SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
______________
SCHEDULE 13D
INFORMATION TO BE INCLUDED IN STATEMENTS FILED
PURSUANT TO RULE 13d-1(a) AND AMENDMENTS
THERETO FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. 23)1
HALLMARK FINANCIAL SERVICES, INC.
(Name of issuer)
SHARES OF COMMON STOCK, PAR VALUE $0.18 PER SHARE
(Title of class of securities)
40624Q104
(CUSIP number)
John Murray
Newcastle Capital Management, L.P.
200 Crescent Court, Suite 1400
Dallas, Texas 75201
(214) 661-7474
(Name, address and telephone number of person
authorized to receive notices and communications)
December 31, 2012
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box / /
Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 15 Pages)
1 The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
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| 1 | NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) NEWCASTLE PARTNERS, L.P. | |
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* | |
| 3 | SEC USE ONLY | |
| 4 | SOURCE OF FUNDS* WC | |
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) | |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION TEXAS | |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE VOTING POWER 3,730,430 |
| 8 | SHARED VOTING POWER 0 | |
| 9 | SOLE DISPOSITIVE POWER 3,730,430 | |
| 10 | SHARED DISPOSITIVE POWER 0 | |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,730,430 | |
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* | |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 19.4% | |
| 14 | TYPE OF REPORTING PERSON* PN | |
*SEE INSTRUCTIONS BEFORE FILLING OUT!
2
| 1 | NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) NEWCASTLE CAPITAL MANAGEMENT, L.P. | |
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) o (b) o | |
| 3 | SEC USE ONLY | |
| 4 | SOURCE OF FUNDS* OO | |
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) o | |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION TEXAS | |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE VOTING POWER 3,864,806 |
| 8 | SHARED VOTING POWER 0 | |
| 9 | SOLE DISPOSITIVE POWER 3,864,806 | |
| 10 | SHARED DISPOSITIVE POWER 0 | |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,864,806 | |
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* o | |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 20.1% | |
| 14 | TYPE OF REPORTING PERSON* PN | |
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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| 1 | NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) NEWCASTLE CAPITAL GROUP, L.L.C. | |
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) o (b) o | |
| 3 | SEC USE ONLY | |
| 4 | SOURCE OF FUNDS* OO | |
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) o | |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION TEXAS | |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE VOTING POWER 3,864,806 |
| 8 | SHARED VOTING POWER 0 | |
| 9 | SOLE DISPOSITIVE POWER 3,864,806 | |
| 10 | SHARED DISPOSITIVE POWER 0 | |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,864,806 | |
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* o | |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 20.1% | |
| 14 | TYPE OF REPORTING PERSON* OO | |
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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| 1 | NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) SCHWARZ 2012 FAMILY TRUST | |
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) o (b) o | |
| 3 | SEC USE ONLY | |
| 4 | SOURCE OF FUNDS* OO | |
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) o | |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION TEXAS | |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE VOTING POWER 4,769,045 |
| 8 | SHARED VOTING POWER 0 | |
| 9 | SOLE DISPOSITIVE POWER 4,769,045 | |
| 10 | SHARED DISPOSITIVE POWER 0 | |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,769,045 | |
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* o | |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 24.8% | |
| 14 | TYPE OF REPORTING PERSON* OO | |
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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| 1 | NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) MARK E. SCHWARZ | |
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) o (b) o | |
| 3 | SEC USE ONLY | |
| 4 | SOURCE OF FUNDS* OO, PF | |
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) o | |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION USA | |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE VOTING POWER 5,014,721 |
| 8 | SHARED VOTING POWER 0 | |
| 9 | SOLE DISPOSITIVE POWER 5,014,721 | |
| 10 | SHARED DISPOSITIVE POWER 0 | |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,014,721 | |
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* o | |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 25.9% | |
| 14 | TYPE OF REPORTING PERSON* IN | |
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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| 1 | NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) DSC SERVICES INC. | |
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) o (b) o | |
| 3 | SEC USE ONLY | |
| 4 | SOURCE OF FUNDS* OO | |
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) o | |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE | |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE VOTING POWER 904,239 |
| 8 | SHARED VOTING POWER 0 | |
| 9 | SOLE DISPOSITIVE POWER 904,239 | |
| 10 | SHARED DISPOSITIVE POWER 0 | |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 904,239 | |
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* o | |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 4.7% | |
| 14 | TYPE OF REPORTING PERSON* CO | |
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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| 1 | NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) JOHN P. MURRAY | |
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) o (b) o | |
| 3 | SEC USE ONLY | |
| 4 | SOURCE OF FUNDS* PF | |
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) o | |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION USA | |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE VOTING POWER 6,571 |
| 8 | SHARED VOTING POWER 0 | |
| 9 | SOLE DISPOSITIVE POWER 6,571 | |
| 10 | SHARED DISPOSITIVE POWER 0 | |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 6,571 | |
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* o | |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) less than 1% | |
| 14 | TYPE OF REPORTING PERSON* IN | |
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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| 1 | NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) CLINTON J. COLEMAN | |
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) o (b) o | |
| 3 | SEC USE ONLY | |
| 4 | SOURCE OF FUNDS* PF | |
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) o | |
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION USA | |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE VOTING POWER 5,831 |
| 8 | SHARED VOTING POWER 0 | |
| 9 | SOLE DISPOSITIVE POWER 5,831 | |
| 10 | SHARED DISPOSITIVE POWER 0 | |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,831 | |
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* o | |
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) less than 1% | |
| 14 | TYPE OF REPORTING PERSON* IN | |
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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The following constitutes Amendment No. 23 (“Amendment No. 23”) to the Schedule 13D filed by the undersigned. This Amendment No. 23 amends the Schedule 13D as specifically set forth herein. Capitalized terms used without definition shall have the meanings given to such terms in the Schedule 13D.
Item 2. Identity and Background
Item 2 is hereby amended and restated in its entirety to read as follows:
Items 2(a), 2(b) and 2(c). This Statement is jointly filed by Newcastle Partners, L.P., a Texas limited partnership (“NP”), Newcastle Capital Management, L.P., a Texas limited partnership (“NCM”), Newcastle Capital Group, L.L.C., a Texas limited liability company (“NCG”), the Schwarz 2012 Family Trust, a trust organized under the laws of the State of Texas (the “Schwarz Trust”), Mark E. Schwarz (“Schwarz”), John P. Murray (“Murray”), Clinton J. Coleman (“Coleman”) and DSC Services Inc., a Delaware corporation (“DSC”) (NP, NCM, NCG, the Schwarz Trust, Schwarz, Murray, Coleman and DSC collectively referred to as the “Reporting Persons”). Each of NCM, as the general partner of NP, NCG, as the general partner of NCM, the Schwarz Trust, as the sole member of NCG, and Schwarz, as the sole trustee of the Schwarz Trust, may be deemed, pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “Act”), to be the beneficial owners of all shares of Common Stock held by NP. In addition, because the Schwarz Trust holds 100% of outstanding shares of the DSC, the Schwarz Trust and Schwarz may be deemed, pursuant to Rule 13d-3 of the Act, to be the beneficial owner of all the shares of Common Stock held by DSC. As of December 31, 2012, all outstanding membership interests in NCG (previously held by Mr. Schwarz) and all outstanding shares in DSC (previously held by Mr. Schwarz and NCG collectively) were transferred to the Schwarz Trust. The Reporting Persons are filing this joint Statement, as they may be considered a “group” under Section 13(d)(3) of the Act. However, neither the fact of this filing nor anything contained herein shall be deemed to be an admission by the Reporting Persons that such a group exists.
Set forth on Schedule A annexed hereto is the name and present principal occupation or employment and the name, principal business and address of any corporation or organization in which such employment is conducted of the directors and executive officers of DSC as of the date hereof.
Schwarz is the CEO of NCM and the sole trustee of the Schwarz Trust. Murray is Vice President and CFO of NCM, and Coleman is a Managing Director and an investment professional of NCM. The principal business of NCG is acting as the general partner of NCM. The principal business of NCM is acting as the general partner of NP. The principal business of NP and DSC is investing in securities. The principal business address for each of Schwarz, Murray, Coleman, NP, NCM, NCG, the Schwarz Trust and DSC is 200 Crescent Court, Suite 1400, Dallas, Texas 75201.
Item 2(d) During the last five years, none of the Reporting Persons or the persons listed in Schedule A annexed hereto has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
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Item 2(e) During the last five years, none of the Reporting Persons or the persons listed in Schedule A annexed hereto has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction, and as a result of such proceeding, was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
Item 2(f) Schwarz, Murray and Coleman are citizens of the United States.
Item 5. Interest in Securities of the Issuer
Item 5(a)-(b) is hereby amended and restated to read as follows:
The aggregate percentage of shares of Common Stock reported to be owned by the Reporting Persons is based upon 19,263,457 shares outstanding, which is the total number of shares of Common Stock outstanding as of November 7, 2012, as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 7, 2012.
As of the filing date of this Amendment No. 23, NP directly owned 3,730,430 shares of Common Stock, representing approximately 19.4% of the issued and outstanding Common Stock of the Issuer.
As of the filing date of this Amendment No. 23, NCM directly owned 134,376 shares of Common Stock, representing less than 1% of the issued and outstanding Common Stock of the Issuer. In addition, NCM, as the general partner of NP, may be deemed to beneficially own the 3,730,430 shares beneficially owned by NP. In total, NCM may be deemed to beneficially own shares representing approximately 20.1% of the issued and outstanding Common Stock of the Issuer.
NCG, as the general partner of NCM, which in turn is the general partner of NP, may be deemed to beneficially own the 134,376 shares and 3,730,430 shares of Common Stock beneficially owned by NCM and NP, respectively. In total, NCG may be deemed to beneficially own shares representing approximately 20.1% of the issued and outstanding Common Stock of the Issuer.
The Schwarz Trust, as the sole member of NCG, which in turn is the general partner of NCM (which is turn the general partner of NP), may be deemed to beneficially own the 134,376 shares and 3,730,430 shares of Common Stock beneficially owned by NCM and NP, respectively. In addition, since the Schwarz Trust holds 100% of outstanding shares of DSC, the Schwarz Trust may also be deemed to own the 904,239 shares beneficially owned by DSC. In total, the Schwarz Trust may be deemed to beneficially own shares representing approximately 24.8% of the issued and outstanding Common Stock of the Issuer.
As of the filing date of this Amendment No. 23, Mark Schwarz directly owned 130,806 shares of Common Stock and options to purchase 114,870 shares of Common Stock that are exercisable within 60 days of the filing date. As the sole trustee of the Schwarz Trust, Mr. Schwarz may also be deemed to beneficially own the 134,376 shares and 3,730,430 shares beneficially owned by NCM and NP, respectively, and the 904,239 shares beneficially owned by DSC. In total, Mr. Schwarz may be deemed to beneficially own shares representing 25.9% of the issued and outstanding Common Stock of the Issuer.
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As of the filing date of this Amendment No. 23, DSC directly owned 904,239 shares of Common Stock, representing 4.7% of the issued and outstanding Common Stock of the Issuer.
As of the filing date of this Amendment No. 23, John Murray directly owned 6,571 shares of Common Stock, representing less than 1% of the issued and outstanding Common Stock of the Issuer.
As of the filing date of this Amendment No. 23, Clinton Coleman directly owned 5,831 shares of Common Stock, representing less than 1% of the issued and outstanding Common Stock of the Issuer.
The filing of this Statement and any future amendment by the Reporting Persons, and the inclusion of information herein and therein, shall not be considered an admission that any of such persons, for the purpose of Section 13(d) of the Act, or otherwise, are the beneficial owners of any shares of Common Stock in which such persons do not have a pecuniary interest.
By virtue of his position with NP, NCM, NCG, the Schwarz Trust and DSC, Mr. Schwarz has the sole power to vote and dispose of the shares of Common Stock reported in this statement for such entities. Mr. Schwarz has the sole power to vote and to dispose of the shares of Common Stock he holds directly reported in this statement. Mr. Coleman has the sole power to vote and dispose of the shares of Common Stock he holds directly reported in this statement. Mr. Murray has the sole power to vote and dispose of the shares of Common Stock he holds directly reported in this statement.
Item 7. Materials to be Filed as Exhibits.
| 99.1 | Joint Filing Agreement dated as of January 22, 2013 by and among Newcastle Partners, L.P., Newcastle Capital Group, L.L.C., Newcastle Capital Management, L.P., the Schwarz 2012 Family Trust, Mark E. Schwarz, DSC Services, Inc., John P. Murray and Clinton J. Coleman. |
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SIGNATURES
After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
| Dated: | January 22, 2013 | NEWCASTLE PARTNERS, L.P. |
| By: Newcastle Capital Management, L.P., | ||
| its general partner | ||
| By: Newcastle Capital Group, L.L.C., | ||
| its general partner | ||
| By: Schwarz 2012 Family Trust | ||
| /s/ Mark Schwarz | ||
| Mark Schwarz, Trustee | ||
| NEWCASTLE CAPITAL MANAGEMENT, L.P. | ||
| By: Newcastle Capital Group, L.L.C., | ||
| its general partner | ||
| By: Schwarz 2012 Family Trust | ||
| /s/ Mark Schwarz | ||
| Mark Schwarz, Trustee | ||
| NEWCASTLE CAPITAL GROUP, L.L.C. | ||
| By: Schwarz 2012 Family Trust | ||
| /s/ Mark Schwarz | ||
| Mark Schwarz, Trustee | ||
| SCHWARZ 2012 FAMILY TRUST | ||
By: /s/ Mark Schwarz | ||
| Mark Schwarz, Trustee | ||
| /s/ Mark Schwarz | ||
| MARK SCHWARZ | ||
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| DSC SERVICES INC. | ||
By: /s/ Mark Schwarz | ||
| Mark Schwarz, Chief Executive Officer | ||
| /s/ John Murray | ||
| JOHN MURRAY | ||
| /s/ Clinton Coleman | ||
| CLINTON COLEMAN |
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Schedule A
Directors and Executive Officers of DSC Services Inc.
| Name and Position | Present Principal Occupation | Business Address |
Mark E. Schwarz, Director, President & Chief Executive Officer | CEO, Newcastle Capital Management, L.P., a private investment management firm and Insurance Company Executive (Executive Chairman, Hallmark Financial Services, Inc.) | Newcastle Capital Management, L.P. 200 Crescent Ct., Ste. 1400, Dallas, TX 75201 |
John Murray Vice President & Treasurer | Vice President and Chief Financial Officer, Newcastle Capital Management, L.P. | Newcastle Capital Management, L.P. 200 Crescent Ct., Ste. 1400 Dallas, TX 75201 |
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