SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
(Amendment No. 9)
ALLSTATE FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, without par value
- --------------------------------------------------------------------------------
(Title of Class of Securities)
020011 10 2
- --------------------------------------------------------------------------------
(CUSIP Number)
Gerald F. Heupel, Jr., Esq.
Elias, Matz, Tiernan & Herrick L.L.P.
12th Floor
734 15th Street, N.W.
Washington, D.C. 20005
(202)347-0300
- --------------------------------------------------------------------------------
(Name, Address, Telephone Number of Person Authorized to Receive Notices
and Communications)
December 29, 1997
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
Page 1 of 23 Pages
<PAGE>
- --------------------------- ----------------------------
CUSIP No. 020011 10 2 13D Page 2 of 23 Pages
- --------------------------- ----------------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Value Partners, Ltd. 75-2291866
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [ ]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
N/A
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
- --------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY EACH
REPORTING PERSON WITH 661,835
--------------------------------------
8 SHARED VOTING POWER
N/A
--------------------------------------
9 SOLE DISPOSITIVE POWER
661,835
--------------------------------------
10 SHARED DISPOSITIVE POWER
N/A
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
661,835
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [X]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.6%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------- ----------------------------
CUSIP No. 020011 10 2 13D Page 3 of 23 Pages
- --------------------------- ----------------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Ewing & Partners (Tax ID number applied for)
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [ ]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
N/A
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
- --------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY EACH
REPORTING PERSON WITH N/A
--------------------------------------
8 SHARED VOTING POWER
661,835
--------------------------------------
9 SOLE DISPOSITIVE POWER
N/A
--------------------------------------
10 SHARED DISPOSITIVE POWER
661,835
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
661,835
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [X]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.6%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------- ----------------------------
CUSIP No. 020011 10 2 13D Page 4 of 23 Pages
- --------------------------- ----------------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Timothy G. Ewing
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [ ]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
N/A
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY EACH
REPORTING PERSON WITH N/A
--------------------------------------
8 SHARED VOTING POWER
661,835
--------------------------------------
9 SOLE DISPOSITIVE POWER
N/A
--------------------------------------
10 SHARED DISPOSITIVE POWER
661,835
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
661,835
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [X]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.6%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------- ----------------------------
CUSIP No. 020011 10 2 13D Page 5 of 23 Pages
- --------------------------- ----------------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
David W. Campbell
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
.00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [ ]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
N/A
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY EACH
REPORTING PERSON WITH 11,000
--------------------------------------
8 SHARED VOTING POWER
2,500
--------------------------------------
9 SOLE DISPOSITIVE POWER
11,000
--------------------------------------
10 SHARED DISPOSITIVE POWER
2,500
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
13,500
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [X]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.6%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------- ----------------------------
CUSIP No. 020011 10 2 13D Page 6 of 23 Pages
- --------------------------- ----------------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Edward A. McNally
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [ ]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
N/A
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY EACH
REPORTING PERSON WITH 13,000
--------------------------------------
8 SHARED VOTING POWER
N/A
--------------------------------------
9 SOLE DISPOSITIVE POWER
13,000
--------------------------------------
10 SHARED DISPOSITIVE POWER
N/A
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
13,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [X]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.6%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------- ----------------------------
CUSIP No. 020011 10 2 13D Page 7 of 23 Pages
- --------------------------- ----------------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
William H. Savage
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [ ]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
N/A
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY EACH
REPORTING PERSON WITH 18,000
--------------------------------------
8 SHARED VOTING POWER
1,000
--------------------------------------
9 SOLE DISPOSITIVE POWER
18,000
--------------------------------------
10 SHARED DISPOSITIVE POWER
1,000
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
19,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [X]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.8%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
<PAGE>
CUSIP No. 020011 10 2 Amendment No. 9 Page 8 of 23
Value Partners, Ltd. ("Value Partners") hereby amends its Schedule 13D
regarding Allstate Financial Corporation (the "Issuer" or "Allstate") as set
forth below. Richard W. Fisher withdrew as a general partner of Fisher Ewing
Partners effective December 31, 1997 and thus is no longer deemed to be a
reporting person, and the name of the partnership was changed to Ewing &
Partners as of January 1, 1998. In addition, since Value Partners filed a
lawsuit against the Issuer on December 29, 1997 jointly with David W. Campbell,
Edward A. McNally and William H. Savage, who are three non-employee directors of
the Issuer, Messrs. Campbell, McNally and Savage are now included as reporting
persons. Value Partners, Ltd., Ewing & Partners, Timothy G. Ewing, David W.
Campbell, Edward A. McNally and William H. Savage are sometimes collectively
referred to herein as the "Reporting Persons."
Since this is the first electronic amendment to the Schedule 13D, the
entire text of the Schedule 13D has been restated pursuant to Rule 13d-2(c) of
the Securities Exchange Act of 1934.
ITEM 1. SECURITY AND ISSUER
This Schedule 13D relates to shares of the common stock, without par value
(the "Common Stock"), of Allstate Financial Corporation, whose principal
executive offices are located at 2700 South Quincy Street, Arlington, Virginia
22206.
ITEM 2. IDENTITY AND BACKGROUND
(a)-(b) Value Partners is a Texas limited partnership. Ewing & Partners, a
Texas general partnership, is the general partner of Value Partners. Timothy G.
Ewing is the general partner and the Managing Partner of Ewing & Partners. In
addition, Ewing Asset Management, L.L.C., a Texas limited liability company
("EAM"), holds a 1% general partnership interest in Ewing & Partners. Mr. Ewing
is the Manager and 100% owner of EAM. The principal place of business for Value
Partners, Ewing & Partners, EAM and Mr. Ewing is Suite 4660 West, 2200 Ross
Avenue, Dallas, Texas 75201. Richard W. Fisher, who was previously a general
partner of Fisher Ewing Partners, was sworn in as Deputy U.S. Trade
Representative (which carries the rank of a United States Ambassador) on
December 11, 1997. Because Mr. Fisher withdrew as a general partner of Fisher
Ewing Partners effective as of December 31, 1997, Mr. Fisher is no longer deemed
to have any shared voting or dispositive power over the shares of Common Stock
held by Value Partners.
The address for David W. Campbell is 6410 Nobel Rock Court, Clifton,
Virginia 22024. The address for Edward A. McNally is 120-41 Prospect Street,
Ridgefield, Connecticut 06837. The address for William H. Savage is 314 Franklin
Street, Alexandria, Virginia 22314.
<PAGE>
CUSIP No. 020011 10 2 Amendment No. 9 Page 9 of 23
(c) The principal business of Value Partners is investment in and trading
of capital stocks, warrants, bonds, notes, debentures and other securities. The
principal business of Ewing & Partners is the management of Value Partners. The
principal business of EAM is being a general partner of Ewing & Partners. The
present principal occupation of Mr. Ewing is general partner of Ewing &
Partners.
Mr. Campbell has been a director of the Issuer since 1995. He was formerly
President and Chief Operating Officer and Director of Southern Financial
Bancorp, Inc. and Southern Financial Bank in Warrenton, Virginia from April 1996
to June 1997.
Mr. McNally has been a director of the Issuer since 1996. He is the
Managing Director of Windham Partners, LLC and the President of McNally and Co.
The principal business of each company is management consulting, and the address
of each company is 120-41 Prospect Street, Ridgefield, Connecticut 06837.
Mr. Savage has been a director of the Issuer since 1995. He is currently
Chairman of Island Preservation Partnership, 46 41st Avenue, Isle of Palms,
South Carolina 29451, developer of a 1,200 acre private, oceanfront retreat near
Charleston, South Carolina; President and Director of Richards United
Corporation, a real estate investment company located at 6100 Franconia Road,
Alexandria, Virginia 22310; and Chairman of Arbec Orchids Dominicana, S.A.,
Calle Floor del Sol, Alameda, Santo Domingo, D.R., which propagates and
cultivates orchid plants for the United States market. Since 1990, Mr. Savage
has also been engaged in a variety of other investment ventures in real estate
development and banking. From 1994 to 1995, Mr. Savage was a Director of
Jefferson Federal Savings Bank in Warrenton, Virginia. Prior to 1990, Mr. Savage
was the Chief Executive Officer and Trustee of Ameribanc Investors Group, a
savings and loan holding company headquartered in Annandale, Virginia, and its
predecessor, Mortgage Investors of Washington, a real estate investment trust.
(d) During the last five years, none of the Reporting Persons nor EAM has
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, none of the Reporting Persons nor EAM has
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
(f) Value Partners is a Texas limited partnership, Ewing & Partners is a
Texas general partnership, and EAM is a Texas limited liability company. Each of
Messrs. Ewing, Campbell, McNally and Savage is a citizen of the United States of
America.
<PAGE>
CUSIP No. 020011 10 2 Amendment No. 9 Page 10 of 23
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Between August 24, 1993 and October 12, 1993, Value Partners purchased
169,000 shares of Common Stock on the Nasdaq National Market System
("Nasdaq/NMS") for an aggregate purchase price of $930,530 (including brokerage
commissions). Value Partners thereafter filed a Schedule 13D on October 15, 1993
with the Securities and Exchange Commission ("SEC"). On November 18, 1993, Value
Partners purchased an additional 36,000 shares of Common Stock in transactions
effected on the Nasdaq/NMS for an aggregate purchase price of $232,920.00
(including brokerage commissions). On November 24, 1993, Value Partners filed
Amendment No. 1 to Schedule 13D reflecting the additional purchases. Between
November 22, 1993 and December 14, 1993, Value Partners purchased an additional
37,000 shares of Common Stock on the Nasdaq/NMS, for an aggregate price of
$229,225.00 (including brokerage commissions). On December 22, 1993, Value
Partners filed Amendment No. 2 to Schedule 13D reflecting the additional
purchases. Between August 22, 1994 and August 26, 1994, Value Partners purchased
an additional 32,100 shares of Common Stock on the Nasdaq/NMS for an aggregate
price of $197,854.80. On September 13, 1994, Value Partners filed Amendment No.
3 to Schedule 13D reflecting these additional purchases. The funds for all these
purchases were derived from the working capital of Value Partners.
On September 9, 1994, September 12, 1994 and September 21, 1994, Value
Partners purchased an additional 5,000, 4,300 and 26,100 shares of Common Stock,
respectively, on the Nasdaq/NMS for an aggregate purchase price of $218,935, all
of which was derived from the working capital of Value Partners. On September
27, 1994, Value Partners filed Amendment No. 4 to Schedule 13D related to these
additional purchases. On December 16, 1994, Value Partners sold 30,000 shares of
Common Stock for an aggregate sale price of $183,000. Between July 11, 1995 and
October 13, 1995, Value Partners purchased an additional 95,700 shares of Common
Stock for an aggregate purchase price of $569,730, all of which was derived from
working capital of Value Partners. On or about October 13, 1995, Value Partners
became aware that the outstanding shares of Common Stock of the Company had
decreased from 3,102,328 to 2,655,128, thus increasing Value Partners'
percentage ownership of the Common Stock. Value Partners filed Amendment No. 5
to its Schedule 13D on October 24, 1995.
On October 31, 1995, November 3, 1995, December 19, 1995, December 21, 1995
and December 28, 1995, Value Partners purchased an additional 4,500, 20,000,
45,000, 17,000 and 7,000 shares of Common Stock, respectively, on the Nasdaq/NMS
for an aggregate purchase price of $516,635, all of which was derived from the
working capital of Value Partners. Value Partners filed Amendment No. 6 to its
Schedule 13D on January 4, 1996.
On January 24, 1996, Value Partners purchased an additional 76,600 shares
of Common Stock on the Nasdaq/NMS for an aggregate purchase price of
$445,237.50, all of which was derived from the working capital of Value
Partners. Value Partners filed
<PAGE>
CUSIP No. 020011 10 2 Amendment No. 9 Page 11 of 23
Amendment No. 7 to its Schedule 13D on February 3, 1996. In Amendment No. 7 to
this Schedule 13D, Value Partners incorrectly reported that it purchased 7,500
shares of Common Stock on January 10, 1996. Such purchase was of shares of an
issuer other than the Issuer.
On January 12, 1996, the Issuer closed an exchange offer (the "Exchange
Offer") pursuant to which the Issuer offered to exchange $2,162,000 in principal
amount of the Issuer's Convertible, Subordinated Notes due September 30, 2000
(the "Notes") for outstanding Common Stock at an exchange ratio of $6.35 in
principal amount of Notes for each share of Common Stock. Pursuant to the
Exchange Offer, Value Partners tendered 468,700 shares of Common Stock, of which
204,882 shares were accepted by the Issuer in exchange for $1,301,000 in
principal amount of Notes issued to Value Partners. The Notes issued to Value
Partners are immediately convertible into 173,467 shares of Common Stock.
On February 5, 1996 and February 7, 1996, Value Partners purchased an
additional 117,950 shares and 30,000 shares, respectively, of Common Stock on
the Nasdaq/NMS for an aggregate purchase price of $692,956.25, all of which was
derived from the working capital of Value Partners. On or about February 8,
1996, Value Partners filed Amendment No. 8 to its Schedule 13D.
The source of funds for the 2,500, 1,000 and 7,000 shares of Common Stock
purchased by Messrs. Campbell, McNally and Savage, respectively, was the
personal funds of the respective individual. Of the 1,500 shares purchased by
Mr. Campbell during the past 60 days, the aggregate purchase price was $8,644
(including brokerage commissions). This purchase was made through a margin
account at Brown & Co. and is subject to the terms of a standard margin
agreement. The aggregate purchase price (including brokerage commissions) for
the 2,500, 1,000 and 7,000 shares purchased by Messrs. Campbell, McNally and
Savage was $14,583, $5,922 and $42,503, respectively.
ITEM 4. PURPOSE OF TRANSACTION
Each of Value Partners and Messrs. Campbell, McNally and Savage originally
acquired its or his shares of Common Stock solely for investment purposes.
In 1995, one of Allstate's then largest shareholders, Scoggins Capital
Management, L.P., began pressing for changes in Allstate's management and
management-dominated Board, particularly in light of Allstate's poor financial
performance. In response, Allstate's management agreed in 1995 to the election
of Messrs. Campbell and Savage to the Board as independent, outside directors.
In light of Allstate's performance for fiscal year 1995, certain outside
directors urged Allstate management to agree to, among other changes, the
establishment of an Executive Committee "to build and maintain the confidence of
major investors, analysts, and market
<PAGE>
CUSIP No. 020011 10 2 Amendment No. 9 Page 12 of 23
makers" and "dispel the perception that Allstate is being run primarily for the
benefit of Lee Fishman, Gene Haskin and management." Memorandum from Bill Savage
to Craig Fishman, dated January 9, 1996. As a result, Allstate's management,
including the Management Directors, agreed at a Special Meeting of the Board on
May 16, 1996 to the addition of two new, independent outside directors, Messrs.
Edward A. McNally and Lawrence Vecker. In exchange, Allstate received "an
acceptable executed agreement from Value Partners that Value Partners will not
challenge the membership of the Board as restructured ...(prior to the 1997
Meeting of Shareholders of the Corporation), effective June 18, 1996" [Board
Minutes of May 16, 1996, Special Meeting]. As a result, a direct challenge to
the management-controlled Board by one of Allstate's largest shareholders was
avoided.
Allstate's corporate performance showed few signs of improvement following
the May 1996 Special Meeting. Dissatisfaction with management's performance
among Allstate's major shareholders continued to increase, and Value Partners
made it known that it was considering whether to oppose the re-election of the
Management Directors with a separate slate of directors at the upcoming Annual
Meeting in November 1997.
In August and early-September 1997, Board members discussed potential
changes in Allstate's management structure with the goal of improving poor
shareholder value. During those discussions, Messrs. Campbell, McNally and
Savage advised the Board that they would not stand for re-election to the Board
on a management-endorsed slate of directors unless the Board agreed to a
proposed plan of reorganization that these independent directors considered the
minimum organizational reform necessary to allow them to address fundamental
issues of corporate management.
Discussions among Board members culminated in an agreement at the Board
meeting held on September 24, 1997 between the outside directors and the
Management Directors on specific changes in Allstate's organization and
corporate governance that the directors "hope[d] and expect[ed]...will enhance
the value of [Allstate] for the benefit of all shareholders." Memorandum from
Craig Fishman to David W. Campbell, William H. Savage and Edward A. McNally,
dated September 15, 1997. Solely as a result of this agreement, Messrs. Savage,
Campbell and McNally agree to stand for re-election with the Management
Directors.
Pursuant to the agreement that had been reached, the Board unanimously
approved at its meeting on September 24, 1997 a plan of reorganization, under
which (among other things) (1) Allstate's Board was expanded to ten (as opposed
to nine) directors; (2) Messrs. Savage, McNally and Campbell consented to stand
for re-election as part of a management- endorsed slate with the Management
Directors; (3) Craig Fishman's employment contract was extended through July
1999; and (4) the newly elected Board would, immediately after the Annual
Meeting: (a) elect Mr. Campbell as Chairman of the Board; and (b) create an
Executive Committee that would consist of three of Allstate's independent
directors (Messrs. Campbell, McNally and Savage), and Craig Fishman (the
"Agreement"). In accordance with
<PAGE>
CUSIP No. 020011 10 2 Amendment No. 9 Page 13 of 23
the Agreement, the Board extended Craig Fishman's employment contract and
nominated ten directors, including Messrs. Campbell, McNally and Savage, the
Management Directors, Lawrence Vecker and Lindsay Trittipoe as an additional
outside director, expressly "with the understanding that once elected, the new
Board will establish an Executive Committee and elect David Campbell as Chairman
as contemplated in [the Plan of Reorganization]." Minutes of the Board meeting
held on September 24, 1997.
On October 17, 1997, consistent with the terms of the Agreement, Allstate
issued a Notice of Annual Meeting of Shareholders to be held on November 18,
1997, for the purpose of electing the ten nominated directors for terms to
expire at the annual meeting of shareholders to be held in 1998. Issued together
with the Notice was a Proxy Statement, in which the Board solicited shareholder
proxies to vote in favor of the management- endorsed slate of ten directors.
The Proxy Statement listed Messrs. Campbell, McNally and Savage, the
Management Directors, and Messrs. Vecker and Trittipoe as nominees for election
to the Board at the Annual Meeting and contained the following representations:
On September 24, 1997, the Board of Directors asked Director
Campbell to serve as Chairman of the Board (replacing Eugene Haskin)
effective at the meeting of the Board of Directors to be held
immediately following the Annual Meeting. Director Campbell has agreed
to serve as Chairman at [sic] the Board and a formal vote to appoint
him Chairman will be taken at the November 18, 1997 meeting of the
Board of Directors. (emphasis added)
* * *
On September 24, 1997, the Board of Directors approved the
nomination of ten individuals to serve on the Board commencing
November 18, 1997. Also on September 24, 1997, the Board of Directors
approved the formation of an Executive Committee to be formally
established at the meeting of the Board of the Directors to be held
immediately following the Annual Meeting. The members of the Executive
Committee are expected to be Messrs. Campbell, McNally, Savage and C.
Fishman. The Executive Committee's function will be to make
recommendations to the Board regarding strategic initiatives, assist
and support management in implementing those initiatives and monitor
management performance in general. (emphasis added)
<PAGE>
CUSIP No. 020011 10 2 Amendment No. 9 Page 14 of 23
On or about October 18, 1997, Value Partners received the Proxy Statement
and based on Allstate's representations concerning the election of Mr. David
Campbell as Chairman and the creation of the Executive Committee, decided not to
nominate a competing slate of directors or engage in a proxy contest.
The Annual Meeting was held on November 19, 1997, and the Board-nominated
slate of ten directors was elected without a competing slate based on the voting
of proxies that had been solicited and obtained through the Proxy Statement. In
order to emphasize the seriousness of its concerns over existing corporate
management, Value Partners abstained from voting for the Management Directors,
with the expectation that the entire unopposed management endorsed slate would
be elected without Value Partners' affirmative votes for the Management
Directors. No votes were cast against any of the nominees.
Immediately after the Annual Meeting, the newly-elected Board convened to
transact business, including the implementation of the balance of the Agreement
that the newly- elected Board members had agreed to and which the Proxy
Statement represented would be carried out by the new Board during that initial
meeting. All members of the Board were present, with the exception of director
Vecker. Having by then obtained their benefits under the Agreement, the
Management Directors immediately and for the first time disavowed the balance of
the Agreement. Upon motion of Mr. Savage, seconded by Mr. Campbell, to implement
the balance of the Agreement, the five Management Directors all formally voted
against carrying out the plan of reorganization. The Management Directors' vote
against carrying out the plan of reorganization was contrary to the Proxy
Statement's representations to shareholders and in violation of the Agreement
that had secured their re-election without a contest. As a result, the Board
failed to implement the balance of the Agreement by a vote of five to four.
As justification for their refusal to elect Mr. Campbell as Board Chairman
or to create the promised Executive Committee, the Management Directors
primarily pointed to Value Partners' withholding its shareholder votes for the
Management Directors. However, Value Partners had properly submitted its proxies
making known its intention at least four days before the Annual Meeting, and the
Management Directors never disclosed before or during the Annual Meeting any
desire or intention to abrogate the balance of the Agreement based on Value
Partners' stated intentions. Moreover, there was no requirement under the
Agreement that any shareholder affirmatively vote for the Management Directors
and the Management Directors were in fact elected without an opposing slate, as
the Agreement contemplated.
Had Messrs. Savage, Campbell and McNally known of the Management Directors'
intention not to abide by the Agreement once re-elected, they would have
withdrawn their names as nominees prior to the casting of votes and would have
demanded an adjournment of the Annual Meeting until corrective action could have
been taken.
<PAGE>
CUSIP No. 020011 10 2 Amendment No. 9 Page 15 of 23
Had Value Partners known of the Management Directors' intention not to
implement the balance of the Agreement once re-elected, it would have demanded
an adjournment of the Annual Meeting so to afford it an opportunity to nominate
an opposing slate and to cause the distribution of a corrected proxy statement
and would have, in any event, rescinded its proxies.
As a material inducement and essential condition to their willingness to
stand for re-election as part of the same slate as the Management Directors,
Messrs. Savage, Campbell and McNally insisted on and obtained an agreement from
the Management Directors that the plan of reorganization that was part of the
Agreement would be implemented immediately upon the Board's election.
As a result of the Management Directors' breach of their agreements and
understandings, Messrs. Campbell, McNally and Savage have found themselves
directors of Allstate in circumstances under which they had previously announced
they would not stand for re-election as part of a management-endorsed slate.
Messrs. Campbell, McNally and Savage therefore are forced to either (i) resign,
in which event the Management Directors will perpetuate their control of the
Board by default and without the promised organizational reforms, contrary to
the expectations of the shareholders; (ii) serve on a Board that does not allow
them, in their view, to effectively address fundamental issues of corporate
management and governance; or (iii) to seek a new election in which the Allstate
shareholders will have the opportunity to elect directors who will act as they
represent. Messrs. Campbell, McNally and Savage have chosen to seek a new
election in order to discharge under the present circumstances what they now
deem to be their fiduciary duty to address misconduct on the part of Allstate's
management and the Management Directors and to vindicate the rights of
Allstate's shareholders not to be misled or manipulated.
By letter dated December 4, 1997 to Eugene R. Haskin as Board Chairman and
Craig Fishman as Allstate's President, Messrs. Campbell, McNally and Savage, and
also director Lindsay Trittipoe, gave notice to Allstate and the Management
Directors that they contested the election of the Management Directors and
demanded a new election of directors and the calling of a special shareholders
meeting for that purpose, as Va. Code ss.ss. 13.1-655 and 680 authorize. By
letter dated December 12, 1997 to Messrs. Campbell, McNally and Savage and
director Trittipoe, Chairman Haskin and President Craig Fishman refused to call
a special shareholders meeting as they were authorized to do pursuant to the
Bylaws and Va. Code, ss.ss. 13.1-655.
On December 18, 1997, the Board met, at which time it considered the demand
of Messrs. Campbell, McNally and Savage for a special shareholders meeting. The
Board, under the control of the Management Directors, rejected that demand by a
vote of 5 to 4, director Vecker being absent. During that meeting, the
Management Directors raised, as a new justification for their conduct, that the
outside directors might attempt to hold the 1998 annual shareholders meeting
within less than one full year from the just concluded
<PAGE>
CUSIP No. 020011 10 2 Amendment No. 9 Page 16 of 23
1997 annual shareholders meeting. The Management Directors advanced this
position even though the date of the 1998 annual meeting was never part of the
Agreement, the Amended Bylaws call for the annual meeting to be held in May of
each year and the company's recent practice of delaying the annual meeting until
some eleven months after the close of the fiscal year was generally recognized
as not conducive to sound corporate practice or shareholder or investor
confidence.
The Management Directors' refusal to carry out the Agreement that had
secured their election and other benefits rendered both inaccurate and
misleading the Proxy Statement's representations concerning the intentions and
promises of the management- endorsed slate. As a result, those representations
have worked an actual or constructive fraud upon Allstate's shareholders and the
Reporting Persons, in particular; and the election that secured the re-election
of the Management Directors is tainted, inequitable and unfair and should be set
aside.
Following the annual meeting of Allstate's stockholders held on November
18, 1997, Messrs. Campbell, McNally and Savage informed Mr. Ewing that the
Management Directors had determined not to honor the terms of the Agreement
reached by the Board of Directors of the Issuer on September 24, 1997, as
described in Allstate's definitive proxy materials for the annual meeting.
Various discussions were then held among the Reporting Persons, which resulted
in Mr. Ewing deciding to join Messrs. Campbell, McNally and Savage in filing a
lawsuit against the Issuer following the December 18, 1997 meeting of the
Issuer's Board of Directors.
On December 29, 1997, Value Partners and Messrs. Campbell, McNally and
Savage jointly filed in the Circuit Court of Arlington County, Virginia a
Petition to Set Aside Election of Directors. The petition requests the Court,
pursuant to Va. Code ss. 13.1-681, to (i) proceed forthwith in a summary way to
hear and decide the issues presented; (ii) set aside the election of directors
held at the 1997 Annual Shareholders Meeting; (iii) order that there be held as
soon as possible a new election of directors of Allstate; (iv) enjoin and
restrain respondents Craig Fishman, Leon Fishman, Eugene Haskin, James Spector
and Alan Freeman from exercising without court approval any powers as directors
pending a new election; and (v) grant such other relief as the Court may deem
just and equitable.
The Reporting Persons seek a new election of the entire Board of Directors
of the Issuer. While the Reporting Persons intend to seek the election of
persons representing at least a majority of the new Board of Directors, no
decision has been made yet as to the exact number of directors the Reporting
Persons will seek to elect or whom such directors (other than Messrs. Campbell,
McNally and Savage) will be.
Depending on its evaluation of the Issuer, other investment opportunities,
market conditions, and such other factors as it may deem material, Value
Partners may seek to acquire additional shares of Common Stock in the open
market, in private transactions, by
<PAGE>
CUSIP No. 020011 10 2 Amendment No. 9 Page 17 of 23
converting its Notes, or otherwise, or may dispose of all or a portion of the
shares of Common Stock owned by it. Depending on their evaluation of the Issuer,
other investment opportunities, market conditions, and such other factors as
they may deem material, each of Messrs. Campbell, McNally and Savage may seek to
acquire additional shares of Common Stock in the open market, in private
transactions, by exercising their stock options, or otherwise, or may dispose of
all or a portion of the shares of Common Stock owned by them.
Other than as set forth above, none of the Reporting Persons has at this
time any specific plans or proposals that relate to, or could result in, any of
the matters referred to in paragraphs (a) through (j), inclusive, of Item 4 of
Schedule 13D, except that Messrs. Campbell, McNally and Savage will continue to
consider all matters presented to the Board of Directors of the Issuer in
accordance with their fiduciary duties.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) According to the Issuer's Report on Form 10-Q for the quarter ended
September 30, 1997, a total of 2,318,185 shares of Common Stock were issued and
outstanding as of November 12, 1997. As of December 29, 1997, Value Partners
beneficially owned 488,368 shares of Common Stock, representing approximately
21.1% of the Common Stock issued and outstanding. In addition, Value Partners
owns $1,301,000 of Notes, which are convertible into 173,467 shares of Common
Stock. Because the Notes are currently convertible into Common Stock, Value
Partners is deemed to beneficially own for purposes of Rule 13d-3 an aggregate
of 661,835 shares of Common Stock, or 26.6% of the 2,491,652 shares of Common
Stock that would be issued and outstanding if Value Partners fully converted its
Notes into Common Stock.
Mr. Campbell beneficially owns 2,500 shares of Common Stock jointly with
his spouse, representing approximately .1% of the Common Stock issued and
outstanding. In addition, Mr. Campbell holds options to purchase 11,000 shares
of Common Stock. Because the options are exercisable within 60 days of December
29, 1997, Mr. Campbell is deemed to beneficially own for purposes of Rule 13d-3
an aggregate of 13,500 shares of Common Stock, or .6% of the 2,329,185 shares of
Common Stock that would be issued and outstanding if Mr. Campbell fully
exercised his options.
Mr. McNally beneficially owns 1,000 shares of Common Stock through an
individual retirement account, or less than .1% of the Common Stock issued and
outstanding. In addition, Mr. McNally holds options to purchase 12,000 shares of
Common Stock. Because the options are exercisable within 60 days of December 29,
1997, Mr. McNally is deemed to beneficially own for purposes of Rule 13d-3 an
aggregate of 13,000 shares of Common Stock, or .6% of the 2,330,185 shares of
Common Stock that would be issued and outstanding if Mr. McNally fully exercised
his options.
<PAGE>
CUSIP No. 020011 10 2 Amendment No. 9 Page 18 of 23
Mr. Savage beneficially owns 6,000 shares of Common Stock, or approximately
.3% of the Common Stock issued and outstanding, and his spouse owns 1,000 shares
of Common Stock or less than .1% of the Common Stock issued and outstanding. In
addition, Mr. Savage holds options to purchase 12,000 shares of Common Stock.
Because the options are exercisable within 60 days of December 29, 1997, Mr.
Savage is deemed to beneficially own for purposes of Rule 13d-3 an aggregate of
19,000 shares of Common Stock, or .8% of the 2,330,185 shares of Common Stock
that would be issued and outstanding if Mr. Savage fully exercised his options.
In the aggregate, the Reporting Persons beneficially own 498,868 shares of
Common Stock, representing 21.5% of the issued and outstanding Common Stock,
excluding shares which the Reporting Persons have a right to acquire. If the
Notes held by Value Partners were fully converted and if the options held by
Messrs. Campbell, McNally and Savage were fully exercised, the Reporting Persons
would hold 707,335 shares, or 28.0% of the 2,526,652 shares of Common Stock that
would then be issued and outstanding.
(b) Value Partners has the sole power to vote and dispose of the Common
Stock and the Notes beneficially owned by it. Value Partners does not share the
power to vote or to direct the vote of, or the power to dispose or to direct the
disposition of, the Common Stock or the Notes owned by it. Ewing & Partners, EAM
and Mr. Ewing do not directly own any shares of Common Stock of the Issuer.
However, Ewing & Partners, as a general partner of Value Partners, may be
deemed, for purposes of determining beneficial ownership pursuant to Rule 13d-3,
to have the shared power with Value Partners to vote or direct the vote of, and
the shared power with Value Partners to dispose of or to direct the disposition
of, the Common Stock and the Notes owned by Value Partners. Mr. Ewing, as a
general partner and the Managing Partner of Ewing & Partners, may be deemed, for
purposes of determining beneficial ownership pursuant to Rule 13d-3, to have
shared power with Value Partners to vote or to direct the vote of, and the
shared power to dispose or to direct the disposition of, the Common Stock and
the Notes owned by Value Partners. Although EAM holds a 1% general partner
interest in Ewing & Partners, EAM does not have any shared voting or dispositive
power over the Common Stock and the Notes owned by Value Partners, as Section 8
of the general partnership agreement for Ewing & Partners gives such power
solely to Mr. Ewing as the Managing Partner of Ewing & Partners. For the reasons
stated above, Mr. Fisher is no longer deemed as of December 31, 1997 to have any
shared voting or dispositive power over the shares of Common Stock or Notes
directly owned by Value Partners. Value Partners, Ewing & Partners, EAM and Mr.
Ewing each disclaim any beneficial ownership in the shares of Common Stock held
by Messrs. Campbell, McNally and Savage.
Mr. Campbell shares the power to vote and to dispose of his 2,500 shares of
Common Stock with his spouse, Mary W. Campbell. Mr Campbell's options to
purchase 11,000 shares of Common Stock are held solely by Mr. Campbell. Mr
Campbell disclaims any beneficial ownership in the shares of Common Stock held
by the other Reporting Persons.
<PAGE>
CUSIP No. 020011 10 2 Amendment No. 9 Page 19 of 23
Mr. McNally has the sole power to vote and to dispose of the 1,000 shares
of Common Stock held by him, and his options to purchase 12,000 shares of Common
Stock are held solely by him. Mr. McNally disclaims any beneficial ownership in
the shares of Common Stock held by the other Reporting Persons.
Mr. Savage has the sole power to vote and to dispose of the 6,000 shares of
Common Stock held by him, and shared power to vote and to dispose of the 1,000
shares of Common Stock held by his spouse, Ilona S. Savage. Mr. Savage's options
to purchase 12,000 shares of Common Stock are held solely by him. Mr. Savage
disclaims any beneficial ownership in the shares of Common Stock held by the
other Reporting Persons.
<PAGE>
CUSIP No. 020011 10 2 Amendment No. 9 Page 20 of 23
(c) As previously reported, Value Partners effected the following
transactions on the Nasdaq/NMS:
Number of Shares of
Common Stock Price per
Date Purchased (Sold) Share*
- ----------------------- ---------------------------- ----------------------
8/25/93 7,000 5.68
8/26/93 7,000 5.55
8/27/93 10,000 5.43
9/8/93 65,000 5.14
9/9/93 8,000 5.36
9/24/93 25,000 $5.93
10/11/93 5,000 5.80
10/12/93 42,000 5.80
11/18/93 36,000 6.47
11/22/93 12,000 6.24
11/30/93 10,000 6.18
12/14/93 15,000 6.18
8/22/94 14,600 6.18
8/25/94 8,200 6.18
8/26/94 9,300 6.14
9/9/94 5,000 6.20
9/12/94 4,300 6.18
9/21/94 26,100 6.18
12/16/94 (30,000) (6.10)
7/11/95 16,00 6.45
7/18/95 6,200 6.30
7/21/95 4,000 6.18
10/5/95 20,000 5.86
10/9/95 17,500 5.80
10/13/95 32,000 5.75
10/31/95 4,500 5.56
11/3/95 20,000 5.56
12/19/95 45,000 5.50
12/21/95 17,000 5.50
12/28/95 7,000 5.63
1/24/96 76,600 5.81
2/2/96 (204,882) exchanged for Notes
2/5/96 117,950 5.88
2/7/96 30,000 5.88
9/16/96 (20,000) 5.50
10/4/96 20,000 6.50
- ----------
* Price per share includes brokerage commissions
<PAGE>
CUSIP No. 020011 10 2 Amendment No. 9 Page 21 of 23
In addition, Mr. Campbell purchased 1,500 shares of Common Stock on the
Nasdaq/NMS on December 8, 1997 at a price of $5.76 per share (including
brokerage commissions). As non-employee directors of the Issuer, each of Messrs.
Campbell, McNally and Savage are granted an option to purchase 1,000 shares of
Common Stock as of the date of each Board of Directors' meeting. Other than as
shown above, no other transactions were effected by any of the Reporting Persons
during the past 60 days.
(d) Ewing & Partners and Mr. Ewing may be deemed to have the power to
direct the receipt of dividends from, or the proceeds from the sale of, the
Common Stock owned by Value Partners.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER
The Reporting Persons have no contracts, arrangements, understandings or
relationships (legal or otherwise) between themselves and any person with
respect to any securities of the Issuer other than those described below:
(a) The Amended and Restated Agreement of Limited Partnership of Value
Partners, dated as of October 1, 1993, pursuant to the terms of which Ewing &
Partners, as General Partner, has the sole power to manage the affairs of Value
Partners, including the right to vote the shares of the Issuer and to dispose of
such shares. This agreement was previously filed as an exhibit.
(b) The Partnership Agreement of Ewing & Partners (formerly known as Fisher
Ewing Partners), dated as of September 1, 1991, pursuant to the terms of which
Mr. Ewing, as General Partner, has the power to manage the affairs of Ewing &
Partners, including the right to vote the shares of the Issuer and to dispose of
such shares. This agreement was previously filed as an exhibit. The partnership
agreement was amended and restated as of January 1, 1998 to change the name to
Ewing & Partners, to show Mr. Ewing as a 99% general partner and the Managing
Partner, and to show EAM as a 1% general partner.
(c) Following the annual meeting of the Issuer's stockholders held on
November 18, 1997, Messrs. Campbell, McNally and Savage informed Mr. Ewing that
the management directors had determined not to honor the terms of the Agreement
reached by the Board of Directors of the Issuer on September 24, 1997, as
described in Item 4 above. Various discussions were then held among the
Reporting Persons, which resulted in Mr. Ewing deciding to join Messrs.
Campbell, McNally and Savage in filing a lawsuit against the Issuer following
the December 18, 1997 meeting of the Issuer's Board of Directors. Value Partners
and Messrs. Campbell, McNally and Savage have orally agreed to bear the costs of
the lawsuit in proportion to their respective ownership of the Common
<PAGE>
CUSIP No. 020011 10 2 Amendment No. 9 Page 22 of 23
Stock of the Issuer. In addition, the Reporting Persons decided to jointly file
this Schedule 13D, as evidenced by the Joint Filing Agreement filed as Exhibit 4
hereto.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following are filed as exhibits to this Schedule 13D:
Exhibit 1* Form of Amended and Restated Agreement of Limited
Partnership of Value Partners dated as of October 1,
1993
Exhibit 2* Agreement of General Partnership of Ewing & Partners
(formerly known as Fisher Ewing Partners) dated as of
September 1, 1991
Exhibit 3 Amended and Restated Agreement of General Partnership
of Ewing & Partners dated as of January 1, 1998.
Exhibit 4 Joint Filing Agreement
- ----------
* Previously filed.
<PAGE>
CUSIP No. 020011 10 2 Amendment No. 9 Page 23 of 23
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
VALUE PARTNERS, LTD.
By: Ewing & Partners as General Partner
January 7, 1998 By:/s/ Timothy G. Ewing
--------------------
Timothy G. Ewing
General Partner
EWING & PARTNERS
January 7, 1998 By:/s/ Timothy G. Ewing
--------------------
Timothy G. Ewing
General Partner
January 7, 1998 /s/ Timothy G. Ewing
--------------------
Timothy G. Ewing
January 7, 1998 /s/ David W. Campbell
---------------------
David W. Campbell
January 7, 1998 /s/ Edward A. McNally
---------------------
Edward A. McNally
January 7, 1998 /s/ William H. Savage
---------------------
William H. Savage
EXHIBIT 3
AMENDED AND RESTATED AGREEMENT
OF GENERAL PARTNERSHIP
OF
EWING & PARTNERS
This Agreement of General Partnership (the "Agreement") is made by and
between Timothy Gordon Ewing of Dallas, Texas ("TGE") and Ewing Asset
Management, L.L.C., a Texas limited liability company ("EAM") (together, the
"Partners") as of the 1st day of January 1998.
RECITALS
A. Pursuant to an Agreement of General Partnership dated as of September 1,
1991 (the "Original Agreement"), Richard Welton Fisher ("RWF") and TGE formed
the Partnership which, prior to the date hereof, has been known as "Fisher Ewing
Partners."
B. Pursuant to a Withdrawal Agreement effective as of December 31, 1997
(the "Withdrawal Agreement"), RWF has withdrawn from the Partnership and TGE and
EAM have acquired RWF's interest in the Partnership such that, after
consummation of the transactions contemplated by the Withdrawal Agreement, TGE
owns 99% of the partnership interests of the Partnership and EAM owns 1% of the
partnership interests of the Partnership.
C. The Partners desire to continue the Partnership without dissolution and
to amend and restate the original agreement in its entirety.
In consideration of the covenants and conditions contained herein, and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Partners agree as follows:
1. Continuation. The Partners hereby agree to continue the Partnership
without dissolution as a general partnership in accordance with the provisions
of the Revised Partnership Act of the State of Texas and on the terms and
conditions set forth in this Agreement.
2. Name. The business of the Partnership will be conducted under the name
"Ewing & Partners."
<PAGE>
3. Term. The term of the Partnership commenced effective September 1, 1991
and will continue until December 31, 2050, unless previously terminated in
accordance with the terms of this Agreement.
4. Purpose. The purposes of this Partnership are (a) to operate the General
Partnership of Value Partners, Ltd.; (b) engage in any and all activities
related or incident to the rendition of such services, and (c) to engage in any
and all other activities as the Partners may agree. Neither Partner will be
obligated to make available to the Partnership any business opportunities by
either of them that are not within the scope of the business and purpose of the
Partnership described in this Section 4.
5. Partnership Interests. The partnership interests of the Partners (the
"Partnership Interest") will be: TGE, 99%; EAM 1%.
6. Contributions and Distributions. The Partners will fund all capital
requirements of the Partnership in accordance with their Partnership Interests.
The Partnership will annually, as soon as practicable after the close of the
fiscal year of the Partnership, distribute all funds received by it to the
Partners in accordance with their Partnership Interests; provided, that the
Partnership may retain funds within the Partnership to the extent the Managing
Partner determines to be reasonable for the conduct of its business and
fulfillment of its purposes. Notwithstanding the foregoing, the Managing Partner
may, in his discretion, cause the Partnership to make more frequent distribution
to the Partners in accordance with their Partnership Interests.
7. Allocations.
(a) All income, gains, losses, and deductions will be allocated to the
Partners in accordance with their Partnership Interests.
(b) If any interest in the Partnership is sold, assigned or transferred
during any fiscal year, all items of income, gain, loss, deduction and credit
attributable to the transferred interest for such period will be divided and
allocated between the transferor and the transferee by taking into account their
varying interests during the period in accordance with section 706(d) of the
Internal Revenue Code, using any conventions permitted by law and selected by
the Partners.
8. Management.
(a) The holder or holders of Partnership Interests aggregating more
than 50% may at any time vote to elect new partners or dismiss existing partners
from the Partnership.
(b) The holder or holders of Partnership Interests aggregating more
than 50% will designate a Managing Partner who will serve until his successor is
designated. TGE shall serve as Managing Partner until his successor is duly
designated or until his earlier
2
<PAGE>
death, resignation or removal. The Managing Partner will have the exclusive
authority to operate and manage the day-to-day business and affairs of the
Partnership. Persons dealing with the Partnership are entitled to rely
conclusively on the power and authority of the Managing Partner as set forth in
this Agreement. In no event will any person dealing with the Managing Partner
with respect to any business, property or asset of the Partnership be obligated
to ascertain that the terms of this Agreement have been complied with, or be
obligated to inquire into the necessity or expediency of any act of the Managing
Partner; and every contract, agreement, deed, mortgage, security agreement,
promissory note, or other instrument or document executed by the Managing
Partner with respect to any business, property or asset of the Partnership will
be conclusive evidence in favor of any and every person relying thereon or
claiming thereunder that (i) at the time of the execution and delivery thereof,
this Agreement was in full force and effect; (ii) such instrument or document
was duly executed in accordance with the terms and provisions of this Agreement
and is binding upon the Partnership and all the Partners; and (iii) the Managing
Partner was duly authorized and empowered to execute and deliver any and every
such instrument or document for and on behalf of the Partnership.
(c) The Managing Partner is hereby granted the right, power and
authority to do in the name of and on behalf of the Partnership all things that,
in the Managing Partner's sole judgment, are necessary, proper or desirable to
carry out its duties and responsibilities including, without limitation, the
right, power and authority to:
(i) dispose of Partnership assets in the exercise of any rights
or powers possessed by the Managing Partners under this
Agreement;
(ii) enter into agreements containing such terms, provisions and
conditions as the Managing Partner, in his discretion,
approves;
(iii) purchase from or through other contracts of liability,
casualty, and other insurance that the Managing Partner
deems advisable for the protection of the Partnership and
the Partners with respect to the Partnership's operations
or for any purpose convenient or beneficial to the
Partnership;
(iv) incur indebtedness, grant mortgage liens on Partnership
assets, pledge, and otherwise encumber Partnership assets,
and subordinate the interest of the Partnership in any
asset to any indebtedness or interest, whether newly
created or preexisting;
(v) sell, exchange, lease, or otherwise dispose of, on such
terms and conditions as the Managing Partner deems
advisable, appropriate or convenient, any of the assets of
the Partnership;
3
<PAGE>
(vi) invest in short-term debt obligations such funds as are
temporarily not required for the purpose of the
Partnership's operations or distributions pursuant to
Section 6.
(vii) delegate all or any of the Managing Partner's duties under
this Agreement and, in furtherance of any such delegation,
appoint, employ, or contract with any person for the
transaction of the business of the Partnership, which
persons may, under the supervision of the Managing Partner,
act as consultants, accountants, attorneys, brokers, escrow
agents, or any other capacity deemed by the Managing
Partner necessary or desirable and pay appropriate fees to
any such persons.
(viii) prepare, or have prepared, and file all tax returns for the
Partnership and make all tax elections for the Partnership,
including any special basis adjustments pursuant to section
754 of the Internal Revenue Code, provided, however, that
the Partner benefiting from such election will reimburse
the Partnership for any additional costs incurred by the
Partnership in making the election for and on behalf of the
Partnership;
(ix) institute, prosecute, defend, and settle any legal,
arbitration or administrative actions or proceedings on
behalf of or against the Partnership; and
(x) employ, terminate the employment of, supervise and
compensate such persons or entities for and in connection
with the business of the Partnership and the acquisition,
development, improvement, operation, maintenance,
management, leasing, financing, refinancing, sale, exchange
or other disposition of any assets of the Partnership or
any interest in any of such assets as the Managing Partner,
in his sole discretion, deems necessary or desirable.
(d) Notwithstanding the powers of the Managing Partner set forth in
this Section 8, without the consent of all the Partners, the Managing Partner
will not have the right or power to:
(i) do any act in contravention of this Agreement as amended
from time to time;
(ii) do any act which would make it impossible to carry on the
ordinary business of the Partnership;
(iii) confess a judgment against the Partnership;
4
<PAGE>
(iv) possess Partnership property, or assign any Partnership
property for other than a Partnership purpose;
(v) admit a person as a Partner other than as provided in this
Agreement; or
(vi) amend this Agreement.
(e) The Managing Partner is hereby designated as the "Tax Matters
Partner" under Section 6331(a)(7) of the Internal Revenue Code, to manage
administrative tax proceedings conducted at the Partnership level by the
Internal Revenue Service with respect to Partnership matters.
(9) Dissolution. The Partnership will be dissolved upon the occurrence of
any of the following events unless the Partners agree in writing to the
contrary: (a) the death, bankruptcy, resignation or dismissal of any Partners
(the "Departing Partner"); (b) the receipt by the Partnership of the final
payment due on any sale of all or substantially all of the Partnership's assets;
or (c) the agreement of each of the Partners to dissolve the Partnership. In the
event of a dissolution of the Partnership pursuant to clause (a) above, each
Partner (or its legal representative or successor) will submit the cash purchase
price at which it would be willing to purchase an undivided 100% interest in the
Partnership in accordance with conditions set by the Managing Partner. Whichever
Partner submits the higher price will purchase the interest of the Departing
Partner for an amount equal to the product of such price multiplied by the
Partnership Interest of such other Partner.
10. Transfer.
(a) No Partner will be permitted to assign, transfer, sell, pledge,
hypothecate, mortgage, encumber, give, abandon, or otherwise dispose of all or
any part of its interest in the Partnership (by operation of law or otherwise)
without the prior consent of the voting majority of the other Partners.
(b) No transferee or assignee of any interest in the Partnership
(whether by death or divorce of any Partner, voluntary or involuntary transfer,
or otherwise) will, without the consent of a voting majority of the Partnership,
(i) be entitled to influence or interfere in the management or administration of
the business or affairs of the Partnership; (ii) have any rights or privileges
with respect to the Partnership other than those of any "assignee" under the
Texas Uniform Partnership Act; or (iii) be considered a partner in this
Partnership.
11. Binding Effect. Except as otherwise provided in this Agreement, this
Agreement will be binding upon and inure to the benefit of the parties to this
Agreement and their respective heirs, successors and assigns.
5
<PAGE>
12. Additional Documents. Each Partner hereby agrees to execute such
additional documents as may be reasonably necessary to carry out the purposes of
the Partnership.
IN WITNESS WHEREOF, the Partners have executed this Agreement as of the day
and year first above written.
/s/ Timothy Gordon Ewing
------------------------
Timothy Gordon Ewing
EWING ASSET MANAGEMENT, L.L.C.
By: /s/ Timothy Gordon Ewing
-----------------------------
Timothy Gordon Ewing, Manager
6
EXHIBIT 4
JOINT FILING AGREEMENT
Pursuant to Rule 13d-1(f)(1) under the Securities Exchange Act of 1934, as
amended, each of the undersigned hereby enter into this Joint Filing Agreement
dated as of January 7, 1998 and agree that the Schedule 13D regarding Allstate
Financial Corporation to which this Agreement is being filed as an exhibit shall
be a joint statement filed on behalf of each of the undersigned.
VALUE PARTNERS, LTD.
By: Ewing & Partners as General Partner
By:/s/ Timothy G. Ewing
--------------------
Timothy G. Ewing
General Partner
EWING & PARTNERS
By:/s/ Timothy G. Ewing
--------------------
Timothy G. Ewing
General Partner
/s/ Timothy G. Ewing
--------------------
Timothy G. Ewing
/s/ David W. Campbell
---------------------
David W. Campbell
/s/ Edward A. McNally
---------------------
Edward A. McNally
/s/ William H. Savage
---------------------
William H. Savage
