Specialty Underwriters Alliance Inc
Specialty Underwriters Alliance — Proxy Contest (April 2009)
15 slides from Specialty Underwriters Alliance's proxy contest presentation, Apr 17, 2009
Slide 1: Proxy Solicitation to Elect Nominees to the Board of Directors of Specialty Underwriters' Alliance
HALLMARK FINANCIAL SERVICES, INC. PRESENTATION Proxy Solicitation to Elect Nominees to the Board of Directors of Specialty Underwriters’ Alliance, Inc. April 2009 F=SIHALLMARK
Slide 2: Background to Solicitation
Background to Solicitation LT! + Hallmark is the second largest stockholder of SUAI (9.9%), having made its first investment in February 2008. + Hallmark made a proposal to acquire the Company in June 2008. © The combination offered compelling benefits: * Stock for stock structure = 30% premium to c
Slide 3: Significant performance issues preceded economic downturn
Significant performance issues preceded economic downturn + Since SUAI’s IPO in November 2004 through December 31, 2008, cumulative total stockholder return has been negative 72%, far underperforming the ‘S&P 500 (when that index reflects the worst bear market in a generation). (COMPARISON OF CUMULA
Slide 4: Significant performance issues preceded economic downturn (cont.)
Significant performance issues preceded economic downturn (cont.) A ee A! + Annual growth in book value per share for the five-year period ended December 31, 2008 has been a paltry 1.6%. [Fear Book Value Per Shar] 08 > 809 00s S676 2006 Ss 7a2 2007 S 8a 2008 S80 [Annual grow 1.6%) sar period ended D
Slide 5: Significant performance issues preceded economic downturn (cont.)
Significant performance issues preceded economic downturn (cont.) A ee A! + According to SNL Financial, SUAI’s expense ratio has been significantly higher than the industry average for each year during the past four completed fiscal years. In fact, the expense ratio has averaged more than fourteen p
Slide 6: Critical strategic and business model issues have not been addressed
Critical strategic and business model issues have not been addressed nnn * SUAI’s top five partner-agents in 2008 made up over 90% of written premiums, which relatively unchanged from 2005 when these same five partner-agents made up 100% of written premiums. © SUAI's failure to expand partner-agent
Slide 7: The Incumbent Board has not acted in the best interest of all shareholders
The Incumbent Board has not acted in the best interest of all shareholders a In 2008 alone: . The Board approved defensive bylaw amendments, including eliminating stockholders’ rights (1) to call special meetings and (2) fill vacancies on the Board (even when directors have been removed by stockhold
Slide 8: A change in the status quo is imperative at SUAI
A change in the status quo is imperative at SUAI LT! + Hallmark's nominees offer a fresh perspective, along with significant and industry experience, and are entirely independent of Hallmark and SUAT. 0 Mark E. Pape served as Executive Vice President and Chief Financial Officer at Affirmative Insura
Slide 9: The SUAI Board does not have a meaningful ownership interest in the Company
The SUAI Board does not have a meaningful ownership nterest in the Company eT AREA! + The existing Board of Directors collectively owns directly approximately 1% of the outstanding shares. ‘Options and) Shares hei] Director Restricted Stock Outright [Courtney C. Smith 202000248 , Jokiel 144400 103,1
Slide 10: Partner-Agents
Partner-Agents re + Hallmark's “A~” rated paper would be welcomed by all of SUAI’s partner-agents. + The partner-agents’ recent letters supporting SUAI’s nominees are simply form letters. + The partner-agents’ willingness to sign the letters for SUAI is not surprising in light of their existing busi
Slide 11: SUAI Town Hall website
Item 2: Changes were made to the following web pages of http://www.suaitownhall.com: Welcome to the SUAI Town Hall As the second largest stockholder of Specialty Underwriters’ Alliance, Inc. (Nasdaq: SUAI), Hallmark Financial Services strongly believes that significant improvements are needed at SUA
Slide 12: Nominees
Nominees Robert M. Fishman (Age 59) Robert M. Fishman has been self-employed as an insurance industry consultant since January 2009. From January 2008 through January 2009, Mr. Fishman served as Managing Director of Southwest Insurance Partners, Inc., an investment company with operating subsidiarie
Slide 13: Letters to SUAI
P=SIHALLMARK "oe FINANCIAL SERVICES, 1 teletree (77 832-6642 | Hone [Press Reeses | Nanines [tiers toSUAl | SECFiings |Privacy aly vapor tic] Letters to SUAI Date Title 2009 Mar 26 Hallmark Letter regarding a potential meeting with SUA directors (PDF) Hallmark Proxy Statement And 2008 Jul 01 ‘Gola C
Slide 14: SEC Filings
PIHALLMARI<€ Se STRAT GT ML Be RE eee Se totktree 677) 832-4642 SEC Filings Date Title 2009 Apr 8 Hallmark Definitive Proxy Statement, Contested Solicitations 2009 Apr 2 Hallmark Preliminary Proxy Statement - Contested Solicitation ‘Amended 2009 Apr 1 Hallmark Amended General Statement of Acquisitio
Slide 15: Contacts
FaStHALLMARI< es yA OU Ae a Pex=y 0 tolhtree @77 832-4642 Contacts Investor and Media Contact: MacKenzie Partners, Inc. 105 Madison Avenue Hallmark Proxy Statement New York, New York 10016 And (212) 929-5500 Coe proxyamackenziepartners.com Hallmark Stockholder Presentation Copyright © Hallmark Finan
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