<PAGE> 1
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement.
[X] Definitive Proxy Statement.
[ ] Definitive Additional Materials.
[ ] Soliciting Material pursuant to Rule 14a-11(c) or Rule 14a-12
UNISTAR FINANCIAL SERVICE CORP.
-------------------------------
(Name of Registrant as Specified In Its Charter)
-------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)and 0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
--------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
--------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
--------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
[UNISTAR FINANCIAL SERVICE CORP. LETTERHEAD]
April 29, 1999
Dear Fellow Shareholder:
You are cordially invited to attend Unistar Financial Service Corp.'s
Annual Meeting of Shareholders to be held at 9:00 a.m. on Friday, June 18, 1999,
at Unistar's corporate headquarters at 4635 McEwen Road, Dallas, Texas.
At the meeting, you will have the opportunity to learn more about
Unistar's notable performance in 1998 and our strategy for continuing profitable
growth. We encourage all shareholders to review and continuously monitor our
website at www.unistarfinancial.com. The attached Notice of Annual Meeting and
proxy statement describe all known items to be acted upon by shareholders.
It is important that your shares are represented at the Annual Meeting
whether or not you plan to attend. To ensure that you will be represented, we
ask you to sign, date and return the enclosed proxy card or proxy voting
instruction form as soon as possible. If you then attend the meeting, you may,
in your discretion, withdraw your proxy and vote in person.
In closing, I hope that you will be able to attend Unistar's Annual
Meeting, and I look forward to the chance to report to you on our progress and
plans.
Sincerely,
/s/ MARC A. SPARKS
MARC A. SPARKS
Chairman of the Board
<PAGE> 3
[UNISTAR FINANCIAL SERVICE CORP. LETTERHEAD]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Our Shareholders:
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of the Shareholders
of Unistar Financial Service Corp., a Delaware corporation (the "Company"), will
be held at the offices of the Company at 4635 McEwen Road, Dallas, Texas at 9:00
a.m., Dallas time, on Friday, June 18, 1999, for the following purposes:
1. To elect nine directors to serve until the next Annual Meeting
of Shareholders or until their successors are duly elected and
qualified;
2. To ratify the appointment of Karlins Arnold & Corbitt, P.C. as
the Company's independent auditors for 1999; and
3. To transact such other business as may properly come before
the meeting or any adjournment thereof.
Pursuant to a provision in the Company's bylaws, any matter to be
presented at the meeting for consideration and with a view to obtaining a vote
thereon must be introduced by a motion, and any such motion must be seconded
before consideration of it may begin or before a vote on it may be obtained.
Shareholders of record at the close of business on April 20, 1999, are
entitled to notice of, and to vote at, the Annual Meeting or any adjournment
thereof.
A list of shareholders entitled to vote at the meeting and the number
of shares registered in the name of each will be available for examination by
any shareholder at the office of the Corporate Secretary of the Company, 4635
McEwen Road, Dallas, Texas, during ordinary business hours beginning April 30,
1999, and running throughout the course of the meeting.
YOUR VOTE IS IMPORTANT. The Board encourages you to be represented in
person or by proxy at the Annual Meeting, regardless of the number of shares you
own. Whether or not you plan to attend the Annual Meeting, please complete,
sign, date and return the enclosed proxy card promptly in the enclosed envelope.
If you attend the Annual Meeting, you may revoke your proxy and vote in person.
All shareholders of the Company are cordially invited to attend the
Annual Meeting.
By order of the Board of Directors
/s/ JAMES G. LEACH
James G. Leach
Corporate Secretary
Dallas, Texas
April 29, 1999
<PAGE> 4
PROXY STATEMENT AND PROXY
This Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of Unistar Financial Service
Corp., a Delaware corporation (the "Company"), to be voted at the 1999 Annual
Meeting of Shareholders (the "Annual Meeting") to be held on Friday, June 18,
1999, at the time and place and for the purposes set forth in the accompanying
Notice of Annual Meeting of Shareholders (the "Notice"), and at any
adjournment(s) thereof. When proxies in the accompanying form are properly
executed and received, the shares represented thereby will be voted at the
Annual Meeting in accordance with the directions noted thereon. If no direction
is indicated on the proxy, the shares represented thereby will be voted for the
election of each of the nominees for director, in favor of the other proposals
set forth in the Notice and in the discretion of the proxy holder on any other
matter that may properly come before the meeting.
Submitting a proxy will not affect a shareholder's right to vote in
person at the Annual Meeting. Any shareholder who gives a proxy may revoke it at
any time before it is exercised by delivering written notice of revocation to
the Company, by substituting a new proxy executed on a later date, or by making
a written request in person at the Annual Meeting that the proxy be returned.
However, mere attendance at the Annual Meeting will not of itself revoke the
proxy.
All expenses of preparing, assembling and mailing this Proxy Statement
and the enclosed materials and all costs of soliciting proxies will be paid by
the Company. In addition to solicitation by mail, proxies may be solicited by
officers and regular employees of the Company by telephone or in person. Such
officers and employees who solicit proxies will receive no compensation for
their services other than their regular salaries. Arrangements will also be made
with brokerage houses and other custodians, nominees and fiduciaries to forward
solicitation materials to the beneficial owners of shares they hold, and the
Company may reimburse them for reasonable out-of-pocket expenses they incur in
forwarding these materials.
The principal executive offices of the Company are located at 4635
McEwen Road, Dallas, Texas 75244. The Company's mailing address is the same as
that of its principal executive offices, and its website is
www.unistarfinancial.com.
This Proxy Statement and the accompanying form of proxy are first being
mailed or given to shareholders on or about April 26, 1999. A copy of the
Company's Annual Report on Form 10-KSB for the fiscal year ended December 31,
1998 has been filed with the Securities and Exchange Commission, but such
document constitutes no part of the materials used for the solicitation of
proxies.
Except as otherwise expressly indicated, all information in this proxy
statement is provided as of April 20, 1999.
PURPOSES OF THE MEETING
At the Annual Meeting, the shareholders of the Company will consider
and vote on the following matters:
1. Election of nine directors to serve until the next Annual
Meeting of Shareholders or until their successors are duly
elected and qualified;
2. Ratification of the appointment of Karlins Arnold & Corbitt,
P.C. as the Company's independent auditors for 1999; and
3. Transaction of such other business as may properly come before
the meeting or any adjournment thereof.
1
<PAGE> 5
QUORUM AND VOTING
The record date for the determination of shareholders entitled to
notice of and to vote at the Annual Meeting was the close of business on April
20, 1999 (the "Record Date"). On the Record Date, there were 24,370,422 shares
of Common Stock of the Company, par value $0.01 per share (the "Common Stock"),
issued and outstanding, each of which is entitled to one vote on all matters to
be acted upon at the Annual Meeting. There are no cumulative voting rights. The
presence, in person or by proxy, of holders of one-third of the outstanding
shares of Common Stock entitled to vote at the meeting is necessary to
constitute a quorum to transact business. Assuming the presence of a quorum,
directors will be elected by a plurality of the votes cast. The affirmative vote
of the holders of a majority of the shares of Common Stock actually voted will
be required for the approval of all other matters to come before the Annual
Meeting.
Abstentions and broker non-votes will be counted solely for purposes of
determining whether a quorum is present at the Annual Meeting. Under applicable
Delaware law, broker non-votes will not be counted in determining the number of
shares voted on any matter and will have no effect on the election of directors
or the approval of any proposal submitted to a vote of the shareholders at the
Annual Meeting.
PRINCIPAL SHAREHOLDERS AND STOCK OWNERSHIP OF MANAGEMENT
The following table and the notes thereto set forth certain information
regarding the beneficial ownership of the Common Stock as of the Record Date, by
(i) each current director, nominee for director and executive officer of the
Company; (ii) all executive officers and current directors of the Company as a
group; and (iii) each other person known to the Company to own beneficially more
than five percent of the presently outstanding Common Stock. Unless otherwise
indicated, the persons identified in the table have sole voting and dispositive
power with respect to the shares shown as beneficially owned by them. The
mailing address for all directors and executive officers is the same as that of
the Company.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF CLASS
SHAREHOLDER BENEFICIALLY OWNED BENEFICIALLY OWNED
Directors and Executive Officers:
<S> <C> <C>
Marc A. Sparks(1) .......................... 2,365,000 9.7%
F. Jeffrey Nelson(1) ....................... 1,198,000 4.9
James G. Leach ............................. 200,000 0.8
Kerry A. Sebree ............................ 15,000 0.1
Morris Belzberg(2) ......................... 822,222 3.4
Brent Brown ................................ 5,000 0.0
Noelle Hill ................................ 0 0.0
Leonard Feldman(1) ......................... 2,055,555 8.4
Patrick Rastiello .......................... 10,000 0.0
Victor L. Horne(1) ......................... 310,000 1.3
All directors and executive officers
as a group (ten persons) ................. 6,980,777 28.6%
</TABLE>
(1) Includes shares held of record by or jointly with family
members.
(2) Includes 222,222 shares held by a family partnership in which
Mr. Belzberg and his wife ultimately share a 25% interest, and
600,000 shares held by another partnership, ownership of which
is shared by Mr. Belzberg and his wife.
2
<PAGE> 6
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company's Board of Directors for the ensuing year will consist of
nine directors who are to be elected for a term expiring at the 2000 Annual
Meeting of the Company's shareholders or when their successors are elected and
qualify. Directors will be elected by a plurality of the votes cast at the
Annual Meeting. Cumulative voting is not permitted in the election of directors.
The Company's Board of Directors has proposed the election of the
following slate of nominees for election as directors at the Annual Meeting.
None of the nominees was selected on the basis of any special arrangement or
understanding with any other person. None of the nominees bears any family
relationship to any other nominee or to any executive officer of the Company. In
the absence of instructions to the contrary, shares represented by proxy will be
voted for the election of each nominee named below. Each nominee has accepted
nomination and agreed to serve if elected. If any nominee becomes unable to
serve before election, shares represented by proxy may be voted for the election
of a substitute nominee designated by the Board of Directors.
Unless otherwise noted below, all of the officers and directors have
held their positions with the Company since August 17, 1998, the date of a
Special Meeting of the Company's Shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH
NOMINEE LISTED BELOW.
<TABLE>
<CAPTION>
NAME AGE CURRENT POSITION(S) WITH THE COMPANY
<S> <C> <C>
Marc A. Sparks(1)(2)................ 41 Chairman, Chief Executive Officer and Director
F. Jeffrey Nelson(1)................ 42 President, Chief Financial Officer, Treasurer and Director
James G. Leach(1)................... 51 Vice Chairman, General Counsel, Secretary and Director
Kerry A. Sebree(1).................. 35 Executive Vice President, Chief Operating Officer and Director
Morris Belzberg(1).................. 69 Director
Brent Brown(2)(3)................... 49 Director
Noelle Hill ........................ 29 Director
Leonard Feldman(3).................. 73 Director
Patrick Rastiello(2)(3)............. 44 Director
</TABLE>
- --------------------
(1) Member of Executive Committee.
(2) Member of Compensation Committee.
(3) Member of Audit Committee.
MARC A. SPARKS has founded, owned and operated several insurance
related corporations. Mr. Sparks has had extensive experience in the insurance,
surety bonding, premium finance, and investment banking fields. For the last
several years, Mr. Sparks has owned and managed property and casualty insurance
companies, multi-location insurance agencies, a nationally recognized surety
bonding agency, and managing general agencies for surety and insurance. Mr.
Sparks is the founder of International Fidelity Holding Corp., U.S. Fidelity
Holding Corp., International Surety & Casualty Company, Great Southern General
Agency, First Choice Underwriters, Peak Underwriters, Advanced Underwriters,
Eagle Underwriters, Eagle Premium Finance Company, and Eagle Claims Corp. He is
licensed by the Texas Department of Insurance as a Managing General Agent (MGA),
Local Recording Agent (LRA Broker), Surplus Lines Agent, and he holds a Texas
Premium Finance license. Mr. Sparks is certified (Form A approved) by the Texas
Department of Insurance to own and operate Texas property and casualty insurance
companies.
3
<PAGE> 7
F. JEFFREY NELSON has been in the insurance business since 1978. He has
been involved in all aspects of life insurance and property and casualty
insurance companies. He is responsible for overseeing day-to-day activities of
each company and subsidiary for which he is an officer. Mr. Nelson's emphasis is
on the financial performance and management of profit and loss and balance sheet
activities. A substantial amount of his time is spent in reinsurance
negotiations and management to achieve the greatest financial protection for the
company and its policyholders. Mr. Nelson also directs and participates in
corporate management activities such as legal regulatory matters, general
litigation activities, claim settlements and management of corporate finance. He
is the liaison to industry associations and oversees cash flow management.
JAMES G. LEACH joined the Company as Vice Chairman, General Counsel and
Director in August, 1998. He was previously Senior Vice President and General
Counsel for certain American Safety Insurance Group companies since 1993. He was
a reinsurance intermediary for American Safety from 1990 to 1993. Mr. Leach has
held numerous executive insurance and securities positions since 1975. He holds
degrees in Physics and Economics, an M.B.A. in Finance and Accounting, an M.I.
in Insurance, and a J.D. He also holds a CPCU and CLU designation, and is a
licensed Insurance Agent and Broker in several states. Mr. Leach is a General
Securities Principal with series 7, 63 and 24 licenses.
KERRY SEBREE has an extensive background in insurance operations, sales
and marketing, as well as an understanding of all facets of managing a business
enterprise. He has substantial experience in the auto insurance industry as an
owner of a multi-location retail auto insurance agency and through his extensive
involvement in premium finance business development. Mr. Sebree's primary
responsibility with the Company is to manage and balance underwriting,
processing and claims as well as to identify and evaluate quality acquisition
candidates and formulate and negotiate company acquisitions.
MORRIS BELZBERG has been Chairman Emeritus of Budget Rent a Car
Corporation since 1991. During his 35-year tenure at Budget, Mr. Belzberg held
the titles of Chief Executive Officer, Chairman of the Board, and Chairman of
the Executive Committee. Although semi-retired, Mr. Belzberg continues to assist
Budget with its market strength and budgetary goals.
BRENT BROWN is a Director of the legal firm of Abernathy, Roeder,
Robertson, Boyd & Joplin since 1998 and from 1988 to 1998 he was a partner with
the law firm of Bracewell & Patterson. Mr. Brown is admitted to the Bar in the
states of Texas and Missouri, and specializes in the areas of corporate and
insurance law and litigation.
LEONARD FELDMAN joined the Company's Board as a Director in January,
1999. He has been a member of the Chicago Mercantile Exchange, the International
Monetary Fund, the London Financial Exchange, the Chicago Board of Trade, and
the Chicago Board of Options Exchange for 30 years. Mr. Feldman served as
financial advisor to Rene Champion, Senior Vice President of Swiss Bank
Corporation Zurich, with interests in the financial markets.
NOELLE HILL, PH.D, is currently a director of IMARK Corporation, a
Toronto Stock Exchange traded company (formerly Durkin Hayes Publishing, Ltd.).
She holds a Doctor of Philosophy, Master of Arts, and a Bachelor of Science,
Radio, Television and Film from the University of Texas at Austin.
PATRICK RASTIELLO is currently Vice President at Aon Re Worldwide and
is responsible for production and marketing of all lines of insurance and
reinsurance business. His experience in the reinsurance and insurance fields is
extensive, as Vice President of American International Underwriters - London
(for American International Group) from 1978 to 1985, as Senior Vice President
in charge of all worldwide
4
<PAGE> 8
broker treaty underwriting operations for US International Reinsurance Company
from 1985 - 1989, as Vice President of Treaty Underwriting with Folksamerica
Reinsurance Company from 1989 - 1994, and as a Vice President of Minet Re
Intermediaries, which was acquired by Aon Corporation in 1997.
The Board of Directors held two meetings during 1998, each subsequent
to the August 17, 1998 Special Meeting of Shareholders, and all directors were
in attendance at each meeting.
Committees of the Board of Directors
Standing committees of the Board of Directors of the Company include
the Executive Committee, the Audit Committee and the Compensation Committee.
The Executive Committee is presently composed of Messrs. Sparks
(chairman), Nelson, Leach, Sebree and Belzberg. Between meetings of the Board of
Directors, the Executive Committee has the full power and authority of the Board
in the management of the business and affairs of the Company, except to the
extent limited by statute and the Bylaws of the Company. The Executive Committee
also manages the investments held by the Company. The Executive Committee meets
periodically between meetings of the Board of Directors and did not meet during
1998.
The Audit Committee is presently composed of Messrs. Brown (chairman),
Feldman and Rastiello. The Audit Committee consults with management regarding
reports and recommendations submitted by the Company's independent auditors,
reviews the independent auditors' billings, and makes recommendations to the
full Board with respect to the engagement or dismissal of independent auditors.
The Audit Committee did not meet during 1998.
The Compensation Committee is presently composed of Messrs. Sparks
(chairman), Brown and Rastiello. At the direction of the full Board, this
committee reviews and makes recommendations with respect to compensation of the
executive officers of the Company. The Compensation Committee did not meet
during 1998.
The Company does not pay directors' fees to its Board members, but does
provide transportation, lodging and reimbursement of all reasonable expenses for
attending Board and committee meetings.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Because the Company does not have a class of securities registered
under Section 12 of the Securities Exchange Act of 1934 (the "Exchange Act"),
the Company's executive officers, directors and beneficial owners of more than
10% of the Company's Common Stock are not required to file reports of ownership
and changes of ownership of the Common Stock with the Securities and Exchange
Commission under Section 16(a) of the Exchange Act.
COMPENSATION OF EXECUTIVE OFFICERS
The discussion that follows has been prepared based on the actual
compensation paid and benefits provided by the Company to the five most highly
compensated executive officers of the Company (collectively, the "Named
Executive Officers") for services performed during 1998. This historical data is
not necessarily indicative of the compensation and benefits that may be provided
to such persons in the future. No other executive officer's compensation totaled
more than $100,000 for fiscal 1998.
5
<PAGE> 9
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation awarded to, earned by
or paid to the Named Executive Officers for services rendered in all capacities
to the Company and its subsidiaries.
<TABLE>
<CAPTION>
Name and Principal Position 1998 Salary(1)
--------------------------- --------------
<S> <C>
Marc A. Sparks
(Chairman and Chief Executive Officer) $510,000
F. Jeffrey Nelson
(President, Chief Financial Officer 465,000
and Treasurer)
James G. Leach
(Vice Chairman, General Counsel 230,000
and Secretary)
Kerry A. Sebree
(Executive Vice President and 340,000
Chief Operating Officer)
Victor L. Horne
Vice President 160,000
</TABLE>
(1) Includes annualized salary (plus auto allowance) for 1998, although the
Named Executive Officer did not assume his present position with the
Company until August 17, 1998, following the Special Meeting of
Shareholders.
OPTION GRANTS/EXERCISES IN LAST FISCAL YEAR
The Company has not granted any options under its 1998 Stock Option
Plan.
EXECUTIVE COMPENSATION AGREEMENTS
At this time, the officers of the Company serve at the pleasure of the
Company's Board of Directors, although the Compensation Committee is currently
considering the implementation of employment agreements for several of the
Company's officers.
CERTAIN TRANSACTIONS
As disclosed in the Form 8-K filed by the Company on September 2, 1998,
Marc A. Sparks and F. Jeffrey Nelson were shareholders of International Fidelity
Holding Corporation, which was purchased by the Company for 19,777,000 shares of
Common Stock on August 17, 1998, the date on which the purchase was approved at
a Special Meeting of Shareholders.
As disclosed in the Form 8-K filed by the Company on October 15, 1998,
Marc A. Sparks and F. Jeffrey Nelson were former shareholders of U.S. Fidelity
Holding Corp., the assets and subsidiaries of which were purchased by the
Company for 3,975,000 shares of Common Stock on September 30, 1998.
The Company leases its 30,000 square foot facility in Dallas, Texas
from 4635 Partners Ltd., an affiliate of Marc A. Sparks and F. Jeffrey Nelson,
for approximately $250,000 per year.
6
<PAGE> 10
PROPOSAL NO. 2
RATIFICATION OF AUDITOR
The firm of Karlins Arnold & Corbitt, P.C. of The Woodlands, Texas,
examined the financial statements of the Company for the year ended December 31,
1998. The following resolution will be presented at the meeting to ratify the
appointment by the Audit Committee of the firm of Karlins Arnold & Corbitt,
P.C., as independent public accountants, to examine the financial statements of
the Company for the current year ending December 31, 1999, and to perform other
related accounting services.
RESOLVED: That the appointment by the Audit Committee of the Board of
Directors of Karlins Arnold & Corbitt, P.C. as independent public
accountants of the Company for the current year ending December 31,
1999, is hereby ratified, approved and confirmed.
The Company has been advised by Karlins Arnold & Corbitt, P.C. that no
member of the firm has any financial interest, either direct or indirect, in the
Company, or has any connection with the Company in any capacity other than that
of public accountants. A member of Karlins Arnold & Corbitt, P.C. will be
present at the meeting to answer questions by shareholders and will have the
opportunity to make a statement if he or she so desires.
If the shareholders do not ratify the appointment of Karlins Arnold &
Corbitt, P.C., the selection of independent public accountants will be
reconsidered by the Audit Committee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS RESOLUTION.
The affirmative vote of the holders of a majority of the shares
represented at the meeting is required for adoption of this resolution.
OTHER MATTERS
The Board of Directors does not know, as of the date of mailing of this
Proxy Statement, of any other business to be brought before the Annual Meeting.
The enclosed proxy card authorizes the voting of shares represented by the proxy
on all other matters that may properly come before the meeting, and any
adjournment or adjournments thereof. If any such other matters should come
before the meeting, it is the intention of the proxy holders to take such action
in connection therewith as shall be in accordance with their best judgment.
By order of the Board of Directors
/s/ JAMES G. LEACH
James G. Leach
Corporate Secretary
April 29, 1999
7
<PAGE> 11
PROXY
UNISTAR FINANCIAL SERVICE CORP.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Marc A. Sparks and F. Jeffrey Nelson as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them, and each of them, to represent and vote, as designated below, all the
shares of Common Stock of Unistar Financial Service Corp. (the "Company") which
the undersigned is entitled to vote at the Annual Meeting of Shareholders to be
held on Friday, June 18, 1999, and any adjournments thereof, with all the powers
the undersigned would possess if personally present, upon the matters noted
below:
1. Election of the Board's nominees for Directors.
Nominees: Marc A. Sparks, F. Jeffrey Nelson, Morris Belzberg, Brent
Brown, Noelle Hill, Leonard Feldman, Patrick Rastiello, James G. Leach
and Kerry Sebree.
<TABLE>
<S> <C>
[ ] FOR all nominees listed above [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below) vote for all nominees listed below
</TABLE>
INSTRUCTION: To withhold authority to vote for any individual nominee listed
above, write that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
2. Ratification of the appointment of Karlins Arnold & Corbitt, P.C. as
the Company's independent auditors for 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Meeting.
This proxy, when properly executed, will be voted in the manner directed by the
undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
ALL THE ABOVE PROVISIONS.
< SEE REVERSE SIDE FOR SIGNATURE LINE >
<PAGE> 12
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING
THE ENCLOSED ENVELOPE.
Please sign exactly as name appears below and mail proxy to:
Unistar Financial Service Corp.
c/o Marc A. Sparks, Chairman and CEO
4635 McEwen Road
Dallas, Texas 75244
When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such. If a corporation, please sign in full corporate name by the President
or other authorized officer. If a partnership, please sign in partnership name
by authorized person.
--------------------------------------------
Print Name
--------------------------------------------
Signature
--------------------------------------------
Signature if held jointly
Dated: , 1999
----------------------
[ ] Please check this box if you are planning
to attend the 1999 Annual Meeting of
Shareholders in person.
