FROM: Franklin Mutual Advisers, LLC
Telephone 650-312-4701
Contact: Holly Gibson
- --------------------------------------------------------------------------------
For Immediate Release
Franklin Mutual Commences Lawsuit Against Commercial Federal
Short Hills, NJ, October 19, 1998 -- Franklin Mutual Advisers, LLC
announced today that it has sued Commercial Federal Corporation and its Board of
Directors in the United States District Court for the District of Nebraska.
Franklin Mutual is the largest stockholder of Commercial Federal with a 7.9%
ownership stake and is seeking to elect two independent nominees to the
Commercial Federal board who will advocate a sale of the company.
On September 8, 1999, Franklin Mutual notified Commercial Federal of
its intention to nominate George R. Zoffinger and J. Thomas Burcham for election
to two of the four board seats to be filled at Commercial Federal's annual
meeting of shareholders scheduled for November 16, 1999. Franklin Mutual also
notified Commercial Federal of its intention to nominate Matthew P. Wagner for
election as a director instead of Mr. Zoffinger or Mr. Wagner should either Mr.
Zoffinger or Mr. Burcham be unable or unavailable to serve.
On September 29, 1999, Commercial Federal notified Franklin Mutual
that it intends to declare the nominations of Mr. Burcham and Mr. Wagner
defective based on its interpretation of certain Office of Thrift Supervision
regulations which Franklin Mutual has asserted do permit its nominees to stand
for election. After receiving Franklin Mutual's notice of nominations, the
Commercial Federal board also adopted an amendment to the Commercial Federal
by-laws establishing new eligibility requirements for directors. Commercial
Federal has also announced that it is seeking a declaration from a federal court
in Nebraska that Messrs. Burcham and Wagner are not eligible to be nominated or
stand for election as directors and that the by-law amendment is legally valid.
Franklin Mutual's complaint alleges that Commercial Federal and its
incumbent directors have unlawfully attempted to prevent Franklin Mutual from
nominating Mr. Burcham and Mr. Wagner by erroneously declaring them unqualified
under Commercial Federal's by-laws and by subsequently amending the by-laws to
prohibit them from being nominated. The complaint further alleges that, through
these actions, the incumbent directors breached their fiduciary duties to
Commercial Federal's stockholders. Franklin Mutual seeks to enjoin Commercial
Federal and its incumbent directors from preventing Franklin Mutual's nomination
of its candidates, including implementation of the new by-law amendment, and a
declaration that Mr. Burcham and Mr. Wagner are qualified to stand for election.
Messrs. Burcham and Wagner are also plaintiffs in the action.
Mr. Zoffinger is the President and Chief Executive Officer of
Constellation Capital Corp., a New Jersey-based commercial finance and
investment company. He is also a
<PAGE>
director of Admiralty Bank Corp., a bank holding company located in Florida. He
is the former Chairman of Corestates New Jersey National Bank, a $6 billion
bank, as well as the former President and Chief Executive Officer of
Constellation Bancorp, a bank holding company which was sold to Corestates in
1993.
Mr. Burcham is a significant stockholder of Commercial Federal and
has particular familiarity with Commercial Federal and the banking business in
the Midwest. He is a paid independent consultant to Commercial Federal and was
the Chairman of First National Bank Shares, Ltd. which was acquired by
Commercial Federal in 1998. He is the former Chairman and Chief Executive
Officer of Missouri Bank and Trust Company, and its parent holding company, MBT
Bancshares, Inc.
Mr. Wagner is the President, Chief Executive Officer and a director
of Western Bancorp, a large California bank holding company. Mr. Wagner will no
longer be a director or officer of Western Bancorp upon the close of the pending
sale of Western Bancorp to US Bancorp, presently scheduled to occur prior to the
Commercial Federal annual meeting of shareholders.
Franklin Mutual Advisers, LLC serves as the investment manager for
the Mutual Series funds and is headquartered at 51 JFK Parkway, Short Hills, NJ
07078.
# # #
