SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. 1)
Filed by the Registrant [_]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission only (as permitted by rule
14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials Soliciting Material Pursuant to ss.
240.14a-11(c) or ss. 240.14a-12
COMMERCIAL FEDERAL CORPORATION
................................................................................
(Name of Registrant as Specified in Its Charter)
FRANKLIN MUTUAL ADVISERS, LLC
................................................................................
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies: __________
2) Aggregate number of securities to which transaction applies: _____________
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined): ______________________________
4) Proposed maximum aggregate value of the transaction: ______________________
5) Total fee paid: __________
[_] Fee paid previously with preliminary material.
[_] 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>
Franklin Mutual ADVISERS, LLC
51 John F. Kennedy Parkway
Short Hills, NJ 07078
October [ ], 1999
Dear Fellow Commercial Federal Corporation Stockholder:
Franklin Mutual Advisers, LLC ("Franklin Mutual") is a mutual fund
manager registered with the Securities and Exchange Commission. Our business is
investing and protecting our clients' money. Our investment approach focuses on
securities that our research identifies as having significant unrealized value.
Commercial Federal Corporation ("CFC" or the "Company") common stock is one of
those securities. Funds that Franklin Mutual advises have invested over $118
million in CFC and currently own approximately 7.9% of the Company's outstanding
shares. We are CFC's largest stockholder.
We are seeking your support to elect two independent nominees to the
CFC Board. The independent nominees have no affiliation with Franklin Mutual.
However, they do share our belief that CFC stock trades at levels far below its
potential value in a sale or merger transaction. We believe this is the case
based on the following analysis:
o During the past year, reported closing prices of CFC's stock ranged
between $18 5/8 and $25 per share.
o CFC's originally reported earnings per share ("EPS") for 1996, 1997
and 1998 were $1.66, $1.34 and $1.62, respectively.
o Based on statistics compiled by Keefe, Bruyette & Woods, a leading
investment bank specializing in the banking industry, the median price
to earnings ratios for acquisitions in the savings and loan industry
in 1996, 1997 and 1998 were 19.8, 28.3 and 22.0, respectively.
o By applying these multiples to CFC's originally reported EPS in 1996,
1997 and 1998, CFC's potential per share merger value would be $32.87
based on 1996 EPS, $37.92 based on 1997 EPS and $35.04 based on 1998
EPS.
Our analysis is supported by analysts at leading research firms. In an August
1999 report, Fox-Pitt, Kelton, Inc., asserts that CFC could command a minimum of
15 times estimated year 2000 EPS in a sale (or, $32.25 based on estimated EPS of
$21.50). Similarly, an August 1999 Howe Barnes Investments, Inc. report
estimates CFC's merger value at between $33 and $35 per share. Friedman,
Billings, Ramsey & Co., Inc. stated in yet another August 1999 report that in
the event of an acquisition CFC could represent a "30% upside for investors" (or
approximately $31 from a then current price of $23 7/8).
<PAGE>
We are taking the unusual step of proposing independent nominees for
election to the CFC Board because your incumbent directors do not believe that a
sale or merger of CFC would be in the best interests of all of the Company's
stockholders.
WE ARE COMMITTED TO MAXIMIZING THE VALUE OF CFC STOCK FOR ALL
STOCKHOLDERS. OUR INTERESTS ARE IDENTICAL TO YOURS. Join us in our effort to
obtain maximum value for your investment. The Company's Annual Meeting is
scheduled to take place on November 16, 1999. At that time, you will have the
opportunity to elect independent directors to the CFC Board who will act on your
behalf to keep pressure on CFC's current directors and send them the strongest
possible message.
WE URGE YOU TO VOTE TO PROTECT YOUR INVESTMENT NOW BY SIGNING,
DATING AND RETURNING THE ENCLOSED WHITE PROXY CARD TODAY.
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IF THE INDEPENDENT NOMINEES ARE ELECTED, THEY WILL STRONGLY ADVOCATE
THE SALE OF THE COMPANY TO THE HIGHEST BIDDER.
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The CFC Board's record speaks for itself. Less than two years ago,
CFC's common stock hit a closing high of $38 3/16 in April 1998. But within the
last year, CFC has missed earnings estimates and the closing price of CFC's
common stock has dropped as low as $18 5/8 and never gone higher than $25 This
history of poor performance goes back as far as 1996. From January 1996 through
July 1999, during the strongest bull market in history, CFC's common stock, on
average, underachieved a broad index of large thrifts and Midwestern banking
companies by 52.5% and, if dividends are included, by 65%. During the same time
period, CFC's common stock dramatically underperformed the S&P 500 Index by
77.1% and, if dividends are included, by 86.6%. In our view, the gap between
CFC's trading value and its potential merger value is substantial. We do not
believe that CFC's stock price will ever reflect its value as long as CFC
remains independent.
Unfortunately, rather than concentrating on maximizing the value of
your investment, the CFC Board seems more interested in spending corporate funds
to entrench itself. Consider your board's drastic response to our effort to have
you elect only two pro-sale directors to CFC's ten-member board:
o Nearly one month after we had given CFC timely notice of our intention
to nominate two highly-qualified individuals for election as directors
at this year's annual meeting, CFC announced that it had adopted an
amendment to its by-laws which is intended to prevent one of our
nominees and our alternate nominee from being nominated and from
serving on your board.
o Instead of letting you decide who should serve on your board, the CFC
Board is directing its efforts at disqualifying one of our nominees
and our alternate nominee based on an erroneous interpretation of the
CFC by-
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<PAGE>
laws and certain banking regulations that, contrary to the CFC's
Board's assertions, DO in fact permit our nominees to serve as
directors.
o Even assuming that the CFC Board's interpretation of the by-laws is
correct, the CFC Board is claiming that we cannot nominate qualified
candidates for election as directors at the annual meeting, even
though we gave notice of our nominations well before the deadline
which was fixed by the CFC Board for no purpose other than to protect
itself.
o Your incumbent directors initiated a lawsuit against us and our
nominees and are now pleading with a Nebraska federal judge to permit
them to declare one of our nominees and our alternate nominee
ineligible to serve on your board. We believe that the lawsuit is
simply another effort to thwart your right to elect independent
directors.
o Your board is even attempting to deny us the right to look at certain
corporate records, such as minutes of board of directors meetings.
What can the incumbent directors be so afraid of?
Franklin Mutual is appalled by the CFC Board's efforts to
disenfranchise its stockholders. Accordingly, we have initiated our own lawsuit
against CFC and the incumbent directors to protect the right of all of the
Company's stockholders to decide freely between competing slates of nominees.
You, the stockholder, have the right to elect independent nominees despite the
CFC Board's efforts to deny you that fundamental right.
KEEP THE PRESSURE ON THE CFC BOARD TO DO THE RIGHT THING.
Electing independent nominees should help ensure that the CFC Board will
pursue an open, honest process to sell the Company and maximize the value of
your investment. However, if they are elected, the independent nominees
would occupy only two of the ten seats on the CFC Board and ordinarily would
not be able to cause any action to be taken or not taken by the CFC Board.
Therefore, there can be no assurance that election of the independent
nominees will result in (i) the CFC Board pursuing an open, honest process to
sell the Company or (ii) stockholders receiving maximum value for their
investment. In addition, because the independent nominees are not affiliated
with us, we cannot assure how the nominees will act if elected to the CFC
Board.
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SEND YOUR BOARD A MESSAGE IT CAN'T IGNORE!
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The enclosed proxy statement contains important information
concerning the Company's Annual Meeting and the independent nominees--please
read it carefully.
WE URGE YOU TO SIGN, DATE AND RETURN THE ENCLOSED WHITE PROXY CARD
TODAY.
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<PAGE>
Thank you for your support.
Sincerely,
Raymond Garea
Senior Vice President
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IMPORTANT
o PLEASE SIGN, DATE AND RETURN THE ENCLOSED WHITE PROXY CARD TODAY IN THE
POSTAGE-PAID ENVELOPE PROVIDED.
o DO NOT SIGN ANY PROXY CARD THAT YOU MAY RECEIVE FROM CFC, EVEN AS A PROTEST
VOTE AGAINST CFC'S BOARD AND MANAGEMENT.
IF YOU HAVE ANY QUESTIONS, OR NEED ASSISTANCE VOTING, PLEASE CONTACT THE FIRM
ASSISTING US IN THE SOLICITATION OF PROXIES:
INNISFREE
M&A INCORPORATED
TOLL-FREE: (888) 750-5833
BANKS AND BROKERS, CALL COLLECT: (212) 750-5833
- --------------------------------------------------------------------------------
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<PAGE>
PRELIMINARY PROXY STATEMENT; SUBJECT TO COMPLETION
1999 ANNUAL MEETING OF STOCKHOLDERS
OF
COMMERCIAL FEDERAL CORPORATION
PROXY STATEMENT
OF
FRANKLIN MUTUAL ADVISERS, LLC
To the Stockholders of
Commercial Federal Corporation:
This Proxy Statement and the enclosed WHITE proxy card are being
furnished by Franklin Mutual Advisers, LLC ("Franklin Mutual") to holders of
common stock, par value $0.0l per share (the "Common Stock"), of Commercial
Federal Corporation, a Nebraska corporation (the "Company" or "CFC"), in
connection with the solicitation of proxies for use at the Annual Meeting of CFC
Stockholders and at any and all adjournments or postponements thereof (the
"Meeting"). The Meeting is scheduled to be held November 16, 1999 at the time
and place to be announced in the Notice of Annual Meeting of Stockholders that
will be sent to stockholders by the Company. As of October 10, 1999, Franklin
Mutual and the independent nominees its supports for election as directors were
the beneficial owners of an aggregate of 5,490,290 shares of Common Stock,
representing approximately 9.2% of the outstanding shares. According to the
Company's Form l0-K for the fiscal year ended June 30, 1999, as of September 20,
1999, there were 59,362,412 shares of Common Stock outstanding.
THIS SOLICITATION IS BEING MADE BY FRANKLIN MUTUAL ADVISERS, LLC AND
NOT ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
At the Meeting, four persons will be elected directors of the
Company to hold office for a term of three years and until their successors have
been duly elected and qualified. In opposition to the solicitation of proxies by
the Board of Directors of CFC (the "CFC Board"), Franklin Mutual, as the largest
stockholder of the Company, is soliciting proxies to support the election of two
outstanding and independent nominees who, if elected, will act in the best
interest of all of the Company's stockholders. Franklin Mutual is NOT soliciting
proxies to elect its own representatives to the Board. The nominees are
independent persons who share Franklin Mutual's view that the Company should be
sold to the highest bidder on terms most favorable to the Company. Neither
nominee is an affiliate of Franklin Mutual and, if elected, the nominees will
not have any allegiance to Franklin Mutual.
This Proxy Statement and the WHITE proxy card are first being mailed
or furnished to stockholders of the Company on or about October [ ], 1999.
YOUR VOTE IS IMPORTANT. PLEASE SIGN AND DATE THE ENCLOSED WHITE
PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE PROMPTLY. PROPERLY VOTING
THE ENCLOSED WHITE PROXY
<PAGE>
CARD AUTOMATICALLY REVOKES ALL PRIOR PROXY CARDS PREVIOUSLY SIGNED BY YOU.
DO NOT MAIL ANY PROXY CARD OTHER THAN THE ENCLOSED WHITE CARD IF YOU
WISH TO VOTE FOR THE INDEPENDENT NOMINEES FRANKLIN MUTUAL SUPPORTS.
EVEN IF YOU PREVIOUSLY HAVE VOTED A PROXY CARD FURNISHED TO YOU BY
THE CFC BOARD, YOU HAVE THE LEGAL RIGHT TO CHANGE YOUR VOTE BY SIGNING, DATING
AND RETURNING THE ENCLOSED WHITE PROXY CARD. ONLY YOUR LATEST DATED PROXY WILL
COUNT AT THE MEETING.
HOLDERS OF RECORD OF SHARES OF COMMON STOCK AS OF OCTOBER 13, 1999,
THE RECORD DATE FOR VOTING AT THE MEETING, ARE URGED TO SUBMIT A WHITE PROXY
CARD EVEN IF YOUR SHARES ARE SOLD AFTER THE RECORD DATE.
IF YOU PURCHASED SHARES OF COMMON STOCK AFTER THE RECORD DATE AND
WISH TO VOTE SUCH SHARES AT THE MEETING, YOU SHOULD OBTAIN A WHITE PROXY CARD
FROM THE SELLER OF SUCH SHARES.
IF YOUR SHARES ARE REGISTERED IN YOUR OWN NAME, PLEASE SIGN, DATE
AND MAIL THE ENCLOSED WHITE PROXY CARD TO FRANKLIN MUTUAL IN CARE OF INNISFREE
M&A INCORPORATED, THE FIRM ASSISTING FRANKLIN MUTUAL IN THE SOLICITATION OF
PROXIES, IN THE POSTAGE-PAID ENVELOPE PROVIDED. IF YOUR SHARES ARE HELD IN THE
NAME OF A BROKERAGE FIRM, BANK NOMINEE OR OTHER INSTITUTION, ONLY IT CAN SIGN A
WHITE PROXY CARD WITH RESPECT TO YOUR SHARES AND ONLY UPON RECEIPT OF SPECIFIC
INSTRUCTIONS FROM YOU. ACCORDINGLY, YOU SHOULD CONTACT THE PERSON RESPONSIBLE
FOR YOUR ACCOUNT AND GIVE INSTRUCTIONS FOR A WHITE PROXY CARD TO BE SIGNED
REPRESENTING YOUR SHARES. FRANKLIN MUTUAL URGES YOU TO CONFIRM IN WRITING YOUR
INSTRUCTIONS TO THE PERSON RESPONSIBLE FOR YOUR ACCOUNT AND TO PROVIDE A COPY OF
SUCH INSTRUCTIONS TO FRANKLIN MUTUAL IN CARE OF INNISFREE M&A INCORPORATED AT
THE ADDRESS INDICATED BELOW SO THAT FRANKLIN MUTUAL WILL BE AWARE OF ALL
INSTRUCTIONS GIVEN AND CAN ATTEMPT TO ENSURE THAT SUCH INSTRUCTIONS ARE
FOLLOWED.
If you have any questions about executing your proxy or require
assistance, please call:
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<PAGE>
INNISFREE
M&A INCORPORATED
501 Madison Avenue, 20th floor
New York, NY 10022
Call toll free: (888) 750-5833
Banks and Brokers, call collect: (212) 750-5833
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<PAGE>
FRANKLIN MUTUAL ADVISERS, LLC
The proxies solicited hereby are being sought by Franklin Mutual.
Franklin Mutual is an investment adviser registered with the Securities and
Exchange Commission (the "SEC") and an indirect wholly-owned subsidiary of
Franklin Resources, Inc. ("FRI"). Franklin Mutual's principal business is
advising its clients with respect to investments in securities, including those
of financial institutions. Franklin Mutual has invested over $118 million in
CFC. The shares of Common Stock beneficially owned by Franklin Mutual are owned
by the funds identified in Appendix I (the "Funds"). Franklin Mutual has all
investment and voting power over the securities owned by the Funds. Franklin
Mutual, however, does not have any financial interest in the shares owned by its
advisory clients.
For additional information regarding Franklin Mutual and the Funds,
see Appendix I annexed to this Proxy Statement.
WHY YOU SHOULD VOTE FOR THE INDEPENDENT
NOMINEES SUPPORTED BY FRANKLIN MUTUAL
At the Meeting, Franklin Mutual intends to nominate two persons for
the four vacancies scheduled to be filled at the Meeting. Franklin Mutual
intends to nominate J. Thomas Burcham and George R. Zoffinger. If Franklin
Mutual determines at or prior to the Meeting that either Mr. Burcham or Mr.
Zoffinger is unable or otherwise unavailable to serve as a director, Franklin
Mutual intends to nominate Matthew P. Wagner at the Meeting for election as a
director if he is available. Franklin Mutual will not nominate more than two
individuals for election as directors and has no present intention to seek
additional board seats if both of its nominees are elected. Franklin Mutual
believes that the election of independent nominees represents the best means for
the Company's stockholders to maximize the value of their investment in the
Company. Franklin Mutual, as the largest stockholder of the Company, is
determined to return the value of CFC's Common Stock to where it should be, for
the benefit of all of CFC's stockholders.
Messrs. Burcham, Zoffinger and Wagner are not affiliated with
Franklin Mutual or any of its affiliates. If elected to the CFC Board, the
nominees will act independently of Franklin Mutual. Franklin Mutual chose the
nominees and selected the alternate nominee based on their extensive experience
in the banking industry.
Mr. Burcham is a significant stockholder of the Company and has
particular familiarity with the Company and the banking business in the Midwest.
He is a paid independent consultant to the Company and was the Chairman of First
National Bank Shares, Ltd. which was acquired by the Company in 1998. He is the
former Chairman and Chief Executive Officer of Missouri Bank and Trust Company
("MB&T"), a well-run community bank located in Kansas City, Missouri, and its
parent holding company, MBT Bancshares, Inc., of which he is the majority
stockholder.
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 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
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<PAGE>
President and Chief Executive Officer of Constellation Bancorp, a bank holding
company which was sold to Corestates in 1993.
Mr. Wagner is a seasoned banking executive. He is currently the
President, Chief Executive Officer and a director of Western Bancorp, a large
California bank holding company. Mr. Wagner's status as a director and officer
of Western Bancorp will terminate upon the close of the pending sale of Western
Bancorp to US Bancorp, presently scheduled to occur prior to the Meeting.
However, if the sale of Western Bancorp does not close at or prior to the
Meeting, there can be no assurance that Mr. Wagner will resign from his
positions at Western Bancorp. If Mr. Wagner does not so resign, Franklin Mutual
will not nominate him for election as a director at the Meeting.
If elected, Messrs. Burcham and Zoffinger (or Mr. Wagner, if he is
nominated) are expected to take all actions, subject to their fiduciary duties
to all of the Company's stockholders, to maximize stockholder value, through the
sale of the Company to the highest bidder, or any other transaction or series of
transactions that, in the judgement of the nominees, will serve to accomplish
this goal, in each case on the terms most favorable to the Company. There can be
no assurance that stockholder value will be maximized as a result of this
solicitation or the other proposals set forth herein.
YOU, THE COMPANY'S STOCKHOLDERS, CAN MOVE TO MAXIMIZE YOUR
INVESTMENT, BY SIGNING, DATING AND MAILING PROMPTLY THE ENCLOSED WHITE PROXY
CARD IN SUPPORT OF THE INDEPENDENT NOMINEES FRANKLIN MUTUAL SUPPORTS.
The CFC Board's record speaks for itself. Less than two years ago,
CFC's Common Stock hit a closing high of $38 3/16 in April 1998. But within the
last year, CFC has missed earning estimates and the closing price of CFC's
Common Stock has dropped as low as $18 5/8 and never gone higher than $25 This
history of poor performance goes back as far as 1996. From January 1996 through
July 1999, during the strongest bull market in history, CFC's Common Stock, on
average, underperformed a broad index of large thrifts and Midwestern banking
companies by 52.5% and, if dividends are included, by 65%. During the same time
period, CFC's Common Stock dramatically underachieved the S&P 500 Index by 77.1%
and, if dividends are included, by 86.6%.
The following table sets forth, for the fiscal quarters of the
Company indicated, the highest closing price per share and lowest closing price
per share on the New York Stock Exchange as reported in published financial
sources. The stock prices listed below have been modified, when applicable, to
reflect distributions such as stock splits or stock dividends:
QUARTER ENDED HIGHEST CLOSE LOWEST CLOSE
------------- ------------- ------------
March 31, 1996 $17 9/32 $15 9/16
June 30, 1996 17 9/32 16 25/64
September 30, 1996 19 7/64 16
December 31, 1996 21 9/16 18 39/64
March 31, 1997 26 20 3/4
June 30, 1997 25 5/64 21 27/64
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<PAGE>
QUARTER ENDED HIGHEST CLOSE LOWEST CLOSE
------------- ------------- ------------
September 30, 1997 32 1/8 25 5/64
December 31, 1997 36 1/2 31 3/8
March 31, 1998 36 3/8 30
June 30, 1998 38 3/16 31 1/8
September 30, 1998 32 3/8 22
December 31, 1998 24 7/16 19 5/8
March 31, 1999 24 21 1/16
June 30, 1999 25 22
September 30, 1999 24 11/16 18 5/8
The following graph compares the performance of the Company's
trading price from January 1, 1996 through July 30, 1999 to (i) the S&P 500
Index and (ii) an index of the Company's peers. The peer group included in the
index consists of Firstar Corp., Greenpoint Financial, Charter One Financial, US
Bancorp, Banc One Corp., Washington Mutual, St. Paul Bancorp, TCF Financial,
Dime Bancorp, Astoria Financial, People's Heritage, Washington Federal and Union
Planters Corp. The stockholder return comparison tracks $100 invested on January
1, 1996 in each of CFB, S&L and Midwest Bank Peers and the S&P 500 Index.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Indexed Return Comparison 1/1/96 6/30/96 12/31/96 6/30/97 12/31/97 6/30/98 12/31/98
Commercial Federal $100 $102 $127 $147 $212 $188 $138
S&L and Midwest Bank Peers $100 $103 $135 $172 $210 $211 $187
S&P 500 Index $100 $109 $120 $144 $158 $184 $193
</TABLE>
Less than two years ago, CFC's Common Stock hit a closing high of
$39 in April 1998. However, the gap between CFC's current trading value and its
potential merger value is, in Franklin Mutual's view, substantial. We believe
this is the case based on the following analysis:
o During the past year, reported closing prices of CFC's stock ranged
between $18 5/8 and $25 per share.
o CFC's originally reported earnings per share ("EPS") for 1996, 1997
and 1998 were $1.66, $1.34 and $1.62, respectively.
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<PAGE>
o Based on statistics compiled by Keefe, Bruyette & Woods, a leading
investment bank specializing in the banking industry, the median price
to earnings ratios for acquisitions in the savings and loan industry
in 1996, 1997 and 1998 were 19.8, 28.3 and 22.0, respectively.
o By applying these multiples to CFC's originally reported EPS in 1996,
1997 and 1998, CFC's potential per share merger value would be $32.87
based on 1996 EPS, $37.92 based on 1997 EPS and $35.04 based on 1998
EPS.
Our analysis is supported by analysts at leading research firms. In an August
1999 report, Fox-Pitt, Kelton, Inc., asserts that CFC could command a minimum of
15 times estimated year 2000 EPS in a sale (or, $32.25 based on estimated EPS of
$21.50). Similarly, an August 1999 Howe Barnes Investments, Inc. report
estimates CFC's merger value at between $33 and $35 per share. Friedman,
Billings, Ramsey & Co., Inc. stated in yet another August 1999 report that in
the event of an acquisition CFC could represent a "30% upside for investors" (or
approximately $31 from a then current price of $23 7/8).
Based on its past performance, we do not believe that CFC's stock
price will ever reflect its potential merger value as long as CFC remains
independent.
CFC's stockholders have in the past urged the CFC Board to pursue a
sale of the Company. In 1996, such a stockholder proposal was defeated, but
during a 1995 proxy contest conducted by CAI Corporation, CFC's stockholders
passed a non-binding stockholder resolution calling for the sale of the Company
and elected two directors who were committed to selling the Company.
Unfortunately, the CFC Board resisted a sale and instead adopted a misguided
acquisition strategy which has significantly decreased the value of CFC's Common
Stock and diluted the interests of stockholders.
The time for the CFC Board to correct its mistake and find a buyer
is running short. In our view, the value of CFC stock is likely to decline
further as consolidation continues in the financial institutions industry.
Continued consolidation will result in fewer potential acquirors both because
there will be fewer financial institutions to acquire CFC and the size of CFC
will continue to decline relative to other financial institutions that grow
through acquisition.
In its August 8, 1999 issue, the Omaha & World-Herald, reported that
the chairman and chief executive officer of CFC said that the incumbent board
believes the Company should remain independent. We, therefore, believe that
electing pro-sale directors is perhaps the only way the sale of the Company will
occur before it is too late.
Messrs. Burcham, Zoffinger and Wagner have considerable experience
in starting, managing and selling banks. If Messrs. Burcham and Zoffinger (or
Mr. Wagner, if he is nominated) are elected to the CFC Board, as many as eight
of the ten members of the CFC Board will be management nominees, and the
independent directors will not be in control of the CFC Board. Because CFC's
by-laws provide that action by the CFC Board requires a majority vote of the
directors present at a meeting at which a quorum (a majority of the number of
directors fixed by CFC's by-laws) is present, the independent nominees (if
elected) ordinarily will not be able to cause any action to be taken or not
taken by the CFC Board unless at least two (assuming only six directors are
present at a meeting of the CFC Board) and as many as four (assuming all ten
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<PAGE>
directors are present at such a meeting) other directors agree with their
position. Nevertheless, the independent nominees may, because of their
qualifications and expertise, be able to inform and persuade other directors
sufficiently enough to cause the CFC Board to take or not take various actions.
If elected and subject to their fiduciary duties under applicable
law, Messrs. Burcham and Zoffinger (or Mr. Wagner, if he is nominated) intend to
encourage the CFC Board to cause a sale or merger of the Company to or with
another financial institution on the most favorable terms available to the
Company. However, the independent nominees will only seek to encourage the CFC
Board to approve such a transaction if they believe that the value of the
transaction is fair to the stockholders of CFC. The independent nominees would
encourage the CFC Board to evaluate potential bids on the basis of among other
things, the value of the consideration offered, the ability of the bidder to
finance the bid, the quality of any non-cash consideration offered (including
the financial condition of any bidder offering non-cash consideration), and the
timing and likelihood of consummation of the proposed transaction in light of
any required financing or regulatory approvals.
Franklin Mutual and Messrs. Burcham, Zoffinger and Wagner believe
that the election of independent nominees would send a strong message to the CFC
Board that CFC stockholders want to maximize the value of their investment in
the Company through a sale or merger, and would make it more likely that a
successful acquisition of the Company will occur. However, because the
independent nominees, if elected, will fill only two of the ten seats on the CFC
Board, there can be no assurance that the CFC Board will seek to solicit or
consider offers for the sale or merger of CFC even if the independent nominees
are elected.
Neither Franklin Mutual nor Messrs. Burcham, Zoffinger or Wagner
works on behalf of or as a representative of any potential acquiror of the
Company. The Funds, however, may own securities of entities that may be
potential acquirors of CFC. Franklin Mutual, its nominees and its alternative
nominee are merely committed to maximizing the value of the investment of all of
the stockholders of CFC. Franklin Mutual intends to communicate with potential
acquirors of CFC and their financial advisors with a view towards encouraging
potential acquirors to submit merger and acquisition proposals to the CFC Board
and the stockholders of CFC.
YOUR VOTE IS IMPORTANT. SIGN, DATE AND MAIL PROMPTLY THE
ENCLOSED WHITE PROXY CARD IN THE ENCLOSED ENVELOPE.
THE CFC BOARD'S RESPONSE TO FRANKLIN MUTUAL'S
EFFORTS TO ALLOW YOU TO ELECT INDEPENDENT DIRECTORS
Unfortunately, rather than concentrating on maximizing the value of
your investment, the CFC Board seems more interested in spending corporate funds
to entrench itself. AS YOU DECIDE WHICH NOMINEES TO VOTE FOR, YOU SHOULD
CONSIDER STRONGLY YOUR BOARD'S DRASTIC RESPONSE TO OUR EFFORT TO HAVE YOU ELECT
ONLY TWO PRO-SALE DIRECTORS TO CFC'S TEN-MEMBER BOARD. We believe that through
their response your incumbent directors are sending you the message that their
only goal is to maintain the status quo and that improving stockholder value is
NOT their priority.
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<PAGE>
In a stockholder notice of nominations, dated September 8, 1999, in
accordance with the CFC Board's self-serving advance notice requirement, we
notified CFC of our intention to nominate Mr. Burcham and Mr. Zoffinger at the
Meeting for election as directors. We also notified CFC of our intention to
nominate Mr. Wagner at the Meeting for election as a director if we determine at
or prior to the Meeting that either Mr. Burcham or Mr. Zoffinger is unable or
otherwise unavailable to serve as a director. In response, the CFC Board, on
September 28, 1999, adopted an amendment to the CFC by-laws which establishes
new eligibility requirements for directors and would preclude Mr. Burcham and
Mr. Wagner from serving as a director even though they are otherwise qualified
to serve under the federal banking laws and under the Company's by-laws in
effect when CFC received our timely notice of nominations. The CFC Board's
adoption of the by-law amendment was not disclosed publicly until after the
deadline for giving notice of nominations passed.
By letter dated September 29, 1999, which we did not receive until
October 4, 1999, the CFC Board notified us of its intention to declare the
nominations of Mr. Burcham and Mr. Wagner defective based on the CFC Board's
erroneous interpretation of certain Office of Thrift Supervision (the "OTS")
regulations. By letter dated October 6, 1999, we notified the Company that,
contrary to the Company's assertions, both Mr. Burcham and Mr. Wagner are
eligible to be nominated and to serve as directors under the OTS regulations and
the Company's by-laws in effect when CFC received our stockholder notice of
nominations. We also notified CFC that the by-law amendment is an impermissible
and improper attempt to disenfranchise stockholders and called for the CFC Board
to rescind the by-law amendment immediately. So far, the CFC Board has refused
to rescind the improper by-law amendment. Indeed, in a letter dated October 14,
1999, CFC responded to our October 6, 1999 letter by reiterating its position
that Mr. Burcham and Mr. Wagner are not eligible to serve or to be nominated to
serve as directors and that the by-law amendment is valid.
On October 13, 1999, CFC filed suit in federal court in Nebraska
against Franklin Mutual and Messrs. Burcham and Wagner seeking a declaration by
the court that Mr. Burcham and Mr. Wagner are not eligible to be nominated
and/or to serve as directors. CFC is also seeking a declaration by the court
that the by-law amendment is legally valid.
By letter dated October 6, 1999, we requested, among other things,
(i) a list of the stockholders of the Company entitled to vote at the Meeting,
(ii) certain information concerning the beneficial owners of the Company's
Common Stock, and (iii) all minutes of meetings of the CFC Board for the past
three years. On October 15, 1999, CFC made available to our representatives
some, but not all, of the records we requested in our October 6, 1999 letter.
Specifically, although the record date for the Meeting had passed, CFC refused
to provide a list of stockholders entitled to vote at the meeting. Instead, as
permitted under Nebraska law, CFC provided a record of stockholders as of
October 6, 1999, the date of our request, and said it would make a record of
stockholders as of the record date available after it provided notice of the
meeting to stockholders, which presumably would occur through mailing of the
Company's proxy statement. By not providing us with an accurate list of
stockholders entitled to vote at the meeting until after it mails its proxy
material to stockholders, the CFC Board is attempting to place its largest
stockholder at a disadvantage in the solicitation of proxies. CFC also refused
to provide us with its board minutes for the last three years claiming that its
largest stockholder did not have a "proper purpose" for reviewing the minutes.
We are surprised that the CFC Board is not willing to make its records available
to its stockholders. What can they be afraid of? As to the additional
information we requested, CFC said it would only provide such information if and
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<PAGE>
when it becomes available, provided we sign a confidentiality agreement.
CLEARLY, THE CFC BOARD'S RESPONSE TO OUR REQUEST FOR STOCKHOLDER AND BOARD
RECORDS IS AIMED AT DELAYING AND FRUSTRATING ITS LARGEST STOCKHOLDER FROM
CONDUCTING A LAWFUL PROXY SOLICITATION.
Because we want to protect the right of all of the Company's
stockholders to decide freely between competing slates of nominees, on October
18, 1999, we and Messrs. Burcham and Wagner sued CFC and the incumbent directors
in Nebraska federal court. Our complaint alleges that CFC and the incumbent
directors have taken unlawful and irresponsible action to entrench themselves,
to frustrate Franklin Mutual's intention to nominate two nominees and to
preclude two highly-qualified individuals from running for election and serving
as directors on the Company's board of directors. The complaint alleges in
particular that the by-law amendment is unlawful and that the incumbent
directors have breached their fiduciary duties to the Company's stockholders. We
are also seeking injunctive relief to preclude CFC and the incumbent directors
from preventing the election of independent nominees.
- --------------------------------------------------------------------------------
RATHER THAN LETTING YOU, THE STOCKHOLDER, DECIDE FREELY WHO SHOULD SIT ON YOUR
BOARD AND CONCENTRATING ON MAXIMIZING THE VALUE OF YOUR INVESTMENT, THE CFC
BOARD IS DIRECTING ITS EFFORTS AT ATTEMPTING TO DENY YOU THE RIGHT TO ELECT
INDEPENDENT DIRECTORS OF YOUR CHOOSING.
- --------------------------------------------------------------------------------
As the largest stockholder of CFC, we are deeply concerned by CFC's
attempt to deny its stockholders the right to decide freely between competing
slates of nominees for election to the CFC Board. We are appalled, as should all
of the Company's stockholders, by CFC's desperate efforts to deny all
stockholders the right to elect two highly-qualified and independent nominees to
the Company's board of directors.
We delivered our notice of nominations to the Company on September
9, 1999, well in advance of the September 17, 1999 advance notice deadline fixed
by the CFC by-laws. The sole purpose of this requirement is to protect the
incumbent board by making it more difficult for the Company's stockholders to
nominate an alternate slate of directors. Nevertheless, we complied fully with
this arbitrary deadline. The Company, however, took 20 days to respond to our
notice. This delay is surprising given that CFC's response was in essence an
attempt to disenfranchise its stockholders, and, in particular, its largest
stockholder.
CFC's attempt to disregard the nomination of Mr. Burcham is based on
CFC's erroneous interpretation of the OTS regulations. CFC asserts that under
these regulations Mr. Burcham is ineligible to serve as a director of the
Company because he is the majority stockholder of MBT Bancshares, which is the
parent company of MB&T, a well-run community bank whose only office is in Kansas
City, Missouri. Despite the Company's assertions, the fact that Mr. Burcham is
the majority stockholder of MBT Bancshares does not disqualify Mr. Burcham from
being nominated or serving as a director of the Company. In fact, we believe Mr.
Burcham's experience with MB&T as well as his other banking experience,
including the fact that he is an independent consultant to CFC, make him
uniquely qualified to serve as a director. In any event, the OTS has adopted
amendments to its regulations that take effect on January 1, 2000, but that can
be relied upon immediately without having to wait for the official effective
date. The amended regulations include a "small market share exemption" for
depository organizations that hold, in the aggregate, no more than 20% of the
deposits in the relevant markets where each have offices. In view of the
relatively small market share of CFC,
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<PAGE>
and the miniscule market share of MB&T, this exemption avoids any issue under
the OTS regulations.
For no logical reason, other than to entrench itself, the CFC Board
has determined that it is not in the best interests of the Company or its
stockholders to rely on the amended regulations immediately. The incumbent
directors claim that CFC's experience with a director who sat on the board of a
small bank is justification for not relying on the amended regulation
immediately. We believe that the former director CFC is referring to is William
A. Krause. According to published news reports, Mr. Krause is the largest
individual stockholder of CFC and became a CFC director in early 1998, upon
CFC's acquisition of Liberty Financial, a bank holding company formerly owned in
part by Mr. Krause. Mr. Krause was a director of CFC until May 10, 1999. The
vacancy created by Mr. Krause's resignation was not filled by the CFC Board
until after we notified the Company of our intention to nominate two independent
directors for election to the board. By filling the vacancy after receiving our
notice of nominations, the CFC Board was able to ensure that the independent
nominees would, at most, represent only two of the ten directors on the board as
opposed to two of nine, which was the size of the board when we submitted our
notice of nominations. According to published news reports, Mr. Krause strongly
advocated the sale of CFC while he was a director. Also according to published
news reports, while a director of CFC, he bought a small bank that had an office
near CFC's West Des Moines office. Mr. Krause has stated publicly that he was
never asked to leave the CFC Board and resigned voluntarily in May 1999. Indeed,
according to published news reports, the OTS gave him permission to serve on the
boards of both banks. It is only now, when faced with our effort to elect two
independent directors, that the CFC Board is claiming that Mr. Krause's tenure
on the CFC Board justifies, first, the board's unwillingness to rely on the
amended OTS regulations and, second, its adoption of the improper by-law
amendment. We believe the incumbent directors are simply distorting the facts
concerning Mr. Krause's tenure on the CFC Board in a shameless attempt to
justify its efforts to deny you the opportunity to elect independent directors.
Contrary to CFC's assertions, there is virtually no action required of CFC to
rely on the amended regulation other than maintaining certain records showing
the exemption available. Consequently, if Mr. Burcham is elected to the board,
there will be no issue to resolve under the OTS regulations.
The CFC Board also questioned Mr. Wagner's eligibility to serve as a
director. As disclosed elsewhere in this proxy statement, we selected Mr. Wagner
as an alternate nominee, among other reasons, because Mr. Wagner is a seasoned
banking executive. Mr. Wagner is currently the President, Chief Executive
Officer and a director of Western Bancorp, a large California bank holding
company. CFC has asserted that Mr. Wagner is ineligible to serve as a director
because he currently is, and at the time we sent CFC our notice of nominations
was, a management official of a financial institution for which there is no
exemption under the OTS regulations. Mr. Wagner's status as a director and
officer of Western Bancorp will terminate upon the close of the pending sale of
Western Bancorp to US Bancorp, presently scheduled to occur prior to the
Meeting. However, if the sale of Western Bancorp does not close at or prior to
the Meeting, there can be no assurance that Mr. Wagner will resign from his
positions at Western Bancorp. If Mr. Wagner does not so resign, Franklin Mutual
will not nominate him for election as a director at the Meeting. CFC claims that
we cannot nominate Mr. Wagner for election at the Meeting, even if Mr. Wagner
has resigned from his positions at Western Bancorp, because the CFC Board's
self-serving interpretation of the by-laws it adopted is that Mr. Wagner should
have resigned at the time we notified the Company of our intention to nominate
him as an alternate
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<PAGE>
nominee. Contrary to the Company's assertions, the CFC by-laws say nothing about
when the requirements must be met, and in our view the only reasonable
interpretation is that the requirements must be met when the director takes
office.
In yet another effort to thwart our nominations, CFC claims that a
stockholder is not permitted to designate an alternate nominee. We are not
seeking to elect an alternate director. If either Mr. Burcham or Mr. Zoffinger
becomes unable or unavailable to serve after being elected as a director, Mr.
Wagner will not replace either of them. The CFC Board would fill the vacancy
according to the Company's by-laws. Rather, solely to comply with the CFC
Board's self-serving advance notice requirement, we have notified CFC that we
intend to nominate Mr. Wagner at the Meeting for election as a director if and
only if he is available and we determine at or prior to the Meeting that either
Mr. Burcham or Mr. Zoffinger is unable or unavailable to serve. If we did not
give the Company advance notice of the name of our alternate nominee, under
CFC's by-laws, we would not have been able to nominate two persons for election
to the board if one of our nominees became unavailable. The Company has its own
precedent for permitting alternate nominees. In its definitive proxy materials
for the Company's 1995 Annual Meeting, CAI Corporation clearly stated its
intention to nominate an alternate if either of its two nominees was unable to
serve or otherwise unavailable for election. As noted elsewhere in this proxy
statement, it was at the 1995 annual meeting that the Company's stockholders
passed a resolution calling for the sale of the Company and elected two
directors who were committed to selling the Company to maximize stockholder
value. However, even in the face of this clear message, the CFC Board resisted a
sale and instead adopted a misguided acquisition strategy which has
significantly decreased the value of CFC's Common Stock and diluted the
interests of stockholders.
The CFC Board's adoption of a by-law amendment that is intended to
disqualify Mr. Burcham and Mr. Wagner from being elected a director of the
Company is an egregious breach of the incumbent directors' fiduciary duties to
stockholders. By attempting to impose new eligibility requirements for directors
after receiving our timely notice of nominations and after the date fixed by the
CFC Board for notice of nominations, the Board is no longer, if it ever was,
acting in the best interests of the Company's stockholders. Clearly, the
amendment was adopted because the CFC Board is aware that the amended OTS
regulations would remove any doubt as to whether Mr. Burcham is eligible to
serve as director. BECAUSE THE EXISTING RULES DO PERMIT MR. BURCHAM TO SERVE AS
A DIRECTOR, THE CFC BOARD CAN ONLY SEEK TO BLOCK HIS NOMINATION BY CHANGING THE
RULES IN THE MIDDLE OF THE GAME! The incumbent directors claim that the
amendment is necessary to prevent an individual from serving on the Board who
serves also on the board of a competing bank, regardless of how little the other
bank may be and how little a competitive threat it may be. We are surprised that
CFC finds it necessary to adopt through its by-laws a restriction that even the
federal banking regulators would not adopt. We believe the amendment is
inadvisable and against the best interests of stockholders because it limits the
number of qualified individuals who can serve as directors of the Company. We
believe that you, the stockholder, should determine who is qualified to sit on
your board. But more importantly and regardless of its general advisability, the
amendment cannot be adopted at a time when it would deprive a stockholder of its
right to nominate directors who are otherwise qualified under the by-laws of the
Company as in effect at the time of nomination. There is no justification for a
board's adoption of a by-law amendment which has the effect of impeding the
proper exercise of stockholder voting power, especially when the Company is on
notice of a contested election of directors.
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<PAGE>
Despite the Company's attempts to deny its stockholders the freedom
to choose between two slates of nominees for election, we continue to believe
that the election of our independent nominees to the CFC Board and the prompt
sale of the Company to the highest bidder on terms most favorable to the Company
are the best means for the Company's stockholders to maximize the value of their
investment. BY VOTING FOR THE INDEPENDENT NOMINEES, YOU CAN SEND THE CFC BOARD
THE CLEAR MESSAGE THAT THE JOB OF THE COMPANY'S BOARD IS TO FOCUS ON INCREASING
STOCKHOLDER VALUE AND THAT YOU, NOT THE INCUMBENT DIRECTORS, WILL DECIDE WHO
SITS ON YOUR BOARD.
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
ELECTION OF DIRECTORS
The Company's Articles of Incorporation set the total number of
directors at no less than nine and no more than twelve and provide that the CFC
Board shall be divided into three classes, each having a staggered term of three
years. The Company's Board of Directors currently consists of ten directors. At
the Meeting, four directors will be elected for a term of three years.
Franklin Mutual intends to nominate Mr. Burcham and Mr. Zoffinger
for election to the Company's Board at the Meeting. Each of these nominees has
consented to being named in this proxy statement and to serve as a director if
elected, and it is not contemplated that either of them will be unavailable for
election as a director. If Franklin Mutual determines at or prior to the Meeting
that either Mr. Burcham or Mr. Zoffinger is unable or otherwise unavailable to
serve as a director, and Mr. Wagner is available, Franklin Mutual intends to
nominate Mr. Wagner at the Meeting for election as a director. Should any
additional substitute nominees be required, the persons named on the enclosed
WHITE proxy card will vote for the additional or substitute nominees selected by
Franklin Mutual if permitted under CFC's by-laws. It is unlikely that Franklin
Mutual will be permitted to vote for additional or substitute nominees because
the deadline for giving notice of nominations has passed. Franklin Mutual is
proposing the election of two nominees in opposition to the nominees proposed by
the CFC Board. However, if either Mr. Burcham or Mr. Zoffinger is unavailable or
unable to serve as a director, and Mr. Wagner is also unavailable, stockholders
who use Franklin Mutual's WHITE proxy card will only be voting for one of the
four seats to be filled at the meeting.
FRANKLIN MUTUAL RECOMMENDS THAT YOU VOTE "FOR" ITS NOMINEES ON
THE ENCLOSED WHITE PROXY CARD.
The information below is provided with respect to Franklin Mutual's
nominees for directors of the Company and its alternative nominee. Each of the
independent nominees and the alternate nominee is a United States citizen.
NAME AND PRINCIPAL OCCUPATION FOR
BUSINESS ADDRESS AGE PAST FIVE YEARS AND DIRECTORSHIPS
---------------- --- ---------------------------------
J. Thomas Burcham.............. 58 Chairman and Chief Executive Officer,
191 Damifiwill Missouri Bank and Trust Company, from
Boca Grande, FL 33921 December 1985 to August 1999; Chairman,
First National Bank Shares, Ltd., from
December 1983 to January 1998. Mr. Burcham
is also a paid consultant of CFC pursuant
to
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<PAGE>
a consulting agreement which will expire
January 30, 2001.
George R. Zoffinger............ 51 President and Chief Executive Officer,
c/o Constellation Capital Constellation Capital Corp., since February
Corp. 120 Albany St. Plaza 1998; President and Chief Executive
New Brunswick, NJ 08901 Officer, Value Property Trust, October 1995
to February 1998; Chairman, Corestates New
Jersey National Bank, from 1993 to 1995;
President and Chief Executive Officer,
Constellation Bank Corp., from December
1991 to March 1993; Director: New Jersey
Resources, Inc., MFN Financial Corp.,
Admiralty Bank Corp. and Atlas Steel Corp.
ALTERNATE NOMINEE:
Matthew P. Wagner.............. 43 President and Chief Executive Officer of
c/o Western Bancorp Bank Western Bancorp from October 1996 to
Holding Co. present; Executive Vice President of Trust
4100 Newport Place, Suite 900 and Investment Management, First Bank
Newport Beach, CA 92660 System, from June 1985 to June 1996. Mr.
Wagner's status as a director and officer of
Western Bancorp will terminate upon the
close of the pending sale of Western Bancorp
to US Bancorp, presently scheduled to occur
prior to the Meeting. However, if the sale
of Western Bancorp does not close at or
prior to the Meeting, there can be no
assurance that Mr. Wagner will resign from
his positions at Western Bancorp. If Mr.
Wagner does not so resign, Franklin Mutual
will not nominate him for election as a
director at the Meeting.
For additional information regarding Messrs. Burcham, Zoffinger and
Wagner, see Appendix I annexed to this Proxy Statement. The information above
and in Appendix I has been furnished to Franklin Mutual by Messrs.
Burcham, Zoffinger and Wagner.
Messrs. Burcham, Zoffinger and Wagner will not receive any
compensation from Franklin Mutual or the Funds for services as a director of the
Company or for agreeing to stand for election as a director.
Mr. Burcham and the Company are parties to a consulting agreement
effective as of June 30, 1998 pursuant to which Mr. Burcham has agreed to
assist, advise and consult with CFC on the business, affairs and operations of
CFC, its subsidiaries and affiliates, as CFC may request. For his services, CFC
pays Mr. Burcham an annual fee of $125,000, and reimburses him for his expenses
incurred in performing services as a consultant. The agreement expires June 30,
2001.
Except as disclosed in this Proxy Statement (including the Schedules
and Appendices hereto), none of Messrs. Burcham, Zoffinger and Wagner, Franklin
Mutual, the
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<PAGE>
Funds or any of their affiliates or associates has any substantial interest,
direct or indirect, by security holdings or otherwise, in any matter to be acted
upon at the Meeting.
OTHER MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
It is expected that the CFC Board will send to you management's
proxy statement discussing, in addition to the election of directors, any other
matter that may properly come before the Meeting. With the exception of the
election of directors, Franklin Mutual is not aware at the present time of any
other matters which are scheduled to be voted upon by stockholders at the
Meeting. However, if any other matter properly comes before the Meeting, the
persons named as proxies on the enclosed WHITE Proxy Card will, subject to the
provisions of this paragraph, have discretionary authority to vote all shares
covered by such proxies in accordance with their discretion with respect to such
matter. If Franklin Mutual becomes aware a reasonable time in advance of the
Meeting that CFC's management intends to present for a stockholder vote at the
Meeting any matters not included on the enclosed WHITE proxy card, Franklin
Mutual intends either to refrain from voting on any such matter or to revise the
WHITE proxy card in order to include any such additional matter thereon. CFC
also will furnish stockholders with additional proxy materials describing any
such additional matter. If stockholders voted or vote on the original WHITE
proxy card which does not include such additional matters, Franklin Mutual will
exercise its discretionary authority with respect to such additional matter and
will advise stockholders as to how it will use such discretionary authority. If
a stockholder wishes to specify the manner in which his or her shares are to be
voted on any such additional matters, the stockholder will have the opportunity
to vote on the revised WHITE proxy card. Submission of any properly executed
proxy card will revoke all prior proxy cards.
VOTING AND PROXY PROCEDURE
PROXY INFORMATION
The enclosed WHITE Proxy Card may be executed only by holders of
record at the close of business on October 13, 1999 (the "Record Date").
The shares of Common Stock represented by each WHITE Proxy that is
properly executed and returned to Franklin Mutual will be voted at the Meeting
in accordance with the instructions marked thereon but if no instructions are
marked thereon, the proxy will be voted for the election of the Messrs. Burcham
and Zoffinger (or Mr. Wagner, if he is nominated) and, in the discretion of the
proxies, on whatever other matters as may properly come before the meeting or
any adjournments or postponements thereof. Subject to the right of Franklin
Mutual to allocate votes between its two nominees in the manner described below
(see "QUORUM AND VOTING"), executed but unmarked WHITE proxies will be voted FOR
the election of Messrs. Burcham and Zoffinger as directors (or Mr. Wagner, if he
is nominated).
If you hold your shares in one or more brokerage firms, banks or
nominees, only they can vote your shares and only upon receipt of your specific
instructions. Accordingly, you should contact the person responsible for your
account and give instructions to vote the WHITE Proxy.
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<PAGE>
PROXY REVOCATION
Whether or not you plan to attend the Meeting, Franklin Mutual urges
you to vote FOR Messrs. Burcham and Zoffinger (or Mr. Wagner, if he is
nominated) by signing, dating and returning the WHITE Proxy Card in the enclosed
envelope. You can do this even if you have already sent a different proxy card
solicited by the CFC Board. It is the last proxy that counts.
Execution of a WHITE Proxy Card does not affect your right to attend
the Meeting and to vote in person. Any stockholder granting a proxy (including a
proxy given to the Company) may revoke it at any time before it is voted by (a)
submitting a new, duly executed proxy bearing a later date, (b) attending and
voting at the Meeting in person, or (c) at any time before a previously executed
proxy is voted, giving written notice of revocation to either Franklin Mutual,
c/o Innisfree M&A Incorporated, or the Company. Merely attending the Meeting
will not revoke any previous proxy which has been duly executed by you. The
WHITE Proxy Card furnished to you by Franklin Mutual, if properly executed and
delivered, will revoke all prior proxies.
IF YOU PREVIOUSLY EXECUTED AND RETURNED A PROXY CARD TO THE COMPANY,
FRANKLIN MUTUAL URGES YOU TO REVOKE IT BY SIGNING, DATING AND MAILING THE WHITE
PROXY CARD IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED FOR MAILING WITHIN
THE UNITED STATES.
QUORUM AND VOTING
Management's proxy statement is required to provide information
about the number of shares of CFC's stock outstanding and entitled to vote, the
number of record holders thereof and the record date for the Meeting, and
reference is made thereto for such information. Only stockholders of record at
the close of business on the record date are entitled to notice of and to vote
on matters that come 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 at the Meeting. 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 are
elected by a plurality of votes cast by stockholders at the Meeting.
Pursuant to the by-laws of CFC and Nebraska law, each stockholder
voting for the election of directors is entitled to vote the number of shares
owned by such stockholder 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. Each stockholder will be
entitled to cast votes for one director or distribute them among any number of
candidates. According to the proxy statement sent by CFC to stockholders in
connection with the November 16, 1998 Annual Meeting of CFC stockholders, votes
not cast at the Meeting because of abstentions or broker non-votes are not
considered in connection with determining the outcome of the election of
directors.
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<PAGE>
The CFC Board will nominate four persons for the four seats
scheduled to be filled at the Meeting. Franklin Mutual will only nominate two
persons for election. Therefore there will likely be six nominees for the four
seats, and the four nominees who receive the greatest number of votes will be
elected. Stockholders who use the WHITE proxy card furnished by Franklin Mutual
will not be able to vote for any of CFC's nominees and will only be voting to
fill two of the four vacancies scheduled to be filled at the Meeting.
Stockholders who use the WHITE proxy card will revoke any previous proxies they
mailed and will only be voting to fill two of the four board seats to be filled.
Stockholders who use the proxy card furnished by CFC will not be able to vote
for Messrs. Burcham and Zoffinger (or Mr. Wagner, if he is nominated).
Stockholders are not permitted to use both proxy cards and accordingly cannot
vote for Franklin Mutual's nominees on its WHITE proxy card and also vote for a
CFC nominee using CFC's proxy card. Any stockholder who wishes to vote for
Messrs. Burcham and Zoffinger (or Mr. Wagner, if he is nominated) and one or
more of the Company's nominees will be required to vote by ballot at the
Meeting. However, the cumulative voting process insures that no votes are wasted
by voting on Franklin Mutual's WHITE proxy card, as each vote cumulated towards
the election of Messrs. Burcham and Zoffinger (or Mr. Wagner, if he is
nominated) will increase their chances of being elected.
Franklin Mutual intends to vote all of its shares, and those for
which Franklin Mutual is given proxies, for the election of Messrs. Burcham and
Zoffinger (or Mr. Wagner, if he is nominated). Franklin Mutual intends to
cumulate its votes among its two nominees in such a manner as to obtain the
maximum representation possible on the CFC Board.
Unless otherwise indicated by a stockholder, a vote for Messrs.
Burcham and Zoffinger (or Mr. Wagner, if he is nominated) will give Franklin
Mutual discretionary authority to cumulate all votes to which the stockholder is
entitled and to allocate them in favor of any or all of the independent nominees
(including the alternate nominee) as Franklin Mutual may determine. The effect
of cumulation and voting in accordance with that discretionary authority may be
to offset the effect of a stockholder's having withheld authority to vote for
one of Franklin Mutual's nominees because proxyholders will be able to allocate
votes of stockholders who have not withheld authority to vote in any manner they
determine among such nominees. If a stockholder desires specifically to allocate
votes among Franklin Mutual's nominees, the stockholder should so specify on the
proxy card.
CERTAIN STOCKHOLDERS OF THE COMPANY
The following table sets forth, as of October 10, 1999, the
number and percent of outstanding shares of Common Stock beneficially owned
by Franklin Mutual and each of Messrs. J. Thomas Burcham, George R. Zoffinger
and Matthew P. Wagner:
NAME AND ADDRESS NUMBER OF SHARES PERCENTAGE OF SHARES
OF BENEFICIAL OWNER BENEFICIALLY OWNED BENEFICIALLY OWNED
------------------- ------------------ ------------------
Franklin Mutual Advisers, 4,663,552(1) 7.9%(2)
LLC
51 John F. Kennedy Parkway
Short Hills, NJ 07078
J. Thomas Burcham 825,738(3) 1.4%(2)
191 Damifiwill (P.O. Box 1818)
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<PAGE>
NAME AND ADDRESS NUMBER OF SHARES PERCENTAGE OF SHARES
OF BENEFICIAL OWNER BENEFICIALLY OWNED BENEFICIALLY OWNED
------------------- ------------------ ------------------
Boca Grande, FL 33921
George R. Zoffinger 1000(4) *
7 Maidstone Ct.
Skillman, NJ 08558
Matthew P. Wagner 0 *
1426 Mockingbird Place
Los Angeles, CA 90069
All above parties as a 5,490,290 9.2%(2)
group
- ------------
* Indicates less than 1%.
(1) Such shares are beneficially owned by the Funds, which, pursuant to
advisory contracts, are advised by Franklin Mutual. Such advisory
contracts grant to Franklin Mutual all investment and voting power over
the securities owned by such Advisory clients.
(2) Percentage of shares based upon 59,362,412 shares of Common Stock, which
represents the number of shares outstanding as of September 20, 1999
according to the Company's Form 10-K for the fiscal year ended June 30,
1999.
(3) Includes 106,822 shares in trust of which J. Thomas Burcham is one of
three trustees. Also includes 90,000 shares in Goldman Sachs Greenstreet
Exchange Fund LP, 37,594 shares owned by Mr. Burcham's spouse and 6,507
shares owned by Mr. Burcham's adult daughter.
(4) All 1000 shares owned by the Zoffinger Family Limited Partnership.
Management's proxy statement is expected to set forth information as
to the number and percentage of outstanding shares beneficially owned by (i)
each person known by CFC to own more than 5% of the outstanding Common Stock,
(ii) each director of CFC, (iii) each of the five most highly paid executive
officers of CFC, and (iv) all executive officers and directors of CFC as a
group, and reference is made thereto for such information.
CFC ANNUAL REPORT AND MANAGEMENT' S PROXY STATEMENT
An annual report to stockholders covering CFC's fiscal year ended
June 30, 1999, including financial statements, is required to be furnished to
stockholders by the Company. Such annual report does not form any part of the
material for the solicitation of proxies by Franklin Mutual.
It is expected that the CFC Board will also solicit proxies for use
at the Meeting and will furnish a proxy statement in connection therewith.
Neither Franklin Mutual nor any of its affiliates is presently an officer or
director, or otherwise engaged in the management, of CFC. Consequently, Franklin
Mutual does not have current information concerning the Common Stock of the
Company, the beneficial ownership of such stock by the principal holders
thereof, other information concerning the Company's management, the procedures
for submitting proposals for consideration at the next Annual Meeting of
Stockholders of the Company and certain other matters regarding the Company and
the Meeting required by the rules of the SEC to be included
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<PAGE>
in a proxy statement. Accordingly, reference is made to management's proxy
statement for such information.
Franklin Mutual does not make any representation as to the accuracy
or completeness of the information contained in the Annual Report and
management's proxy statement.
PROXY SOLICITATION; EXPENSES
The Funds, in proportion to their ownership of CFC Common Stock,
will bear the entire expense of preparing, assembling, printing and mailing this
Proxy Statement and the WHITE Proxy Card and the cost of soliciting proxies.
The total cost of this proxy solicitation (including fees of
attorneys, accountants, public relations advisers, solicitors and advertising
and printing expenses) is estimated to be approximately $500,000. Through
September 30, 1999, Franklin Mutual has incurred approximately $116,000 of
expenses in connection with this proxy solicitation. To the extent legally
permissible, Franklin Mutual will seek reimbursement from the Company for the
costs of this solicitation. Franklin Mutual does not currently intend to submit
approval of such reimbursement to a vote of stockholders of the Company at a
subsequent meeting unless required by law.
In addition to this initial solicitation by mail, proxy
solicitations may be made by Franklin Mutual (including by its president and
chief executive officer, senior vice president, investment officers, portfolio
managers and other officers) and Messrs. Burcham and Zoffinger, without
additional compensation, except for reimbursement of reasonable out-of-pocket
expenses. Solicitations may be made by telephone, facsimile, hand delivery
messenger, and personal solicitors. Franklin Mutual will pay to banks, brokers
and other fiduciaries their reasonable charges and expenses incurred in
forwarding proxy materials to their principals and in obtaining authorization
for execution of proxies.
Franklin Mutual has retained Innisfree M&A Incorporated
("Innisfree") to assist in the solicitation of proxies. Franklin Mutual will pay
Innisfree a minimum fee of $50,000 and a maximum fee of $100,000 if Franklin
Mutual's nominees are elected to the Board and Franklin Mutual is successful in
obtaining reimbursement of its expenses from the Company. Franklin Mutual has
also agreed to reimburse Innisfree for its reasonable out-of-pocket expenses.
Innisfree will solicit proxies from individuals, brokers, banks, nominees and
other institutional holders. Approximately 40 persons will be utilized by
Innisfree in its solicitation efforts, which may be made by telephone, telegram
or in person.
ADDITIONAL INFORMATION
Franklin Mutual has filed with the SEC a Statement on Schedule 13D,
which contains information in addition to that furnished herein. This Schedule
13D and any amendments thereto may be inspected at, and copies may be obtained
from, the Public Reference Section of the Securities and Exchange Commission,
450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C., 20549.
FRANKLIN MUTUAL ADVISERS, LLC
-19-
<PAGE>
October [ ], 1999
IF YOU HAVE ANY QUESTIONS OR REQUIRE ASSISTANCE, PLEASE CALL:
INNISFREE
M&A INCORPORATED
501 MADISON AVENUE, 20TH FLOOR
NEW YORK, NY 10022
CALL TOLL FREE: (888) 750-5833
BANKS AND BROKERS, CALL COLLECT: (212) 750-5833
-20-
<PAGE>
APPENDIX I
CERTAIN INFORMATION REGARDING FRANKLIN MUTUAL, THE
INDEPENDENT NOMINEES AND THE FUNDS
Franklin Mutual Advisers, LLC
Franklin Mutual's business address is 51 John F. Kennedy Parkway,
Short Hills, NJ 07078.
Franklin Mutual's principal business is an investment adviser
registered with the Securities and Exchange Commission.
The shares of Common Stock beneficially owned by Franklin Mutual are
those of the Funds identified in Appendix I. Schedule A sets forth all purchases
and sales by the Funds of CFC Common Stock during the past two years.
J. Thomas Burcham
The following sets forth all purchases and sales during the past two
years of CFC Common Stock deemed to be beneficially owned by Mr. Burcham. All
transactions were effected in open market transactions.
06/17/98 5,000 shares Sale
07/01/98 5,000 shares Sale
07/24/98 10,000 shares Sale
07/28/98 5,000 shares Sale
07/29/98 5,000 shares Sale
08/11/98 10,000 shares Sale
10/12/98 6,000 shares Sale
10/13/98 2,000 shares Sale
06/08/99 3,000 shares Sale
06/14/99 2,000 shares Sale
George R. Zoffinger
The following sets forth all purchases and sales during the past two
years of CFC Common Stock deemed to be beneficially owned by Mr. Zoffinger. All
transactions were effected in open market transactions.
08/16/99 1000 shares Purchase
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<PAGE>
MATTHEW P. WAGNER
Mr. Wagner has not beneficially owned any CFC Common Stock in the
past two years.
MUTUAL BEACON FUND,
a series of FRANKLIN MUTUAL SERIES INC.
The business address of Mutual Beacon Fund is c/o Franklin Mutual
Advisers, LLC, 51 John F. Kennedy Parkway, Short Hills, NJ 07078.
Mutual Beacon Fund is an investment company registered with the
Securities and Exchange Commission.
Schedule A sets forth all purchases and sales by Mutual Beacon Fund
of CFC Common Stock during the past two years. All transactions were effected in
open market transactions.
MUTUAL FINANCIAL SERVICES FUND,
a series of FRANKLIN MUTUAL SERIES FUND INC.
The business address of Mutual Financial Services Fund is c/o
Franklin Mutual Advisers, LLC, 51 John F. Kennedy Parkway, Short Hills, NJ
07078.
Mutual Financial Services Fund is an investment company registered
with the Securities and Exchange Commission.
Schedule A sets forth all purchases and sales by Mutual Financial
Services Fund of CFC Common Stock during the past two years. All transactions
were effected in open market transactions.
MUTUAL QUALIFIED FUND,
a series of FRANKLIN MUTUAL SERIES FUND INC.
The business address of Mutual Qualified Fund is c/o Franklin Mutual
Advisers, LLC, 51 John F. Kennedy Parkway, Short Hills, NJ 07078.
Mutual Qualified Fund is an investment company registered with the
Securities and Exchange Commission.
Schedule A sets forth all purchases and sales by Mutual Qualified
Fund of CFC Common Stock during the past two years. All transactions were
effected in open market transactions.
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<PAGE>
FRANKLIN MUTUAL BEACON FUND
a sub-fund of TEMPLETON GLOBAL STRATEGY FUNDS
The business address of Franklin Mutual Beacon Fund is c/o
Franklin Mutual Advisers, LLC, 51 John F. Kennedy Parkway, Short Hills, NJ
07078.
Franklin Mutual Beacon Fund is an investment company.
Schedule A sets forth all purchases and sales by Franklin Mutual
Beacon Fund of CFC Common Stock during the past two years. All transactions were
effected in open market transactions.
FRANKLIN MUTUAL BEACON FUND
a member of FRANKLIN TEMPLETON WORLDWIDE FUNDS
The business address is of Franklin Mutual Beacon Fund is c/o
Franklin Mutual Advisers, LLC, 51 John F. Kennedy Parkway, Short Hills, NJ
07078.
Franklin Mutual Beacon Fund is an investment company.
Schedule A sets forth all purchases and sales by Franklin Mutual
Beacon Fund of CFC Common Stock during the past two years. All transactions were
effected in open market transactions.
MUTUAL BEACON FUND (Canada)
The business address of Mutual Beacon Fund is c/o Franklin Mutual
Advisers, LLC, 51 John F. Kennedy Parkway, Short Hills, NJ 07078.
Mutual Beacon Fund is an investment company registered with various
securities and exchange commissions of the country of Canada.
Schedule A sets forth all purchases and sales by Mutual Beacon Fund
(Canada) of CFC Common Stock during the past two years. All transactions were
effected in open market transactions.
* * *
Except as set forth in this Proxy Statement (including the Schedules
and Appendices hereto), none of Franklin Mutual, Messrs. Burcham, Zoffinger or
Wagner, the Funds nor any of their respective affiliates or associates, directly
or indirectly:
o beneficially owns any shares of Common Stock of the Company or any
securities of any parent or subsidiary of the Company;
o has had any relationship with the Company in any capacity other than
as a stockholder (except for Mr. Burcham who has been a paid
consultant to CFC since January 30, 1998);
I-3
<PAGE>
o has been a party to any transaction, or series of similar
transactions, since July 1, 1998, nor is any currently proposed
transaction known to any of them, or series of similar transactions,
to which the Company or any of its subsidiaries was or is to be a
party, in which the amount involved exceeds $60,000 and in which any
of them or their respective affiliates or associates had, or will
have, a direct or indirect material interest;
o has entered into any agreement or understanding with any person
respecting any future employment by the Company or its affiliates or
any future transactions to which the Company or any of its affiliates
will or may be a party;
o has a contract, arrangement or understanding within the past year with
any person with respect to the Company's securities;
o has any agreement, arrangement or understanding with any person with
respect to an future employment with CFC or any of its affiliates or
with respect to any future transactions to which CFC or any of its
affiliates may be a party, except for the agreements by Franklin
Mutual's nominees to serve as directors of the Company if elected, and
Mr. Burcham's agreement to serve as a paid consultant to CFC through
January 30, 2001; or
o is a party adverse to CFC or any of its subsidiaries or has a material
interest adverse to CFC or any of its subsidiaries in any material
legal proceeding, except (i) that Franklin Mutual and Messrs. Burcham
and Wagner have commenced a lawsuit against CFC and its incumbent
directors in Nebraska federal court relating to their improper conduct
in connection with our efforts to elect independent directors and (ii)
CFC has filed a lawsuit in Nebraska federal court seeking declaratory
relief relating to the Meeting. See Section "The CFC Board's Response
to Franklin Mutual's Efforts to Allow You to Elect Independent
Directors" in this proxy statement for a description of these
lawsuits.
I-4
<PAGE>
SCHEDULE A
- --------------------------------------------------------------------------------
DATE OF
NAME OF FRANKLIN MUTUAL TRANSACTION NUMBER OF
ADVISORY CLIENT (MO/DAY/YEAR) SHARES PURCHASE OR SALE
- --------------------------------------------------------------------------------
Franklin Mutual Beacon Fund (TGS) 06/22/1998 3,000 PURCHASE
Franklin Mutual Beacon Fund (TGS) 06/23/1998 3,000 PURCHASE
Franklin Mutual Beacon Fund (TGS) 06/24/1998 2,000 PURCHASE
Franklin Mutual Beacon Fund (TGS) 06/24/1998 4,000 PURCHASE
Franklin Mutual Beacon Fund (TGS) 07/14/1998 1,000 PURCHASE
Franklin Mutual Beacon Fund (TGS) 07/22/1998 500 PURCHASE
Franklin Mutual Beacon Fund (TGS) 07/22/1998 500 PURCHASE
Franklin Mutual Beacon Fund (TGS) 11/19/1998 3,600 PURCHASE
Franklin Mutual Beacon Fund (TGS) 11/19/1998 1,000 PURCHASE
Franklin Mutual Beacon Fund (TGS) 11/20/1998 1,100 PURCHASE
Franklin Mutual Beacon Fund (TGS) 12/03/1998 300 PURCHASE
Franklin Mutual Beacon Fund (TGS) 03/01/1999 5,900 PURCHASE
Franklin Mutual Beacon Fund (TGS) 03/01/1999 20,300 PURCHASE
TOTAL 46,200
Franklin Mutual Beacon Fund (TWF) 01/27/1999 190 PURCHASE
Franklin Mutual Beacon Fund (TWF) 01/29/1999 32 PURCHASE
Franklin Mutual Beacon Fund (TWF) 02/01/1999 1,072 PURCHASE
Franklin Mutual Beacon Fund (TWF) 02/12/1999 200 PURCHASE
Franklin Mutual Beacon Fund (TWF) 02/24/1999 100 PURCHASE
Franklin Mutual Beacon Fund (TWF) 04/20/1999 -194 SELL
TOTAL 1,400 PURCHASE
Mutual Beacon Fund 06/15/1998 15,000 PURCHASE
Mutual Beacon Fund 06/15/1998 11,000 PURCHASE
Mutual Beacon Fund 06/18/1998 35,000 PURCHASE
Mutual Beacon Fund 06/23/1998 18,000 PURCHASE
Mutual Beacon Fund 06/24/1998 10,500 PURCHASE
Mutual Beacon Fund 06/24/1998 18,300 PURCHASE
Mutual Beacon Fund 07/09/1998 33,600 PURCHASE
Mutual Beacon Fund 07/13/1998 30,000 PURCHASE
Mutual Beacon Fund 07/14/1998 18,000 PURCHASE
Mutual Beacon Fund 07/16/1998 20,100 PURCHASE
Mutual Beacon Fund 07/17/1998 10,000 PURCHASE
Mutual Beacon Fund 07/20/1998 40,000 PURCHASE
Mutual Beacon Fund 07/21/1998 24,000 PURCHASE
Mutual Beacon Fund 07/22/1998 16,000 PURCHASE
Mutual Beacon Fund 07/22/1998 4,600 PURCHASE
Mutual Beacon Fund 07/28/1998 26,500 PURCHASE
Mutual Beacon Fund 07/29/1998 47,700 PURCHASE
Mutual Beacon Fund 07/30/1998 53,000 PURCHASE
Mutual Beacon Fund 07/31/1998 300 PURCHASE
Mutual Beacon Fund 07/31/1998 79,500 PURCHASE
A-1
<PAGE>
Mutual Beacon Fund 08/04/1998 33,500 PURCHASE
Mutual Beacon Fund 08/05/1998 6,200 PURCHASE
Mutual Beacon Fund 08/06/1998 2,000 PURCHASE
Mutual Beacon Fund 08/13/1998 196,940 EXCHANGE OF 1ST
COLORADO SHARES
Mutual Beacon Fund 11/13/1998 19,500 PURCHASE
Mutual Beacon Fund 11/16/1998 80,000 PURCHASE
Mutual Beacon Fund 11/17/1998 9,600 PURCHASE
Mutual Beacon Fund 11/19/1998 47,000 PURCHASE
Mutual Beacon Fund 11/19/1998 38,200 PURCHASE
Mutual Beacon Fund 11/20/1998 51,700 PURCHASE
Mutual Beacon Fund 11/25/1998 34,100 PURCHASE
Mutual Beacon Fund 12/03/1998 22,000 PURCHASE
Mutual Beacon Fund 12/04/1998 43,100 PURCHASE
Mutual Beacon Fund 12/07/1998 22,600 PURCHASE
Mutual Beacon Fund 12/10/1998 6,200 PURCHASE
Mutual Beacon Fund 12/11/1998 7,800 PURCHASE
Mutual Beacon Fund 12/14/1998 24,400 PURCHASE
Mutual Beacon Fund 12/15/1998 9,800 PURCHASE
Mutual Beacon Fund 12/17/1998 9,800 PURCHASE
Mutual Beacon Fund 12/30/1998 6,800 PURCHASE
Mutual Beacon Fund 12/31/1998 27,300 PURCHASE
Mutual Beacon Fund 01/04/1999 2,000 PURCHASE
Mutual Beacon Fund 01/05/1999 31,300 PURCHASE
Mutual Beacon Fund 01/05/1999 12,600 PURCHASE
Mutual Beacon Fund 01/06/1999 1,000 PURCHASE
Mutual Beacon Fund 01/06/1999 134,900 PURCHASE
Mutual Beacon Fund 01/08/1999 6,400 PURCHASE
Mutual Beacon Fund 01/11/1999 5,000 PURCHASE
Mutual Beacon Fund 01/11/1999 12,500 PURCHASE
Mutual Beacon Fund 01/12/1999 30,400 PURCHASE
Mutual Beacon Fund 01/14/1999 12,700 PURCHASE
Mutual Beacon Fund 01/14/1999 12,500 PURCHASE
Mutual Beacon Fund 01/15/1999 12,700 PURCHASE
Mutual Beacon Fund 01/15/1999 5,000 PURCHASE
Mutual Beacon Fund 01/19/1999 4,700 PURCHASE
Mutual Beacon Fund 01/20/1999 16,500 PURCHASE
Mutual Beacon Fund 01/21/1999 25,200 PURCHASE
Mutual Beacon Fund 01/25/1999 22,700 PURCHASE
Mutual Beacon Fund 01/26/1999 18,600 PURCHASE
Mutual Beacon Fund 01/27/1999 36,200 PURCHASE
Mutual Beacon Fund 01/28/1999 20,000 PURCHASE
Mutual Beacon Fund 01/29/1999 18,700 PURCHASE
Mutual Beacon Fund 02/01/1999 25,100 PURCHASE
Mutual Beacon Fund 02/01/1999 3,200 PURCHASE
Mutual Beacon Fund 02/01/1999 16,100 PURCHASE
Mutual Beacon Fund 02/02/1999 3,100 PURCHASE
Mutual Beacon Fund 02/10/1999 19,902 PURCHASE
Mutual Beacon Fund 02/10/1999 19,800 PURCHASE
Mutual Beacon Fund 02/10/1999 10,700 PURCHASE
Mutual Beacon Fund 02/11/1999 24,700 PURCHASE
Mutual Beacon Fund 02/12/1999 26,400 PURCHASE
Mutual Beacon Fund 02/16/1999 14,400 PURCHASE
A-2
<PAGE>
Mutual Beacon Fund 02/17/1999 14,300 PURCHASE
Mutual Beacon Fund 02/18/1999 34,100 PURCHASE
Mutual Beacon Fund 02/19/1999 18,400 PURCHASE
Mutual Beacon Fund 02/22/1999 12,800 PURCHASE
Mutual Beacon Fund 02/23/1999 24,300 PURCHASE
Mutual Beacon Fund 02/24/1999 20,200 PURCHASE
Mutual Beacon Fund 02/25/1999 36,100 PURCHASE
Mutual Beacon Fund 02/26/1999 1,500 PURCHASE
Mutual Beacon Fund 03/01/1999 33,700 PURCHASE
Mutual Beacon Fund 03/02/1999 600 PURCHASE
Mutual Beacon Fund 03/03/1999 3,700 PURCHASE
Mutual Beacon Fund 03/04/1999 14,700 PURCHASE
Mutual Beacon Fund 03/05/1999 19,300 PURCHASE
Mutual Beacon Fund 03/08/1999 48,000 PURCHASE
Mutual Beacon Fund 03/22/1999 10,200 PURCHASE
Mutual Beacon Fund 03/23/1999 31,500 PURCHASE
Mutual Beacon Fund 03/24/1999 18,000 PURCHASE
Mutual Beacon Fund 04/07/1999 5,300 PURCHASE
TOTAL 2,161,342
Mutual Beacon Fund (Canada) 06/22/1998 4,000 PURCHASE
Mutual Beacon Fund (Canada) 06/23/1998 4,000 PURCHASE
Mutual Beacon Fund (Canada) 06/24/1998 2,000 PURCHASE
Mutual Beacon Fund (Canada) 06/24/1998 6,000 PURCHASE
Mutual Beacon Fund (Canada) 07/14/1998 1,000 PURCHASE
Mutual Beacon Fund (Canada) 07/22/1998 500 PURCHASE
Mutual Beacon Fund (Canada) 07/22/1998 500 PURCHASE
Mutual Beacon Fund (Canada) 11/13/1998 500 PURCHASE
Mutual Beacon Fund (Canada) 11/16/1998 3,000 PURCHASE
Mutual Beacon Fund (Canada) 11/17/1998 400 PURCHASE
Mutual Beacon Fund (Canada) 11/19/1998 2,000 PURCHASE
Mutual Beacon Fund (Canada) 11/19/1998 800 PURCHASE
Mutual Beacon Fund (Canada) 11/20/1998 2,200 PURCHASE
Mutual Beacon Fund (Canada) 11/25/1998 700 PURCHASE
Mutual Beacon Fund (Canada) 12/03/1998 500 PURCHASE
Mutual Beacon Fund (Canada) 12/04/1998 900 PURCHASE
Mutual Beacon Fund (Canada) 12/07/1998 400 PURCHASE
Mutual Beacon Fund (Canada) 12/14/1998 500 PURCHASE
Mutual Beacon Fund (Canada) 12/15/1998 200 PURCHASE
Mutual Beacon Fund (Canada) 12/17/1998 200 PURCHASE
Mutual Beacon Fund (Canada) 12/30/1998 100 PURCHASE
Mutual Beacon Fund (Canada) 12/31/1998 700 PURCHASE
Mutual Beacon Fund (Canada) 01/05/1999 300 PURCHASE
Mutual Beacon Fund (Canada) 01/05/1999 700 PURCHASE
Mutual Beacon Fund (Canada) 01/06/1999 2,800 PURCHASE
Mutual Beacon Fund (Canada) 01/08/1999 200 PURCHASE
Mutual Beacon Fund (Canada) 01/11/1999 300 PURCHASE
Mutual Beacon Fund (Canada) 01/11/1999 100 PURCHASE
Mutual Beacon Fund (Canada) 01/12/1999 500 PURCHASE
Mutual Beacon Fund (Canada) 01/14/1999 300 PURCHASE
Mutual Beacon Fund (Canada) 01/14/1999 200 PURCHASE
A-3
<PAGE>
Mutual Beacon Fund (Canada) 01/15/1999 100 PURCHASE
Mutual Beacon Fund (Canada) 01/15/1999 200 PURCHASE
Mutual Beacon Fund (Canada) 01/19/1999 100 PURCHASE
Mutual Beacon Fund (Canada) 01/20/1999 400 PURCHASE
Mutual Beacon Fund (Canada) 01/21/1999 500 PURCHASE
Mutual Beacon Fund (Canada) 01/25/1999 500 PURCHASE
Mutual Beacon Fund (Canada) 01/26/1999 400 PURCHASE
Mutual Beacon Fund (Canada) 01/27/1999 1,100 PURCHASE
Mutual Beacon Fund (Canada) 01/28/1999 600 PURCHASE
Mutual Beacon Fund (Canada) 01/29/1999 500 PURCHASE
Mutual Beacon Fund (Canada) 02/01/1999 600 PURCHASE
Mutual Beacon Fund (Canada) 02/01/1999 100 PURCHASE
Mutual Beacon Fund (Canada) 02/01/1999 300 PURCHASE
Mutual Beacon Fund (Canada) 02/02/1999 100 PURCHASE
Mutual Beacon Fund (Canada) 02/10/1999 500 PURCHASE
Mutual Beacon Fund (Canada) 02/10/1999 600 PURCHASE
Mutual Beacon Fund (Canada) 02/10/1999 300 PURCHASE
Mutual Beacon Fund (Canada) 02/11/1999 700 PURCHASE
Mutual Beacon Fund (Canada) 02/12/1999 600 PURCHASE
Mutual Beacon Fund (Canada) 02/16/1999 300 PURCHASE
Mutual Beacon Fund (Canada) 02/17/1999 300 PURCHASE
Mutual Beacon Fund (Canada) 02/18/1999 800 PURCHASE
Mutual Beacon Fund (Canada) 02/19/1999 400 PURCHASE
Mutual Beacon Fund (Canada) 02/22/1999 300 PURCHASE
Mutual Beacon Fund (Canada) 02/23/1999 500 PURCHASE
Mutual Beacon Fund (Canada) 02/24/1999 400 PURCHASE
Mutual Beacon Fund (Canada) 02/25/1999 800 PURCHASE
Mutual Beacon Fund (Canada) 03/01/1999 700 PURCHASE
Mutual Beacon Fund (Canada) 03/03/1999 100 PURCHASE
Mutual Beacon Fund (Canada) 03/04/1999 300 PURCHASE
Mutual Beacon Fund (Canada) 03/05/1999 400 PURCHASE
Mutual Beacon Fund (Canada) 03/08/1999 1,000 PURCHASE
Mutual Beacon Fund (Canada) 03/22/1999 200 PURCHASE
Mutual Beacon Fund (Canada) 03/23/1999 700 PURCHASE
Mutual Beacon Fund (Canada) 03/24/1999 400 PURCHASE
Mutual Beacon Fund (Canada) 04/07/1999 100 PURCHASE
TOTAL 52,400
Mutual Financial Services Fund 01/12/1998 26,000 PURCHASE
Mutual Financial Services Fund 02/12/1998 57,400 PURCHASE
Mutual Financial Services Fund 02/13/1998 30,000 PURCHASE
Mutual Financial Services Fund 02/17/1998 2,300 PURCHASE
Mutual Financial Services Fund 02/17/1998 34,300 PURCHASE
Mutual Financial Services Fund 02/18/1998 20,000 PURCHASE
Mutual Financial Services Fund 02/18/1998 11,100 PURCHASE
Mutual Financial Services Fund 02/18/1998 10,000 PURCHASE
Mutual Financial Services Fund 03/05/1998 6,300 PURCHASE
Mutual Financial Services Fund 05/26/1998 20,000 PURCHASE
Mutual Financial Services Fund 05/27/1998 10,000 PURCHASE
Mutual Financial Services Fund 05/28/1998 5,000 PURCHASE
Mutual Financial Services Fund 07/08/1998 20,000 PURCHASE
A-4
<PAGE>
Mutual Financial Services Fund 07/22/1998 4,500 PURCHASE
Mutual Financial Services Fund 07/22/1998 20,500 PURCHASE
Mutual Financial Services Fund 07/23/1998 5,000 PURCHASE
Mutual Financial Services Fund 07/24/1998 8,700 PURCHASE
Mutual Financial Services Fund 07/27/1998 20,000 PURCHASE
Mutual Financial Services Fund 08/13/1998 205,802 EXCHANGE OF 1ST
Fund COLORADO SHARES
Mutual Financial Services Fund 09/17/1998 -55,000 PURCHASE
Mutual Financial Services Fund 09/18/1998 -39,900 SELL
Mutual Financial Services Fund 09/21/1998 -22,100 SELL
Mutual Financial Services Fund 09/23/1998 -20,000 SELL
Mutual Financial Services Fund 09/24/1998 -10,000 SELL
Mutual Financial Services Fund 11/19/1998 3,000 SELL
Mutual Financial Services Fund 12/30/1998 500 PURCHASE
Mutual Financial Services Fund 12/31/1998 2,200 PURCHASE
Mutual Financial Services Fund 01/04/1999 200 PURCHASE
Mutual Financial Services Fund 01/05/1999 2,500 PURCHASE
Mutual Financial Services Fund 01/05/1999 1,000 PURCHASE
Mutual Financial Services Fund 01/06/1999 100 PURCHASE
Mutual Financial Services Fund 01/06/1999 10,600 PURCHASE
Mutual Financial Services Fund 01/08/1999 500 PURCHASE
Mutual Financial Services Fund 01/11/1999 1,000 PURCHASE
Mutual Financial Services Fund 01/11/1999 400 PURCHASE
Mutual Financial Services Fund 01/12/1999 2,400 PURCHASE
Mutual Financial Services Fund 01/14/1999 1,000 PURCHASE
Mutual Financial Services Fund 01/14/1999 1,000 PURCHASE
Mutual Financial Services Fund 01/15/1999 1,000 PURCHASE
Mutual Financial Services Fund 01/15/1999 400 PURCHASE
Mutual Financial Services Fund 01/19/1999 400 PURCHASE
Mutual Financial Services Fund 01/20/1999 1,300 PURCHASE
Mutual Financial Services Fund 01/21/1999 2,000 PURCHASE
Mutual Financial Services Fund 01/25/1999 1,800 PURCHASE
Mutual Financial Services Fund 01/26/1999 1,600 PURCHASE
Mutual Financial Services Fund 01/27/1999 2,700 PURCHASE
Mutual Financial Services Fund 01/28/1999 1,600 PURCHASE
Mutual Financial Services Fund 01/29/1999 1,500 PURCHASE
Mutual Financial Services Fund 02/01/1999 2,000 PURCHASE
Mutual Financial Services Fund 02/01/1999 1,300 PURCHASE
Mutual Financial Services Fund 02/01/1999 300 PURCHASE
Mutual Financial Services Fund 02/02/1999 200 PURCHASE
Mutual Financial Services Fund 02/10/1999 10,000 PURCHASE
Mutual Financial Services Fund 02/10/1999 10,598 PURCHASE
Mutual Financial Services Fund 02/10/1999 5,000 PURCHASE
Mutual Financial Services Fund 02/11/1999 15,000 PURCHASE
Mutual Financial Services Fund 02/12/1999 2,100 PURCHASE
Mutual Financial Services Fund 02/16/1999 1,100 PURCHASE
Mutual Financial Services Fund 02/17/1999 1,200 PURCHASE
Mutual Financial Services Fund 02/18/1999 14,600 PURCHASE
Mutual Financial Services Fund 02/19/1999 1,100 PURCHASE
Mutual Financial Services Fund 02/22/1999 800 PURCHASE
Mutual Financial Services Fund 02/23/1999 1,400 PURCHASE
Mutual Financial Services Fund 02/24/1999 1,200 PURCHASE
A-5
<PAGE>
Mutual Financial Services Fund 02/25/1999 2,100 PURCHASE
Mutual Financial Services Fund 02/26/1999 100 PURCHASE
Mutual Financial Services Fund 03/01/1999 2,000 PURCHASE
TOTAL
Mutual Qualified Fund 07/01/1996 81,000 PURCHASE
Mutual Qualified Fund 07/02/1996 22,800 PURCHASE
Mutual Qualified Fund 12/19/1996 -103,800 PURCHASE
Mutual Qualified Fund 02/17/1998 48,700 PURCHASE
Mutual Qualified Fund 05/18/1998 2,500 PURCHASE
Mutual Qualified Fund 05/22/1998 5,500 PURCHASE
Mutual Qualified Fund 05/22/1998 3,000 PURCHASE
Mutual Qualified Fund 05/22/1998 3,300 PURCHASE
Mutual Qualified Fund 05/26/1998 5,000 PURCHASE
Mutual Qualified Fund 05/26/1998 55,000 PURCHASE
Mutual Qualified Fund 05/27/1998 20,000 PURCHASE
Mutual Qualified Fund 05/28/1998 16,300 PURCHASE
Mutual Qualified Fund 05/29/1998 3,500 PURCHASE
Mutual Qualified Fund 05/29/1998 6,000 PURCHASE
Mutual Qualified Fund 06/01/1998 2,500 PURCHASE
Mutual Qualified Fund 06/02/1998 17,500 PURCHASE
Mutual Qualified Fund 06/03/1998 30,400 PURCHASE
Mutual Qualified Fund 06/03/1998 18,000 PURCHASE
Mutual Qualified Fund 06/04/1998 10,000 PURCHASE
Mutual Qualified Fund 06/05/1998 13,000 PURCHASE
Mutual Qualified Fund 06/05/1998 40,000 PURCHASE
Mutual Qualified Fund 06/11/1998 100,000 PURCHASE
Mutual Qualified Fund 06/12/1998 11,700 PURCHASE
Mutual Qualified Fund 07/23/1998 5,000 PURCHASE
Mutual Qualified Fund 07/24/1998 8,600 PURCHASE
Mutual Qualified Fund 07/27/1998 40,000 PURCHASE
Mutual Qualified Fund 07/28/1998 23,500 PURCHASE
Mutual Qualified Fund 07/29/1998 42,300 PURCHASE
Mutual Qualified Fund 07/30/1998 47,000 PURCHASE
Mutual Qualified Fund 07/31/1998 70,500 PURCHASE
Mutual Qualified Fund 08/04/1998 29,800 PURCHASE
Mutual Qualified Fund 08/05/1998 5,600 PURCHASE
Mutual Qualified Fund 08/06/1998 1,900 PURCHASE
Mutual Qualified Fund 08/13/1998 295,410 EXCHANGE OF 1ST COLORADO
SHARES
Mutual Qualified Fund 08/28/1998 23,800 PURCHASE
Mutual Qualified Fund 08/31/1998 11,200 PURCHASE
Mutual Qualified Fund 09/01/1998 10,000 PURCHASE
Mutual Qualified Fund 11/19/1998 30,400 PURCHASE
Mutual Qualified Fund 12/30/1998 6,000 PURCHASE
Mutual Qualified Fund 12/31/1998 24,300 PURCHASE
Mutual Qualified Fund 01/04/1999 1,800 PURCHASE
Mutual Qualified Fund 01/05/1999 27,800 PURCHASE
Mutual Qualified Fund 01/05/1999 11,100 PURCHASE
Mutual Qualified Fund 01/06/1999 800 PURCHASE
Mutual Qualified Fund 01/06/1999 119,200 PURCHASE
Mutual Qualified Fund 01/08/1999 5,700 PURCHASE
A-6
<PAGE>
Mutual Qualified Fund 01/11/1999 11,200 PURCHASE
Mutual Qualified Fund 01/11/1999 4,500 PURCHASE
Mutual Qualified Fund 01/12/1999 26,700 PURCHASE
Mutual Qualified Fund 01/14/1999 11,100 PURCHASE
Mutual Qualified Fund 01/14/1999 11,200 PURCHASE
Mutual Qualified Fund 01/15/1999 11,100 PURCHASE
Mutual Qualified Fund 01/15/1999 4,500 PURCHASE
Mutual Qualified Fund 01/19/1999 4,200 PURCHASE
Mutual Qualified Fund 01/20/1999 14,700 PURCHASE
Mutual Qualified Fund 01/21/1999 22,300 PURCHASE
Mutual Qualified Fund 01/25/1999 20,000 PURCHASE
Mutual Qualified Fund 01/26/1999 16,400 PURCHASE
Mutual Qualified Fund 01/27/1999 32,200 PURCHASE
Mutual Qualified Fund 01/28/1999 17,800 PURCHASE
Mutual Qualified Fund 01/29/1999 16,800 PURCHASE
Mutual Qualified Fund 02/01/1999 14,200 PURCHASE
Mutual Qualified Fund 02/01/1999 22,300 PURCHASE
Mutual Qualified Fund 02/01/1999 2,800 PURCHASE
Mutual Qualified Fund 02/02/1999 2,800 PURCHASE
Mutual Qualified Fund 02/10/1999 9,000 PURCHASE
Mutual Qualified Fund 02/10/1999 20,000 PURCHASE
Mutual Qualified Fund 02/10/1999 19,000 PURCHASE
Mutual Qualified Fund 02/11/1999 20,000 PURCHASE
Mutual Qualified Fund 02/12/1999 23,400 PURCHASE
Mutual Qualified Fund 02/16/1999 12,800 PURCHASE
Mutual Qualified Fund 02/17/1999 12,600 PURCHASE
Mutual Qualified Fund 02/18/1999 22,300 PURCHASE
Mutual Qualified Fund 02/19/1999 15,900 PURCHASE
Mutual Qualified Fund 02/22/1999 11,100 PURCHASE
Mutual Qualified Fund 02/23/1999 20,900 PURCHASE
Mutual Qualified Fund 02/24/1999 17,300 PURCHASE
Mutual Qualified Fund 02/25/1999 31,000 PURCHASE
Mutual Qualified Fund 02/26/1999 1,200 PURCHASE
Mutual Qualified Fund 03/01/1999 29,000 PURCHASE
Mutual Qualified Fund 03/02/1999 500 PURCHASE
Mutual Qualified Fund 03/03/1999 3,200 PURCHASE
Mutual Qualified Fund 03/04/1999 13,000 PURCHASE
Mutual Qualified Fund 03/05/1999 17,000 PURCHASE
Mutual Qualified Fund 03/08/1999 42,500 PURCHASE
Mutual Qualified Fund 03/22/1999 9,000 PURCHASE
Mutual Qualified Fund 03/23/1999 27,800 PURCHASE
Mutual Qualified Fund 03/24/1999 16,000 PURCHASE
Mutual Qualified Fund 04/07/1999 4,600 PURCHASE
TOTAL 1,919,510
4,663,552
A-7
<PAGE>
[FORM OF PROXY CARD]
PROXY CARD
THIS PROXY IS SOLICITED BY FRANKLIN MUTUAL ADVISERS, LLC
("FRANKLIN MUTUAL") IN OPPOSITION TO THE BOARD OF DIRECTORS OF
COMMERCIAL FEDERAL CORPORATION
The undersigned hereby appoints Raymond Garea, Robert Friedman
and Peter A. Langerman, and each of them, the proxy or proxies of
the undersigned, with full power of substitution, to vote all shares
of Common Stock, par value $0.01 per share, of Commercial Federal
Corporation (the "Company") which the undersigned would be entitled
to vote if personally present at the Annual Meeting of the
Stockholders of the Company to be held on November 16, 1999 (the
"Meeting"), and at any and all adjournments or postponements
thereof. The undersigned hereby revokes any previous proxies with
respect to the matters covered by this proxy.
1. Election of Directors (check one box only)
[ ] FOR both nominees [ ] WITHHOLD AUTHORITY
Listed below: to vote for both nominees
listed below:
J. Thomas Burcham George R. Zoffinger
(To withhold authority to vote for any individual nominee, check the
"FOR" box above and then write that nominee's name on the line
provided below.)
--------------------------
2. This proxy grants discretionary authority (i) to vote for
an alternate nominee if any of the nominees for director
listed in Item 1 above is unable or unavailable to serve as
a director (unless authority to vote for all nominees or
for the particular nominee who ceases to be a candidate is
withheld) and (ii) to vote on other matters that may
properly come before the Meeting or any adjournments or
postponements thereof.
<PAGE>
[REVERSE] THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO DIRECTION IS
INDICATED, IT WILL BE VOTED FOR THE ELECTION OF BOTH OF THE NOMINEES
NAMED IN ITEM 1 ON THE REVERSE SIDE OF THIS PROXY, AND, IN THE
DISCRETION OF THE PROXIES, FOR AN ALTERNATE NOMINEE IF ANY OF THE
NOMINEES FOR DIRECTOR LISTED IN ITEM 1 IS UNABLE OR UNAVAILABLE TO
SERVE AS A DIRECTOR (UNLESS AUTHORITY TO VOTE FOR ALL NOMINEES OR
FOR THE PARTICULAR NOMINEE WHO CEASES TO BE A CANDIDATE IS WITHHELD)
AND ON OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING OR
ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF. There is cumulative
voting in the election of directors and, unless otherwise indicated
by the stockholder, a vote for the nominees listed in Item 1 on the
reverse side of this proxy, 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 both of such nominees,
as the proxies may determine.
FRANKLIN MUTUAL RECOMMENDS THAT YOU VOTE FOR EACH OF THE NOMINEES
NAMED IN ITEM 1 ON THE REVERSE SIDE OF THIS PROXY. TO VOTE IN
ACCORDANCE WITH FRANKLIN MUTUAL'S RECOMMENDATION, JUST SIGN THIS
PROXY; NO BOXES NEED TO BE CHECKED.
The undersigned hereby acknowledges receipt of the Proxy Statement
of Franklin Mutual Advisers, LLC dated October [ ], 1999.
DATED: __________________________, 1999
Signature: ____________________________
Signature, if held jointly:
_______________________________________
Title or Authority:
_______________________________________
Joint owners should each sign personally.
If signing as attorney, executor,
administrator, trustee or guardian,
please include your full title. If a
corporation, please sign in corporate
name by authorized officer. If a
partnership, please sign in partnership
name by authorized person. This proxy
votes all shares held in all capacities.
