SEC FORM 4

SEC FORM 4 SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

SCHWARZ MARK E

(Last)

(First)

(Middle)

5420 LYNDON B JOHNSON FREEWAY

SUITE 1100

(Street)

DALLAS

75240-2345

(City)

(State)

(Zip)

2. Issuer Name and Ticker or Trading Symbol
HALLMARK FINANCIAL SERVICES INC [ HALL ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

X	Director	X	10% Owner
X	Officer (give title below)		Other (specify below)
Chairman & CEO

3. Date of Earliest Transaction (Month/Day/Year)
04/03/2022

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

	Form filed by One Reporting Person
X	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock								202,580	D⁽¹⁾
Common Stock								949,702	I	Shares directly owned by NCM Services, Inc.⁽²⁾
Common Stock								172,776	I	Shares directly owned by Newcastle Capital Management, L.P.⁽²⁾
Common Stock								3,730,432	I	Shares directly owned by Newcastle Partners, L.P.⁽²⁾

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	8. Price of Derivative Security (Instr. 5)		10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
Restricted Stock Units	⁽³⁾	12/21/2021		A		127,374		⁽³⁾	03/31/2026	Common Stock	⁽³⁾	$0	127,374	D⁽¹⁾
Restricted Stock Units	⁽⁴⁾	04/03/2022		A		123,968		⁽⁴⁾	03/31/2027	Common Stock	⁽⁴⁾	$0.0	123,968	D⁽¹⁾

1. Name and Address of Reporting Person^*

SCHWARZ MARK E

(Last)

(First)

(Middle)

5420 LYNDON B JOHNSON FREEWAY

SUITE 1100

(Street)

DALLAS

75240-2345

(City)

(State)

(Zip)

1. Name and Address of Reporting Person^*

Schwarz 2012 Family Trust

(Last)

(First)

(Middle)

5420 LYNDON B. JOHNSON FREEWAY

SUITE 1100

(Street)

DALLAS

75240-2345

(City)

(State)

(Zip)

1. Name and Address of Reporting Person^*

NCM SERVICES, INC.

(Last)

(First)

(Middle)

5420 LYNDON B. JOHNSON FREEWAY

SUITE 1100

(Street)

DALLAS

75240-2345

(City)

(State)

(Zip)

1. Name and Address of Reporting Person^*

NEWCASTLE CAPITAL GROUP LLC

(Last)

(First)

(Middle)

5420 LYNDON B. JOHNSON FREEWAY

SUITE 1100

(Street)

DALLAS

75240-2345

(City)

(State)

(Zip)

1. Name and Address of Reporting Person^*

NEWCASTLE CAPITAL MANAGEMENT LP

(Last)

(First)

(Middle)

5420 LYNDON B. JOHNSON FREEWAY

SUITE 1100

(Street)

DALLAS

75240-2345

(City)

(State)

(Zip)

1. Name and Address of Reporting Person^*

NEWCASTLE PARTNERS L P

(Last)

(First)

(Middle)

5420 LYNDON B. JOHNSON FREEWAY

SUITE 1100

(Street)

DALLAS

75240-2345

(City)

(State)

(Zip)

Explanation of Responses:

1. Direct ownership by Mr. Schwarz.

2. Mr. Schwarz is the sole trustee of the Schwarz 2012 Family Trust (the "Trust") and a director and officer of NCM Services, Inc. ("NCMS"). The Trust is the sole shareholder of NCMS, which is the sole member of Newcastle Capital Group, L.L.C. ("NCG"), which is the general partner of Newcastle Capital Management, L.P. ("NCM"), which is the general partner of Newcastle Partners, L.P. ("NP"). Accordingly, Mr. Schwarz may be deemed the beneficial owner of all shares held by any of the Trust, NCMS, NCG, NCM or NP, and each of these entities may be deemed the beneficial owner of all shares held by the entities which they directly or indirectly own or control.

3. Each restricted stock unit represents the right to receive shares of common stock upon satisfaction of vesting requirements and performance criteria. Up to 50% of the shares may become issuable as of March 31, 2024, a cumulative of 80% of the shares may become issuable as of March 31, 2025, and a cumulative of 100% of the shares may become issuable as of March 31, 2026. The performance criteria for 63,687 of the restricted stock units is based on the gross 2021 accident year combined ratio ("2021 AYCR%") for the period from from January 1, 2021 to the December 31 preceding each vesting date, and earns a percentage of a share of common stock per restricted stock unit, as follows: (a) 100.0% or greater 2021 AYCR% earns 0%; (b) 99.2% 2021AYCR% earns 20%; (c) 98.4% 2021 AYCR% earns 40%; (d) 97.6% 2021 AYCR% earns 60%; (e) 96.8% 2021 AYCR% earns 80%; (f) 96.0% 2021 AYCR% earns 100%; (g) 95,2% 2021 AYCR% earns 110%; (h) 94.4% 2021 AYCR% earns 120%; (i) 93.6% 2021 AYCR% earns 130%; (j) 92.8% 2021 AYCR% earns 140%; and (k) 92.0% or less 2021 AYCR% earns 150%. The performance criteria for 63,687 of the restricted stock units is based on the compound average annual growth rate ("CAAGR") in book value per share from January 1, 2021 to the December 31 preceding each vesting date and earns a percentage of a share of common stock per restricted stock unit, as follows: (i) 1.0% or less CAAGR earns 0%; (ii) 1.8% CAAGR earns 20%; (iii) 2.6% CAAGR earns 40%; (iv) 3.4% CAAGR earns 60%; (v) 4.2% CAAGR earns 80%; (vi) 5.0% CAAGR earns 100%; (vii) 5.8% CAAGR earns 110%; (viii) 6.6% CAAGR earns 120%; (ix) 7.4% CAAGR earns 130%; (xi) 8.2% CAAGR earns 140%; and (xii) 10.0% or greater CAAGR earns 150%.

4. Each restricted stock unit represents the right to receive shares of common stock upon satisfaction of vesting requirements and performance criteria. Up to 50% of the shares may become issuable as of March 31, 2025, a cumulative of 80% of the shares may become issuable as of March 31, 2026, and a cumulative of 100% of the shares may become issuable as of March 31, 2027. The performance criteria for 61,984 of the restricted stock units is based on the gross 2022 accident year combined ratio ("2022 AYCR%") for the period from from January 1, 2022 to the December 31 preceding each vesting date, and earns a percentage of a share of common stock per restricted stock unit, as follows: (a) 95.4% or greater 2022 AYCR% earns 0%; (b) 94.6% 2022 AYCR% earns 20%; (c) 93.8% 2022 AYCR% earns 40%; (d) 93.0% 2022 AYCR% earns 60%; (e) 92.2% 2022 AYCR% earns 80%; (f) 91.4% 2022 AYCR% earns 100%; (g) 90.6% 2022 AYCR% earns 110%; (h) 89.8% 2022 AYCR% earns 120%; (i) 89.0% 2022 AYCR% earns 130%; (j) 88.2% 2022 AYCR% earns 140%; and (k) 87.4% or less 2022 AYCR% earns 150%. The performance criteria for 61,984 of the restricted stock units is based on the compound average annual growth rate ("CAAGR") in book value per share from January 1, 2022 to the December 31 preceding each vesting date and earns a percentage of a share of common stock per restricted stock unit, as follows: (i) 1.0% or less CAAGR earns 0%; (ii) 1.8% CAAGR earns 20%; (iii) 2.6% CAAGR earns 40%; (iv) 3.4% CAAGR earns 60%; (v) 4.2% CAAGR earns 80%; (vi) 5.0% CAAGR earns 100%; (vii) 5.8% CAAGR earns 110%; (viii) 6.6% CAAGR earns 120%; (ix) 7.4% CAAGR earns 130%; (xi) 8.2% CAAGR earns 140%; and (xii) 10.0% or greater CAAGR earns 150%.

Remarks:

	Steven D. Davidson, as Attorney-In-Fact for all Reporting Persons	04/05/2022
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
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SEC Form 4 filed by Schwarz Mark E