Unassociated Document
As
filed
with the Securities and Exchange Commission on November 23, 2007
Registration
No. 333-________
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-3
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_________________________
HALLMARK
FINANCIAL SERVICES, INC.
(Exact
name of registrant as specified in its charter)
|
Nevada
(State
or other jurisdiction of
incorporation
or organization)
|
|
87-0447375
(I.R.S.
Employer
Identification
Number)
|
777
Main Street
Suite
1000
Fort
Worth, Texas 76102
(817)
348-1600
(Address,
including zip code, and telephone number,
including
area code, of registrant’s principal executive offices)
____________________________
Mark
J. Morrison
President
and Chief Executive Officer
Hallmark
Financial Services, Inc.
777
Main Street
Suite
1000
Fort
Worth, Texas 76102
(817)
348-1600
(Name,
address, including zip code, and telephone number, including area code, of
agent
for service)
____________________________
Copies
to:
|
Steven
D. Davidson
McGuire,
Craddock & Strother, P.C.
3550
Lincoln Plaza
500
N. Akard
Dallas,
Texas 75201
(214)
954-6800
|
______________________________
Approximate
date of commencement of proposed sale to the public:
From
time
to time after the effective date of this registration statement.
_________________________
If
the
only securities being registered on this Form are being offered pursuant to
dividend or interest reinvestment plans, please check the following box. o
If
any of
the securities being registered on this Form are to be offered on a delayed
or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. x
If
this
Form is filed to register additional securities for an offering pursuant to
Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. o
If
this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. ¨
If
this
Form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box. ¨
If
this
Form is a post-effective amendment to a registration statement pursuant to
General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check
the following box. ¨
CALCULATION
OF REGISTRATION FEE
|
Title
of Each Class of
Securities
to be Registered
|
|
Amount
to be Registered
|
|
Proposed
Maximum Offering Price Per Unit
|
|
Proposed
Maximum Aggregate Offering Price
|
|
Amount
of Registration Fee
|
|
| |
|
|
|
|
|
|
|
|
|
|
Primary
Offering:
|
|
|
|
|
|
|
|
|
|
|
Common
Stock,
$0.18
par value per share
|
|
|
(1)
|
|
|
|
|
$
|
75,000,000
|
|
$
|
1,148
|
|
|
Secondary
Offering:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock,
$0.18
par value per share
|
|
|
5,000,000(2)
|
|
$
|
16.15(3)
|
|
$
|
80,750,000(3)
|
|
$
|
1,235
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
$
|
2,383
|
|
| (1) |
An
indeterminate number of shares of common stock are registered hereunder
for issuance by the registrant from time to time at indeterminate
prices.
The aggregate public offering price of common stock offered by the
registrant will not exceed
$75,000,000.
|
| (2) |
Pursuant
to Rule 416 under the Securities Act of 1933, as amended, the shares
of
common stock registered for resale by the selling stockholder also
include
such indeterminate number of shares of common stock as may be issued
from
time to time with respect to shares being registered hereunder as
a result
of stock splits, stock dividends or similar
transactions.
|
| (3) |
Estimated
solely for the purpose of calculating the registration fee in accordance
with Rule 457(o) under the Securities Act of 1933, as amended, based
on
the per share average of the high and low reported prices for the
common
stock on the Nasdaq Global Market as of November 19,
2007.
|
The
registrant hereby amends this registration statement on such date or dates
as
may be necessary to delay its effective date until the registrant shall file
a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until the registration statement shall
become effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
The
information in this prospectus is not complete and may be changed. The
securities described herein may not be sold until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and is not soliciting an offer to
buy
these securities in any state where the offer or sale is not
permitted.
|
SUBJECT
TO COMPLETION, DATED NOVEMBER 23, 2007
|
|
PROSPECTUS
|
|
|
|
Hallmark
Financial Services, Inc.
|
|
$75,000,000
Common
Stock
|
|
5,000,000
Shares of Common Stock
Offered
by Selling Stockholder
|
We
may
offer and sell shares of our common stock, from time to time, to or through
one
or more underwriters, dealers and agents, or directly to purchasers, on a
continuous or delayed basis, at prices and on other terms to be determined
at
the time of offering. We will provide more specific terms of such offering
and
sale of our common stock in supplements to this prospectus.
In
addition, the selling stockholder identified in this prospectus may offer and
sell up to 5,000,000 shares of our common stock from time to time under this
prospectus and any prospectus supplement. The selling stockholder may offer
and
sell such shares to or through one or more underwriters, dealers and agents,
or
directly to purchasers, on a continuous or delayed basis. We will not receive
any of the proceeds from the sale of our common stock by the selling
stockholder. See “Selling Stockholder” and “Plan of Distribution.”
Shares
of
our common stock are traded on the Nasdaq Global Market under the symbol “HALL.”
Our
principal executive offices are located at 777 Main Street, Suite 1000, Fort
Worth, Texas 76102, and our telephone number is (817) 348-1600.
AN
INVESTMENT IN OUR COMMON STOCK INVOLVES RISK. YOU SHOULD CAREFULLY CONSIDER
THE
INFORMATION UNDER THE HEADING “RISK FACTORS” ON PAGE 2 OF THIS PROSPECTUS BEFORE
INVESTING IN OUR COMMON STOCK.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION
HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS
IS
TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
_______________________
The
date
of this prospectus is _______________, 2007.
TABLE
OF CONTENTS
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Page
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About
this Prospectus
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1
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Special
Note Regarding Forward-Looking Statements
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1
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Company
Overview
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2
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| |
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Risk
Factors
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2
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| |
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Use
of Proceeds
|
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2
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| |
|
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Description
of Common Stock
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3
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|
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Selling
Stockholder
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4
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Plan
of Distribution
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5
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Legal
Matters
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8
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Experts
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8
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Where
You Can Find More Information
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8
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Information
Incorporated by Reference
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8
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ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with the Securities
and Exchange Commission (“SEC”) using a “shelf” registration process. Under this
shelf registration process, we may sell certain shares of our common stock
in
one or more offerings and the selling stockholder may, from time to time, sell
up to 5,000,000 shares of our common stock in one or more offerings. This
prospectus provides a general description of our common stock. Each time we
or
the selling stockholder sell shares of common stock under this shelf
registration process, we will provide a prospectus supplement that will contain
more specific information about the terms of such offering. The prospectus
supplement may also add, update or change any of the information contained
in
this prospectus. You should carefully read this prospectus and any prospectus
supplement, as well as the information incorporated in this prospectus by
reference. See, “Information Incorporated by Reference.” Any information in any
prospectus supplement or any subsequent material incorporated herein by
reference will supersede the information in this prospectus or any earlier
prospectus supplement. This prospectus may not be used to offer to sell, to
solicit an offer to buy, or to consummate a sale of any shares of our common
stock unless it is accompanied by a prospectus supplement.
Unless
the context requires otherwise, in this prospectus the term “Hallmark” refers
solely to Hallmark Financial Services, Inc. and the terms “we,” “our,” “our
company” and “us” refer to Hallmark and its subsidiaries.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus,
any
prospectus summary and the materials incorporated herein by reference
contain
certain forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, which are intended to be covered by the safe
harbors created thereby. Forward-looking statements include statements which
are
predictive in nature, which depend upon or refer to future events or conditions,
or which include words such as “expect,” “anticipate,” “intend,” “plan,”
“believe,” “estimate” or similar expressions. These statements include the plans
and objectives of management for future operations, including plans and
objectives relating to future growth of our business activities and availability
of funds. Statements regarding the following subjects are forward-looking by
their nature:
· our
business and growth strategies;
· our
performance goals;
· our
projected financial condition and operating results;
· our
understanding of our competition;
· industry
and market trends;
· the
impact of technology on our products, operations and business;
· our
use
of the proceeds of any offering; and
· any
other
statements or assumptions that are not historical facts.
The
forward-looking statements included in this prospectus, any prospectus summary
and the materials incorporated herein by reference are based on current
expectations that involve numerous risks and uncertainties. Assumptions relating
to these forward-looking statements involve judgments with respect to, among
other things, future economic, competitive and market conditions, regulatory
framework, weather-related events and future business decisions, all of which
are difficult or impossible to predict accurately and many of which are beyond
our control. Although we believe that the assumptions underlying these
forward-looking statements are reasonable, any of the assumptions could be
inaccurate and, therefore, there can be no assurance that the forward-looking
statements included in this prospectus will prove to be accurate. In light
of
the significant uncertainties inherent in these forward-looking statements,
the
inclusion of such information should not be regarded as a representation by
us
or any other person that our objectives and plans will be achieved.
COMPANY
OVERVIEW
We
are a
diversified property/casualty insurance group that serves businesses and
individuals in specialty and niche markets. We offer standard commercial
insurance, specialty commercial insurance and personal insurance in selected
market subcategories that are characteristically low-severity and short-tailed
risks. We focus on marketing, distributing, underwriting and servicing
property/casualty insurance products that require specialized underwriting
expertise or market knowledge. We believe this approach provides us the best
opportunity to achieve favorable policy terms and pricing. The insurance
policies we produce are written by our three insurance company subsidiaries
as
well as unaffiliated insurers.
We
market, distribute, underwrite and service our property/casualty insurance
products through four operating units, each of which has a specific focus.
Our
HGA Operating Unit primarily handles standard commercial insurance, our TGA
Operating Unit concentrates on excess and surplus lines commercial insurance,
our Aerospace Operating Unit specializes in general aviation insurance and
our
Phoenix Operating Unit focuses on non-standard personal automobile insurance.
Our business is geographically concentrated in the south-central and northwest
regions of the United States, except for our general aviation business which
is
written on a national basis.
Each
operating unit has its own management team with significant experience in
distributing products to its target markets and proven success in achieving
underwriting profitability and providing efficient claims management. Each
operating unit is responsible for marketing, distribution, underwriting and
claims management while we provide capital management, reinsurance, actuarial,
investment, financial reporting, technology and legal services and back office
support at the corporate level. We believe this approach optimizes our operating
results by allowing us to effectively penetrate our selected specialty and
niche
markets while maintaining operational controls, managing risks, controlling
overhead and efficiently allocating our capital across operating units.
The
retained premium produced by our operating units is supported by our insurance
company subsidiaries. American Hallmark Insurance Company of Texas presently
retains all of the risks on the commercial property/casualty policies marketed
by our HGA Operating Unit, assumes a portion of the risks on the commercial
property/casualty policies marketed by our TGA Operating Unit and assumes a
portion of the risks on the aviation property/casualty products marketed by
our
Aerospace Operating Unit. Gulf States Insurance Company presently assumes a
portion of the risks on the commercial property/casualty policies marketed
by
our TGA Operating Unit. Phoenix Indemnity Insurance Company presently assumes
all of the risks on the non-standard personal automobile policies marketed
by
our Phoenix Operating Unit and assumes a portion of the risks on the aviation
property/casualty products marketed by our Aerospace Operating
Unit.
RISK
FACTORS
Investing
in our common stock involves a number of risks. Before you decide to buy shares
of our common stock, you should carefully consider the risk factors set forth
in
any applicable prospectus supplement and in the materials incorporated by
reference herein. See, “Information
Incorporated by Reference.” Risks and uncertainties not presently known to us or
that we currently deem immaterial may also affect our business
operations.
USE
OF PROCEEDS
We
will
retain broad discretion over the use of the net proceeds to us from any sale
by
us of our common stock under this prospectus. We currently anticipate that
the
net proceeds from any sale by us of our common stock under this prospectus
will
be used for working capital and general corporate purposes, including funding
acquisitions of businesses.
All
net
proceeds from the sale of shares of our common stock by the selling stockholder
under this prospectus will go to the selling stockholder. We will not receive
any proceeds from the sale of shares of our common stock by the selling
stockholder.
DESCRIPTION
OF COMMON STOCK
General
Our
authorized capital stock consists solely of 33,333,333 shares of common stock,
par value $0.18 per share. As of the date of this prospectus, 20,768,252 shares
of our common stock were issued and outstanding. In addition, 966,334 shares
of
our common stock are reserved for issuance under our equity compensation plans.
Our common stock is currently traded on the Nasdaq Global Market under the
symbol “HALL.”
The
following description of our common stock is a summary and is qualified in
its
entirety by reference to our Restated Articles of Incorporation, our Restated
Bylaws, the provisions of Nevada corporate law and other applicable state
law.
Dividend,
Liquidation and Other Rights.
Holders
of shares of our common stock are entitled to receive ratably those dividends
that may be declared by our board of directors out of legally available funds.
Our board of directors will determine if and when distributions may be paid.
However, we have never paid dividends on our common stock and our board of
directors intends to continue this policy for the foreseeable future in order
to
retain earnings for development of our business. Also, as a holding company,
Hallmark relies primarily on dividends from its insurance subsidiaries as a
source of funds to pay dividends. Payment of dividends by Hallmark’s insurance
subsidiaries is subject to regulatory restriction. The holders of shares of
our
common stock have no preemptive, subscription or conversion rights. All shares
of our common stock to be outstanding following any offering under this
prospectus will be duly authorized, fully paid and non-assessable. Upon our
liquidation, dissolution or winding up, the holders of our common stock will
be
entitled to share ratably in the net assets legally available for distribution
to stockholders after the payment of all of our debts and other liabilities.
Voting
Rights.
Each
outstanding share of our common stock entitles the holder to one vote on all
matters presented to our stockholders for a vote. The holders of one-third
of
the outstanding shares of our common stock constitute a quorum at any meeting
of
our stockholders. Assuming the presence of a quorum, directors are elected
by a
plurality of the votes cast. Our common stock does not have cumulative voting
rights. Therefore, the holders of a majority of the outstanding shares of our
common stock can elect all of our directors. Most amendments to our Restated
Articles of Incorporation must be approved by the affirmative vote of the
holders of a majority of all outstanding shares of our common stock. Assuming
the presence of a quorum, the affirmative vote of the holders of a majority
of
the shares of our common stock actually voted is required for the approval
of
substantially all other matters.
Anti-Takeover
Effects of Certain Statutory Provisions
There
are
no provisions in our Restated Articles of Incorporation or our Restated Bylaws
intended to prevent or restrict takeovers, mergers or acquisitions of our
company. However, certain provisions of Nevada corporate law and various state
insurance laws could have the effect of discouraging others from attempting
hostile takeovers of our company. It is possible that these provisions could
make it more difficult to accomplish transactions which our stockholders may
otherwise deem to be in their best interests.
Nevada
Corporate Law Provisions.
Nevada
corporate law contains provisions governing “acquisition of controlling
interest.” These statutes generally provide that any person or entity that
acquires 20% or more of the outstanding voting shares of a publicly-held Nevada
corporation in the secondary public or private market may be denied voting
rights with respect to the acquired shares, unless a majority of the
disinterested stockholders of the corporation elect to restore such voting
rights in whole or in part. These control share acquisition statutes only apply
to a Nevada domestic corporation which (i) has 200 or more stockholders, with
at
least 100 of such stockholders being both stockholders of record and residents
of Nevada; and (ii) does business in Nevada directly or through an affiliated
corporation. The stockholders or board of directors of a corporation may elect
to exempt the stock of a corporation from these control share acquisition
statutes through adoption of a provision to that effect in the articles of
incorporation or bylaws of the corporation.
Neither
our Restated Articles of Incorporation nor our Restated Bylaws exempt our common
stock from the Nevada control share acquisition statutes. However, at this
time
we do not have 100 stockholders of record who are residents of Nevada and we
do
not do directly or indirectly do business in Nevada. Therefore, the provisions
of these control share acquisition statutes do not presently apply to
acquisitions of our shares. If these provisions were to become applicable in
the
future, they could discourage persons interested in acquiring a significant
interest in or control of our company, regardless of whether such acquisition
was in the interest of our stockholders.
Nevada
corporate law also contains provisions governing “combinations with interested
stockholders” which may also have an effect of delaying or making it more
difficult to effect a change in control of our company. This statute prevents
an
“interested stockholder” and a resident domestic Nevada corporation from
entering into a “combination” unless certain conditions are met. These statutes
generally define an “interested stockholder” as the beneficial owner of 10% or
more of the voting shares of a publicly-held Nevada corporation, or an affiliate
or associate thereof. The statutes define “combination” to include a merger or
consolidation with an “interested stockholder,” or a significant sale, lease,
exchange, mortgage, pledge, transfer or other disposition to an “interested
stockholder.”
A
corporation affected by these Nevada statutes may not engage in a combination
with an interested stockholder within three years after the interested
stockholder acquires its shares unless the combination or purchase was approved
by the board of directors before the interested stockholder acquired such
shares. If pre-approval was not obtained, then after the expiration of the
three-year period the combination may be consummated with the approval of the
board of directors or a majority of the voting power held by disinterested
stockholders, or if the consideration to be paid by the interested stockholder
is at least equal to the highest of certain specified thresholds.
State
Insurance Laws.
Before a
person can acquire control of a U.S. insurance company, prior written approval
must be obtained from the insurance commissioner of the state where the
insurance company is domiciled. Prior to granting approval of an application
to
acquire control of an insurance company, the state insurance commissioner will
consider such factors as the financial strength of the applicant, the integrity
of the applicant’s board of directors and executive officers, the acquiror’s
plans for the management of the applicant’s board of directors and executive
officers, the acquiror’s plans for the future operations of the insurer and any
anti-competitive results that may arise from the consummation of the acquisition
of control. Generally, state insurance statutes provide that control over an
insurer is presumed to exist if any person, directly or indirectly, owns,
controls, holds with the power to vote, or holds proxies representing, 10%
or
more of the voting securities of the insurance company. In addition, certain
state insurance laws contain provisions that require pre-acquisition
notification to the state insurance commissioner of a change in control with
respect to a non-domestic insurance company licensed to do business in that
state. While such pre-acquisition notification statutes do not authorize the
state insurance commissioner to disapprove the change of control, such statutes
do authorize certain remedies, including the issuance of a cease and desist
order with respect to the non-domestic insurance company if certain conditions
exist, such as undue market concentration. These approval requirements may
deter, delay or prevent transactions that stockholders may otherwise deem to
be
in their best interests.
Limitation
of Liability and Indemnification
Our
Restated Articles of Incorporation provide that our directors and officers
will
not be liable to us for monetary damages for any breach of their fiduciary
duty
as a director or officer, other than (i) for acts or omissions which involve
intentional misconduct, fraud or a knowing violation of law; or (ii) for the
payment of dividends in violation of Nevada corporate law. In addition, our
Restated Bylaws include an indemnification provision under which we have agreed
to indemnify our directors, officers, employees and agents to the fullest extent
permissible by law. These provisions may discourage derivative litigation
against our directors and officers even if such action, if successful, might
benefit us and our stockholders. Furthermore, our stockholders may be adversely
affected to the extent we are required to pay the costs of defense, settlement
or damages on behalf of our directors or officers pursuant to these
indemnification provisions.
Transfer
Agent
The
transfer
agent and registrar for our common stock is Securities Transfer
Corporation.
SELLING
STOCKHOLDER
Newcastle
Partners, L.P., or its pledgees, donees, transferees or other successors in
interest, may from time to time offer and sell any or all of the shares of
our
common stock offered by it under this prospectus. Newcastle Partners, L.P.
may
also sell, transfer or otherwise dispose of some or all of its shares of our
common stock in transactions exempt from the registration requirements of the
Securities Act of 1933, as amended. We do not know when or in what amounts
Newcastle Partners, L.P. may offer shares of our common stock for sale under
this prospectus. We will pay all expenses incurred with respect to the
registration and sale of the shares of our common stock offered by Newcastle
Partners, L.P. under this prospectus, other than the SEC registration fee,
underwriting fees, discounts and commissions, which will be borne by the selling
stockholder.
The
table
below sets forth information as of November 21, 2007, regarding beneficial
ownership of shares of our common stock by Newcastle Partners, L.P. The number
of shares, if any, to be offered by Newcastle Partners, L.P., and the amount
and
percentage of shares of our common stock to be owned by Newcastle Partners,
L.P.
following any offering under this prospectus, will be disclosed in the
prospectus supplement issued in respect of that offering.
| |
|
Shares
Beneficially Owned
Prior
to This Offering
|
|
Shares
Offered
|
|
Shares
Beneficially Owned
After
This Offering
|
|
|
Name
of Beneficial Owner
|
|
Number
|
|
Percent(1)
|
|
|
|
Number(2)
|
|
Percent(2)(3)
|
|
|
Newcastle
Partners, L.P.
|
|
|
9,738,243
|
|
|
46.9
|
|
|
5,000,000
|
|
|
4,738,243
|
|
|
22.8
|
|
|
(1)
|
Based
on 20,768,252 shares of our common stock outstanding as of November
21,
2007.
|
|
(2)
|
Assumes
that the selling stockholder sells
all of the shares of our common stock offered under this prospectus
and
neither acquires nor disposes of any other shares of our common stock.
The
selling stockholder is not obligated to sell any of its shares of
our
common stock.
|
|
(3)
|
Assumes
no increase or decrease in the number of outstanding shares of our
common
stock subsequent to November 21,
2007.
|
Newcastle
Partners, L.P. is an affiliate of our Executive Chairman, Mark E. Schwarz.
Mr.
Schwarz is the managing member of Newcastle Capital Group LLC, which is the
general partner of Newcastle Capital Management, L.P., which is the general
partner of Newcastle Partners, L.P., Newcastle
Special Opportunity Fund I, L.P., Newcastle Special Opportunity Fund II,
L.P.
and
Newcastle Focus Fund II, L.P., the address for all of which is 200 Crescent
Court, Suite 1400, Dallas, Texas 75201. As a result of these relationships,
Mr.
Schwarz may be deemed to beneficially own all shares of our common stock which
are offered for sale by Newcastle Partners, L.P. under this
prospectus.
As
of
November 21, 2007, Mr. Schwarz may be deemed to beneficially own 14,593,612
shares, or 70.3%, of our common stock, consisting of 48,821 shares directly
owned by Mr. Schwarz, 14,167 shares which may be acquired by Mr. Schwarz
pursuant to stock options exercisable within 60 days, 1,515,151 shares over
which Newcastle Capital Management, L.P. exercises voting and investment power,
9,738,243 shares owned by Newcastle Partners, L.P., 1,643,965 shares owned
by
Newcastle Special Opportunity Fund I, L.P., 1,630,865 shares owned by Newcastle
Special Opportunity Fund II, L.P. and 2,400 shares owned by Newcastle Focus
Fund
II, L.P. If Newcastle Partners, L.P. sells all of the shares of our common
stock
offered under this prospectus, none of Mr. Schwarz or his affiliates acquires
or
disposes of any other shares of our common stock and there is no increase or
decrease in the number
of
outstanding shares of our common stock subsequent to November 21, 2007, the
beneficial ownership of Mr. Schwarz will be reduced to 9,593,612 shares, or
46.2%, of our common stock.
PLAN
OF DISTRIBUTION
We
and
the selling stockholder (which, as used herein, includes donees, pledgees,
transferees or other successors-in-interest selling shares of common stock
or
interests in shares of common stock received after the date of this prospectus
from a selling stockholder as a gift, pledge, partnership distribution or other
transfer) may, from time to time, sell, transfer or otherwise dispose of any
or
all of the shares of common stock offered by this prospectus or any prospectus
supplement on any stock exchange, market or trading facility on which such
shares are traded or in private transactions. These dispositions may be at
fixed
prices, at prevailing market prices at the time of sale, at prices related
to
the prevailing market price, at varying prices determined at the time of sale
or
at negotiated prices.
We
and
the selling stockholder may use any one or more of the following methods when
disposing of shares our common stock:
| |
•
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
| |
•
|
block
trades in which the broker-dealer will attempt to sell the shares
as
agent, but may position and resell a portion of the block as principal
to
facilitate the transaction;
|
| |
•
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for
its
account;
|
| |
•
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
| |
•
|
privately
negotiated transactions;
|
| |
•
|
short
sales effected after the date of this
prospectus;
|
| |
•
|
through
the writing or settlement of options or other hedging transactions,
whether through an options exchange or
otherwise;
|
| |
•
|
broker-dealers
may agree to sell a specified number of such shares at a stipulated
price
per share;
|
| |
•
|
a
combination of any such methods of sale;
and
|
| |
•
|
any
other method permitted pursuant to applicable
law.
|
If
underwriters are used to sell the securities, we and the selling stockholder,
if
any, will enter into an underwriting agreement or similar agreement with them
at
the time of the sale to them. In that event, underwriters may receive
compensation from us and the selling stockholder, if any, in the form of
underwriting discounts or commissions and may also receive commissions from
purchasers of the securities for whom they may act as agent.
To
the
extent required by applicable law, a prospectus supplement relating to any
such
offering of shares of our common stock will set forth:
| |
•
|
the
offering terms, including the name or names of any underwriters,
dealers
or agents;
|
| |
•
|
the
number of shares of our common stock involved, the purchase price
of such
shares and the proceeds to us and the selling stockholder, if any,
from
such sale;
|
| |
•
|
any
underwriting discounts, concessions, commissions and other items
constituting compensation to underwriters, dealers or
agents;
|
| |
•
|
any
public offering price;
|
| |
•
|
any
discounts or concessions allowed or reallowed or paid by underwriters
or
dealers to other dealers; and
|
| |
•
|
any
securities exchanges on which the shares of our common stock may
be
listed.
|
The
shares of our common stock may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or
directly by one or more of such firms. Unless otherwise set forth in an
applicable prospectus supplement, the obligations of underwriters or dealers
to
purchase the shares will be subject to certain conditions precedent and the
underwriters or dealers will be obligated to purchase all the shares if any
are
purchased. Any public offering price and any discounts or concessions allowed
or
reallowed or paid by underwriters or dealers to other dealers may be changed
from time to time.
The
shares of our common stock may be sold directly by us or the selling
stockholder, or through agents designated by us or the selling stockholder
from
time to time. Any agent involved in the offer or sale of the shares in respect
of which this prospectus and a prospectus supplement is delivered will be named,
and any commissions payable by us or the selling stockholder to such agent
will
be set forth, in any required prospectus supplement. Unless otherwise indicated
in the prospectus supplement, any such agent will be acting on a best efforts
basis for the period of its appointment.
If
so
indicated in the prospectus supplement, we or the selling stockholder may
authorize underwriters, dealers or agents to solicit offers from certain
specified institutions to purchase securities from us or the selling stockholder
at the public offering price set forth in the prospectus supplement pursuant
to
delayed delivery contracts providing for payment and delivery on a specified
date in the future. Such contracts will be subject to any conditions set forth
in the prospectus supplement and the prospectus supplement will set forth the
commissions payable for solicitation of such contracts. The underwriters and
other persons soliciting such contracts will have no responsibility for the
validity or performance of any such contracts.
Underwriters,
dealers and agents may be entitled under agreements entered into with us or
the
selling stockholder to be indemnified by us or the selling stockholder against
certain civil liabilities, including liabilities under the Securities Act of
1933, as amended, or to contribution by us or the selling stockholder to
payments which they may be required to make. The terms and conditions of such
indemnification will be described in an applicable prospectus supplement.
Underwriters, dealers and agents may be customers of, engage in transactions
with or perform services for us or the selling stockholder in the ordinary
course of business.
Any
underwriters to whom securities are sold by us or the selling stockholder for
public offering and sale may make a market in such securities, but such
underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. No assurance can be given as to the liquidity
of the trading market for any securities.
Certain
persons participating in any offering of shares of our common stock may engage
in transactions that stabilize, maintain or otherwise affect the price of the
shares offered. In connection with any such offering, the underwriters, dealers
or agents, as the case may be, may purchase and sell securities in the open
market. These transactions may include overallotment and stabilizing
transactions and purchases to cover syndicate short positions created in
connection with the offering. Stabilizing transactions consist of certain bids
or purchases for the purpose of preventing or retarding a decline in the market
price of the shares. Syndicate short positions involve the sale by the
underwriters, dealers or agents, as the case may be, of a greater number of
shares than they are required to purchase from us in the offering. The
underwriters may also impose a penalty bid, whereby selling concessions allowed
to syndicate members or other broker-dealers for the shares sold for their
account may be reclaimed by the syndicate if such shares are repurchased by
the
syndicate in stabilizing or covering transactions. These activities may
stabilize, maintain or otherwise affect the market price of the shares, which
may be higher than the price that might otherwise prevail in the open market,
and if commenced, may be discontinued at any time. These transactions may be
effected on the Nasdaq Global Market, in the over-the-counter market or
otherwise. These activities will be described in more detail in the applicable
prospectus supplement.
In
connection with the sale of shares of our common stock, the selling stockholder
may enter into hedging transactions with broker-dealers or other financial
institutions, which may in turn engage in short sales of the common stock in
the
course of hedging the positions they assume. The selling stockholder may also
sell shares of our common stock short and deliver these securities to close
out
their short positions, or loan or pledge the common stock to broker-dealers
that
in turn may sell these securities. The selling stockholder may also enter into
option or other transactions with broker-dealers or other financial institutions
or the creation of one or more derivative securities which require the delivery
to such broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other financial institution
may
resell pursuant to this prospectus and any prospectus supplement.
The
aggregate proceeds to the selling stockholder from the sale of the common stock
offered by it will be the purchase price of the common stock less discounts
or
commissions, if any. The selling stockholder reserves the right to accept and,
together with its agents from time to time, to reject, in whole or in part,
any
proposed purchase of common stock to be made directly or through agents.
The
selling stockholder also may resell all or a portion of its shares in open
market transactions in reliance upon Rule 144 under the Securities Act, provided
that it meets the criteria and conforms to the requirements of that
rule.
The
selling stockholder and any broker-dealers that act in connection with the
sale
of securities might be deemed to be “underwriters” within the meaning of Section
2(11) of the Securities Act, and any commissions received by such broker-dealers
and any profit on the resale of the securities sold by them while acting as
principals might be deemed to be underwriting discounts or commissions under
the
Securities Act.
To
the
extent required, the shares of our common stock to be sold, the purchase price
and public offering price, the names of any agent, dealer or underwriter, and
any applicable commissions or discounts with respect to a particular offer
will
be set forth in an accompanying prospectus supplement or, if appropriate, a
post-effective amendment to the registration statement that includes this
prospectus.
In
order
to comply with the securities laws of some states, if applicable, shares of
our
common stock may be sold in these jurisdictions only through registered or
licensed brokers or dealers. In addition, in some states shares of our common
stock may not be sold unless it has been registered or qualified for sale or
an
exemption from registration or qualification requirements is available and
is
complied with.
We
have
advised the selling stockholder that the anti-manipulation rules of Regulation
M
under the Securities Exchange Act of 1934, as amended, may apply to sales of
shares in the market and to the activities of the selling stockholder and its
affiliates. In addition, we will make copies of this prospectus (as it may
be
supplemented or amended from time to time) available to the selling stockholder
for the purpose of satisfying the prospectus delivery requirements of the
Securities Act.
LEGAL
MATTERS
The
validity of the shares of common stock offered hereby will be passed upon for
us
by McGuire, Craddock & Strother, P.C., Dallas, Texas.
EXPERTS
The
consolidated financial statements of Hallmark Financial Services, Inc. as of
December 31, 2006 and 2005, and for each of the years in the three-year period
ended December 31, 2006, appearing in our Annual Report on Form 10-K for the
year ended December 31, 2006, have been audited by KPMG LLP, independent
registered public accounting firm, as set forth in their report thereon included
therein. The audit report covering the December 31, 2006 financial statements
refers to a change in the accounting for stock-based
compensation. The audit report covering the December 31, 2006
financial statements refers to a change in the accounting for stock-based
compensation. Such financial statements have been incorporated in this
prospectus by reference to our Annual Report on Form 10-K for the year ended
December 31, 2006, in reliance on the authority of said firm as experts in
auditing and accounting.
WHERE
YOU CAN FIND MORE INFORMATION
This
prospectus is part of a registration statement on Form S-3 filed by us with
the
SEC relating to the shares of our common stock offered under this prospectus.
As
permitted by SEC rules, this prospectus does not contain all of the information
contained in the registration statement and accompanying exhibits and schedules
filed by us with the SEC. The registration statement, exhibits and schedules
provide additional information about us and our common stock. The registration
statement, exhibits and schedules are available at the SEC’s public reference
rooms or the SEC website at www.sec.gov.
We
file
annual, quarterly and current reports, proxy statements and other information
with the SEC. These documents are available for inspection and copying by the
public at the Public Reference Room at 100 F Street, N.E., Room 1580,
Washington, D.C. 20549. You may obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330. Our filings are
also
available to the public on the internet through the SEC website at www.sec.gov.
You may also find our SEC filings and other relevant information about us on
our
website at http://www.hallmarkgrp.com. However, the information on our website
is not a part of this prospectus.
INFORMATION
INCORPORATED BY REFERENCE
The
SEC
allows us to “incorporate by reference” into this prospectus the information we
file with the SEC. This permits us to disclose important information to you
by
referencing these filed documents. Any information referenced in this way is
considered part of this prospectus and any prospectus supplement. Any
information filed with the SEC after the date on the cover of this prospectus
or
any prospectus supplement will automatically be deemed to update and supersede
this prospectus and such prospectus supplement. We incorporate by reference
the
documents listed below and any future filings made by us with the SEC with
file
number 001-11252 under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended, until all of the securities described in
this
prospectus are sold:
| · |
our
Annual Report on Form 10-K for the year ended December 31, 2006;
|
| · |
our
definitive proxy statement filed on April 26,
2007;
|
| · |
our
Quarterly Reports on Form 10-Q for the quarters ended March 31, June
30
and September 30, 2007;
|
| · |
our
Current Reports on Form 8-K filed on February 9, March 23, May 14,
June 8,
August 10, August 23, August 24, October 1, November 8, November
13 and
November 19, 2007; and
|
| · |
the
description of our common stock contained in our registration statement
on
Form 8-A filed with the SEC on August 9, 2005, including all amendments
and reports filed for purposes of updating such description.
|
You
can
request a copy of any document incorporated by reference in this prospectus,
at
no cost, by writing or telephoning us at the following:
Hallmark
Financial Services, Inc.
777
Main
Street, Suite 1000
Fort
Worth, Texas 76102
Attention:
Mark J. Morrison, President
Telephone:
(817) 348-1600
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other
Expenses of Issuance and Distribution.
The
following table sets forth the expenses expected to be incurred in connection
with this registration statement. All such expenses will be payable by Hallmark
Financial Services, Inc., except that the selling stockholder will pay the
Securities and Exchange Commission (“SEC”) registration fee attributable to the
secondary offering. All items below are estimates, other than the SEC
registration fees.
|
SEC
registration fee - Primary Offering
|
|
$
|
1,148
|
|
|
SEC
registration fee - Secondary Offering
|
|
$
|
1,235
|
|
|
Printing
expenses(1)
|
|
$
|
1,000
|
|
|
Accounting
fees and expenses(1)
|
|
$
|
5,000
|
|
|
Legal
fees and expenses(1)
|
|
$
|
15,000
|
|
|
Miscellaneous
|
|
$
|
1,617
|
|
|
Total
|
|
$
|
25,000
|
|
|
(1)
|
Does
not include expenses in connection with preparing prospectus supplements
and offering shares of common stock pursuant
thereto.
|
Item
15. Indemnification
of Directors and Officers.
The
Nevada General Corporation Law (“NGCL”) provides that a director or officer is
not individually liable to the corporation or its stockholders or creditors
for
any damages as a result of any act or failure to act in his capacity as a
director or officer unless (i) such act or omission constituted a breach of
his
fiduciary duties as a director or officer; and (ii) his breach of those duties
involved intentional misconduct, fraud or a knowing violation of law. Under
the
NGCL, a corporation may indemnify directors and officers, as well as other
employees and individuals, against any threatened, pending or completed action,
suit or proceeding, except an action by or in the right of the corporation,
by
reason of the fact that he is or was a director, officer, employee or agent
of
the corporation so long as such person acted in good faith and in a manner
which
he reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon
a
plea of nolo contendere or its equivalent, does not, of itself, create a
presumption that the person did not act in good faith and in a manner which
he
reasonably believed to be in or not opposed to the best interests of the
corporation, or that, with respect to any criminal action or proceeding, he
had
reasonable cause to believe that his conduct was unlawful.
The
NGCL
further provides that indemnification may not be made for any claim as to which
such a person has been adjudged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to be liable to the corporation or for
amounts paid in settlement to the corporation, unless and only to the extent
that the court in which the action or suit was brought or other court of
competent jurisdiction determines upon application that, in view of all the
circumstances of the case, the person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper. To the extent that a
director, officer, employee or agent of a corporation has been successful on
the
merits or otherwise in defense of any action, suit or proceeding or in defense
of any claim, issue or matter therein, the corporation must indemnify him
against expenses, including attorneys’ fees, actually and reasonably incurred by
him in connection with the defense. The NGCL provides that this is not exclusive
of other rights to which those seeking indemnification may be entitled under
any
bylaw, agreement, vote of stockholders or disinterested directors or otherwise.
The
registrant’s articles of incorporation provide that the directors and officers
will not be personally liable to the registrant or its stockholders for monetary
damages for breach of their fiduciary duty as a director or officer, except
for
liability of a director or officer for acts or omissions involving intentional
misconduct, fraud or a knowing violation of law, or the payment of dividends
in
violation of the NGCL. The registrant’s bylaws and contractual arrangements with
certain of its directors and officers provide that the registrant is required
to
indemnify its directors and officers to the fullest extent permitted by law.
The
registrant’s bylaws and these contractual arrangements also require the
registrant to advance expenses incurred by a director or officer in connection
with the defense of any proceeding upon receipt of an undertaking by or on
behalf of the director or officer to repay the amount if it is ultimately
determined by a court of competent jurisdiction that he or she is not entitled
to be indemnified by the registrant. The registrant’s bylaws also permit the
registrant to purchase and maintain errors and omissions insurance on behalf
of
any director or officer for any liability arising out of his or her actions
in a
representative capacity. The registrant does not presently maintain any such
errors and omissions insurance for the benefit of its directors and
officers.
Item
16. Exhibits.
|
Exhibit
#
|
|
Description
|
|
1(a)+
|
|
Form
of Underwriting Agreement
|
|
4(a)
|
|
Specimen
certificate for Common Stock, $0.18 par value per share, of the registrant
(incorporated by reference to Exhibit 4.1 to the registrant’s
Post-Effective Amendment No. 1 to Registration Statement on Form
S-1 filed
October 3, 2006).
|
|
4(b)
|
|
Indenture
dated as of June 21, 2005, between Hallmark Financial Services, Inc.
and
JPMorgan Chase Bank, National Association (incorporated by reference
to
Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed June 27,
2005).
|
|
4(c)
|
|
Amended
and Restated Declaration of Trust of Hallmark Statutory Trust I dated
as
of June 21, 2005, among Hallmark Financial Services, Inc., as sponsor,
Chase Bank USA, National Association, as Delaware trustee, and JPMorgan
Chase Bank, National Association, as institutional trustee, and Mark
Schwarz and Mark Morrison, as administrators (incorporated by reference
to
Exhibit 4.2 to the registrant’s Current Report on Form 8-K filed June 27,
2005).
|
|
4(d)
|
|
Form
of Junior Subordinated Debt Security Due 2035 (incorporated by reference
to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed June
27, 2005).
|
|
4(e)
|
|
Form
of Capital Security Certificate (incorporated by reference to Exhibit
4.2
to the registrant’s Current Report on Form 8-K filed June 27,
2005).
|
|
4(f)
|
|
Form
of Registration Rights Agreement dated January 27, 2006, between
Hallmark
Financial Services, Inc. and Newcastle Special Opportunity Fund I,
L.P.
and Newcastle Special Opportunity Fund II, L.P. (incorporated by
reference
to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed
February 2, 2006).
|
|
4(g)
|
|
Indenture
dated as of August 23, 2007, between Hallmark Financial Services,
Inc. and
The Bank of New York Trust Company, National Association (incorporated
by
reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K
filed August 24, 2007).
|
|
4(h)
|
|
Amended
and Restated Declaration of Trust of Hallmark Statutory Trust II
dated as
of August 23, 2007, among Hallmark Financial Services, Inc., as sponsor,
The Bank of New York (Delaware), as Delaware trustee, and The Bank
of New
York Trust Company, National Association, as institutional trustee,
and
Mark Schwarz and Mark Morrison, as administrators (incorporated by
reference to Exhibit 4.2 to the registrant’s Current Report on Form 8-K
filed August 24, 2007).
|
|
4(i)
|
|
Form
of Junior Subordinated Debt Security Due 2037 (incorporated by reference
to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed August
24, 2007).
|
|
4(j)
|
|
Form
of Capital Security Certificate (incorporated by reference to Exhibit
4.2
to the registrant’s Current Report on Form 8-K filed August 24,
2007).
|
|
5*
|
|
Opinion
of McGuire, Craddock & Strother, P.C.
|
|
23(a)*
|
|
Consent
of Independent Registered Public Accounting Firm.
|
|
23(b)*
|
|
Consent
of McGuire, Craddock & Strother, P.C. (included in opinion filed as
Exhibit 5.1).
|
|
24*
|
|
Power
of Attorney (included on signature page
hereto).
|
|
+
|
To
be filed as an exhibit to a Current Report on Form 8-K in connection
with
a specific offering.
|
Item
17. Undertakings.
The
undersigned registrant hereby undertakes:
(1)
To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i)
to
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933;
(ii)
to
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding
the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20% change in the maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the effective
registration statement;
(iii)
to
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement;
Provided,
however, that paragraphs 1(i), 1(ii) and 1(iii) do not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in reports filed with or furnished to the Commission by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration statement, or is
contained in a form of prospectus filed pursuant to Rule
424(b)
that is part of the registration statement.
(2)
That,
for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3)
To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4)
That,
for the purpose of determining liability under the Securities Act of 1933 to
any
purchaser:
(i)
Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed
to
be part of the registration statement as of the date the filed prospectus was
deemed part of and included in the registration statement; and
(ii)
Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7)
as
part of a registration statement in reliance on Rule 430B relating to an
offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose
of
providing the information required by section 10(a) of the Securities Act of
1933 shall be deemed to be part of and included in the registration statement
as
of the earlier of the date such form of prospectus is first used after
effectiveness or the date of the first contract of sale of securities in the
offering described in the prospectus. As provided in Rule 430B, for liability
purposes of the issuer and any person that is at that date an underwriter,
such
date shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which that
prospectus relates, and the offering of such securities at that time shall
be
deemed to be the initial bona fide offering thereof. Provided, however, that
no
statement made in a registration statement or prospectus that is part of the
registration statement or made in a document incorporated or deemed incorporated
by reference into the registration statement or prospectus that is part of
the
registration statement will, as to a purchaser with a time of contract of sale
prior to such effective date, supersede or modify any statement that was made
in
the registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such effective
date.
(5)
That,
for the purpose of determining liability of the registrant under the Securities
Act of 1933 to any purchaser in the initial distribution of the securities,
the
undersigned registrant undertakes that in a primary offering of securities
of
the undersigned registrant pursuant to this registration statement, regardless
of the underwriting method used to sell the securities to the purchaser, if
the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser:
(i)
Any
preliminary prospectus or prospectus of the undersigned registrant relating
to
the offering required to be filed pursuant to Rule 424;
(ii)
Any
free writing prospectus relating to the offering prepared by or on behalf of
the
undersigned registrant or used or referred to by the undersigned
registrant;
(iii)
The
portion of any other free writing prospectus relating to the offering containing
material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and
(iv)
Any
other communication that is an offer in the offering made by the undersigned
registrant to the purchaser.
(6)
That,
for purposes of determining any liability under the Securities Act of 1933,
each
filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of
an
employee benefit plan’s annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(7)
Insofar as indemnification for liabilities arising under the Securities Act
of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of
such issue.
(8)
That,
for purposes of determining any liability under the Securities Act of 1933,
the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(9)
That,
for purposes of determining any liability under the Securities Act of 1933,
each
post-effective amendment that contains a form of prospectus shall be deemed
to
be a new registration statement relating to the securities offered therein,
and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant certifies
that
it has reasonable grounds to believe that it meets all of the requirements
for
filing on Form S-3 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Fort
Worth, State of Texas, on the 23rd day of November, 2007.
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HALLMARK
FINANCIAL SERVICES, INC. |
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By: |
/s/ MARK
J.
MORRISON |
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Mark
J. Morrison, President and Chief Executive
Officer |
POWER
OF ATTORNEY
KNOW
ALL
PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby
constitutes and appoints Mark E. Schwarz, Executive Chairman, and Mark J.
Morrison, President and Chief Executive Officer, and each of them individually,
as his true and lawful attorneys-in-fact and agents, with full power of
substitution, for him in his name, place and stead, in any and all capacities,
in connection with this registration statement, including to sign and file
in
the name and on behalf of the undersigned as director or officer of the
registrant (i) any and all amendments or supplements (including any and all
stickers and post-effective amendments) to this registration statement, with
all
exhibits thereto, and other documents in connection therewith, and (ii) any
and
all additional registration statements, and any and all amendments thereto,
relating to the same offering of securities as those that are covered by this
registration statement that are filed pursuant to Rule 462(b) promulgated under
the Securities Act of 1933 with the Securities and Exchange Commission and
any
applicable securities exchange or securities self-regulatory body, granting
unto
said attorneys-in-fact and agents, and each of them, full power and authority
to
do and perform each and every act and thing requisite or necessary to be done
in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute, may lawfully do or cause
to
be done by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed by the following persons in the capacities and on the dates
indicated:
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Signature
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Title
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Date
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/s/
MARK E. SCHWARZ
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Executive
Chairman and Director
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November
23, 2007
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Mark
E. Schwarz
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/s/
MARK J. MORRISON
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President
and Chief Executive Officer
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November
23, 2007
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Mark
J. Morrison
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(principal
executive officer)
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|
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/s/
JEFFREY R. PASSMORE
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Senior
Vice President and Chief Accounting
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November
23, 2007
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Jeffrey
R. Passmore
|
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Officer
(principal financial and accounting officer)
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/s/
SCOTT T. BERLIN
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Director
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November
23, 2007
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Scott
T. Berlin
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/s/
JAMES H. GRAVES
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Director
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November
23, 2007
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James
H. Graves
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/s/
GEORGE R. MANSER
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Director
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November
23, 2007
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George
R. Manser
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