to which the
Option is then being exercised. Each such notice (and payment
where required) shall be delivered, or mailed by prepaid
registered or certified mail, addressed to the Treasurer of the
Company at its executive offices. Common Stock utilized in full
or partial payment of the Exercise Price for Options shall be
valued at its Market Value at the date of exercise, and may
consist of Shares subject to the Option being exercised. Upon a
Participant's exercise of an Option, the Company may, in the
discretion of the Committee, pay to the Participant a cash amount
up to but not exceeding the amount of dividends, if any, declared
on the underlying Shares between the date of grant and the date
of exercise of the Option.
(c) Period of Exercisability for ISOs. Except to the
extent otherwise provided in the terms of an Agreement, an ISO
may be exercised by a Participant only while he is an Employee
and has maintained Continuous Service from the date of the grant
of the ISO, or within three months after termination of such
Continuous Service (but not later than the date on which the ISO
would otherwise expire), except if the Employee's Continuous
Service terminates by reason of --
A-5<PAGE>
<PAGE>
(1) "Just Cause" which for purposes hereof shall
have the meaning set forth in any unexpired employment or
severance agreement between the Employee and the Bank and/or the
Company (and, in the absence of any such agreement, shall mean
termination because of the Employee's personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) or final cease-and-
desist order), then the Employee's rights to exercise such ISO
shall expire on the date of such termination;
(2) death, then to the extent that the Employee
would have been entitled to exercise the ISO immediately prior to
his death, such ISO of the deceased Employee may be exercised
within two years from the date of his death (but not later than
the date on which the ISO would otherwise expire) by the personal
representatives of his estate or person or persons to whom his
rights under such ISO shall have passed by will or by laws of
descent and distribution;
(3) Disability, then to the extent that the
Employee would have been entitled to exercise the ISO immediately
prior to his or her Disability, such ISO may be exercised within
one year from the date of termination of employment due to
Disability, but not later than the date on which the ISO would
otherwise expire.
(d) Period of Exercisability for Non-ISOs. Except as
otherwise provided in an Agreement, a Non-ISO may be exercised by
a Participant only during the period during which he has
maintained Continuous Service from the date of grant of the Non-
ISO, provided that such Non-ISO shall (i) expire immediately if
the Participant's Continuous Service terminates due to Just
Cause, and (ii) continue to be exercisable for one year following
his termination of Continuous Service for any reason other than
death. In the event of the Participant's death, then to the
extent that the Participant would have been entitled to exercise
the Non-ISO immediately prior to his death, such Non-ISO of the
deceased Participant may be exercised within two years from the
date of his death (but not later than the date on which the Non-
ISO would otherwise expire) by the personal representatives of
his estate or person or persons to whom his rights under such
Non-ISO shall have passed by will or by laws of descent and
distribution. Notwithstanding the foregoing, a Non-ISO may not
be exercised later than the date on which the Non-ISO would
otherwise expire.
(e) Effect of the Committee's Decisions. The
Committee's determination whether a Participant's Continuous
Service has ceased, and the effective date thereof, shall be
final and conclusive on all persons affected thereby.
9. SARS (STOCK APPRECIATION RIGHTS)
(a) Granting of SARs. In its sole discretion, the
Committee may from time to time grant SARs to Employees either in
conjunction with, or independently of, any Options granted under
the Plan. An SAR granted in conjunction with an Option may be an
alternative right wherein the exercise of the Option terminates
the SAR to the extent of the number of shares purchased upon
exercise of the Option and, correspondingly, the exercise of the
SAR terminates the Option to the extent of the number of Shares
with respect to which the SAR is exercised. Alternatively, an
SAR granted in conjunction with an Option may be an additional
right wherein both the SAR and the Option may be exercised. An
SAR may not be granted in conjunction with an ISO under
circumstances in which the exercise of the SAR affects the right
to exercise the ISO or vice versa, unless the SAR, by its terms,
meets all of the following requirements:
(1) The SAR will expire no later than the ISO;
(2) The SAR may be for no more than the difference
between the Exercise Price of the ISO and the Market
Value of the Shares subject to the ISO at the time
the SAR is exercised;
A-6<PAGE>
<PAGE>
(3) The SAR is transferable only when the ISO is
transferable, and under the same conditions;
(4) The SAR may be exercised only when the ISO may be
exercised; and
(5) The SAR may be exercised only when the Market Value
of the Shares subject to the ISO exceeds the
Exercise Price of the ISO.
(b) Exercise Price. The Exercise Price as to any
particular SAR shall not be less than the Market Value of the
Optioned Shares on the date of grant.
(c) The provisions of Paragraphs 8(c) and 8(d) regarding
the period of exercisability of Options are incorporated by
reference herein, and shall determine the period of
exercisability of SARs.
(d) Exercise of SARs. An SAR granted hereunder shall be
exercisable at such times and under such conditions as shall be
permissible under the terms of the Plan and of the Agreement
granted to a Participant,provided that an SAR may not be
exercised for a fractional Share. Upon exercise of an SAR, the
Participant shall be entitled to receive, without payment to the
Company except for applicable withholding taxes, an amount equal
to the excess of (or, in the discretion of the Committee if
provided in the Agreement, a portion of) the excess of the then
aggregate Market Value of the number of Optioned Shares with
respect to which the Participant exercises the SAR, over the
aggregate Exercise Price of such number of Optioned Shares. This
amount shall be payable by the Company, in the discretion of the
Committee, in cash or in Shares valued at the then Market Value
thereof, or any combination thereof.
(e) Procedure for Exercising SARs. To the extent not
inconsistent herewith, the provisions of Paragraph 8(b) as to the
procedure for exercising Options are incorporated by reference,
and shall determine the procedure for exercising SARs.
10. RESTRICTED STOCK AWARDS.
Any Share of Restricted Stock which the Committee may grant
to Employees and Directors shall be subject to the following
terms and conditions, and to such other terms and conditions as
are either applicable generally to Awards, or prescribed by the
Committee in the applicable Agreement:
(a) Restriction Period. At the time of each award of
Restricted Stock, there shall be established for the Restricted
Stock a restriction period, which shall be no greater than 5
years (the "Restriction Period"). Such Restriction Period may
differ among Participants and may have different expiration dates
with respect to portions of shares of Restricted Stock covered by
the same award.
(b) Vesting Restrictions. The Committee shall determine
the restrictions applicable to the award of Restricted Stock,
including, but not limited to, requirements of Continuous Service
for a specified term, or the attainment of specific corporate,
divisional or individual performance standards or goals, which
restrictions may differ with respect to each Participant. The
Agreement shall provide for forfeiture of Shares covered thereby
if the specified restrictions are not met during the Restriction
Period, and may provide for early termination of any Restriction
Period in the event of satisfaction of the specified restrictions
prior to expiration of the Restricted Period.
(c) Vesting upon Death, Disability, or Retirement. The
Committee shall set forth in the Agreement the percentage of the
award of Restricted Stock which shall vest in the Participant in
the event of death, disability or retirement prior to the
expiration of the Restriction Period or the satisfaction of the
restrictions applicable to an award of Restricted Stock.
A-7<PAGE>
<PAGE>
(d) Acceleration of Vesting. Notwithstanding the
Restriction Period and the restrictions imposed on the Restricted
Stock, as set forth in any Agreement, the Committee may shorten
the Restriction Period or waive any restrictions, if the
Committee concludes that it is in the best interests of the
Company to do so.
(e) Ownership; Voting. Stock certificates shall be
issued in respect of Restricted Stock awarded hereunder and shall
be registered in the name of the Participant, whereupon the
Participant shall become a stockholder of the Company with
respect to such Restricted Stock and shall, to the extent not
inconsistent with express provisions of the Plan, have all the
rights of a stockholder, including but not limited to the right
to receive all dividends paid on such Shares and the right to
vote such Shares. Said stock certificates shall be deposited
with the Company or its designee, together with a stock power
endorsed in blank, and the following legend shall be placed upon
such certificates reflecting that the shares represented thereby
are subject to restrictions against transfer and forfeiture:
"The transferability of this certificate and the shares
of stock represented thereby are subject to the terms and
conditions (including forfeiture) contained in the 1996 Stock
Option and Incentive Plan of Commercial Federal Corporation, and
an agreement entered into between the registered owner and
Commercial Federal Corporation. Copies of such Plan and
Agreement are on file in the offices of the Secretary of
Commercial Federal Corporation, 2120 South 72nd Street Omaha,
Nebraska 68124".
(f) Lapse of Restrictions. At the expiration of the
Restricted Period applicable to the Restricted Stock, the Company
shall deliver to the Participant, or the legal representative of
the Participant's estate, or if the personal representative of
the Participant's estate shall have assigned the estate's
interest in the Restricted Stock, to the person or persons to
whom his rights under such Stock shall have passed by assignment
pursuant to his will or to the laws of descent and distribution,
the stock certificates deposited with it or its designee and as
to which the Restricted Period has expired and the requirements
of the restrictions have been met. If a legend has been placed
on such certificates, the Company shall cause such certificates
to be reissued without the legend.
(g) Forfeiture of Restricted Stock. The Agreement shall
provide for forfeiture of any Restricted Stock which is not
vested in the Participant or for which the restrictions have not
been satisfied during the Restriction Period.
11. CHANGE IN CONTROL
Notwithstanding the provisions of any Award which provides
for its exercise or vesting in installments, all Shares of
Restricted Stock shall become fully vested upon a Change in
Control, and all Options and SARs shall be immediately
exercisable and fully vested. With respect to Options, at the
time of a Change in Control, the Participant shall, at the
discretion of the Committee, be entitled to receive cash in an
amount equal to the excess of the Market Value of the Common
Stock subject to such Option over the Exercise Price of such
Shares, in exchange for the cancellation of such Options by the
Participant.
12. EFFECT OF CHANGES IN COMMON STOCK SUBJECT TO THE
PLAN.
(a) Recapitalizations; Stock Splits, Etc. The number
and kind of shares reserved for issuance under the Plan, and the
number and kind of shares subject to outstanding Awards, and the
Exercise Price thereof, shall be proportionately adjusted for any
increase, decrease, change or exchange of Shares for a different
number or kind of shares or other securities of the Company which
results from a merger, consolidation, recapitalization,
reorganization, reclassification, stock dividend, split-up,
combination of shares, or similar event in which the number or
kind of shares is changed without the receipt or payment of
consideration by the Company.
(b) Transactions in which the Company is Not the
Surviving Entity. In the event of (i) the liquidation or
dissolution of the Company, (ii) a merger or consolidation in
which the Company is not the surviving entity, or
A-8<PAGE>
<PAGE>
(iii) the sale or disposition of all or substantially all of the
Company's assets (any of the foregoing to be referred to herein
as a "Transaction"), all outstanding Awards, together with the
Exercise Prices thereof, shall be equitably adjusted for any
change or exchange of Shares for a different number or kind of
shares or other securities which results from the Transaction.
(c) Special Rule for ISOs. Any adjustment made pursuant
to subparagraphs (a) or (b)(1) hereof shall be made in such a
manner as not to constitute a modification, within the meaning of
Section 424(h) of the Code, of outstanding ISOs.
(d) Conditions and Restrictions on New, Additional, or
Different Shares or Securities. If, by reason of any adjustment
made pursuant to this Paragraph, a Participant becomes entitled
to new, additional, or different shares of stock or securities,
such new, additional, or different shares of stock or securities
shall thereupon be subject to all of the conditions and
restrictions which were applicable to the Shares pursuant to the
Award before the adjustment was made.
(e) Other Issuances. Except as expressly provided in
this Paragraph, the issuance by the Company or an Affiliate of
shares of stock of any class, or of securities convertible into
Shares or stock of another class, for cash or property or for
labor or services either upon direct sale or upon the exercise of
rights or warrants to subscribe therefor, shall not affect, and
no adjustment shall be made with respect to, the number, class,
or Exercise Price of Shares then subject to Awards or reserved
for issuance under the Plan.
13. NON-TRANSFERABILITY OF AWARDS.
Awards may not be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner other than by will or by
the laws of descent and distribution. Notwithstanding any other
provision of this Plan to the contrary, to the extent permissible
under Rule 16b-3, a Participant who is granted Non-ISOs pursuant
to this Plan may transfer such Non-ISOs to his or her spouse,
lineal ascendants, lineal descendants, or to a duly established
trust, provided that Non-ISOs so transferred may not again be
transferred other than to the Participant originally receiving
the grant of Non-ISOs or to an individual or trust to whom such
Participant could have transferred Non-ISOs pursuant to this
Paragraph 13. Non-ISOs which are transferred pursuant to this
Paragraph 13 shall be exercisable by the transferee subject to
the same terms and conditions as would have applied to such Non-
ISOs in the hands of the Participant originally receiving the
grant of such Non-ISOs.
14. TIME OF GRANTING AWARDS.
The date of grant of an Award shall, for all purposes, be
the later of the date on which the Committee makes the determina-
tion of granting such Award, and the Effective Date. Notice of
the determination shall be given to each Participant to whom an
Award is so granted within a reasonable time after the date of
such grant.
15. EFFECTIVE DATE.
The Plan shall become effective immediately upon its
approval by a favorable vote of stockholders owning at least a
majority of the total votes cast at a duly called meeting of the
Company's stockholders held in accordance with applicable laws.
No Awards may be made prior to approval of the Plan by the
stockholders of the Company.
16. MODIFICATION OF AWARDS.
At any time, and from time to time, the Board may authorize
the Committee to direct execution of an instrument providing for
the modification of any outstanding Award, provided no such
modification shall confer on the holder of said Award any right
or benefit which could not be conferred on him by the grant of a
new Award at such time, or impair the Award without the consent
of the holder of the Award.
A-9<PAGE>
<PAGE>
17. AMENDMENT AND TERMINATION OF THE PLAN.
The Board may from time to time amend the terms of the Plan
and, with respect to any Shares at the time not subject to
Awards, suspend or terminate the Plan. No amendment, suspension
or termination of the Plan shall, without the consent of any
affected holders of an Award, alter or impair any rights or
obligations under any Award theretofore granted.
18. CONDITIONS UPON ISSUANCE OF SHARES.
(a) Compliance with Securities Laws. Shares of Common
Stock shall not be issued with respect to any Award unless the
issuance and delivery of such Shares shall comply with all
relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the rules and regulations
promulgated thereunder, any applicable state securities law, and
the requirements of any stock exchange upon which the Shares may
then be listed.
(b) Special Circumstances. The inability of the Company
to obtain approval from any regulatory body or authority deemed
by the Company's counsel to be necessary to the lawful issuance
and sale of any Shares hereunder shall relieve the Company of any
liability in respect of the non-issuance or sale of such Shares.
As a condition to the exercise of an Option or SAR, the Company
may require the person exercising the Option or SAR to make such
representations and warranties as may be necessary to assure the
availability of an exemption from the registration requirements
of federal or state securities law.
(c) Committee Discretion. The Committee shall have the
discretionary authority to impose in Agreements such restrictions
on Shares as it may deem appropriate or desirable, including but
not limited to the authority to impose a right of first refusal
or to establish repurchase rights or both of these restrictions.
19. RESERVATION OF SHARES.
The Company, during the term of the Plan, will reserve and
keep available a number of Shares sufficient to satisfy the
requirements of the Plan.
20. WITHHOLDING TAX.
The Company's obligation to deliver Shares upon exercise of
Options and/or SARs or upon the vesting of Restricted Stock shall
be subject to the Participant's satisfaction of all applicable
federal, state and local income and employment tax withholding
obligations. The Committee, in its discretion, may permit the
Participant to satisfy the obligation, in whole or in part, by
irrevocably electing to have the Company withhold Shares, or to
deliver to the Company Shares that he already owns, having a
value equal to the amount required to be withheld. The value of
the Shares to be withheld, or delivered to the Company, shall be
based on the Market Value of the Shares on the date the amount of
tax to be withheld is to be determined. As an alternative, the
Company may retain, or sell without notice, a number of such
Shares sufficient to cover the amount required to be withheld.
21. NO EMPLOYMENT OR OTHER RIGHTS.
In no event shall an Employee's or Director's eligibility to
participate or participation in the Plan create or be deemed to
create any legal or equitable right of the Employee, Director, or
any other party to continue service with the Company, the Bank,
or any Affiliate of such corporations. No Employee or Director
shall have a right to be granted an Award or, having received an
Award, the right to again be granted an Award. However, an
Employee or Director who has been granted an Award may, if
otherwise eligible, be granted an additional Award or Awards.
22. GOVERNING LAW.
The Plan shall be governed by and construed in accordance
with the laws of the State of Nebraska, except to the extent that
federal law shall be deemed to apply.
A-10
<PAGE>
<PAGE>
[FORM OF PROXY CARD]
COMMERCIAL FEDERAL CORPORATION
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE
NOVEMBER 19, 1996 ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints Talton K. Anderson, Carl G.
Mammel and James P. O'Donnell, and each of them, with full power
of substitution, as attorneys in fact, agents and proxies for the
undersigned to vote all of the shares of Common Stock, par value
$.01 per share, of COMMERCIAL FEDERAL CORPORATION (the
"Corporation") which the undersigned is entitled to vote at the
Annual Meeting of Stockholders to be held at the Holiday Inn
Central Convention Centre, "Holiday C" Meeting Room, 3321 South
72nd Street, Omaha, Nebraska on Tuesday, November 19, 1996 at
10:00 a.m., local time, and at any and all adjournments or
postponements thereof (the "Meeting") as indicated below and as
directed by the Board of Directors, with respect such other
matters as may properly come before the Meeting.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO DIRECTIONS
ARE SPECIFIED, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS
PROXY "FOR" PROPOSALS I and II AND AGAINST PROPOSAL III. IF
OTHER MATTERS ARE PROPERLY BROUGHT BEFORE THE MEETING, THIS PROXY
WILL BE VOTED BY THOSE NAMED IN THIS PROXY AS DIRECTED BY A
MAJORITY OF THE BOARD OF DIRECTORS. There is cumulative voting
in the election of directors and, unless otherwise indicated by
the stockholder, a vote for the nominees listed in Proposal I
will give the proxies discretionary authority to cumulate all
votes to which the undersigned is entitled and to allocate such
votes in favor of one or more of such nominees, as the proxies
may determine.
THE UNDERSIGNED HEREBY REVOKES ANY PREVIOUS PROXIES WITH
RESPECT TO THE MATTERS COVERED BY THIS PROXY.
The Board of Directors recommends a vote "FOR" Proposals I and
II.
I. The election as directors of all nominees listed below
(except as marked to the contrary):
(a) For terms to expire in 1998
Robert D. Taylor and Aldo J. Tesi
(b) For terms to expire in 1999
Robert F. Krohn, Charles M. Lillis and
Robert S. Milligan.
[ ] FOR [ ] WITHHOLD AUTHORITY FOR ALL NOMINEES
INSTRUCTION: To withhold your vote for any
individual nominee(s), mark "FOR" above and write
the name(s) of the nominee(s) for which you do NOT
wish to vote on the line below.
_____________________________________
II. Approval of the Commercial Federal Corporation 1996 Stock
Option and Incentive Plan
The Board of Directors recommends a vote "AGAINST" Proposal III.
III. A stockholder proposal recommending the sale or merger of
the Corporation
Please sign exactly as your name appears
on this card. Joint owners should each
sign personally. Corporation proxies
should be signed in corporate name by an
authorized officer. Executors,
administrators, trustees or guardians
should give their title when signing.
Date: __________________________________
Signature(s): _________________________
_________________________
PLEASE SIGN, DATE AND MAIL YOUR PROXY PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
