sec document
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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. 3)1
HALLMARK FINANCIAL SERVICES, INC.
(Name of issuer)
SHARES OF COMMON STOCK, PAR VALUE $0.03 PER SHARE
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(Title of class of securities)
40624Q104
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(CUSIP number)
STEVEN WOLOSKY, ESQ.
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
505 Park Avenue
New York, New York 10022
(212) 753-7200
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(Name, address and telephone number of person
authorized to receive notices and communications)
September 17, 2003
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(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 8 Pages)
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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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CUSIP No. 40624Q104 13D Page 2 of 8 pages
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
NEWCASTLE PARTNERS, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
TEXAS
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 22,870,623
OWNED BY EACH
REPORTING
PERSON WITH -----------------------------------------------------------------
8 SHARED VOTING POWER
0
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
22,870,623
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10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
22,870,623
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
62.8%
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14 TYPE OF REPORTING PERSON*
PN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 40624Q104 13D Page 3 of 8 pages
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================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
NEWCASTLE CAPITAL MANAGEMENT, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
TEXAS
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 22,870,623
OWNED BY EACH
REPORTING
PERSON WITH -----------------------------------------------------------------
8 SHARED VOTING POWER
0
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
22,870,623
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
22,870,623
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
62.8%
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14 TYPE OF REPORTING PERSON*
PN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 40624Q104 13D Page 4 of 8 pages
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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.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
TEXAS
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 22,870,623
OWNED BY EACH
REPORTING
PERSON WITH -----------------------------------------------------------------
8 SHARED VOTING POWER
0
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
22,870,623
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
22,870,623
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
62.8%
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14 TYPE OF REPORTING PERSON*
OO
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 40624Q104 13D Page 5 of 8 pages
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
MARK E. SCHWARZ
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 22,945,623
OWNED BY EACH
REPORTING
PERSON WITH -----------------------------------------------------------------
8 SHARED VOTING POWER
0
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
22,945,623
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
22,945,623
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
62.9%
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14 TYPE OF REPORTING PERSON*
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 40624Q104 13D Page 6 of 8 pages
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The following constitutes Amendment No. 3 ("Amendment No. 3") to the
Schedule 13D filed by the undersigned. This Amendment No. 3 amends the Schedule
13D as specifically set forth herein.
Item 3 is hereby amended and restated to read as follows:
Item 3. Source and Amount of Funds or Other Consideration.
The net investment cost (including commissions, if any) of the
shares of Common Stock held directly by NP was approximately $8,992,678.74, all
of which was obtained from NP's working capital. NP also directly owns a
currently exercisable option to purchase 50,000 shares of Common Stock which was
purchased for nominal value, as previously described in Item 6 hereof. Mark
Schwarz directly owns options exercisable within 60 days of the date hereof to
purchase 75,000 shares of Common Stock, which options were provided to him as
consideration for his service as a director of the Issuer.
NP acquired 18,356,594 shares of Common Stock pursuant to rights
that were issued to NP as a shareholder of the Company as part of a rights
offering completed by the Company on September 17, 2003. Simultaneously
therewith, NP sold 819,472 shares in a private transaction to certain employees
of the Company.
Items 5(a)-(b) is hereby amended and restated as follows:
(a) The aggregate percentage of shares of Common Stock reported to
be owned by the Reporting Persons is based upon 36,366,059 shares outstanding,
which is the total number of shares of Common Stock outstanding as reported in
the Issuer's Form 10-Q for the quarter ended September 30, 2003.
As of the filing date of this statement, NP beneficially owned
22,870,623 shares of Common Stock (including 50,000 shares currently issuable
upon the exercise of an option at an exercise price of $.375 per share),
representing approximately 62.8% of the issued and outstanding Common Stock of
the Issuer.
NCM, as the general partner of NP, may be deemed to beneficially own
the 22,870,623 shares of Common Stock beneficially owned by NP, representing
approximately 62.8% 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 also be deemed to beneficially own the 22,870,623 shares of
Common Stock beneficially owned by NP, representing approximately 62.8% of the
issued and outstanding Common Stock of the Issuer.
Mark Schwarz, as the managing member of NCG, the general partner of
NCM, which in turn is the general partner of NP, may also be deemed to
beneficially own the 22,945,623 shares of Common Stock beneficially owned by NP,
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CUSIP No. 40624Q104 13D Page 7 of 8 pages
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representing approximately 62.9% of the issued and outstanding Common Stock of
the Issuer, which number includes options to purchase 75,000 shares of common
stock directly held by Mr. Schwarz and exercisable within 60 days of the date
hereof at an exercise price of $0.6875 per share.
(b) By virtue of his position with NP, NCM and NCG, Mr. Schwarz has
the sole power to vote and dispose of the shares of Common Stock reported in
this statement.
Item 5(c) is hereby amended to add the following:
(c) Transactions in the Common Stock in the last 60 days.
Reporting Person: Newcastle Partners, L.P.*
Type of Number of Shares Price Per Date of
Transaction Common Stock Share Transaction
Purchase 18,356,594 $0.40 9/17/03
Sale 232,646 $0.40 9/17/03
Sale 121,390 $0.40 9/17/03
Sale 107,200 $0.40 9/17/03
Sale 21,400 $0.40 9/17/03
Sale 20,836 $0.40 9/17/03
Sale 6,000 $0.40 9/17/03
Sale 310,000 $0.40 9/17/03
*NCM, NCG and Mr. Schwarz may be deemed, pursuant to Rule 13d-3 of
the Securities Exchange Act of 1934, as amended, to be the beneficial owners of
all of the shares of Common Stock transacted by NP.
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CUSIP No. 40624Q104 13D Page 8 of 8 pages
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SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: November 18, 2003 NEWCASTLE PARTNERS, L.P.
By: Newcastle Capital Management, L.P.,
its general partner
By: Newcastle Capital Group, L.L.C.,
its general partner
By: /s/ Mark Schwarz
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Mark Schwarz, Managing Member
NEWCASTLE CAPITAL MANAGEMENT, L.P.
By: Newcastle Capital Group, L.L.C.,
its general partner
By: /s/ Mark Schwarz
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Mark Schwarz, Managing Member
NEWCASTLE CAPITAL GROUP, L.L.C.
By: /s/ Mark Schwarz
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Mark Schwarz, Managing Member
/s/ Mark Schwarz
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MARK SCHWARZ