sec document
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13D
(Rule 13d-101)
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. 6)1
Hallmark Financial Services, Inc.
---------------------------------
(Name of Issuer)
Shares of Common Stock, Par Value $0.03 Per Share
-------------------------------------------------
(Title of Class of Securities)
40624Q104
---------
(CUSIP Number)
STEVEN WOLOSKY, ESQ.
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
Park Avenue Tower
65 East 55th Street
New York, New York 10022
(212) 451-2300
--------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 25, 2006
------------
(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 that 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 11 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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CUSIP No. 40624Q104 13D Page 2 of 11 Pages
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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* (a) / /
(b) / /
--------------------------------------------------------------------------------
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 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 67,520,362
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH - 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
67,520,362
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
67,520,362
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
63.4%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 40624Q104 13D Page 3 of 11 Pages
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================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS.OF ABOVE PERSONS (ENTITIES ONLY)
NEWCASTLE SPECIAL OPPORTUNITY FUND I, L.P.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
--------------------------------------------------------------------------------
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
DELAWARE
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 9,863,785
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH - 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
9,863,785
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
9,863,785
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.3%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 40624Q104 13D Page 4 of 11 Pages
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================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS.OF ABOVE PERSONS (ENTITIES ONLY)
NEWCASTLE SPECIAL OPPORTUNITY FUND II, L.P.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
--------------------------------------------------------------------------------
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
DELAWARE
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 9,785,187
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH - 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
9,785,187
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
9,785,187
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.2%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 40624Q104 13D Page 5 of 11 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.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
--------------------------------------------------------------------------------
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) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
TEXAS
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 87,169,334
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH - 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
87,169,334
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
87,169,334
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
81.8%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 40624Q104 13D Page 6 of 11 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.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
--------------------------------------------------------------------------------
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) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
TEXAS
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 87,169,334
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH - 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
87,169,334
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
87,169,334
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
81.8%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 40624Q104 13D Page 7 of 11 Pages
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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) / /
(b) / /
--------------------------------------------------------------------------------
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) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 87,462,259
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH - 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
87,462,259
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
87,462,259
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
82.1%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 40624Q104 13D Page 8 of 11 Pages
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The following constitutes Amendment No. 6 ("Amendment No. 6") to the
Schedule 13D filed by the undersigned. This Amendment No. 6 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 3 is hereby amended to add the following:
On May 25, 2006, NSOF I delivered to the Issuer a notice of conversion
with respect to the entire outstanding principal amount, plus accrued and unpaid
interest thereon, of a promissory note, dated January 27, 2006, in the principal
amount of $12,550,000, issued by the Issuer to NSOF I (the "NSOF I Note"). NSOF
I was issued 9,863,785 shares of Common Stock of the Issuer in respect of such
conversion. Of such shares, 9,804,687 shares were issued in respect of the
conversion of the entire outstanding principal amount of the NSOF I Note and
59,098 shares were issued in respect of the conversion of accrued and unpaid
interest thereon. Such conversion did not require the payment of any
consideration on the part of NSOF I.
On May 25, 2006, NSOF II delivered to the Issuer a notice of conversion
with respect to the entire outstanding principal amount, plus accrued and unpaid
interest thereon, of a promissory note, dated January 27, 2006, in the principal
amount of $12,450,000, issued by the Issuer to NSOF II (the "NSOF II Note" and,
together with the NSOF I Note, the "Notes"). NSOF II was issued 9,785,187 shares
of Common Stock of the Issuer in respect of such conversion. Of such shares,
9,726,562 shares were issued in respect of the conversion of the entire
outstanding principal amount of the NSOF II Note and 58,625 shares were issued
in respect of the conversion of accrued and unpaid interest thereon. Such
conversion did not require the payment of any consideration on the part of NSOF
II.
Item 4 is hereby amended to add the following:
On May 25, 2006, each of NSOF I and NSOF II delivered to the Issuer a
notice of conversion with respect to the conversion of the entire outstanding
principal amount, and accrued and unpaid interest thereon, of its Note into
9,863,785 and 9,785,187 shares of Common Stock of the Issuer, respectively, as
more fully described in Item 3 above.
Item 5(a)-(b) is hereby amended and restated to read as follows:
(a) The aggregate percentage of shares of Common Stock reported to be
owned by the Reporting Persons is based upon 106,558,619 shares outstanding
(86,909,647 shares of Common Stock reported by the Issuer to be outstanding as
of May 12, 2006, plus an aggregate of 19,648,972 shares of Common Stock issued
to NSOF I and NSOF II upon conversion of the Notes).
As of the filing date of this statement, NP beneficially owned
67,520,362 shares of Common Stock, representing approximately 63.4% of the
issued and outstanding Common Stock of the Issuer.
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CUSIP No. 40624Q104 13D Page 9 of 11 Pages
----------------------- -----------------------
NSOF I beneficially owned 9,863,785 shares of Common Stock,
representing approximately 9.3% of the issued and outstanding Common Stock of
the Issuer.
NSOF II beneficially owned 9,785,187 shares of Common Stock,
representing approximately 9.2% of the issued and outstanding Common Stock of
the Issuer.
NCM, as the general partner of each of NP, NSOF I and NSOF II, may be
deemed to beneficially own the 67,520,362 shares, 9,863,785 shares and 9,785,187
shares of Common Stock beneficially owned by NP, NSOF I and NSOF II,
respectively, representing approximately 81.8% 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 each of NP, NSOF I and NSOF II, may also be deemed to beneficially
own the 67,520,362 shares, 9,863,785 shares and 9,785,187 shares of Common Stock
beneficially owned by NP, NSOF I and NSOF II, respectively, representing
approximately 81.8% 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 each of NP, NSOF I and NSOF II, may
also be deemed to beneficially own the 67,520,362 shares, 9,863,785 shares and
9,785,187 shares of Common Stock beneficially owned by NP, NSOF I and NSOF II,
respectively, which, together with the 292,925 shares of Common Stock Mr.
Schwarz owns directly, represents approximately 82.1% of the issued and
outstanding Common Stock of the Issuer.
NCM, NCG and Mr. Schwarz disclaim beneficial ownership of the shares of
Common Stock beneficially owned by NP, NSOF I and NSOF II, except to the extent
of their pecuniary interest therein.
(b) By virtue of his position with NP, NSOF I, NSOF II, 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:
There were no transactions by the Reporting Persons in the shares of
Common Stock during the past 60 days other than the conversion by NSOF I and
NSOF II of the Notes described herein.
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CUSIP No. 40624Q104 13D Page 10 of 11 Pages
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SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certify that the information set forth in this statement is
true, complete and correct.
Dated: June 5, 2006 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
-----------------------------------
Mark Schwarz, Managing Member
NEWCASTLE SPECIAL OPPORTUNITY FUND I,
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
-----------------------------------
Mark Schwarz, Managing Member
NEWCASTLE SPECIAL OPPORTUNITY FUND II,
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
-----------------------------------
Mark Schwarz, Managing Member
NEWCASTLE CAPITAL MANAGEMENT, L.P.
By: Newcastle Capital Group, L.L.C.,
its general partner
By: /s/ Mark Schwarz
-----------------------------------
Mark Schwarz, Managing Member
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CUSIP No. 40624Q104 13D Page 11 of 11 Pages
----------------------- -----------------------
NEWCASTLE CAPITAL GROUP, L.L.C.
By: /s/ Mark Schwarz
-----------------------------------
Mark Schwarz, Managing Member
/s/ Mark Schwarz
---------------------------------------
MARK SCHWARZ