<PAGE>
SCHEDULE 14A-INFORMATION REQUIRED IN PROXY STATEMENT
REG.(S) 240.14a-101.
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 14a-12
US FACILITIES CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
US FACILITIES CORPORATION
- --------------------------------------------------------------------------------
(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:
----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
(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.:
-----------------------------------------------------------------------
(3) Filing party:
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(4) Date filed:
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<PAGE>
PRELIMINARY
[LOGO OF US FACILITIES CORPORATION]
March 28, 1997
Dear Stockholder,
You are cordially invited to attend the 1997 Annual Meeting of Stockholders
of US Facilities Corporation to be held on Wednesday, May 14, 1997, at the
offices of the Company, 650 Town Center Drive, 15th Floor, Costa Mesa,
California, at 9:00 a.m., Local Time.
Information concerning the matters to be voted on at the Annual Meeting is
set forth in the attached Notice of 1997 Annual Meeting of Stockholders and
Proxy Statement.
It is important that your shares be represented at the Annual Meeting
whether or not you are personally able to attend. All materials you need to
vote your shares by mail are enclosed in this package. Please review them
carefully. I URGE YOU TO VOTE, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY
CARD IN THE ENCLOSED ENVELOPE AS PROMPTLY AS POSSIBLE.
Sincerely,
/s/ DAVID L. CARGILE
--------------------------------
David L. Cargile
Chairman of the Board, President
and Chief Executive Officer
<PAGE>
PRELIMINARY
[LOGO OF US FACILITIES CORPORATION]
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
MAY 14, 1997
-----------------------------
To the Stockholders of US Facilities Corporation:
Notice is hereby given that the Annual Meeting of Stockholders of US
Facilities Corporation, a Delaware corporation (the "Company"), will be held
on Wednesday, May 14, 1997, at the offices of the Company, 650 Town Center
Drive, 15th Floor, Costa Mesa, California, at 9:00 a.m., Local Time, for the
following purposes:
(1) To elect two of seven directors for the Company's Board of Directors,
to serve until their successors have been duly elected and qualified or
until their earlier death, resignation or removal;
(2) To approve an amendment to the Company's Restated Certificate of
Incorporation to change the Company's name to "The Centris Group,
Inc.";
(3) To approve an amendment to the Company's Restated Certificate of
Incorporation to increase the number of shares of authorized common
stock from 20,000,000 shares to 40,000,000 shares;
(4) To approve the adoption of the Company's 1997 Long-Term Incentive-
Performance Unit Plan;
(5) To approve amendments to the US Facilities Corporation 1988 and 1991
Employee Stock Option Plans;
(6) To ratify the selection by the Board of Directors of KPMG Peat Marwick
LLP as the Company's independent auditors for the year ending December
31, 1997; and
(7) To act upon such other matters as may properly come before the Annual
Meeting of Stockholders.
The Board of Directors has fixed the close of business on March 21, 1997 as
the record date for the determination of stockholders entitled to notice of
and to vote at the Annual Meeting of Stockholders and any postponements or
adjournments thereof.
<PAGE>
All stockholders are cordially invited to attend the Annual Meeting of
Stockholders. Even if a stockholder expects to attend, it will be appreciated
if the stockholder would promptly vote, sign, date and return the enclosed
proxy card in the envelope provided.
By Order of the Board of Directors,
/s/ JOSE A. VELASCO
-----------------------------------
Jose A. Velasco
Senior Vice President, Secretary
and General Counsel
March 28, 1997
Costa Mesa, California
PLEASE VOTE, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY CARD WITHOUT DELAY
IN THE ENCLOSED POSTAGE PREPAID ENVELOPE. THE PROXY IS REVOCABLE AND WILL NOT
AFFECT A STOCKHOLDER'S RIGHT TO VOTE IN PERSON IN THE EVENT THE STOCKHOLDER
ATTENDS THE MEETING.
<PAGE>
PRELIMINARY
[LOGO OF US FACILITIES CORPORATION]
-------------------------
PROXY STATEMENT
-------------------------
1997 ANNUAL MEETING OF STOCKHOLDERS
MAY 14, 1997
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of US Facilities Corporation, a Delaware
corporation (the "Company"), for use at the 1997 Annual Meeting of
Stockholders of the Company (the "Annual Meeting") to be held at the offices
of the Company, 650 Town Center Drive, 15th Floor, Costa Mesa, California, on
Wednesday, May 14, 1997, at 9:00 a.m., Local Time, and any postponements or
adjournments thereof. Accompanying this Proxy Statement is a proxy card
(sometimes referred to herein as a "proxy") which may be used to indicate a
stockholder's vote as to each of the proposals described in this Proxy
Statement.
The Company intends to mail this Proxy Statement and the accompanying proxy
card on March 28, 1997 to stockholders entitled to notice of and to vote at
the Annual Meeting.
GENERAL INFORMATION
All proxies which are properly completed, signed and returned to the Company
prior to the Annual Meeting, and which have not been revoked, will be voted. A
stockholder may revoke his or her proxy at any time before it is voted by
filing with the Secretary of the Company at its principal executive offices
either a written notice of revocation or a duly executed proxy bearing a later
date, or by appearing in person at the Annual Meeting and voting his or her
shares in person. The submission of a proxy to the Company in connection with
the 1997 Annual Meeting, if properly executed, automatically revokes all prior
proxies which may have previously been submitted to the Company for this
Annual Meeting.
The close of business on March 21, 1997 has been fixed as the record date
for the determination of stockholders entitled to notice of and to vote at the
Annual Meeting and any postponements or adjournments thereof. As of the record
date, the Company had outstanding shares of its $0.01 par value common
stock, the only outstanding voting securities of the Company. Pursuant to the
Company's Bylaws, the holders of one-third ( 1/3rd) of all shares of stock
outstanding and entitled to vote at a meeting of stockholders shall constitute
a quorum. For each share owned on the record date, a stockholder is entitled
to one vote on all matters to be considered at the Annual Meeting. The
Company's
<PAGE>
Restated Certificate of Incorporation does not provide for cumulative voting
for the election of directors.
Abstentions and broker non-votes are counted for purposes of determining the
presence or absence of a quorum for the transaction of business. As described
on the proxy card, where no instructions have been given by a stockholder on
the Company's proxy card with respect to a matter, the shares will be voted
FOR the matter. However, shares held in "street name" will not be voted with
respect to certain matters when no instructions have been given. While
abstentions will be counted as abstentions for the tabulation of the votes
cast on proposals presented to stockholders, broker non-votes will be
disregarded in the tabulations and will have no effect on the outcome of the
vote on any proposal.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
NOMINEES
The Company's Restated Certificate of Incorporation and Bylaws divide the
Board of Directors into three classes and permit the Board of Directors to
determine its size. The number of directors established by the Board of
Directors is currently seven, with two directors elected at two annual
meetings of stockholders, and three directors elected at a third annual
meeting. Each of the directors of the Company serves for a term ending on the
date of the third annual meeting of stockholders following his or her election
(and thereafter until a successor has been duly elected and qualified or until
the director's earlier death, resignation or removal). The dates of each
director's term of office are as set forth below.
The two directors who are to be elected at this 1997 Annual Meeting will
hold office until the 2000 Annual Meeting of Stockholders of the Company. Both
nominees for election have advised the Company that they are able and willing
to serve as directors. If either nominee refuses or is unable to serve, the
proxy holders will vote for another person nominated by the Board of
Directors.
DIRECTORS WILL BE ELECTED BY A PLURALITY OF THE VOTES CAST IN PERSON OR BY
PROXY AT THE ANNUAL MEETING. THE TWO CANDIDATES RECEIVING THE HIGHEST NUMBER
OF VOTES WILL BE ELECTED. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
COMPANY'S TWO NOMINEES. ALL PROXIES RECEIVED BY THE COMPANY WILL BE VOTED IN
FAVOR OF THE COMPANY'S NOMINEES, UNLESS AN INSTRUCTION TO THE CONTRARY IS
INDICATED ON A PROPERLY EXECUTED PROXY CARD.
2
<PAGE>
Certain information for each person nominated for election as a director,
and for all continuing directors of the Company, is set forth below.
COMPANY NOMINEES FOR ELECTION AS DIRECTORS
WHOSE TERMS WILL EXPIRE AT THE 2000 ANNUAL MEETING OF STOCKHOLDERS
JOHN F. KOOKEN, age 64, has served as a director of the Company since 1986.
In 1987 he was appointed Vice Chairman and Chief Financial Officer of Security
Pacific Corporation, the parent of Security Pacific National Bank, Los
Angeles, California, and retired in July 1992. Since June 1992 Mr. Kooken has
served as a director of Glendale Federal Savings Bank, and since February 1994
he has served as a director of Pacific Gulf Properties, Inc., a real estate
investment trust.
L. STEVEN MEDGYESY, M.D., age 62, has served as a director of the Company
since 1983 and is a director of its USF RE INSURANCE COMPANY subsidiary. Until
March 31, 1996, he served as Medical Director of the Company's USBenefits
Insurance Services, Inc. subsidiary. From 1963 until his retirement in 1993 as
the Director of Laboratories at Lincoln West Medical Center, Chicago, he
practiced in the field of pathology.
DIRECTORS CONTINUING IN OFFICE
WHOSE TERMS EXPIRE AT THE 1998 ANNUAL MEETING OF STOCKHOLDERS
DAVID L. CARGILE, age 51, joined the Company as Senior Vice President in
December 1991, and was appointed as its President, Chief Operating Officer and
a director in August 1994, as its Chief Executive Officer in March 1995 and as
Chairman of the Board in April 1995. Prior to joining the Company he was
employed by Reinsurance Facilities Corporation for seventeen years and had
served since 1984 as its President and Chief Executive Officer. He has also
served on the Boards of Directors of a number of companies engaged in the
reinsurance business.
CHARLES L. SCHULTZ, age 69, was elected a director of the Company in May
1995. From 1985 until his retirement in 1993, Mr. Schultz held the position of
Senior Vice President, Finance and Chief Financial Officer of Farmers Group,
Inc., the management and holding company for the Farmers Insurance Group.
Since November 1995 Mr. Schultz has served as a director of Amwest Insurance
Group, a Southern California-based insurance holding company.
HOWARD S. SINGER, age 51, has served as a director of the Company since its
founding, and serves as a director of various of its subsidiaries. From 1983
through 1991 he served in the capacity of financial consultant to the Company.
Since December 1, 1991 Mr. Singer has been employed by the Company as its
Executive Vice President-Corporate Finance. Mr. Singer had been a securities
broker-dealer in Chicago, Illinois, since the early 1970s.
3
<PAGE>
DIRECTORS CONTINUING IN OFFICE
WHOSE TERMS EXPIRE AT THE 1999 ANNUAL MEETING OF STOCKHOLDERS
BERNARD H. ROSS, age 70, has served as a director of the Company since 1986.
He currently serves as Executive Vice President of Request, Inc., a developer
of medical software, and prior to that was Chairman and Chief Executive
Officer of Fitness Horizons, Inc., a developer of fitness centers for
children. In addition to being a partner and consultant, he was National
Director of Healthcare Services of Touche, Ross & Company until 1989. He has
also served on various professional and governmental advisory boards related
to healthcare.
KENNETH C. TYLER, age 78, served as a director of the Company from 1986 to
September 1989, at which time he resigned from the Company's Board of
Directors due to health reasons. The vacancy created by his resignation was
not filled, and following his recovery Mr. Tyler was re-elected to the Board
of Directors in December 1989. Prior thereto Mr. Tyler had served for almost
40 years in a variety of managerial and executive capacities with the Farmers
Group, Inc., Los Angeles, California, and held the position of Vice Chairman
of the Board and General Counsel for Farmers Group, Inc., the management and
holding company for the Farmers Insurance Group, from 1983 until his
retirement in 1985.
1996 COMMITTEES OF THE BOARD: FUNCTION; MEMBERSHIP; ATTENDANCE
The Board of Directors of the Company has five standing Committees:
The EXECUTIVE COMMITTEE has all of the powers and authority in the
management of the business and affairs of the Company to take action on behalf
of the Board of Directors as may be necessary between regular meetings of the
Board when a special meeting or a telephonic meeting of the full Board is not
possible or practicable.
The functions of the AUDIT COMMITTEE include: (i) meeting with the Company's
independent auditors to review the scope and results of the independent
auditors' activities, and to review the results of their audit when it is
completed; (ii) reviewing the adequacy of internal financial and accounting
controls and the results of the independent auditors' examinations thereof;
(iii) recommending to the Board of Directors the appointment of the Company's
independent auditors after reviewing and approving in advance for each year
the audit and nonaudit services and fees of such auditors; and (iv) reporting
its findings on any of the above to the Board of Directors, as appropriate.
All members of the Audit Committee are nonemployee directors.
The functions of the INVESTMENT COMMITTEE are: (i) to establish goals for
the Company's investment program and policies to achieve such goals; (ii) to
analyze current investments and their return, and suggest any changes deemed
necessary; and (iii) to select investment advisors, determine the scope of
their duties and responsibilities, approve their fees and to monitor and
evaluate their performance.
4
<PAGE>
The functions of the COMPENSATION COMMITTEE are: (i) to establish criteria
and adopt compensation policies applicable to the Company's Chief Executive
Officer and executive officers at the level of Senior Vice President and
above; (ii) to recommend to the Board of Directors salary, bonus and other
forms of direct and indirect compensation provided to the Chief Executive
Officer; (iii) to evaluate and make recommendations to the Board of Directors
regarding compensation policies and programs applicable to all Company
employees; (iv) to administer the Company's stock option and other short-term
and long-term incentive plans; and (v) to prepare the Compensation Committee
Reports in proxy statements, as well as to review the Company's executive
compensation disclosures in proxy statements and other related documents. All
members of the Compensation Committee are nonemployee directors.
The primary functions of the NOMINATING COMMITTEE are to review and
investigate the qualification of candidates proposed by management or by
others (including candidates proposed by stockholders or members of the Board)
for election by stockholders, or election by the Board itself, to fill a
vacancy on the Company's Board of Directors. The Nominating Committee will
consider persons for Board membership recommended by stockholders.
Recommendations supported by a description of such persons' background and
experience, and written consents of such persons to serve on the Board, if
elected, should be addressed to the Nominating Committee, in care of the
Secretary, US Facilities Corporation, 650 Town Center Drive, Suite 1600, Costa
Mesa, California. This information must be received by February 11, 1998, for
such persons to be considered for nomination by the Board for election at the
1998 Annual Meeting of Stockholders.
There were six meetings of the Board and the Audit Committee during 1996.
The Executive Committee acted twice during the year by written consent. Other
Committees met as follows: Investment--four times; Compensation--five times;
and Nominating--once. All current directors attended or participated by
telephone in at least 75% of the meetings of the Board and the Committees of
which they were members during 1996. Committee members are appointed each year
at the Board of Directors meeting immediately following the annual meeting of
stockholders. The table below identifies the present members of each Committee
who were appointed on May 22, 1996.
<TABLE>
<CAPTION>
COMMITTEE MEMBERS
--------- -------
<S> <C>
Executive..... Messrs. Cargile (Chair), Kooken and Singer
Audit......... Messrs. Schultz (Chair), Kooken, Ross and Tyler
Investment.... Messrs. Kooken (Chair), Cargile, Medgyesy, Schultz and Singer
Compensation.. Messrs. Ross (Chair), Medgyesy, Schultz and Tyler
Nominating.... Messrs. Singer (Chair), Cargile, Medgyesy, Ross and Tyler
</TABLE>
COMPENSATION OF DIRECTORS
Directors who are also full-time employees of the Company receive no
additional compensation for their services as directors. From October 1986 to
March 26, 1996, all nonemployee directors were compensated based on an annual
retainer of $5,000 and a fee
5
<PAGE>
of $2,500 for each meeting of the Board attended, and $1,000 for each
telephonic Board meeting in which they participated. Such directors also
received a fee of $1,000 for each meeting of a committee of the Board which
they attended or participated in ($1,500 for committee Chairmen). Commencing
on March 27, 1996, nonemployee directors receive an annual retainer of $12,500
and a fee of $3,000 for each meeting of the Board attended. No change was made
in the compensation to be received for telephonic Board meetings or for
meetings of Committees of the Board. Directors are reimbursed for reasonable
out-of-pocket expenses incurred by them in connection with their attendance at
meetings of the Board of Directors and committees thereof.
The Company's five nonemployee directors are also entitled to receive
compensation under the Company's 1991 Directors Stock Option Plan, as amended.
Until this Plan was amended at the 1996 Annual Meeting of Stockholders, each
nonemployee director was automatically granted an award on the first business
day of each year of options covering 2,500 shares of common stock. Due to an
inadequate number of shares remaining in the Plan, no option grants were made
to nonemployee directors in January of 1995. The 1996 amendments increased the
number of shares available for option grants and confirmed an award of 3,000
shares to those nonemployee directors serving as of July 1995, subject to
stockholder approval. The 1996 amendments also provided that the nonemployee
directors be granted options of 3,000 shares for 1996, and that on the third
business day following each annual meeting commencing in 1997 and thereafter,
nonemployee directors automatically would be granted an award of options
covering between 3,000 to 4,500 shares of common stock, with the number of
options actually to be granted within that range to be determined in
accordance with a formula related to the Company's return on equity for the
prior year. Based on the Company's return on equity in 1996, the nonemployee
directors will receive an option grant for 4,000 shares after the 1997 Annual
Meeting.
Those directors who are also employees of the Company are participants and
may be entitled to additional compensation in their capacity as employees
under the Company's short-term and long-term incentive compensation plans, as
noted elsewhere in this Proxy Statement.
6
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 21, 1997, the number of shares
of the Company's common stock deemed to be beneficially owned (including
shares which can be acquired within 60 days) by: (i) each director of the
Company; (ii) persons who have served during the last fiscal year as its Chief
Executive Officer; (iii) the Company's four other most highly compensated
officers; and (iv) all directors and all executive officers of the Company as
a group, and the percentage of such shares to the total shares outstanding.
The Chief Executive Officer plus the four other most highly compensated
officers are sometimes herein referred to collectively as the "Named
Executives." Except as otherwise noted, the indicated owners have sole voting
and investment power with respect to the shares specified.
<TABLE>
<CAPTION>
NUMBER AND RIGHT TO ACQUIRE
NATURE OF SHARES BENEFICIAL OWNERSHIP PERCENT OF CLASS
NAME AND ADDRESS BENEFICIALLY OWNED WITHIN 60 DAYS(/1/) BENEFICIALLY OWNED
- ---------------- ------------------ -------------------- ------------------
<S> <C> <C> <C>
David L. Cargile 3,000 166,500 2.7%
650 Town Center Drive
Costa Mesa, CA 92626
John T. Grush 15,500 36,500 *
650 Town Center Drive
Costa Mesa, CA 92626
Craig J. Kelbel 30 3,500 *
650 Town Center Drive
Costa Mesa, CA 92626
John F. Kooken 10,200(/2/) 6,500 *
1170 Lorain Road
San Marino, CA 91108
L. Steven Medgyesy, M.D. 320,201(/3/) 6,500 5.2%
6200 North Hiawatha
Chicago, IL 60646
Bernard H. Ross 3,000 4,000 *
1853 Mission Hills Lane
Northbrook, IL 60062
Charles L. Schultz -0- 1,500 *
325 South Rimpau
Boulevard
Los Angeles, CA 90020
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
NUMBER AND RIGHT TO ACQUIRE
NATURE OF SHARES BENEFICIAL OWNERSHIP PERCENT OF CLASS
NAME AND ADDRESS BENEFICIALLY OWNED WITHIN 60 DAYS(/1/) BENEFICIALLY OWNED
- ---------------- ------------------ -------------------- ------------------
<S> <C> <C> <C>
Howard S. Singer 258,055(/4/) 29,750 4.6%
6200 North Hiawatha
Chicago, IL 60646
Kenneth C. Tyler 11,500 1,500 *
17244 Exeter Place
Northridge, CA 91325
Jose A. Velasco 8,000 24,750 *
650 Town Center Drive
Costa Mesa, CA 92626
All Directors and Execu- 539,645 294,750 13.3%
tive Officers of the
Company (11 persons)
as a group
</TABLE>
- --------
* Indicates ownership of less than 1% of the Company's outstanding stock.
(1) This column reflects the number of shares that could be purchased by
exercise of options under the Company's stock option plans within 60 days
of March 21, 1997.
(2) Includes 10,000 shares held by Mr. Kooken and 200 shares held by Mr.
Kooken's wife through their separate individual retirement accounts.
(3) Includes 158,800 shares owned directly by Dr. Medgyesy; 86,311 shares held
by Dr. Medgyesy in his capacity as trustee of the Singer Family Trust,
which trust is for the benefit of Howard S. Singer and members of his
family; 8,060 shares held by Dr. Medgyesy's wife; 67,030 shares held in
various trusts for the benefit of Dr. Medgyesy and members of his family
(including the 33,530 shares held in trust by Mr. Singer, as noted below
in footnote 4). Dr. Medgyesy disclaims beneficial ownership in 94,371 of
said shares.
(4) Includes 120,000 shares held directly by Mr. Singer; 86,311 shares held by
Dr. Medgyesy in his capacity as trustee of the Singer Family Trust, which
trust is for the benefit of Mr. Singer and members of his family; 8,414
shares held by Mr. Singer's wife as trustee for the benefit of their
descendants; 33,530 shares held by Mr. Singer as trustee of certain trusts
for members of the Medgyesy family; 7,000 shares held by a partnership of
which Mr. Singer is the general partner; and 2,800 shares held by
Mr. Singer's individual retirement account. Mr. Singer disclaims
beneficial ownership in 48,944 of said shares.
8
<PAGE>
SECURITY OWNERSHIP OF CERTAIN OTHER STOCKHOLDERS
The following table sets forth information regarding the beneficial
ownership of each person, other than those affiliated with the management of
the Company, known to the Company to be the beneficial owner of more than 5%
of its outstanding common stock. The Company believes that except with regard
to the Fertitta holdings, the Company's stock in the name of the firms listed
below is held by investment advisors or affiliates on behalf of their
respective clients, and that none of such clients is the beneficial owner of
more than 5% of the Company's stock.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
BENEFICIAL OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP CLASS
------------------------------------ ---------- -------
<S> <C> <C>
FMR Corp. 545,300(/1/) 9.1%
82 Devonshire Street
Boston, Massachusetts 02109
Lorenzo J. Fertitta 516,223(/2/) 8.7%
3360 W. Sahara Avenue, Suite 200
Las Vegas, Nevada 89102
Dimensional Fund Advisors Inc. 347,600(/3/) 5.8%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
Kramer Spellman L.P. 417,500(/4/) 7.0%
2050 Center Avenue, Suite 300
Fort Lee, New Jersey 07024
Dorchester Partners, L.P. 385,800(/5/) 6.5%
Dorchester Advisors, Inc.
Michael J. Halpern
1999 Avenue of the Stars, Suite 1950
Los Angeles, California 90067
</TABLE>
- --------
(1) As disclosed in a Schedule 13G, filed with the SEC on February 14, 1997
and furnished to the Company. The Schedule 13G indicates that FMR Corp.
has sole voting power with respect to 409,200 shares and sole dispositive
power with respect to 545,300 shares.
(2) As disclosed in a Schedule 13D dated May 16, 1996, filed with the SEC and
furnished to the Company. The Schedule 13D states that Lorenzo Fertitta
has shared voting and dispositive powers with respect to 516,223 shares.
(3) As disclosed in a Schedule 13G dated February 13, 1997, filed with the SEC
and furnished to the Company. Dimensional Fund Advisors Inc.
("Dimensional"), a registered investment advisor, is deemed to have
beneficial ownership of 347,600 shares. Dimensional has sole dispositive
power with respect to such 347,600 shares, and sole
9
<PAGE>
voting power with respect to 242,900 shares. Persons who are officers of
Dimensional also serve as officers of The Investment Dimensions Group Inc.
(the "Fund") and The DFA Investment Trust Company (the "Trust"), each an
open-end management investment company. In their capacities as officers of
the Fund and the Trust, these persons vote 54,100 additional shares which
are owned by the Fund and 50,600 shares which are owned by the Trust.
(4) As disclosed in Amendment No. 1 to a Schedule 13D dated May 23, 1996,
filed with the SEC and furnished to the Company. The amended Schedule 13D
indicates that Oren J. Kramer and Jay Spellman, together with the
partnership, Kramer Spellman L.P., share voting and dispositive power with
respect to the 417,500 shares.
(5) As disclosed in a Schedule 13D filed with the SEC on January 13, 1997 and
furnished to the Company. The Schedule 13D states that Dorchester
Partners, L.P. ("Partners"), a private investment partnership, and
Dorchester Advisors, Inc. ("Advisors") have shared voting power and
dispositive power with respect to 385,800 shares, and that Michael J.
Halpern ("Halpern") has sole voting power and sole dispositive power with
respect to 39,600 shares. However, while Partners and Advisors as well as
Halpern are identified as reporting persons, through Halpern's position as
the sole stockholder, officer and director of Advisors which is the
general partner of Partners, the Schedule indicates that Halpern controls
the investment and voting decisions.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file with the
Securities and Exchange Commission reports of ownership and changes in
ownership of common stock and other equity securities of the Company.
Officers, directors and greater than 10% shareholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on review of the copies of such reports furnished to the
Company and written representations that no other reports were required, the
Company believes that, during the 1996 fiscal year, all filing requirements
applicable to its officers and directors were complied with, except for a sale
of shares held by US Pathologists Employee Pension Plan of which L. Steven
Medgyesy, M.D., a director of the Company, was a participant and a trustee.
This sale was timely reported by the trust, but inadvertently not reported by
Dr. Medgyesy at that time. Subsequently Dr. Medgyesy filed a Form 4 reporting
this sale.
10
<PAGE>
US FACILITIES CORPORATION
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
REPORT ON EXECUTIVE COMPENSATION
GENERAL
The Compensation Program of US Facilities Corporation for the 1996 fiscal
year consisted of three components: annual cash salaries, discretionary
bonuses under its Incentive Compensation Program (Cash Bonuses), and
discretionary long-term incentives (Stock Option Awards).
Base salaries of all employees, except for the Chief Executive Officer, are
generally set in accordance with the Company's Salary Administration Program.
The Program provides a system for the evaluation of each employee to determine
the employee's salary level. This determination is based upon a variety of
factors that include job function, expertise, experience and the competitive
placement of each position relative to other companies. Management of the
Company establishes the base salaries for those employees below the level of
the senior officers.
The Incentive Program provides for the payment of cash bonuses. The amount
which an eligible participant can receive depends on the component of the
Incentive Program in which each person participates, the extent to which the
Company meets a predetermined earnings target for the respective year and the
participant's job performance for that year. Job performance is based upon an
individual review by a supervisor. Payments under the Incentive Program to
eligible participants below the level of senior officers are made at the
discretion of the Chief Executive Officer. Only the aggregate amount of these
payments is subject to the approval of the Compensation Committee. The
Compensation Committee specifically approves the payments under the Incentive
Program made to each senior officer.
The Chief Executive Officer recommends to the Compensation Committee awards
under the Company's employee stock option plans to be granted to eligible
employees. The Compensation Committee does a thorough review of such
recommendations. The salary, bonus payments and stock option awards for the
Chief Executive Officer are recommended by the Compensation Committee to the
full Board. The Board may adopt, modify or reject any such recommendations.
Directors who are also employees do not participate in the discussions or vote
on matters affecting any aspect of their own compensation or the compensation
of the Chief Executive Officer.
COMPENSATION POLICIES FOR EXECUTIVES
The goals of the Company's Compensation Program have been to further the
Company's business objectives, and at the same time to attract, retain and
reward those executives who contribute to its success. During the past few
years the Compensation Committee adopted an approach for compensating
executive officers which seeks to more directly link executive compensation
with achievement of profitability goals and the
11
<PAGE>
strategic goal of enhancing stockholder value on a short-term and long-term
basis. Under this approach, compensation continues to be predicated on the use
of base pay, cash bonuses and stock options. The objective of this approach is
to align the interests of senior executives with those of stockholders by
tying the value of a portion of the senior executives' compensation to the
Company's performance.
BASE SALARIES. Historically, the Company's approach toward base pay has been
to provide executive officers with salaries which are in the higher quartile
of the range of competitive salaries paid to executives of companies in the
same sector of the insurance industry. The initial purpose of this approach
was to attract highly skilled and experienced individuals to a company that
had only recently become publicly traded and which was in the process of
expanding into new lines of business. As the Company matured, it has continued
to seek information regarding executive salary levels for comparable companies
through various sources, including salary surveys and analyses presented by an
independent compensation consultant engaged by the Company.
The Committee is now placing greater emphasis on incentive based
compensation for the Company's senior executive officers by linking their
performance to their cash bonus awards and their stock option grants.
ANNUAL BONUSES. Awards under the Incentive Program in effect for 1996 were
related to achievement of net income targets or goals. The Compensation
Committee has the ability under the Incentive Program to evaluate other
factors relating to the Company's and Management's performance when
considering whether to award bonuses and, if such awards are to be made, the
amount of bonuses to be paid to each executive officer. For 1996 the Company
met its net earnings target.
Accordingly, bonuses were paid under the Incentive Program to the Company's
executive officers ranging from 20% to 67% of their annual salary. The amount
which each executive officer received was based on the target amount for each
executive, which target was generally based on position held and level of
responsibility. However, the Committee modified the target amount in each case
after receipt of recommendations from the Chief Executive Officer, who
evaluated each executive officer's level of performance and accomplishment
during the 1996 year.
Among the factors considered were the executive's effectiveness as a manager
of personnel with respect to the attainment of their individual performance
goals, the results of the operations under the executive's direction as
compared to the Company's business plan, the extent and quality of the
executive's participation in the Company's long-range strategic planning and
other contributions to the Company's success during 1996.
NO STOCK OPTIONS GRANTED. During the 1996 fiscal year the Board decided that
the Company's entire Compensation Program should be reviewed by independent,
experienced compensation specialists and a consulting firm was engaged for
that purpose. After meetings with the Compensation Committee and an extensive
examination of the Company and its needs, the consultant presented various
proposals which were reviewed and
12
<PAGE>
analyzed by the Committee, followed by discussion with the Board. In broad
terms, the basic assignment of the consultant was to achieve better
integration of the Company's current compensation arrangements, and to make
the non-salary awards more performance oriented.
As a result of the consultant's recommendations, cash awards under a Long-
Term Incentive-Performance Unit Plan ("LTI-PUP"), and a deferral of the
receipt of such awards through a Non-Qualified Deferred Compensation Plan,
were adopted by the Board for the Company's senior executive officers to be
effective as of January 1, 1997. Since Internal Revenue Service regulations
require that the adoption of the LTI-PUP be approved by the stockholders, it
is being presented for approval at this 1997 Annual Meeting and is described
in this Proxy Statement under the heading PROPOSAL 4.
The Non-Qualified Deferred Compensation Plan basically provides for
mandatory deferral and installment vesting by senior executives of the awards
granted under the LTI-PUP and does not require stockholder approval. Both of
these Plans will be implemented commencing in fiscal year 1997.
Because these new Plans as well as other concepts and their respective
ramifications were being intensely reviewed throughout the 1996 fiscal year,
the Committee did not believe that it was appropriate to grant stock options
to senior executives until the manner in which the proposed new Plans would
affect the compensation awards of these executives had been fully clarified.
In years prior to 1996, stock option grants were determined and awarded before
the end of each fiscal year. To better align these awards with a completed
fiscal year that furnished a more accurate analysis of performance, it was
decided to make stock option awards subsequent to the end of each fiscal year.
Therefore, no awards were made during the year 1996. However, because the
Committee believes that the interests of senior executives should be aligned
with those of stockholders, it is fully anticipated that stock options will be
granted to senior executives during 1997 based on the retrospective analysis
of achievements and contributions by each senior executive during 1996. In
connection with these grants, the Committee will consider, as it has in past
years, various factors primarily related to levels of responsibility, the
performance of each officer in his or her area of responsibility, and his or
her contribution to the success of the overall business results. It is the
belief of the Committee that stock options remain a useful tool for long-term
incentives for its senior executives, and the continued use of stock options
as supplemented by the LTI-PUP and the deferral arrangements is planned.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
The employment of David L. Cargile, Chairman, President and Chief Executive
Officer, through October 1996 was pursuant to an August 1994 employment
agreement. The agreement provided for an annual base salary of $350,000 that
could be increased and supplemented at the discretion of the Board of
Directors. Under that contractual arrangement, in March 1996 Mr. Cargile's
annual salary was increased to $420,000, and in January 1997 the Board granted
to him a bonus of $280,000 for his performance during 1996.
13
<PAGE>
Mr. Cargile's contributions in revitalizing the Company since he became
Chief Executive Officer in 1995 continued throughout 1996. Under his
leadership, the Company experienced significant growth and improvement in its
business, the control of operating expenses continued to improve, productivity
increased and the quality of its operations has been enhanced. This all
contributed to increases in revenues and profitability.
Under Mr. Cargile's guidance and direction, in 1996 the Company attained the
listing of its stock on the New York Stock Exchange and the A.M. Best &
Company rating of its insurance operations rose from "A-" to "A." In every
area, the Company, its employees and its stockholders have experienced
significant benefits from Mr. Cargile's stewardship.
When Mr. Cargile's employment agreement expired on October 31, 1996, the
Company entered into a new four-year agreement with him which basically
follows the terms of the prior employment contract. (See "EMPLOYMENT
AGREEMENTS WITH EXECUTIVES" elsewhere in this Proxy Statement.) As with other
senior executives, no stock options were granted to Mr. Cargile during 1996.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The 1993 Omnibus Budget Reconciliation Act ("OBRA") provides that the income
tax deductions of publicly traded companies in tax years beginning on or after
January 1, 1994 may be limited to the extent total compensation (including
base salary, annual bonus, stock option exercises and nonqualified benefits)
for certain executive officers exceeds $1,000,000 in any one year. Under OBRA,
the deduction limit does not apply to payments which meet certain requirements
to qualify as "performance-based" compensation.
The Compensation Committee intends to consider various alternatives to
preserve the deductibility of compensation payments to the extent it is
reasonably practicable and consistent with its other objectives. In this
connection, the Company and the Board are currently seeking stockholder
approval of the Company's 1997 Long-Term Incentive-Performance Unit Plan, and
intend to operate the Plan within the requirements of Section 162(m) of the
Internal Revenue Code to preserve the corporate deductibility of executive
compensation. The Company may, however, pay compensation which is not
deductible in limited circumstances when sound management of the Company so
requires. The Committee believes that if any loss of deductibility occurs it
would not be materially adverse to the Company. For fiscal year 1996, no
executive officer's taxable compensation exceeded the $1,000,000 limit on
deductibility.
COMPENSATION COMMITTEE
Bernard H. Ross, Chairman
L. Steven Medgyesy, M.D.Charles L. Schultz
Kenneth C. Tyler
THE ABOVE REPORT OF THE COMPENSATION COMMITTEE WILL NOT BE DEEMED TO BE
INCORPORATED BY REFERENCE INTO ANY FILING BY THE COMPANY UNDER THE SECURITIES
ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT THAT
THE COMPANY SPECIFICALLY INCORPORATES THE SAME BY REFERENCE.
14
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The members of the Compensation Committee from January 1, 1996 through
May 22, 1996 were Bernard H. Ross (Chair), John A. Allison, Dr. L.
Steven Medgyesy, Kenneth C. Tyler and Charles L. Schultz. From May 22, 1996 to
the present, the members of the Compensation Committee were Bernard H. Ross
(Chair), Dr. L. Steven Medgyesy, Charles L. Schultz and Kenneth C. Tyler. All
of the directors who served on the Compensation Committee during 1996 were
nonemployee directors.
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE*
The following table provides information concerning all compensation paid or
credited by the Company to the Named Executives for services rendered to the
Company and its subsidiaries in all capacities during the fiscal years ended
December 31, 1996, 1995 and 1994.
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E) (G) (I)
-------------------------------------------------------
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------------------------
NUMBER OF
SECURITIES
UNDERLYING
NAME AND PRINCIPAL FISCAL OTHER ANNUAL OPTIONS ALL OTHER
POSITION YEAR SALARY BONUS(/1/) COMPENSATION GRANTED COMPENSATION(/2/)
------------------ ------ ------ ---------- ------------ -------- -----------------
<S> <C> <C> <C> <C> <C> <C>
David L. Cargile** 1996 $408,435 $280,000 (/3/) -0- $187,400(/4/)
President and Chief 1995 350,100 350,000 (/3/) 175,000 99,178(/4/)
Executive Officer 1994 274,471 -0- (/3/) -0- 22,461(/4/)
- --------------------------------------------------------------------------------------------------
Howard S. Singer** 1996 $225,914 $ 56,818 (/3/) -0- $ 9,000
Executive Vice
President-- 1995 216,876 75,871 (/3/) 3,500 9,000
Corporate Finance 1994 209,537 -0- (/3/) -0- 17,081
and Investor Relations
- -------------------------------------------------------------------------------------------------
John T. Grush 1996 $291,646 $ 58,309 (/3/) -0- $ 20,213
Senior Vice President
and 1995 291,693 58,118 (/3/) 3,000 20,213
President of USF RE 1994 284,870 -0- (/3/) -0- 19,993
- --------------------------------------------------------------------------------------------------
Craig J. Kelbel** 1996 $229,793 $ 69,459 (/3/) -0- $ 12,562
Senior Vice President
and 1995 181,516 70,000 (/3/) 7,000 12,534
President of USBenefits 1994 165,107 45,000 (/3/) -0- 12,333
Insurance Services,
Inc.
- --------------------------------------------------------------------------------------------------
Jose A. Velasco 1996 $175,380 $ 53,165 (/3/) -0- $ 15,816
Senior Vice President, 1995 166,658 58,295 (/3/) 3,500 15,370
Secretary and General 1994 155,466 37,500 (/3/) -0- 12,987
Counsel
</TABLE>
15
<PAGE>
* The Company has excluded from the SUMMARY COMPENSATION TABLE columns
relating to awards of Restricted Stock (column f) and Long-Term Incentive
Plan Payouts (column h) because no such awards or compensation were earned
by or paid to the Named Executives in the fiscal years covered by the
table.
** The compensation paid to Messrs. Cargile and Singer during 1996 and to Mr.
Kelbel after November 1, 1996 was pursuant to employment agreements
described elsewhere in this Proxy Statement. See "EMPLOYMENT AGREEMENTS
WITH NAMED EXECUTIVES" elsewhere in this Proxy Statement for a description
of such agreements.
(1) Cash bonuses paid pursuant to the Company's Incentive Compensation Program
(the "Incentive Program") during the first quarter of the subsequent year
for services performed in the year indicated in the table. The gross
amounts paid to all participants under the Incentive Program applicable to
fiscal years 1996, 1995 and 1994 were $1,240,000, $1,534,000 and $502,000,
respectively. See also "COMPENSATION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION" elsewhere in this Proxy Statement.
(2) Each of the Named Executives was credited with $9,000 in each year
presented in the table as the Company's matching contribution to such
executive's participation in the Company's 401(k) Employees Savings Plan,
except that Mr. Velasco received $6,978 in 1994. The balance of the amount
shown in each year, if any, for these executives, except Mr. Cargile, was
an amount paid for accrued but unused vacation.
(3) The Company also provides its executive officers health and group term-
life insurance and other benefits generally available to all salaried
employees, and certain additional noncash benefits, including club
memberships and the use and maintenance of automobiles, which benefits in
no individual case have an aggregate incremental cost to the Company which
exceeds the lesser of $50,000 or 10% of that individual's total salary and
bonus as reported in the "SUMMARY COMPENSATION TABLE." See also
"EMPLOYMENT AGREEMENTS WITH NAMED EXECUTIVES" elsewhere in this Proxy
Statement for compensation payments to Mr. Cargile, Mr. Singer and Mr.
Kelbel (or their named beneficiaries) in the event of their disability or
death during the term of their employment agreements.
(4) As a result of the loan forgiveness arrangement and the additional income
taxes incurred as a part of Mr. Cargile's required relocation in 1995 from
Atlanta, Georgia, to Southern California (see "EMPLOYMENT AGREEMENTS WITH
NAMED EXECUTIVES" elsewhere in this Proxy Statement), Mr. Cargile received
additional compensation of $178,400 attributable to 1996 and $90,178
attributable to 1995. Mr. Cargile also was paid $13,461 in 1994 for
accrued but unused vacation.
OPTION GRANTS IN LAST FISCAL YEAR
No option grants were awarded to the Named Executives during the fiscal year
ended December 31, 1996.
16
<PAGE>
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
The following table provides information with respect to options to purchase
the Company's common stock granted to the Named Executives in prior years
under the Company's 1988 Employee Stock Plan and its 1991 Employee Stock
Option Plan, the number of shares acquired by the Named Executives upon
exercise of options during the 1996 fiscal year and the number of unexercised
options held by each of them at December 31, 1996 under such Plans.
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-
NUMBER OF UNDERLYING UNEXERCISED THE-MONEY OPTIONS HELD AT
SHARES OPTIONS HELD AT 12/31/96 12/31/96(/1/)
ACQUIRED VALUE ------------------------ -------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ---------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David L. Cargile -0- -0- 116,500 87,500 $670,831 $448,187
- -----------------------------------------------------------------------------------------------
Howard S. Singer -0- -0- 29,750 1,750 $221,250 -0-
- -----------------------------------------------------------------------------------------------
John T. Grush 20,000 $103,649 36,500 1,500 $281,875 -0-
- -----------------------------------------------------------------------------------------------
Craig J. Kelbel -0- -0- 3,500 3,500 -0- -0-
- -----------------------------------------------------------------------------------------------
Jose A. Velasco 10,000 $ 72,450 25,750 1,750 $171,875 -0-
</TABLE>
(1) Based on the closing price of the common stock of $19.625 at December 31,
1996 on the New York Stock Exchange, as reported by The Wall Street
Journal, minus the exercise price of the option.
17
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG
US FACILITIES CORPORATION, THE NASDAQ INSURANCE STOCKS INDEX AND
THE NASDAQ STOCK MARKET (U.S.) INDEX(/1/)
DECEMBER 31, 1991 TO DECEMBER 31, 1996
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period U.S. FACILITIES NASDAQ NASDAQ
(Fiscal Year Covered) CORPORATION(//2//) INSURANCE(//2//) (U.S. INDEX)(//2//)
- --------------------- ------------------ ---------------- -------------------
<S> <C> <C> <C>
Measurement Pt-12/31/91 $100 $100 $100
FYE 6/30/92 $ 68.91 $105.68 $ 96.09
FYE 12/31/92 $ 67.23 $135.34 $116.38
FYE 6/30/93 $ 61.34 $140.92 $120.84
FYE 12/31/93 $ 78.15 $144.76 $133.59
FYE 6/30/94 $ 86.55 $137.99 $121.99
FYE 12/31/94 $ 67.23 $136.26 $130.59
FYE 6/30/95 $109.92 $158.47 $162.84
FYE 12/31/95 $145.04 $193.56 $184.67
FYE 6/30/96 $117.61 $196.66 $209.08
FYE 12/31/96 $133.55 $220.57 $227.16
</TABLE>
<TABLE>
<CAPTION>
12/31/91 6/30/92 12/31/92 6/30/93 12/31/93 6/30/94 12/31/94 6/30/95 12/31/95 6/30/96 12/31/96
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
US Facilities
Corporation(//2//) 100 68.91 67.23 61.34 78.15 86.55 67.23 109.92 145.04 117.61 133.55
- --------------------------------------------------------------------------------------------------------------------
NASDAQ
Insurance
Stocks Index(//2//) 100 105.68 135.34 140.92 144.76 137.99 136.26 158.47 193.56 196.66 220.57
- --------------------------------------------------------------------------------------------------------------------
NASDAQ
(U.S.) Index(//2//) 100 96.09 116.38 120.84 133.59 121.99 130.59 162.84 184.67 209.08 227.16
</TABLE>
(1) While its common stock began trading on the New York Stock Exchange at the
end of September 1996, US Facilities believes that companies in these
NASDAQ indices are representative of its peer group for comparison
purposes. In addition, the stock of US Facilities traded on NASDAQ for 57
of the 60 months covered by the graph.
(2) Assumes $100 invested on December 31, 1991 in the Company's common stock
and in the specified indices. The stock price performance depicted in the
graph above represents past performance only and is not indicative of
future performance.
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS FILINGS WITH THE SEC UNDER THE SECURITIES ACT OF 1933 OR THE
SECURITIES EXCHANGE ACT OF 1934 THAT MIGHT INCORPORATE FUTURE FILINGS,
INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN PART, THE PERFORMANCE GRAPH SET
FORTH ABOVE IN THIS PROXY STATEMENT SHALL NOT BE INCORPORATED BY REFERENCE INTO
ANY SUCH FILINGS.
18
<PAGE>
EMPLOYMENT AGREEMENTS WITH NAMED EXECUTIVES
David L. Cargile: Mr. Cargile has been an officer of the Company since
December 1, 1991. Pursuant to an employment agreement entered into as of
August 4, 1994, and which expired on October 31, 1996, Mr. Cargile was
employed as the Company's President and Chief Operating Officer at an annual
base salary of $350,000. Mr. Cargile was appointed the Company's Chief
Executive Officer in March 1995. On November 1, 1996, Mr. Cargile entered into
a new four-year employment agreement which provides for a current base annual
salary of $420,000, a discretionary cash bonus, and certain other benefits.
The Company can terminate Mr. Cargile's employment at any time without cause
by paying him 150% of the salary due to him under the remaining term of his
employment agreement. In the event of his death or disability Mr. Cargile (or
his beneficiary) will be paid the greater of the amount of compensation
remaining due for the full term of the employment agreement or one (1) year's
salary.
In connection with his employment, and the requirement that he move from
Atlanta to Southern California, the Company granted Mr. Cargile in 1995 a loan
for the purchase of a residence in the principal amount of $649,000, secured
by a trust deed on that residence, bearing interest at 6.05% per annum. From
the principal amount, $414,765 is being forgiven by the Company over 60
months. Additionally, the full amount of the loan will be forgiven if Mr.
Cargile's employment terminates for any reason other than cause. As of
February 28, 1997, $527,620 of the principal amount of the above-noted loan
was outstanding. In addition, the Company agreed to pay to Mr. Cargile such
additional compensation as is required to compensate him for the additional
state and federal taxes due which will arise as a result of the credit he will
receive against the loan balance, and for the increase in state taxes Mr.
Cargile will experience as a California resident as contrasted with the state
taxes he would otherwise pay as a resident of Georgia.
Howard S. Singer: Mr. Singer was employed by the Company as Executive Vice
President effective December 1, 1991 pursuant to an employment agreement which
expired on November 30, 1996. He entered into a new four-year employment
agreement on November 1, 1996, which provides for a current base annual salary
of $227,270, a bonus as may be granted by the Board, and certain other
benefits, including a one-time "piggyback" registration right, at no cost to
him, with respect to Company stock owned by Mr. Singer. The Company can
terminate Mr. Singer's employment at any time without cause by paying him 150%
of the salary due to him under the remaining term of his employment agreement.
In the event of his death or disability Mr. Singer (or his beneficiary) will
be paid the greater of the amount of compensation remaining due for the full
term of the employment agreement or one (1) year's salary.
Craig J. Kelbel: Mr. Kelbel entered into a three-year employment agreement
with the Company on November 1, 1996, to serve in the positions of President
and Chief Operating Officer of USBenefits and as a Senior Vice President of
the Company at a current base annual salary of $231,530, and certain other
benefits. The Company can terminate Mr. Kelbel's employment at any time
without cause by paying him 100% of the salary due
19
<PAGE>
to him under the remaining term of his employment agreement. In the event of
his death or disability Mr. Kelbel (or his beneficiary) will be paid the
amount of compensation remaining due for a period of one (1) year.
Change-in-Control Agreements: The Company has entered into severance
agreements with the Named Executives. Except for Mr. Cargile, these executives
would be entitled to receive payment of two years annual salary plus an amount
equal to the largest annual cash bonuses received, as well as a continuation
for two years of life and medical insurance benefits, in the event their
employment is terminated by the Company (other than for cause) or is
terminated by the executive "for good reason" within two years after a change
in control of the Company. Mr. Cargile would receive three years annual salary
plus one-and-one-half times his largest annual cash bonus, as well as the
other benefits noted above. All of these agreements further provide that if
any executive has an employment agreement which also provides for payments
upon termination, the executive will receive payments either under the
severance agreement or the employment agreement, whichever payment is greater,
but not under both agreements. Change of control includes a merger of the
Company with another company which results in a 50% change of the combined
voting power of the Company's securities, or the sale of more than 50% of the
Company's assets or, under certain circumstances, the beneficial ownership by
any person of more than 10% of the Company's equity securities.
RELATED TRANSACTIONS
As described above under "EMPLOYMENT AGREEMENTS WITH NAMED EXECUTIVES," the
Company has made a loan to Mr. Cargile in the amount of $649,000 in connection
with the purchase of his principal residence in Southern California, a portion
of which loan is being forgiven over 60 months.
PROPOSAL NO. 2
APPROVAL OF AMENDMENT TO RESTATED CERTIFICATE OF
INCORPORATION TO CHANGE THE COMPANY'S NAME
Management and the Board of Directors believe that the present name of the
Company does not accurately describe its business operations and has caused
some confusion among investors and others with which it does business. The
Board has unanimously recommended that the name of the Company be changed to
one that it believes will enhance the Company's recognition in the minds of
both the investment community and the insurance industry. Accordingly, after
an extensive examination of a wide variety of possibilities, the Board has
recommended that the Company's Restated Certificate of Incorporation be
amended to change the name of the Company from US Facilities Corporation to
"The Centris Group, Inc."
20
<PAGE>
A change of name of the Company requires that stockholders approve an
amendment to the Company's Restated Certificate of Incorporation. Set forth as
Exhibit A is the text of Article FIRST as it will read if the amendment is
adopted.
VOTE REQUIRED
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES PRESENT IN PERSON OR BY
PROXY AND ENTITLED TO VOTE AT THE ANNUAL MEETING IS REQUIRED TO APPROVE THE
AMENDMENT TO THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION TO CHANGE ITS
NAME.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR SUCH APPROVAL. ALL PROXIES
RECEIVED BY THE COMPANY WILL BE VOTED TO APPROVE THE AMENDMENT OF ARTICLE
FIRST OF THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION TO CHANGE ITS
NAME AS SET FORTH ABOVE.
PROPOSAL NO. 3
APPROVAL OF AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED COMMON STOCK OF THE COMPANY
Since July, 1986, the Company's authorized common stock has consisted of
20,000,000 shares of common stock, par value $.001 per share. As of the record
date for this 1997 Annual Meeting, the Company has shares of common
stock issued and outstanding, and shares of common stock reserved
for issuance under its various employee benefit plans. While the Company has
no present plans to issue any additional shares of common stock except
pursuant to its employee plans, the Board of Directors believes that it is
advisable to increase the number of authorized shares of common stock for
future issuance for various corporate purposes. These corporate purposes may
include the declaration of stock dividends or a stock split, the sale of stock
to obtain additional capital funds to enhance the growth of the Company,
future acquisitions or the merger of other companies into the Company. Present
authorization for such additional shares will enable the Company to take
timely advantage of market conditions and the availability of favorable
opportunities without the delay and expense associated with holding a special
meeting of its stockholders at the time that such additional shares may be
needed. Since the Company has no present plans to issue the increased shares
of common stock, the transaction or transactions under which such newly
authorized shares might be issued cannot be described at this time, nor can
the effects of such transactions on the Company's present stockholders be
determined. The proposed increase in the number of authorized shares of common
stock will not change the number of shares currently outstanding or the rights
of the holders of such shares. The Company's stockholders do not have
preemptive rights with respect to issuances of its authorized common stock.
21
<PAGE>
An increase in the authorized common stock requires that stockholders
approve an amendment to the Company's Restated Certificate of Incorporation.
Set forth as Exhibit B is the text of Article FOURTH, Subsection A., as it
will read if the amendment is adopted.
VOTE REQUIRED
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES PRESENT IN PERSON OR BY
PROXY AND ENTITLED TO VOTE AT THE ANNUAL MEETING IS REQUIRED TO APPROVE THE
AMENDMENT TO THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION TO INCREASE
THE NUMBER OF AUTHORIZED SHARES.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR SUCH APPROVAL. ALL PROXIES
RECEIVED BY THE COMPANY WILL BE VOTED TO APPROVE THE AMENDMENT OF SUBSECTION
A. OF ARTICLE FOURTH OF THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION TO
INCREASE THE AUTHORIZED CAPITAL STOCK OF THE COMPANY AS SET FORTH ABOVE.
PROPOSAL NO. 4
APPROVAL OF 1997 LONG-TERM
INCENTIVE-PERFORMANCE UNIT PLAN
GENERAL
The Board has adopted and is seeking stockholder approval of the 1997 Long-
Term Incentive-Performance Unit Plan (the "Plan") which, as described below,
provides for cash payment awards intended to qualify as performance-based
compensation under requirements of Section 162(m) of the Internal Revenue
Code.
DESCRIPTION
The Plan was designed and adopted by the Board of Directors of US Facilities
Corporation (the "Company") to meet the present and anticipated needs of the
Company in retaining, attracting, motivating, and rewarding key executives
through the use of performance units, as well as to reward key executives for
the long-term operating performance of the Company. The Plan is administered
by the Compensation Committee (the "Committee") of the Board of Directors.
The Plan allows for the granting of performance units, contingent on the
Company meeting predetermined operating targets. The number of performance
units granted at the beginning of the performance period is calculated as the
participant's target award
22
<PAGE>
(expressed in dollars) divided by a unit value determined by the Committee.
The number of performance units actually awarded to a participant will be
determined after the performance period, based on actual performance over the
performance period relative to target performance. The performance period is
three (3) years in length, with the first performance period to begin on
January 1, 1997, the Plan's effective date, and to end on December 31, 1999.
Subsequent three-year performance periods will begin annually each January 1
thereafter, until the Plan is terminated.
Awards of performance units will be determined based on the Company meeting
specific predetermined return on equity (ROE) targets, and for any awards to
be made the Company must meet a minimum ROE threshold. ROE, determined as of
the end of each fiscal year, will be calculated as the Company's net income
for such fiscal year as determined by generally accepted accounting principles
(GAAP) divided by stockholders' equity recorded at the beginning of such
fiscal year. ROE for purposes of this Plan shall be the average annual ROE for
the three-year performance period.
The Committee has determined that selected key executives of the Company are
eligible to participate in the Plan and, for 1997, Plan participation and
eligibility will be limited to seven executive officers. The Committee
determines eligibility based on an individual's position in the Company, the
executive's roles and responsibilities, and the overall impact of the
executive's contributions on the Company's operating performance. For purposes
of the Plan, each participant is assigned a target award, expressed as a
percent of base salary, based on the above criteria. An individual's target
award is then used to calculate the annual performance unit grant.
The Company must meet a minimum level of ROE over the performance period
before any awards or payouts can be made from the Plan. If the Company meets
the minimum performance threshold, then ROE performance will be measured
against the following performance levels, and Plan payouts will be determined
based on the performance level achieved. If the performance threshold is not
achieved, the Committee, in its sole discretion and subject to Board approval,
may award payouts under the Plan.
Below Target Performance will refer to the Company achieving an average ROE
over the three (3) year performance period of at least thirteen (13)
percent but less than fifteen (15) percent. If below target performance is
achieved, the participants in the plan will receive a payout equal to at
least fifty (50) percent of their individual performance unit grant.
Target Performance will refer to the Company achieving an average ROE over
the performance period of at least fifteen (15) percent but less than
seventeen (17) percent. If target performance is attained, the participants
in the Plan will receive a payout equal to at least one-hundred (100)
percent of their individual performance unit grant.
Above Target Performance will refer to the Company achieving an average ROE
over the performance period of at least seventeen (17) percent but less
than eighteen (18) percent. If above target performance is attained, the
participants will receive a payout equal to at least one-hundred and
twenty-five (125) percent of their individual performance unit grant.
23
<PAGE>
Well-Above Target Performance will refer to the Company achieving an
average ROE over the performance period of at least eighteen (18) percent.
If well-above target performance is attained, the Participants will receive
a Payout equal to at least one-hundred and fifty (150) percent of their
individual performance unit grant.
Payouts made to each participant will be calculated by multiplying the value
of the individual's performance unit grant by the performance level achieved.
Payouts earned will be determined as soon as practicable following the year in
which the performance period ends. The Committee will certify, in writing, the
accuracy of awards prior to payouts being made. All payments earned by the
participants will be automatically deferred into the Company's Non-Qualified
Deferred Compensation Plan, which provides for vesting of the payouts over a
two-year period.
The CEO shall have the authority, subject only to approval by the Committee
and the Board, and in conformity with the non-discretionary requirements of
Section 162(m) of the Internal Revenue Code, to adjust a participant's payout
to take into account strategic and financial events, conditions or results,
including, but not limited to, recognizing a participant's business unit's
results which had a significant impact on the Company's overall financial
results for the performance period.
If a participant terminates employment for any reason other than death,
disability or retirement at or after age 65, any performance units previously
granted and not paid out shall be forfeited. If a participant terminates
employment for reasons of death, disability, or retirement at or after age 65,
the participant (or legal representative or beneficiary) shall be entitled to
receive, in cash, a portion or all of the earned payout. In the event of a
dissolution, liquidation, or a change in control of the Company, payouts shall
be made in cash to participants in the plan, depending on the Company's actual
ROE performance to-date relative to target ROE performance, providing the
Company has met its performance threshold.
24
<PAGE>
NEW PLAN BENEFITS
1997 LONG-TERM INCENTIVE-PERFORMANCE UNIT PLAN
The following table sets forth the award potential, assuming the Company
achieves Target Performance (as described above) and the number of performance
units granted in 1997 to the Named Executives and to all Plan participants for
the performance period 1997-1999, during which each performance unit had a
value of $10.
<TABLE>
<CAPTION>
NUMBER OF DOLLAR
NAME AND POSITION UNITS VALUE
<S> <C> <C>
David L. Cargile, President and Chief Executive Officer 14,700 $147,000
- -----------------------------------------------------------------------------------
John T. Grush, Senior Vice President and President of USF RE
INSURANCE COMPANY 5,831 $ 58,310
- -----------------------------------------------------------------------------------
Craig J. Kelbel, Senior Vice President and President of
USBenefits Insurance Services, Inc. 5,788 $ 57,880
- -----------------------------------------------------------------------------------
Howard S. Singer, Executive Vice President--Corporate Finance
and Investor Relations 5,682 $ 56,820
- -----------------------------------------------------------------------------------
Jose A. Velasco, Senior Vice President, Secretary and General
Counsel 4,430 $ 44,300
- -----------------------------------------------------------------------------------
Named Executives as a Group 36,431 $364,310
- -----------------------------------------------------------------------------------
All Plan Participants (including Named Executives) 45,255 $452,550
</TABLE>
VOTE REQUIRED
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES PRESENT IN PERSON OR BY
PROXY AND ENTITLED TO VOTE AT THE ANNUAL MEETING IS REQUIRED TO APPROVE THE
1997 LONG-TERM INCENTIVE-PERFORMANCE UNIT PLAN.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR SUCH APPROVAL. ALL PROXIES
RECEIVED BY THE COMPANY WILL BE VOTED TO APPROVE THE 1997 LONG-TERM INCENTIVE-
PERFORMANCE UNIT PLAN, UNLESS A CONTRARY VOTE IS INDICATED ON THE PROXY CARD.
PROPOSAL NO. 5
APPROVAL OF AMENDMENTS TO
THE 1988 AND 1991 EMPLOYEE STOCK OPTION PLANS
At the 1996 Annual Meeting, stockholders approved certain amendments to the
Company's 1991 Employee Stock Option Plan. Under one of these amendments, the
Compensation Committee of the Board of Directors was authorized to allow the
Company to loan to option holders the exercise price of options under certain
conditions, including a requirement that the exercise of options be followed
by a prompt sale of some or all of the shares issued upon exercise of the
options and that a portion of the sale proceeds be dedicated to the full
payment of the exercise price and any applicable taxes.
25
<PAGE>
It is believed to be in the best interest of the Company to encourage stock
ownership by its employees to align their interests with that of stockholders
generally, and that this goal can be achieved more easily by providing greater
flexibility in the terms and conditions on which the Company can extend loans
to them. Accordingly, it is now proposed that the Company's 1988 and 1991
Employee Stock Option Plans be amended to permit the Company to assist any
employee to whom an option is granted in the payment of the purchase price
(including, without limitation, by loan or the acceptance of a promissory
note) which is payable to the Company in connection with the receipt or
exercise of any option. Under this proposal, any such loans would require the
approval of the Compensation Committee of the Board of Directors with respect
to its terms and conditions, including whether such loans will be secured or
unsecured.
VOTE REQUIRED
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES PRESENT IN PERSON OR BY
PROXY AND ENTITLED TO VOTE AT THE ANNUAL MEETING IS REQUIRED TO APPROVE
AMENDMENTS TO THE COMPANY'S 1988 AND 1991 EMPLOYEE STOCK OPTION PLANS.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR SUCH APPROVALS. ALL PROXIES
RECEIVED BY THE COMPANY WILL BE VOTED TO APPROVE THE AMENDMENTS TO THE 1988
AND 1991 EMPLOYEE STOCK OPTION PLANS.
PROPOSAL NO. 6
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP, independent
certified public accountants, to continue as the Company's auditors for the
fiscal year ending December 31, 1997, unless in the opinion of the Board KPMG
Peat Marwick LLP is not in a position to continue providing its services to
the Company or the continuation of the audit relationship is inappropriate. In
such situations the Board of Directors retains the ability to designate a
successor auditing firm, subject to ratification by the stockholders at the
next regularly scheduled Annual Meeting of Stockholders.
KPMG Peat Marwick LLP, or a predecessor, has audited the Company's financial
statements since 1982. Representatives of KPMG Peat Marwick LLP will be
present at the Annual Meeting to respond to appropriate questions from
stockholders and to make a statement if they desire to do so.
VOTE REQUIRED
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES PRESENT IN PERSON OR BY
PROXY AND ENTITLED TO VOTE AT THE ANNUAL MEETING IS REQUIRED TO RATIFY THE
SELECTION OF KPMG PEAT MARWICK LLP AS THE COMPANY'S AUDITORS FOR THE FISCAL
YEAR ENDING DECEMBER 31, 1997.
26
<PAGE>
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR SUCH RATIFICATION. ALL PROXIES
RECEIVED BY THE COMPANY WILL BE VOTED TO RATIFY THE KPMG PEAT MARWICK LLP
SELECTION, UNLESS A CONTRARY VOTE IS INDICATED ON THE PROXY CARD.
OTHER MATTERS
The Board of Directors is not aware of any business to be presented at the
Annual Meeting except the matters set forth in the Notice and described in
this Proxy Statement. Unless otherwise directed, all shares represented by the
proxy holders appointed by the Company will be voted IN FAVOR OF the proposals
described in this Proxy Statement. If any other matters come before the Annual
Meeting, the proxy holders will vote on those matters using their best
judgment.
STOCKHOLDER PROPOSALS
Stockholders desiring to exercise their rights under the Proxy Rules of the
SEC to submit proposals for consideration by the stockholders at the 1998
Annual Meeting are advised that their proposals must be received by the
Company no later than November 28, 1997, in order to be eligible for inclusion
in the Company's Proxy Statement and proxy card relating to the 1998 Annual
Meeting of Stockholders. Under current plans, the Company's 1998 Annual
Meeting of Stockholders is scheduled to be held on May 12, 1998.
EXPENSES
The Company will bear the entire cost of preparing, assembling, printing and
mailing this Proxy Statement and the enclosed proxy card, and of soliciting
proxies. The Company will request banks and brokers to solicit their customers
who beneficially own shares listed on the Company's records in the names of
such nominees, and will reimburse those banks and brokers for their reasonable
out-of-pocket expenses in connection with such solicitation.
For this 1997 Annual Meeting the Company has retained the services of D.F.
King & Co., Inc. ("King"), a proxy solicitation firm. While King's primary
activities will involve contacting all intermediaries believed to be holding
stock of the Company on behalf of others, and will assist in the delivery of
proxy materials to such persons and in collecting executed proxies, King may
also contact and assist persons who hold stock directly. It is anticipated
that King will be paid a fee of $6,000, for performing such services, plus
out-of-pocket costs. The original solicitation of proxies by mail may be
supplemented by telephone solicitation by employees of King. In addition to
the use of the mails and King, proxies may be solicited by the directors,
officers and employees of the Company, without additional compensation, by
personal interview, by telephone or by telegram.
27
<PAGE>
ANNUAL REPORT TO STOCKHOLDERS
The 1996 Annual Report to Stockholders of the Company, which includes
financial information for fiscal periods ending December 31, 1996, 1995 and
1994, is being mailed to the stockholders along with this Proxy Statement. The
1996 Annual Report to Stockholders is not to be considered part of the proxy
soliciting material.
By Order of the Board of Directors,
/s/ JOSE A. VELASCO
----------------------------------
Jose A. Velasco
Senior Vice President, Secretary
and General Counsel
March 28, 1997
Costa Mesa, California
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K TO THE SECURITIES AND
EXCHANGE COMMISSION FOR FISCAL YEAR ENDED DECEMBER 31, 1996 CAN BE OBTAINED
WITHOUT CHARGE FROM HOWARD S. SINGER, EXECUTIVE VICE PRESIDENT, US FACILITIES
CORPORATION, 6200 NORTH HIAWATHA, SUITE 400, CHICAGO, ILLINOIS 60646.
28
<PAGE>
EXHIBIT A
PROPOSED ARTICLE FIRST FOR CERTIFICATE OF AMENDMENT OF US FACILITIES
CORPORATION RESTATED CERTIFICATE OF INCORPORATION
FIRST: The name of the Corporation is The Centris Group, Inc. (hereinafter
-----
sometimes referred to as the "Corporation").
* * * * * * * *
EXHIBIT B
PROPOSED ARTICLE FOURTH, SUBSECTION A., FOR CERTIFICATE OF AMENDMENT OF US
FACILITIES CORPORATION RESTATED CERTIFICATE OF INCORPORATION
FOURTH:
------
A. The total number of shares of all classes of stock which the
Corporation shall have authority to issue is forty-five million
(45,000,000), consisting of:
(1) five million (5,000,000) shares of Preferred Stock, par value one
cent ($.01) per share (the "Preferred Stock"); and
(2) forty million (40,000,000) shares of Common Stock, par value one
cent ($.01) per share (the "Common Stock").
<PAGE>
_____________
|PRELIMINARY|
|___________|
REVOCABLE PROXY REVOCABLE PROXY
US FACILITIES CORPORATION
650 Town Center Drive, Suite 1600
Costa Mesa, California 92626
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints JOSE A. VELASCO, BARBARA FOX STONER AND
RODNEY W. LOEB, and each of them, with full power of substitution, as the
attorneys and proxies of the undersigned to attend the Annual Meeting of
Stockholders of US Facilities Corporation to be held on May 14, 1997, at 9:00
a.m., Local Time, at the offices of the Company, 650 Town Center Drive, 15th
Floor, Costa Mesa, California, and any postponements or adjournments thereof,
and to vote as directed below all shares which the undersigned would be entitled
to vote if the undersigned were personally present at the Annual Meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED BY THE APPOINTED PROXY
HOLDERS IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2, 3, 4, 5, AND 6.
THE SUBMISSION OF THIS PROXY TO THE COMPANY IN CONNECTION WITH THE 1997 ANNUAL
MEETING OF STOCKHOLDERS, IF PROPERLY EXECUTED, REVOKES ALL PRIOR PROXIES WHICH
MAY HAVE PREVIOUSLY BEEN SUBMITTED TO THE COMPANY FOR THE 1997 ANNUAL MEETING.
(Continued and to be signed on reverse side)
<PAGE>
[X] Please mark your
votes as in this
example.
<TABLE>
<S> <C> <C>
Vote FOR all nominees Vote is withheld from
listed at right, except vote is all nominees listed
withheld from the nominees at right for election
listed below (if any): as directors Nominees: John F. Kooken
L. Steven Medgyesy, M.D.
</TABLE>
1. Election of
two directors. [_] [_]
(To withhold authority to vote for any one or more nominee, write the
nominee's name(s) on the line below.)
______________________________________________________________________
______________________________________________________________________
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
2. Approval of an amendment to the Company's Restated Certificate of [_] [_] [_]
Incorporation to change the name of the Company to "The Centris Group, Inc."
3. Approval of an amendment to the Company's Restated Certificate of [_] [_] [_]
Incorporation to increase the number of shares of authorized common stock
from 20,000,000 shares to 40,000,000 shares.
4. Approval of the adoption of the Company's 1997 Long-Term Incentive - [_] [_] [_]
Performance Unit Plan.
5. Approval of amendments to the US Facilities Corporation 1988 and 1991 Employee Stock [_] [_] [_]
Option Plans.
6. Ratification of KPMG Peat Marwick LLP as the independent auditors of the [_] [_] [_]
Company for the year ended December 31, 1997.
</TABLE>
7. The proxy holders are authorized to vote in their discretion upon
such other business as may properly come before the Annual Meeting or any
postponements or adjournments thereof.
Receipt of Notice and Proxy Statement for the 1997 Annual Meeting of
Stockholders as well as the Company's 1996 Annual Report to Stockholders is
acknowledged.
(Please vote, sign, date and return the Proxy Card promptly using the enclosed
envelope.)
PLEASE CHECK THIS BOX IF YOU PLAN TO ATTEND [_]
THE ANNUAL MEETING ON MAY 14, 1997
SIGNATURE DATE
------------------------------------------------------- ---------
DATE
- ---------------------------------------------------------------- ---------
SIGNATURE IF HELD JOINTLY
NOTE: Please sign exactly as your name appears hereon. 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 president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
