Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On January 11, 2021, Naveen Anand submitted his resignation as President and
Chief Executive Officer of Hallmark Financial Services, Inc. (the "Company"), as
well as all other positions with any of the subsidiaries of the Company,
effective February 26, 2021. Mr. Anand cited family and personal reasons for his
resignation.
On January 14, 2021, the Board of Directors of the Company appointed the current
Executive Chairman, Mark E. Schwarz, to the additional positions of President
and Chief Executive Officer of the Company, effective February 27, 2021. Mr.
Schwarz, age 60, was elected Executive Chairman of the Company in August, 2006.
He previously served as Chief Executive Officer of the Company from January,
2003 until August, 2006, and as President from November, 2003 through March,
2006. Since 1993, Mr. Schwarz has indirectly controlled Newcastle Partners, L.P.
("Newcastle Fund"), a private investment firm. Mr. Schwarz presently serves as
Chairman of the boards of directors of Rave Restaurant Group, Inc., an operator
and franchisor of pizza restaurants; and Wilhelmina International, Inc., a model
management and talent representation company. Within the past five years, Mr.
Schwarz has served as a director of SL Industries, Inc., a developer of power
systems used in a variety of aerospace, computer, datacom, industrial, medical,
telecom, transportation and utility equipment applications. He also serves as a
director of various privately held companies.
Mr. Schwarz is the sole trustee of the Schwarz 2012 Family Trust ("Schwarz
Trust"), which entity is the sole shareholder of NCM Services, Inc. ("NCMS"),
which entity is the sole member of Newcastle Capital Group, L.L.C. ("NCG"),
which entity is the sole general partner of Newcastle Capital Management, L.P.
("NCM"), which entity is the sole general partner of Newcastle Fund. As a result
of these relationships, Mr. Schwarz has sole investment and voting control over
the shares of common stock of the Company beneficially owned by NCMS, NCM and
the Newcastle Fund, which are collectively the largest shareholders of the
Company.
Mr. Schwarz has no written employment agreement with the Company and is an
at-will employee. Presently, Mr. Schwarz will maintain his current salary of
$195,000 per year. He is eligible to receive discretionary annual bonuses and
participate in the Company's 2015 Long Term Incentive Plan along with other
managerial employees of the Company. Mr. Schwarz has no family relationship with
any director or other executive officer of the Company. There are no
transactions in which Mr. Schwarz has an interest requiring disclosure under
Item 404(a) of Regulation S-K.
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