SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934 (Amendment No. )
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e) (2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
(Name of Registrant as Specified In Its Charter)
HALLMARK FINANCIAL SERVICES, INC.
___________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, If Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
___________________________________________________________________________
(2) Aggregate numer of securities to which transactions applies:
___________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
___________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
___________________________________________________________________________
(5) Total Fee Paid
___________________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
___________________________________________________________________________
(1) Amount Previously Paid:
___________________________________________________________________________
(2) Form, Schedule or Registration Statement No:
___________________________________________________________________________
(3) Filing Party:
___________________________________________________________________________
(4) Date Filed:
___________________________________________________________________________
HALLMARK FINANCIAL SERVICES, INC.
14651 Dallas Parkway, Suite 900
Dallas, Texas 75254
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 21, 2002
_______________________
SOLICITATION AND REVOCABILITY OF PROXIES
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Hallmark Financial Services, Inc., a
Nevada corporation (the "Company"), to be voted at the 2002 Annual Meeting
of Shareholders (the "Annual Meeting") to be held on Tuesday, May 21, 2002,
at the time and place and for the purposes set forth in the accompanying
Notice of Annual Meeting of Shareholders (the "Notice"), and at any
adjournment(s) thereof. When proxies in the accompanying form are properly
executed and received, the shares represented thereby will be voted at the
Annual Meeting in accordance with the directions noted thereon. If no
direction is indicated on the proxy, the shares represented thereby will be
voted for the election of each of the nominees for director and in the
discretion of the proxy holder on any other matter that may properly come
before the meeting.
Submitting a proxy will not affect a shareholder's right to vote in
person at the Annual Meeting. Any shareholder who gives a proxy may revoke
it at any time before it is exercised by delivering written notice of
revocation to the Company, by substituting a new proxy executed on a later
date, or by making a written request in person at the Annual Meeting that
the proxy be returned. However, mere attendance at the Annual Meeting will
not of itself revoke the proxy.
All expenses of preparing, assembling and mailing this Proxy Statement
and the enclosed materials and all costs of soliciting proxies will be paid
by the Company. In addition to solicitation by mail, proxies may be
solicited by officers and regular employees of the Company by telephone or
in person. Such officers and employees who solicit proxies will receive no
compensation for their services other than their regular salaries.
Arrangements will also be made with brokerage houses and other custodians,
nominees and fiduciaries to forward solicitation materials to the beneficial
owners of shares they hold, and the Company may reimburse them for
reasonable out-of-pocket expenses they incur in forwarding these materials.
The principal executive offices of the Company are located at 14651
Dallas Parkway, Suite 900, Dallas, Texas 75254. The Company's mailing
address is the same as that of its principal executive offices.
This Proxy Statement and the accompanying form of proxy are first being
mailed or given to shareholders on or about April 23, 2002. A copy of the
Company's Annual Report for the fiscal year ended December 31, 2001, is
enclosed herewith. Except as expressly incorporated by reference herein,
such Annual Report does not constitute a part of the materials used for the
solicitation of proxies.
PURPOSES OF THE MEETING
At the Annual Meeting, the shareholders of the Company will consider
and vote on the following matters:
1. Election of five directors to serve until the next annual
meeting of shareholders or until their successors are duly elected and
qualified; and
2. Transaction of such other business as may properly come
before the meeting or any adjournment thereof.
QUORUM AND VOTING
The record date for the determination of shareholders entitled to
notice of and to vote at the Annual Meeting was the close of business on
April 10, 2002 (the "Record Date"). On the Record Date, there were
11,049,133 shares of Common Stock of the Company, par value $0.03 per share
(the "Common Stock"), issued and outstanding, each of which is entitled to
one vote on all matters to be acted upon at the Annual Meeting. There are
no cumulative voting rights. The presence, in person or by proxy, of
holders of one-third of the outstanding shares of Common Stock entitled to
vote at the meeting is necessary to constitute a quorum to transact
business. Assuming the presence of a quorum, directors will be elected by a
plurality of the votes cast. The affirmative vote of the holders of a
majority of the shares of Common Stock actually voted will be required for
the approval of all other matters to come before the Annual Meeting.
Abstentions and broker non-votes will be counted solely for purposes of
determining whether a quorum is present at the Annual Meeting. Pursuant to
the Bylaws of the Company, abstentions and broker non-votes will not be
counted in determining the number of shares voted on any matter and will
have no effect on the election of directors or the approval of any proposal
submitted to a vote of the shareholders at the Annual Meeting.
PRINCIPAL SHAREHOLDERS AND STOCK OWNERSHIP OF MANAGEMENT
The following table and the notes thereto set forth certain information
regarding the beneficial ownership of the Common Stock as of the Record
Date, by (i) each current director and nominee for director of the Company;
(ii) all executive officers and current directors of the Company as a group;
and (iii) each other person known to the Company to own beneficially more
than five percent of the presently outstanding Common Stock. Unless
otherwise indicated, the persons identified in the table have sole voting
and dispositive power with respect to the shares shown as beneficially owned
by them. Except as otherwise indicated, the mailing address for all persons
is the same as that of the Company.
No. of Shares Percent of Class
Shareholder Beneficially Beneficially
Owned Owned
----------------------- ------------ ------------
Linda H. Sleeper 1 383,000 3.4
Raymond A. Kilgore 2 633,047 5.6
John J. DePuma 2 259,571 2.3
James H. Graves 3 252,500 2.2
George R. Manser 3, 4 203,200 1.8
Scott T. Berlin 5 62,500 0.6
Mark E. Schwarz 6 5,346,501 48.1
All executive officers and current
directors, as a group (7 persons) 7 7,140,319 57.8
Ramon D. Phillips 8 836,476 7.3
Thomas G. Berlin 9 1,111,900 10.1
-------------------
1 Includes 380,000 shares which may be acquired pursuant to stock options
exercisable on or within 60 days after the Record Date.
2 Includes 230,000 shares which may be acquired pursuant to stock options
exercisable on or within 60 days after the Record Date.
3 Includes 175,000 shares which may be acquired pursuant to stock options
exercisable on or within 60 days after the Record Date.
4 Includes 9,000 shares held by Mr. Manser's spouse, over which shares
Mr. Manser shares voting and dispositive authority.
5 Includes 62,500 shares which may be acquired pursuant to stock options
exercisable on or within 60 days after the Record Date. Mr. Berlin
disclaims beneficial ownership of all shares owned by his parents, Mr.
& Mrs. Thomas G. Berlin.
6 Includes 62,500 shares which may be acquired pursuant to stock options
exercisable on or within 60 days after the Record Date and 5,284,001
shares owned by Newcastle Partners, L.P., a limited partnership in
which Mr. Schwarz serves as the sole general partner. The address for
Newcastle Partners, L.P. is 200 Crescent Court, Suite 670, Dallas,
Texas 75201.
7 Includes 1,315,000 shares which may be acquired pursuant to stock
options exercisable on or within 60 days after the Record Date.
8 Includes 380,000 shares which may be acquired pursuant to stock options
exercisable on or within 60 days after the Record Date.
9 As reported on Schedule 13G filed with the Securities and Exchange
Commission on January 21, 2000. Includes 40,600 shares over which Mr.
Berlin shares voting and dispositive power with his spouse. The
address for Mr. Berlin is 37500 Eagle Road, Willoughby Hills, Ohio
44094. Thomas G. Berlin is the father of Scott T. Berlin.
ELECTION OF DIRECTORS
(Item 1)
At the Annual Meeting, five directors will be elected for a term
expiring at the 2003 annual meeting of the Company's shareholders or when
their successors are elected and qualify. Directors will be elected by a
plurality of the votes cast at the Annual Meeting. Cumulative voting is not
permitted in the election of directors.
The Company's Board of Directors has proposed the election of the
following slate of nominees for election as directors at the Annual Meeting.
Except as discussed below, none of the nominees was selected on the basis
of any special arrangement or understanding with any other person. None of
the nominees bears any family relationship to any other nominee or to any
executive officer of the Company. In the absence of instructions to the
contrary, shares represented by proxy will be voted for the election of each
nominee named below. Each nominee has accepted nomination and agreed to
serve if elected. If any nominee becomes unable to serve before election,
shares represented by proxy may be voted for the election of a substitute
nominee designated by the Board of Directors.
The Board of Directors recommends a vote FOR election of each nominee
below.
Director
Name Age Since Current Position(s) with the Company
---------------- --- -------- ------------------------------------
Mark E. Schwarz 41 2001 Director and Chairman of the Board
Linda H. Sleeper 54 1996 President, Chief Executive Officer
and Director
James H. Graves 53 1995 Director
George R. Manser 70 1995 Director
Scott T. Berlin 32 2001 Director
Mark E. Schwarz has served since 1993 as the sole general partner of
Newcastle Partners, L.P., a private investment firm. Since 2000, he has
also served as the President and sole Managing Member of Newcastle Capital
Group, L.L.C., the general partner of Newcastle Capital Management, L.P., a
private investment management firm. From 1995 until 1999, Mr. Schwarz was
also a Vice President of Sandera Capital Management, L.L.C., a private
investment firm associated with the Lamar Hunt family. From 1993 until
1996, Mr. Schwarz was a securities analyst and portfolio manager for SCM
Advisors, L.L.C., an investment advisory firm. Mr. Schwarz presently serves
as a director of Bell Industries, Inc., a company primarily engaged in
providing computer systems integration services; Nashua Corporation, a
manufacturer of specialty papers, labels and printing supplies; SL
Industries, Inc., a developer of power systems used in a variety of
aerospace, computer, datacom, industrial, medical, telecom, transportation
and utility equipment applications; Tandycrafts, Inc., a manufacturer of
frames, framed art, mirrors, and other wall decor products; and WebFinancial
Corporation, a banking and specialty finance company.
Linda H. Sleeper was elected President and Chief Executive Officer in
2000. Ms. Sleeper joined the Company as Vice President of Corporate
Development and Administration in 1993 and was promoted to Executive Vice
President and Chief Operating Officer in 1994. From 1992 until 1993, Ms.
Sleeper was self-employed as a management consultant. From 1989 until 1992,
she served as a Vice President for Audisys Corporation, a financial
consulting firm, and was Senior Assistant Treasurer of Southmark Corporation
from 1988 until 1989. Ms. Sleeper held various offices at Pizza Inn, Inc.
from 1979 until 1988, completing her tenure as Vice President of Finance.
Ms. Sleeper was an accountant with Peat, Marwick, Mitchell & Co. from 1975
until 1979. She is a certified public accountant.
James H. Graves is a Managing Director and Partner of Erwin, Graves &
Associates, LP, a management consulting firm founded in January, 2002.
Previously, he was a Managing Director of UBS Warburg, Inc., an
international financial services firm which provides investment banking,
underwriting and brokerage services. He was a Managing Director of Paine
Webber Group Inc. prior to its acquisition by UBS Warburg in November 2000,
and was Chief Operating Officer of J.C. Bradford & Co. at the time of its
acquisition by Paine Webber Group Inc. in June 2000. Mr. Graves had earlier
served as Managing Director of J.C. Bradford & Co. and co-manager of its
Corporate Finance Department. In these capacities, Mr. Graves has rendered
advisory services to the Company. Prior to joining J.C. Bradford & Co. in
1991, Mr. Graves had for 11 years been employed by Dean Witter Reynolds,
where he completed his tenure as the head of the Special Industries Group in
New York City. Mr. Graves also serves as a director of Cash America
International, Inc., a company operating pawn shops and jewelry stores, and
is Vice Chairman and a director of Detwiler, Mitchell & Company, a
securities brokerage and investment banking firm.
George R. Manser is Chairman of Uniglobe Travel (Capital Cities), Inc.,
a franchisor of travel agencies, President of Concorde Holding Co., a
private investment management company, and a director of State Auto
Financial Corp., an insurance holding company that engages primarily in the
property and casualty insurance business. Prior to his retirement in 2000,
Mr. Manser also served as a director of CheckFree Corporation, a provider of
financial electronic commerce services, software and related products, and
as an advisory director of J.C. Bradford & Co. From 1995 to 1999, Mr.
Manser served as the Director of Corporate Finance of Uniglobe Travel USA,
L.L.C., a franchisor of travel agencies, and also served as a director of
Cardinal Health, Inc. and AmerLink Corp. From 1984 to 1994, he also served
as a director and Chairman of North American National Corporation and its
subsidiaries, Pan-Western Life Insurance Company, Brookings International
Life Insurance Company and Howard Life Insurance Company.
Scott T. Berlin is a Director focused on the corporate finance and
mergers/acquisitions practice at Brown, Gibbons, Lang & Company, an
investment banking firm serving middle market companies. Prior to joining
Brown, Gibbons, Lang & Company in 1997, Mr. Berlin was a lending officer in
the Middle Market Group at The Northern Company.
Board Committees and Meetings
Standing committees of the Board of Directors of the Company include
the Executive Committee, the Audit Committee, the Compensation Committee and
the Stock Option Committee.
The Executive Committee is currently comprised of Mr. Schwarz
(chairman), Ms. Sleeper, Mr. Graves and Mr. Manser. Between meetings of the
Board of Directors, the Executive Committee has the full power and authority
of the Board in the management of the business and affairs of the
Corporation, except as limited by the Bylaws or statute. The Executive
Committee meets periodically between meetings of the Board of Directors and
held two such meetings during 2001.
The Audit Committee is currently comprised of Mr. Manser (chairman),
Mr. Schwarz, Mr. Graves and Mr. Berlin. The Audit Committee oversees the
conduct of the financial reporting process of the Company, including
reviewing with management and the outside auditors the audited financial
statements included in the Company's Annual Report, the Committee chairman
reviewing with the outside auditors the interim financial results included
in the Company's quarterly reports filed with the Securities and Exchange
Commission, discussing with management and the outside auditors the quality
and adequacy of internal controls, and reviewing the independence of the
outside auditors. See, Audit Committee Report. The Audit Committee met
twice during 2001.
The Compensation Committee and the Stock Option Committee are currently
comprised of Mr. Graves (chairman), Mr. Schwarz and Mr. Berlin. At the
direction of the full Board, the Compensation Committee reviews and makes
recommendations with respect to compensation of the executive officers of
the Company. The Stock Option Committee administers the Company's 1991 Key
Employee Stock Option Plan and 1994 Key Employee Long Term Incentive Plan,
including the determination of participants therein and the grant of options
thereunder. Neither the Compensation Committee nor the Stock Option
Committee met during 2001.
The full Board of Directors acts in place of a nominating committee to
investigate qualified nominees for election to the Board when vacancies
occur. The Board has not implemented any formal procedures for
consideration of nominees submitted by shareholders of the Company.
The Board of Directors held four meetings during 2001. Various matters
were also approved by the unanimous written consent of the Board of
Directors during the last fiscal year. Each director attended at least 75%
of the aggregate of (i) the total number of meetings of the Board of
Directors and (ii) the total number of meetings held by all committees of
the Board on which such director served.
Director Compensation
Each non-employee director receives a fee of $1,500 for each Board
meeting attended and a fee of $750 for each committee meeting attended. No
other compensation was paid to any non-employee director during 2001.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
The Company's executive officers, directors and beneficial owners of
more than 10% of the Company's Common Stock are required to file reports of
ownership and changes of ownership of the Common Stock with the Securities
and Exchange Commission. Based solely upon information provided to the
Company by individual directors, executive officers and beneficial owners,
the Company believes that all such reports were timely filed during and with
respect to the fiscal year ended December 31, 2001.
[The remainder of this page intentionally left blank.]
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors of the Company is
composed of four independent directors and operates under a written charter
adopted by the Board of Directors in accordance with applicable rules of the
Securities and Exchange Commission and the American Stock Exchange.
The primary purpose of the Audit Committee is to assist the Board in
fulfilling its responsibility to oversee management's conduct of the
Company's financial reporting process. In discharging its oversight role,
the Audit Committee is empowered to investigate any matter brought to its
attention with full access to all books, records, facilities and personnel
of the Company and is authorized to retain outside counsel, auditors or
other experts for this purpose. Subject to any action that may be taken by
the full Board, the Audit Committee also has the authority and
responsibility to select, evaluate and, where appropriate, replace the
Company's independent certified public accountants.
The Company's management is responsible for preparing the Company's
financial statements and the independent accountants are responsible for
auditing those financial statements. The role of the Audit Committee is to
monitor and oversee these processes.
In this context, the Audit Committee has reviewed and discussed the
consolidated financial statements with both management and the independent
accountants. The Audit Committee also discussed with the independent
accountants the matters required to be discussed by Statement on Auditing
Standards No. 61 (Communication with Audit Committees). The Audit Committee
received from the independent accountants the written disclosures required
by Independence Standards Board Standard No. 1 (Independence Discussions
with Audit Committees), and the Audit Committee discussed with the
independent accountants their independence.
Based upon the Audit Committee's review and discussions with management
and the independent accountants, the Audit Committee recommended to the
Board of Directors that the audited financial statements be included in the
Company's Annual Report on Form 10-KSB filed with the Securities and
Exchange Commission for the year ended December 31, 2001. The Audit
Committee also retained PricewaterhouseCoopers LLP as the Company's
independent accountants for the 2002 fiscal year.
Audit Committee: James H. Graves
--------------- Mark E. Schwarz
George R. Manser
Scott T. Berlin
EXECUTIVE OFFICERS AND COMPENSATION
Executive Officers
The following persons are the executive officers of the Company:
Name Age Position(s) with the Company
----------------- --- ------------------------------------------
Linda H. Sleeper 54 President, Chief Executive Officer and
Director
Raymond A. Kilgore 53 Senior Vice President and Secretary
Johnny J. DePuma 64 Senior Vice President and Chief
Financial Officer
No executive officer bears any family relationship to any other
executive officer or to any director or nominee for director of the Company.
Information concerning the business experience of Linda H. Sleeper is
provided under Election of Directors.
Raymond A. Kilgore has served as Senior Vice President of the Company
since 1994. He served as a director of the Company from 1988 until 2001.
From 1988 until 1994, Mr. Kilgore served as Vice President of the Company,
and also served as interim Chief Executive Officer from 1988 until 1989.
From 1985 until 1988, Mr. Kilgore was a Vice President of Cash America
Investments, Inc. (now known as Cash America International, Inc.).
John J. DePuma joined the Company in 1990 as Vice President and Chief
Financial Officer and was promoted to his present position in 1994. For 10
years prior to joining the Company, he was Vice President and Chief
Financial Officer of HiLite Industries, Inc., a manufacturer of original
equipment auto parts.
Summary Compensation Table
The following table sets forth certain information concerning
compensation of the Chief Executive Officer and the other executive officers
of the Company for the last three fiscal years.
Name and Year Ended
Principal Positions December 31 Salary ($) Bonus ($) 1
-------------------------------------- ---------- --------- ----------
Linda H. Sleeper 2001 195,769 -0-
President and Chief Executive 2000 176,923 30,000
Officer 2 1999 145,800 -0-
Raymond A. Kilgore 2001 109,340 -0-
Senior Vice President and Secretary 2000 106,469 10,000
1999 101,325 -0-
John J. DePuma 2001 121,938 -0-
Senior Vice President and Chief 2000 119,954 18,000
Financial Officer 1999 111,300 -0-
-------------------
1 Bonuses are reflected in the year paid, although accrued in the prior
year.
2 Prior to her election as President in September 2000 and as Chief
Executive Officer in December 2000, Ms. Sleeper served as Executive
Vice President and Chief Operating Officer.
Option Grants in Last Fiscal Year
No stock options or stock appreciation rights were granted to the
executive officers during the fiscal year ended December 31, 2001.
Option Exercises in Last Fiscal Year and Fiscal Year-End Values
None of the executive officers of the Company exercised any options
during the fiscal year ended December 31, 2001. The following table shows
the value of unexercised options held by the executive officers as of
December 31, 2001.
Securities Underlying Value of Unexercised
Unexercised Options (#) In-the-Money Options ($) 1
--------------------------- ---------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
Linda H. Sleeper 380,000 120,000 11,000 -0-
Raymond A. Kilgore 230,000 20,000 11,000 -0-
Johnny J. DePuma 230,000 20,000 11,000 -0-
-------------------
1 Values stated are pre-tax and are based upon the closing price of $0.43
per share of the Common Stock on the American Stock Exchange Emerging
Company Marketplace on December 31, 2001, the last trading day of the
fiscal year.
Executive Compensation Agreements
The Company previously entered into an Executive Compensation Agreement
with each of Linda H. Sleeper, Raymond A. Kilgore, and John J. DePuma. The
term of the agreements with Mr. Kilgore and Mr. DePuma expired on December
31, 2000. The term of the agreement with Ms. Sleeper expires December 31,
2002.
The Executive Compensation Agreement with Ms. Sleeper specifies minimum
levels of base salary and benefits (including automobile allowance) and the
reimbursement of certain expenses. The agreement includes covenants to at
all times maintain the confidentiality of the Company's trade secrets and
not to compete with the Company during the term of employment and for two
years thereafter. Pursuant to the agreement, if the Company terminates Ms.
Sleeper without "cause" (as defined therein), or she resigns within six
months after a "change of control" (as defined therein), the Company is
obligated to pay her a lump sum cash payment equal to the sum of (a) her
then current annual salary, plus (b) the highest amount of bonus and other
cash compensation received by her during any one of the three preceding
fiscal years. The agreement also provides that the Company will, for a
period of one year, maintain health insurance for Ms. Sleeper and her family
(if applicable) substantially comparable to that available to her
immediately prior to the terminating event. In addition, all incentive
stock options granted under the Company's 1991 Key Employee Stock Option
Plan and 1994 Key Employee Long Term Incentive Plan provide for accelerated
vesting in the event of a change of control of the Company.
OTHER BUSINESS
(Item 2)
The Board of Directors knows of no other business to be brought before
the Annual Meeting. If, however, any other business should properly come
before the Annual Meeting, the persons named in the accompanying proxy will
vote the proxy as they in their discretion may deem appropriate, unless they
are directed by the proxy to do otherwise.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected PricewaterhouseCoopers LLP ("PWC")
as independent certified public accountants to audit the consolidated
financial statements of the Company for the 2002 fiscal year. PWC also
reported on the Company's consolidated financial statements for the fiscal
years ended December 31, 2001, 2000 and 1999. Representatives of PWC are
expected to be present at the Annual Meeting, will have the opportunity to
make a statement if they so desire and are expected to be available to
respond to appropriate questions from shareholders.
DATE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Any shareholder desiring to submit a proposal for inclusion in the
proxy material relating to the 2003 annual meeting of shareholders must do
so in writing. The proposal must be received at the Company's principal
executive offices by December 24, 2002.
By Order of the Board of Directors,
/s/ Raymond A. Kilgore
-----------------------------
Raymond A. Kilgore, Secretary
April 23, 2002
Dallas, Texas
[FRONT]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY
FOR THE ANNUAL MEETING OF SHAREHOLDERS OF
HALLMARK FINANCIAL SERVICES, INC.
TO BE HELD MAY 21, 2002
The undersigned hereby appoints Mark E. Schwarz, Linda H. Sleeper and
Raymond A. Kilgore, and each of them individually, as the lawful agents and
Proxies of the undersigned, with full power of substitution, and hereby
authorizes each of them to represent and vote, as designated below, all
shares of Common Stock of Hallmark Financial Services, Inc. held of record
by the undersigned as of April 10, 2002, at the Annual Meeting of
Shareholders to be held on May 21, 2002, or at any adjournment thereof.
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for
(except as marked to the contrary) all nominees listed below
INSTRUCTIONS: To withhold authority to vote for any nominee, mark the space
beside the nominee's name with an "X".
Mark E. Schwarz ____ George R. Manser ____
Linda H. Sleeper ____ Scott T. Berlin ____
James H. Graves ____
2. In their discretion, the Proxies are authorized to vote on any other
matter which may properly come before the Annual Meeting or any
adjournment thereof.
When properly executed, this proxy will be voted in the manner directed
herein by the undersigned shareholder. IF NO DIRECTION IS SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS PROPOSED IN ITEM 1.
The undersigned hereby revokes all previous proxies relating to the
shares covered hereby and confirms all that said Proxies may do by virtue
hereof.
[BACK]
Please sign exactly as your name appears below. When shares are held
by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
Date: ____________________ , 2002 ____________________________________
Signature
PLEASE MARK, SIGN, DATE AND
RETURN THE PROXY CARD PROMPTLY,
USING THE ENCLOSED ENVELOPE.
____________________________________
Signature, if held jointly:
PLEASE CHECK THIS BOX IF YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING
OF SHAREHOLDERS. [ ]