Hallmark Financial Services Proceeds With Election Contest to Elect Three Nominees to Board of Specialty Underwriters' Alliance
04 April 2009 - 3:39AM
PR Newswire (US)
Hallmark launches website to provide Specialty Underwriters'
stockholders with real time information related to proxy
solicitation FORT WORTH, Texas, April 3 /PRNewswire-FirstCall/ --
Hallmark Financial Services, Inc. (NASDAQ:HALL), which has
nominated independent director candidates to replace three members
of the board of directors of Specialty Underwriters' Alliance, Inc.
(NASDAQ:SUAI), today announced the launch of a website for SUAI
stockholders, http://www.suaitownhall.com/. SUAI stockholders are
urged to visit the website because it contains important
information regarding Hallmark's election contest, including
biographies of the three independent board nominees and
communications between Hallmark and SUAI. A copy of all proxy
materials and shareholder communications will be available on the
website. Hallmark believes there is a need for improved governance
and board and management accountability to SUAI stockholders.
Hallmark believes that the interests of all SUAI stockholders would
benefit from its highly qualified, truly independent director
nominees that possess a wealth of property and casualty insurance
industry expertise. Hallmark beneficially owns approximately 9.9%
of SUAI's outstanding common stock. Background As previously
disclosed, on June 16, 2008, Hallmark delivered to SUAI's board of
directors a proposal to acquire SUAI in a stock-for-stock
transaction (the "Proposal"). SUAI responded through a public
announcement on June 26, 2008 that its board of directors had
unanimously rejected the Proposal. On July 1, 2008, Hallmark then
delivered to SUAI's board of directors a letter reaffirming the
Proposal (the "July 1 Letter"). In the July 1 Letter, Hallmark
stated that it was committed to its Proposal and strongly believed
that the Proposal offered significant and compelling benefits to
SUAI's stockholders, and reiterated that its senior management
stood ready to meet with the members of the SUAI board and answer
any questions concerning the Proposal. Copies of each of the
Proposal and the July 1 Letter are exhibits to Hallmark's Schedule
13D/A for SUAI filed on July 1, 2008 and can be obtained on the
SEC's website at http://www.sec.gov/. For each of the Proposal and
the July 1 Letter, the offer price in Hallmark stock in the
proposed transaction represented a substantial premium to the then
most recent closing price of SUAI common stock as well as its 30
day trailing average price. Nevertheless, on July 2, 2008, SUAI
publicly reaffirmed its rejection of Hallmark's proposal. Then, on
August 5, 2008, SUAI's board proceeded to adopt certain "defensive"
amendments to the company's bylaws, including bylaws eliminating
stockholders' rights to fill vacancies on the board and to call
special meetings and adding advance notice provisions for board
nominations by stockholders. The bylaw amendments were disclosed
concurrently with the disclosure of the complete terms of new
employment and change of control agreements which provide for the
payment of sums to SUAI executives in the event they depart the
company in certain circumstances, including following a change of
control of SUAI. The Hallmark Nominees C. Gregory Peters served as
Senior Vice President, Equity Research at Raymond James and
Associates from November 1999 through June 2007, where Mr. Peters
was responsible for launching Raymond James' sell-side research
practice for the insurance industry and served as its lead analyst
for property and casualty companies. Mark E. Pape served as
Executive Vice President and Chief Financial Officer at Affirmative
Insurance Holdings, Inc. from November 2005 through December 2007
and served on Affirmative's Board of Directors from July 2004
through November 2005. Mr. Pape also held positions at Torchmark
Corporation and American Income Holding, Inc. Robert M. Fishman
served as Managing Director of Southwest Insurance Partners, Inc.
in 2008 and, from November 2006 through May 2007, was the Chief
Executive Officer and President of United America Indemnity Ltd.
Mr. Fishman also held senior positions at ARAG NA and Zurich
Financial Services. Additional Information Concerning Participants
Hallmark, together with the other Participants (as defined below),
has made a preliminary filing with the Securities and Exchange
Commission ("SEC") of a proxy statement and accompanying proxy card
to be used to solicit votes for the election of its slate of
director nominees at the 2009 Annual Meeting of Stockholders of
SUAI. Hallmark strongly advises all SUAI stockholders to read the
proxy statement because it will contain important information. Such
proxy statement is available at no charge on the SEC's website at
http://www.sec.gov/. In addition, the Participants in the
solicitation will provide copies of the proxy statement without
charge upon request. Requests for copies should be directed to the
Participants' proxy solicitor. The Participants in the proxy
solicitation are Hallmark Financial Services, Inc., American
Hallmark Insurance Company of Texas ("AHIC"), Hallmark Specialty
Insurance Company ("HSIC"), Mark E. Schwarz, C. Gregory Peters,
Mark E. Pape and Robert M. Fishman (collectively, the
"Participants"). Information about the Participants is set forth in
the proxy statement filed by Hallmark with the SEC. Hallmark may be
deemed to beneficially own 1,429,615 shares of common stock of
SUAI, representing approximately 9.9% of the outstanding shares of
common stock, as follows: (i) 21,000 shares of common Stock are
owned directly by Hallmark, (ii) 1,308,615 shares of common stock
are owned directly by AHIC and (iii) 100,000 shares of common stock
are owned directly by HSIC. As their parent company, Hallmark may
be deemed to beneficially own the shares of common stock owned by
AHIC and HSIC. As the Executive Chairman of Hallmark with voting
and dispositive power over Hallmark's, AHIC's and HSIC's portfolio
of securities, Mr. Schwarz may be deemed to beneficially own the
1,429,615 Shares or approximately 9.9% of the issued and
outstanding Shares owned in the aggregate by Hallmark, AHIC and
HSIC. Currently, Messrs. Peters, Pape and Fishman do not directly
own any securities of SUAI. As members of a "group" for the
purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of
1934, as amended, each of the Participants may be deemed to
beneficially own the 1,429,615 shares beneficially owned by
Hallmark. Each of the participants disclaims beneficial ownership
of the shares he/it does not directly own. DATASOURCE: Hallmark
Financial Services, Inc. CONTACT: Dan Sullivan, MacKenzie Partners,
Inc. for Hallmark Financial Services, Inc., +1-212-929-5500 Web
Site: http://www.suaitownhall.com/
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