X0202 4 2008-05-22 0 0000819913 HALLMARK FINANCIAL SERVICES INC HALL 0001208889 SCHWARZ MARK E 200 CRESCENT COURT STE 1400 DALLAS TX 75201 1 1 1 0 Executive Chairman Director Stock Options 11.46 2008-05-22 4 P 0 5000 0 A 2008-11-23 2008-05-22 Common Stock 5000 19167 D Newcastle Capital Management, L.P. ("NCM") is the general partner of each of Newcastle Partners, L.P. ("NP"), Newcastle Special Opportunity Fund I, L.P. ("NSOFI") and Newcastle Special Opportunity Fund II, L.P. ("NSOFII"). Newcastle Capital Group, L.L.C. ("NCG") is the general partner of NCM and Mark E. Schwarz ("Schwarz") is the managing member of NCG. Accordingly, each of NCM, NCG and Schwarz may be deemed to beneficially own the shares directly owned by any of them. 19,167 stock (including 5,000 stock options granted May 22, 2008) are held by Mr. Schwarz. In addition, the Reporting Persons may be deemed to beneficially own 14,579,445 non-derivative securities of the Issuer, which includes (1) 48,821 shares of common stock owned by Mr. Schwarz, (2) 9,738,243 shares of common stock owned by NP, (3) a total of 3,274,830 shares of common stock owned by NSOFI and NSOFII, (4) 2,400 shares of common stock owned by NFF and (5) 1,515,151 shares of common stock controlled by NCM pursuant to an account management agreement under which NCM holds the power to vote and dispose of such shares. Newcastle Partners, L.P., By: Newcastle Capital Management, L.P., its general partner, By: Newcastle Capital Group, L.L.C. its general partner, by:/s/ Mark E. Schwarz, its managing member 2008-05-27 Newcastle Capital Management, L.P., By: Newcastle Capital Group, L.L.C. its general partner, By: /s/ Mark E. Schwarz, its managing member 2008-05-27 Newcastle Capital Group, L.L.C., By: /s/ Mark E. Schwarz, its managing member 2008-05-27 /s/ Mark E. Schwarz 2008-05-27