SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant / /
Filed by a Party other than the Registrant/X/
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission only (as permitted by rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
COMMERCIAL FEDERAL CORPORATION
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(Name of Registrant as Specified in Its Charter)
FRANKLIN MUTUAL ADVISERS, LLC
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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FRANKLIN MUTUAL ADVISERS, LLC
51 John F. Kennedy Parkway
Short Hills, NJ 07078
October 21, 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.
IF THE INDEPENDENT NOMINEES ARE ELECTED, WE BELIEVE THEY WILL STRONGLY ADVOCATE
THE SALE OF THE COMPANY TO THE HIGHEST BIDDER.
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:
- During the past year, reported closing prices of CFC's stock ranged
between $18 5/8 and $25 per share.
- CFC's originally reported earnings per share ("EPS") for 1996, 1997 and
1998 (after giving effect to stock splits) were $1.66, $1.34 and $1.62,
respectively.
- 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.
- 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 $35.64 based on 1998 EPS.
Although there can be no guarantee of potential merger values, 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 $2.15
which is above CFC's historical EPS levels). 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).
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 will take place on
November 16, 1999. At that time, you will have the opportunity to elect
independent directors to the CFC Board who, we believe, 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.
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 an index of large thrifts by 41.5% and, if dividends are
included, by 49.2%. During the same period, CFC's common stock also
underperformed an index of CFC's in-market competitors by 64.9% and, if
dividends are included, by 75.0%. CFC's common stock also dramatically
underperformed the S&P 500 Index during this period 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 given its past
record 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, we believe the CFC Board is more interested in spending corporate
funds to entrench itself. Consider your board's response to our effort to have
you elect ONLY TWO pro-sale directors to CFC's ten-member board:
- 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 we believe is intended to prevent one of our nominees
and our alternate nominee from being nominated and from serving on your
board.
- Instead of letting you decide who should serve on your board, the CFC
Board is, we believe, directing its efforts at disqualifying one of our
nominees and our alternate nominee based on its interpretation of the CFC
by-laws and certain
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banking regulations that, in our view and contrary to the CFC's Board's
assertions, DO in fact permit our nominees to serve as directors.
- 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 we believe
was fixed by the CFC Board for no purpose other than to protect itself.
- 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.
Franklin Mutual is appalled by what we view as 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.
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.
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.
Thank you for your support.
Sincerely,
/s/ Raymond Garea
Raymond Garea
Senior Vice President
IMPORTANT
- - PLEASE SIGN, DATE AND RETURN THE ENCLOSED WHITE PROXY CARD TODAY IN THE
POSTAGE-PAID ENVELOPE PROVIDED.
- - 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:
[LOGO]
TOLL-FREE: (888) 750-5835
BANKS AND BROKERS, CALL COLLECT: (212) 750-5833
4
1999 ANNUAL MEETING OF STOCKHOLDERS
OF
COMMERCIAL FEDERAL CORPORATION
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PROXY STATEMENT
OF
FRANKLIN MUTUAL ADVISERS, LLC
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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 $0.01 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 it 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 10-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 21, 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 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:
[LOGO]
501 Madison Avenue, 20(th) floor
New York, NY 10022
Call toll free: (888) 750-5835
Banks and Brokers, call collect: (212) 750-5833
2
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 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.
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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 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, underperformed an index of large thrifts by 41.5% and, if dividends are
included, by 49.2%. During the same period, CFC's Common Stock also
underperformed an index of CFC's in-market competitors by 64.9% and, if
dividends are included, by 75.0%. CFC's Common Stock also dramatically
underachieved the S&P 500 Index during this period 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
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 top 14 U.S. thrifts by asset size. The thrifts included in the
index are: Greenpoint Financial, People's Bank, Charter One Financial, Sovereign
Bancorp, Webster Financial Corp, St. Paul Bancorp, Washington Mutual, Downey
Financial Corp, Golden West Financial Corp, Dime Bancorp, Astoria Financial,
People's Heritage, Golden State Bancorp and Washington Federal. Franklin Mutual
arrived at this list by reviewing the top 20 U.S. thrifts by asset size as of
June 30, 1999 based on data supplied by SNL Securities. The top 20 U.S. thrifts
by asset size all had more than $5 billion in assets as of June 30, 1999. CFC
has over $12 billion in assets. Franklin Mutual then
4
removed from the list thrifts that went public during the comparison period as
well as private companies, both of which in Franklin Mutual's view, are not
comparable to CFC which has been public for over ten years. The stockholder
return comparison in the graph tracks $100 invested on January 1, 1996 in each
of CFC, the top 14 U.S. thrifts and the S&P 500 Index.
CFC STOCK RETURN VS. SELECTED THRIFTS AND S&P 500
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
COMMERCIAL FEDERIAL THIRFT /S&L PEERS S&P 500 INDEX
1/1/96 100% 100% 100%
6/30/96 102% 104% 109%
12/31/96 127% 126% 120%
6/30/97 147% 149% 144%
12/31/97 212% 194% 158%
6/30/98 188% 204% 184%
12/31/98 138% 187% 193%
7/30/99 139% 186% 216%
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 top 16 financial institutions which compete in the states where CFC
has its main banking activities. The competitors included in the index are:
Firstar Corp, Zions Bancorporation, Wells Fargo Company, First Security Corp.,
BOK Financial Corp, Brenton Banks, Compass Bancshares, US Bancorp, BankFirst
Corp, Community First Bancshares, Commerce Bancshares, Banc One Corp, Golden
West Financial Corp, Union Planters Corp, UMB Financial Corp. and First
Commerce. Franklin Mutual arrived at this list by selecting the top 5 financial
institutions measured by deposit share within each of the states in which CFC
has its main banking activities. These states are Arizona, Colorado, Iowa,
Kansas, Missouri, Nebraska and Oklahoma. Companies that went
5
public during the comparison period were excluded. Franklin Mutual's sources for
deposits by state were SNL Securities and Salomon Smith Barney's THE BANKING
MARKETS, August 13, 1999.
CFC STOCK RETURN VS. SELECTED COMPETITORS AND S&P 500
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
COMMERCIAL FEDERIAL THIRFT /S&L PEERS S&P 500 INDEX
1/1/96 100% 100% 100%
6/30/96 102% 103% 109%
12/31/96 127% 133% 120%
6/30/97 147% 166% 144%
12/31/97 212% 214% 158%
6/30/98 188% 216% 184%
12/31/98 138% 184% 193%
7/30/99 139% 178% 216%
Franklin Mutual believes the above comparisons are a reasonable barometer of
CFC's performance for two reasons. First, CFC is compared to thrifts of
comparable size throughout the U.S. Second, the in-market competitors list
compares CFC's performance to banking institutions in CFC's main markets.
Because banking and thrift profitability is highly dependent on geographical
factors (such as, regional recessions which impact regional employment levels,
home prices and mortgage defaults), Franklin Mutual selected regional banking
company competitors to compare to CFC. These in-market competitors constitute a
comparable peer group for CFC because they compete against CFC in CFC's largest
markets for loans, deposits and fee income opportunities, all of which drive
earnings and profitability, which in turn impact share prices.
Less than two years ago, CFC's Common Stock hit a closing high of $38 3/16
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:
- During the past year, reported closing prices of CFC's stock ranged
between $18 5/8 and $25 per share.
- CFC's originally reported earnings per share ("EPS") for 1996, 1997 and
1998 (after giving effect to stock splits) were $1.66, $1.34 and $1.62,
respectively.
- 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.
6
- 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 $35.64 based on 1998 EPS.
Although there can be no guarantee of potential merger values, 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 $2.15
which is above CFC's historical EPS levels). 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 what is, in our view, 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
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
7
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
We believe that rather than concentrating on maximizing the value of your
investment, the CFC Board is more interested in spending corporate funds to
entrench itself. AS YOU DECIDE WHICH NOMINEES TO VOTE FOR, YOU SHOULD CONSIDER
STRONGLY YOUR BOARD'S 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.
In a stockholder notice of nominations, dated September 8, 1999, in
accordance with CFC's existing 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. Other than the litigation cited herein and
the legal dispute over Mr. Burcham's eligibility, we are not presently aware of
any reason why Mr. Burcham or Mr. Zoffinger would be unable or otherwise
unavailable to serve as a director. After receiving our notice of nominations,
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 we believe
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
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, we believe that 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 we believe the by-law amendment is an
impermissible and improper attempt to disenfranchise stockholders and called for
the CFC Board to rescind the by-law
8
amendment immediately. So far, the CFC Board has refused to rescind the 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, we believe 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
when it becomes available, provided we sign a confidentiality agreement. WE
BELIEVE 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. The complaint also alleges
that CFC's interpretation of the OTS regulations is erroneous. 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, WE BELIEVE
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 what we
believe is 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 all of the Company's stockholders should be, by what we view as
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. We believe the sole purpose of this requirement is to protect the
incumbent board by making it more difficult for the Company's stockholders
9
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. We believe this delay is surprising given that CFC's response was in
our view 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
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, we believe that 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. Such early adoption is permitted by Section 4802(b)(2) of the United
States Code and was explicitly acknowledged by the OTS and the other federal
bank regulators in the release accompanying the amended regulations. 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 the release accompanying the
amended regulations, the OTS and the other federal bank regulators state that
"no agency approval is required in order to claim the proposed small market
share exemption." In view of the relatively small market share of CFC, and the
miniscule market share of MB&T, we believe this exemption avoids any issue under
the OTS regulations.
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
regulations immediately. We believe that the former director CFC is referring to
is W. A. Krause. According to a published news report, 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. We believe that, 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 a published news report,
Mr. Krause advocated the sale of CFC while he was a director. Also according to
a published news report, while a director of CFC, Mr. Krause was a partner in a
group that bought a small bank that opened an office near CFC's West Des Moines
office. Mr. Krause resigned voluntarily from the CFC Board in May 1999.
According to a published news report, Mr. Krause said the most important factor
leading to his resignation was a disagreement over whether the Company should be
sold, as well as legal restrictions on when directors can sell stock. CFC's
Form 8-K and the press release filed as an exhibit thereto announcing
Mr. Krause's resignation from the CFC Board do not state that Mr. Krause
resigned or was asked to resign from the CFC Board because of his relationship
with the new bank. Indeed, according to a published news report, Mr. Krause said
that he checked with the federal banking regulators who told him they did not
see any conflict in his relationship with the new bank. We believe that 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. Contrary to CFC's
assertions, there is virtually no action required of CFC to rely on the amended
regulations other than maintaining certain records showing the exemption is
available. Consequently, if Mr. Burcham is elected to the board, we believe
there will be no issue to resolve under the OTS regulations.
10
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 interpretation of the CFC 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 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 what we believe is 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
CFC's 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 believe 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 what is, in our view, a misguided acquisition strategy
which has significantly decreased the value of CFC's Common Stock and diluted
the interests of stockholders.
We believe that the CFC Board's adoption of a by-law amendment that in our
view 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. We believe that the effect of the by-law
amendment is to impose new eligibility requirements for directors AFTER CFC
received our timely notice of nominations and AFTER the date fixed in the CFC
by-laws for notice of nominations. If this is the case, we believe the Board is
no longer, if it ever was, acting in the best interests of the Company's
stockholders. In our view, 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. 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
11
advisability, we believe that under well-established principles of corporate law
(including the BLASIUS INDUSTRIES case in the State of Delaware which stands for
the proposition that directors must show a compelling justification for actions
that would "thwart" a shareholder vote) 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 it is on notice of a contested election of
directors.
Stockholders should be aware that the litigations referred to in this proxy
statement over the eligibility of Messrs. Burcham and Wagner to serve as
directors may or may not be resolved prior to the Meeting. If the matter remains
unresolved as of the meeting date and Messrs. Burcham and Wagner (if he is
nominated) receive enough votes to be elected to the CFC Board, the outcome of
the litigations would determine whether Messrs. Burcham and/or Wagner will
ultimately be seated as directors.
Despite, in our view, 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 the 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, WE BELIEVE 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.
12
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. Unless a court of
competent jurisdiction orders the Company to permit Franklin Mutual to nominate
additional or substitute nominees, Franklin Mutual will not 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 BUSINESS ADDRESS AGE PRINCIPAL OCCUPATION FOR PAST FIVE YEARS AND DIRECTORSHIPS
- ------------------------- -------- ------------------------------------------------------------
J. Thomas Burcham......................... 58 Chairman and Chief Executive Officer, Missouri Bank and
191 Damifiwill Trust Company, from December 1985 to August 1999; Chairman,
Boca Grande, FL 33921 First National Bank Shares, Ltd., from December 1983 to
January 1998. Mr. Burcham is also a paid consultant of CFC
pursuant to a consulting agreement which will expire January
30, 2001.
George R. Zoffinger....................... 51 President and Chief Executive Officer, Constellation Capital
c/o Constellation Capital Corp. Corp., since February 1998; President and Chief Executive
120 Albany St. Plaza Officer, Value Property Trust, October 1995 to February
New Brunswick, NJ 08901 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.
13
NAME AND BUSINESS ADDRESS AGE PRINCIPAL OCCUPATION FOR PAST FIVE YEARS AND DIRECTORSHIPS
- ------------------------- -------- ------------------------------------------------------------
Alternate Nominee:
Matthew P. Wagner......................... 43 President and Chief Executive Officer of Western Bancorp
c/o Western Bancorp Bank from October 1996 to present; Executive Vice President of
Holding Co. Trust and Investment Management, First Bank System, from
4100 Newport Place, Suite 900 June 1985 to June 1996. Mr. Wagner's status as a director
Newport Beach, CA 92660 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 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
14
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.
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
15
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.
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. Subject to Franklin Mutual's right to cumulate votes, Franklin
Mutual will vote the proxy for the election of Messrs. Burcham and Zoffinger (or
Mr. Wagner, if he is nominated) unless authority to vote for Messrs. Burcham and
Zoffinger (or Mr. Wagner, if he is nominated) is withheld.
16
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, LLC.............................. 4,663,552(1) 7.9%(2)
51 John F. Kennedy Parkway
Short Hills, NJ 07078
J. Thomas Burcham.......................................... 825,738(3) 1.4%(2)
191 Damifiwill (P.O. Box 1818)
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 group............................... 5,490,290 9.2%(2)
- ------------------------
* 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 sets 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 being 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.
The CFC Board is also soliciting proxies for use at the Meeting and will be
furnishing 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
17
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 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.
18
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
October 21, 1999
IF YOU HAVE ANY QUESTIONS OR REQUIRE ASSISTANCE, PLEASE CALL:
[LOGO]
501 MADISON AVENUE, 20(TH) FLOOR
NEW YORK, NY 10022
CALL TOLL FREE: (888) 750-5835
BANKS AND BROKERS, CALL COLLECT: (212) 750-5833
19
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
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.
I-1
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.
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.
I-2
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:
- beneficially owns any shares of Common Stock of the Company or any
securities of any parent or subsidiary of the Company;
- 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);
- 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;
- 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;
- has a contract, arrangement or understanding within the past year with any
person with respect to the Company's securities;
- has any agreement, arrangement or understanding with any person with
respect to any 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
- 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 this proxy solicitation 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-3
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
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
A-1
DATE OF
NAME OF FRANKLIN MUTUAL TRANSACTION NUMBER OF
ADVISORY CLIENT (MO/DAY/YEAR) SHARES PURCHASE OR SALE
Mutual Beacon Fund 07/31/1998 79,500 PURCHASE
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
A-2
DATE OF
NAME OF FRANKLIN MUTUAL TRANSACTION NUMBER OF
ADVISORY CLIENT (MO/DAY/YEAR) SHARES PURCHASE OR SALE
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
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
A-3
DATE OF
NAME OF FRANKLIN MUTUAL TRANSACTION NUMBER OF
ADVISORY CLIENT (MO/DAY/YEAR) SHARES PURCHASE OR SALE
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
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
A-4
DATE OF
NAME OF FRANKLIN MUTUAL TRANSACTION NUMBER OF
ADVISORY CLIENT (MO/DAY/YEAR) SHARES PURCHASE OR SALE
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
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 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
A-5
DATE OF
NAME OF FRANKLIN MUTUAL TRANSACTION NUMBER OF
ADVISORY CLIENT (MO/DAY/YEAR) SHARES PURCHASE OR SALE
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
Mutual Financial Services Fund 02/25/1999 2,100 PURCHASE
A-6
DATE OF
NAME OF FRANKLIN MUTUAL TRANSACTION NUMBER OF
ADVISORY CLIENT (MO/DAY/YEAR) SHARES PURCHASE OR SALE
Mutual Financial Services Fund 02/26/1999 100 PURCHASE
Mutual Financial Services Fund 03/01/1999 2,000 PURCHASE
TOTAL 482,700
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
A-7
DATE OF
NAME OF FRANKLIN MUTUAL TRANSACTION NUMBER OF
ADVISORY CLIENT (MO/DAY/YEAR) SHARES PURCHASE OR SALE
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
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
A-8
DATE OF
NAME OF FRANKLIN MUTUAL TRANSACTION NUMBER OF
ADVISORY CLIENT (MO/DAY/YEAR) SHARES PURCHASE OR SALE
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-9
FRANKLIN MUTUAL ADVISERS, LLC
ANNUAL MEETING OF STOCKHOLDERS
OF
COMMERCIAL FEDERAL CORPORATION
YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.
PLEASE VOTE YOUR PROXY TODAY
FOLD AND DETACH HERE
- --------------------------------------------------------------------------------
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.
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 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.
- ----------------
SEE REVERSE SIDE
- ----------------
WE URGE YOU TO VOTE TO PROTECT YOUR INVESTMENT BY SIGNING,
DATING AND RETURNING THE ATTACHED WHITE PROXY CARD TODAY.
Return your proxy in the
postage-paid envelope provided
FOLD AND DETACH HERE, PLEAE VOTE, SIGN, AND RETURN THE BELOW PROXY
- --------------------------------------------------------------------------------
|X| Please mark vote
as in this example
-----------------------------------------------
FRANKLIN MUTUAL RECOMMENDS A VOTE "FOR" ITEM 1.
-----------------------------------------------
FOR both WITHHOLD AUTHORITY
nominees to vote for all nominees
listed below |_| listed below |_|
1. Election of Directors
(check one box only)
NOMINEES 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 here.)
- --------------------------------------------------------------------------------
2. This proxy grants discretionary authority (i) to vote for an alternative
nominee if any of the nominees for director listed in Item 1 above is unable
to serve as a director (unless authority to vote for all nominees is
withheld) and (ii) to vote on other matters that may properly come before the
Meeting or any adjournment or postponements thereof.
Dated:____________________________, 1999
________________________________________
Signature
________________________________________
Signature if held jointly
Note: Please sign exactly as name
appears hereon. Joint owners should each
sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as
such.