FOR SETTLEMENT PURPOSES ONLY Privileged and Confidential
- ---------------------------- Draft: Oct. 29, 1999
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THIS AGREEMENT (the "Agreement") dated as of October 29,
1999, is by and among Commercial Federal Corporation
("Commercial Federal"), a Nebraska corporation, and Franklin
Mutual Advisers, LLC ("Franklin"), a Delaware limited liability
company.
WHEREAS, there is currently scheduled for November 16,
1999, the annual meeting of Commercial Federal stockholders (the
"Annual Meeting") to consider, among other things, the election
of four individuals to the Commercial Federal Board of
Directors; and
WHEREAS, Commercial Federal has nominated Robert F. Krohn,
Robert S. Milligan, Michael P. Glinsky and Sharon G. Marvin to
stand for election at the Annual Meeting, and Franklin has
nominated J. Thomas Burcham and George R. Zoffinger to stand for
election at the Annual Meeting and has designated Matthew P.
Wagner as an "alternate nominee"; and
WHEREAS, a dispute has arisen between Commercial Federal
and Franklin regarding the eligibility of Messrs. Burcham and
Wagner to be nominated and/or to serve as directors of
Commercial Federal if elected, and regarding the validity of a
September 28, 1999 amendment to Commercial Federal's by-laws
regarding certain management interlocks (the "Amended By-law"),
which dispute has resulted in litigation pending in the United
States District Court for the District of Nebraska, captioned
Commercial Federal Corporation v. Franklin Mutual Advisers, LLC,
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et al., Case No. 8:99 CV 419, and Franklin Mutual Advisers, LLC,
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et al. v. Commercial Federal Corporation, et al., Case No. 8:99
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CV 427 (the "Litigation"); and
WHEREAS, the parties hereto desire to terminate the
Litigation, and in connection therewith to agree upon a slate of
four nominees to stand for election at the Annual Meeting, as
more fully provided for herein;
NOW THEREFORE, in consideration of the promises and the
representations, and warranties, covenants and agreements
contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound hereby, the parties hereto hereby
agree as follows:
1. Upon execution of this Agreement, Franklin shall
withdraw its nomination of Messrs. Burcham and Wagner, shall
cease all solicitation efforts on behalf of Messrs. Burcham,
Zoffinger, Wagner, or any other person in connection with the
Annual Meeting, and shall not vote any proxies which it has
solicited in connection with such efforts. Messrs. Burcham and
Wagner will not stand for election at the Annual Meeting. Each
party shall bear its own solicitation and litigation costs.
2. Commercial Federal shall nominate for election a slate
of four individuals, consisting of George R. Zoffinger, Joseph
Whiteside, Robert F. Krohn and Michael P. Glinsky. Commercial
Federal shall use all reasonable efforts to cause the election
of the foregoing slate of nominees at the Annual Meeting,
including without limitation the
filing of amended proxy materials with the Securities and
Exchange Commission and the distribution of such amended proxy
materials to the shareholders. Franklin shall vote all its
shares in favor of that slate.
3. The Amended By-law shall remain in effect.
4. Promptly following execution of this Agreement, the
parties shall issue a press release in the form attached hereto
as Exhibit A.
5. Upon execution of this Agreement, the parties will (i)
execute the Litigation Releases in the forms attached hereto as
Exhibit B; and (ii) execute and promptly file with the United
States District Court for the District in Nebraska the
Stipulation and Orders of Dismissal in the forms attached hereto
as Exhibit C.
6. The parties hereto agree and acknowledge that time is of
the essence in the performance of this Agreement.
7. This Agreement and all disputes hereunder shall be
governed by and construed and enforced in accordance with the
laws of the State of Nebraska, without regard to the principles
of conflicts of law thereof.
8. This Agreement may be executed in any number of
counterparts, all of which shall be considered one and the same
agreement, and shall become effective when counterparts have
been signed by each party hereto and delivered to each other
party. Copies of executed counterparts transmitted by telecopy
or other electronic transmission service shall be considered
original executed counterparts, provided receipt of copies of
such counterparts is confirmed.
9. If either Mr. Zoffinger or Mr. Whiteside, or both, are
unavailable or unable to stand for election at the Annual
Meeting for any reason, Franklin Mutual shall have the right to
select a replacement nominee who is mutually acceptable to
Commercial Federal and Commercial Federal shall take all action
necessary to nominate such replacement nominee at the Annual
Meeting.
10. Commercial Federal represents that it has no present
intention of increasing the size of its Board to more than 10
members.
11. The parties hereto agree that irreparable damage would
occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the
parties shall be entitled to specific performance of the terms
hereof, in addition to any other remedy at law or equity.
COMMERCIAL FEDERAL CORPORATION
/s/ William A. Fitzgerald
______________________________
Name: William A. Fitzgerald
Title: Chairman of the Board
FRANKLIN MUTUAL ADVISERS, LLC
/s/ Dennis J. Block
______________________________
Name: Dennis J. Block
Title: Attorney-in-Fact