Hallmark Financial seeks support for its nominees to Specialty board

By Lisa Kerner

Charlotte, N.C., April 24 - Hallmark Financial Services, Inc. announced it sent a letter to Specialty Underwriters' Alliance, Inc. stockholders urging them to vote for Hallmark's director nominees on May 5.

The letter has also been posted to www.suaitownhall.com, Hallmark said.

According to Hallmark, a 9.9% shareholder, its three nominees - Robert M. Fishman, Mark E. Pape and C. Gregory Peters - "possess a wealth of property and casualty insurance industry expertise."

Peters is the former senior vice president, equity research at Raymond James & Associates. Pape is the former executive vice president and chief financial officer at Affirmative Insurance Holdings, Inc. Fishman is the former managing director of Southwest Insurance Partners, Inc.

"In its effort to discredit us, the company [Specialty] has written to you that Hallmark's campaign represents some disguised effort by Hallmark to obtain control" of Specialty's board, Hallmark said in the letter.

Hallmark said if elected, its nominees will represent less than a majority of the board "but nevertheless we believe will have a sufficient presence to make a difference on the issues that matter to stockholders."

The shareholder said it believes Specialty is underperforming financially, suffering from corporate governance deficiencies and failing to create stockholder value.

In addition, Hallmark believes the company's strategic and business model is "weak."

As previously noted, Hallmark, a Fort Worth property and casualty insurer, said Specialty amended its bylaws in August 2008, eliminating stockholders' rights to fill vacancies on the board and to call special meetings.

Specialty, a Chicago commercial insurance provider, recently announced that Glass, Lewis & Co. recommended that the company's stockholders reject the dissident slate.

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