UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
UNITED PAYORS & UNITED PROVIDERS, INC.
(Name of Issuer)
Common Stock, par value $.01 per share
(Title and Class of Securities)
911 319-10-1
(CUSIP Number)
Karen Shaff, Esq.
Principal Mutual Life Insurance Company
711 High Street
Des Moines, Iowa 50392
(515) 247-6139
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
July 8, 1996
(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 [ ]
Check the following box if a fee is being paid with the
statement [x]. (A fee is not required only if the reporting
person
(1) has a previous statement on file reporting beneficial
ownership
of more than five percent of the class of securities described in
Item 1; and (2) has filed no amendment subsequent thereto
reporting
beneficial ownership of five percent or less of such class.)
(See
Rule 13d-7.)
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.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
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the
subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a
prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of
the Securities Exchange Act of 1934 ("Act") or otherwise subject
to
the liabilities of that section of the Act but shall be subject
to
all other provisions of the Act (however, see the Notes).
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SCHEDULE 13D
CUSIP No. 911 319-10-1 Page 2
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Principal Health Care, Inc. 52-1503069
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2 (d) OR 2 (E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Iowa
NUMBER OF 7 SOLE VOTING POWER
SHARES 4,400,000
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 4,400,000
PERSON 10 SHARED DISPOSITIVE POWER
WITH
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,400,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN
SHARES
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
38.02%
14 TYPE OF REPORTING PERSON
CO
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Item 1. Security and Issuer
This statement relates to the common stock, $.01 par
value per share (the "Common Stock"), of United Payors & United
Providers, Inc. (the "Company"), a Delaware corporation, which
has
its principal executive offices at 2275 Research Boulevard, Sixth
Floor, Rockville, Maryland 20850.
Item 2. Identity and Background
This statement is being filed by Principal Health Care
Inc., ("PHC").
PHC is a corporation incorporated under the laws of Iowa.
PHC's principal business is as a company which develops and
administers managed care arrangements such as preferred provider
organizations and health maintenance organizations. PHC's parent
is
Principal Holding Company, Inc. ("PH"), a holding company for the
non-life insurance subsidiaries of its parent, Principal Mutual
Life Insurance Company ("PM"). PM is a mutual life insurance
company incorporated under the laws of the state of Iowa. PM's
principal business is the provision of products and services for
businesses, groups and individuals including individual
insurance,
pension plans and group/employee benefits. The address of PHC's
principal business and principal office is 1801 Rockville Pike,
Suite 601, Rockville, MD 20852. The address of each of PH's and
PM's principal business and principal office is 711 High Street,
Des Moines, Iowa 50392.
Information concerning the directors and executive officers
of
PM and PHC is set forth in Appendices A and B.
During the last five years, except as set forth below,
none of PHC, PH or PM, or the Directors or Executive Officers of
PHC or PM, has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).
During the last five years, except as set forth below,
none of PHC, PH or PM, or the Directors or Executive Officers of
PHC or PM, 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, or finding any violation with respect to,
federal or state securities law.
Except as set forth below, the Directors and Executive
Officers of PHC and PM are United States citizens. Victor
Loewenstein and Elizabeth Tallet are British citizens.
<PAGE>
Jean-Pierre
Rosso is a French citizen.
Item 3. Source and Amount of Funds or Other Consideration
PHC acquired 4,400,000 shares of Common Stock as a
result
of the automatic mandatory conversion of the share of Preferred
Stock Series Initial, par value $.01, issued by the Company and
held by PHC (the "Preferred Stock"). The conversion occurred on
July 8, 1996 immediately prior to the closing of the Company's
initial public offering of Common Stock. PHC acquired the
Preferred Stock from PH as a contribution to its capital on June
10, 1996. PH acquired the Preferred Stock in January 1995 for $5
million, the source of which was working capital.
Item 4. Purpose of Transaction
PHC acquired the Preferred Stock and the 4,400,000
underlying shares of Common Stock, each as described in Item 3,
for
investment purposes.
PHC and PM do not have any plans or proposals, which relate
to
or would result in any of the transactions described in
subparagraphs (a) through (j) of Item 4 of Schedule 13D under the
Securities Exchange Act of 1934. PHC and PM reserve the right to
acquire additional securities of the Company, to dispose of
securities of the Company at any time or to formulate other
purposes, plans or proposals regarding the Company or any of its
securities to the extent deemed advisable in light of their
respective general investment and trading policies, market
conditions or other factors.
Item 5. Interest in Securities of the Issuer
The 4,400,000 shares of Common Stock beneficially owned
by PHC and acquired by it as described in Item 3 constitute
38.02%
of the outstanding shares of Common Stock of the Company. PHC
has
sole voting and disposition authority with respect to the
4,400,000
shares.
Item 6. Contracts, Arrangements, Understandings or
Relationships
with Respect to Securities of the Issuer
There are no contracts, arrangements, understandings or
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relationships (legal or otherwise) among the persons named in
Item
2 and between such persons and any person with respect to any
securities of the issuer, including but not limited to transfer
or
voting of any of the securities, finder's fees, joint ventures,
loan or option arrangements, put or calls, guarantees of profits,
division of profits or loss, or the giving or withholding of
proxies, except that PM has agreed along with the Company and
other
stockholders of the Company not to offer, sell or otherwise
dispose
of shares of Common Stock for a period of 180 days from the
effective date of the registration statement covering the Common
Stock offered in the Company's initial public offering without
the
prior written consent of the representative of the underwriters
of
the offering.
Item 7. Material to Be Filed as Exhibits
EXHIBIT NO. EXHIBIT
99.1 Letter Agreement dated
June 24, 1996.
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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.
PRINCIPAL HEALTH CARE, INC.
July 17, 1996 By: /s/ K. J. Linde
Date K. J. Linde
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APPENDIX A
PM's directors and executive officers are identified below.
Directors:
Mary Vermeer Andringa, Director
President and Chief Operating Officer, Vermeer Manufacturing
Company, an international manufacturer and marketer of
agricultural and industrial equipment, Box 200 Pella, IA
50219
Dr. Ruth M. Davis, Director
President and Chief Operating Officer, The Pymatuning Group,
Inc., a technology management and industrial modernization
services company, Suite 570, 4900 Seminary Road, Alexandria,
VA 22311
D.J. Drury, Director
Chairman and Chief Executive Officer, Principal Mutual Life
Insurance Company, 711 High Street, Des Moines, IA 50392
C. Daniel Gelatt, Jr. Director
President, NMT Corporation, a computer graphics services and
software company, 2004 Kramer Street, La Crosse, WI 54603
G. David Hurd, Director
Retired, 711 High Street, Des Moines, IA 50392
Theodore M. Hutchinson, Director
Vice Chairman, Principal Mutual Life Insurance Company, 711
High Street, Des Moines, IA 50392
Charles S. Johnson, Director
President and Chief Executive Officer, Pioneer Hi-Bred
International, Inc., an agricultural products development,
production and marketing company, 400 Locust, Suite 700
Capital Square, Des Moines, IA 50309
William T. Kerr, Director
President and Chief Operating Officer, Meredith Corporation,
a media and marketing company, 1716 Locust, Suite 700
Capital
Square, Des Moines, IA 50309
Lee Liu, Director
President, Chairman and Chief Executive Officer, IES
Industries, Inc., a public utilities company, P.O. Box 351
Cedar Rapids, IA 52406
Victor H. Loewenstein, Director
Managing Partner, Egon Zehnder International, an
international
management consulting company, 55 East 59th Street, New
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York,
NY 10022
Ronald D. Pearson, Director
Chairman, President and Chief Executive Officer
Hy-Vee, Inc., an operator of retail stores, 5820 Westown
Parkway, West Des Moines, IA 50266
John R. Price, Director
Managing Director, The Chase Manhattan Corporation, a bank
holding company, 279 Park Avenue 44th Floor New York, NY
Barbara A. Rice, Director
Principal, Rice and Associates, a human resource consulting
company, 712 Germantown Pike Lafayette Hill, PA 19444
Jean-Pierre C. Rosso, Director
President and Chief Executive Officer, Case Corporation, a
heavy machinery manufacturer, 700 State Street Racine, WI
53404
Dr. Donald M. Stewart, Director
President, The College Board, a non-profit provider of
educational transition services, 45 Columbus Avenue, New
York, NY 10023
Elizabeth E. Tallett, Director
Biotechnology consultant, 48 Federal Twist Road, Stockton,
NJ
08559
Dean D. Thornton, Director
Retired, 1602 34 Court West, Seattle, WA 98199
F.W. Weitz, Director
President, Chairman of the Board and Chief Executive
Officer,
Essex Meadows, Inc., a retirement homes company, 800 Second
Avenue Des Moines, IA 50309
Executive Officers who are not Directors (all of whom are
principally employed by PM as set forth below and have, as their
principal business address, 711 High Street, Des Moines, Iowa
50392):
J.E. Aschenbrenner, Senior Vice President
R.S. Crabtree, Executive Vice President
T.J. Gaard, Senior Vice President
M.H. Gersie, Senior Vice President
T.J. Graf, Senior Vice President
J.B. Griswell, Executive Vice President
R.E. Keller, Executive Vice President
<PAGE>
G.R. Narber, Senior Vice President and General Counsel
C.E. Rohm, Executive Vice President
<PAGE>
APPENDIX B
PHC's Directors and Executive Officers are identified below.
Directors:
T.J. Graf, Chairman
D.J. Drury
K.J. Linde
K.J. Linde is principally employed by PHC and has as a principal
business address 1801 Rockville Pike, Suite 601, Rockville, MD
20852. T.J. Graf and D.J. Drury are principally employed by PM as
set forth in Appendix A and have, as their principal business
address, 711 High Street, Des Moines, Iowa 50392
Executive Officers (T.J. Graf's principal employment and business
address are set forth above. The other Executive Officers are
principally employed by PHC as set forth below and have, as their
principal business address, 1801 Rockville Pike, Suite 601,
Rockville, MD 20852 ):
K.J. Linde, President and Chief Executive Officer
T.J. Graf, Executive Vice President
D.W. Goltz, Vice President - Finance
R.J. Mrizek, Vice President and Counsel - Law and
Government Relations
S.I. Taylor, Vice President, Operations
D.L. Weiss, Vice President - Planning and Development
S.C. Whitty, President - Marketing and Sales
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[Principal Mutual Life Insurance Company Letterhead]
June 24, 1996
Bear, Stearns & Co. Inc.
Schroder, Wertheim & Co., Incorporated
c/o Bear, Stearns & Co. Inc.
215 Park Avenue
New York, NY 10167
Re: United Payors & United Providers, Inc.
Proposed Initial Public Offering of Common Stock
Dear Sirs:
The undersigned understands that Bear, Stearns & Co. Inc. and
Schroder Wertheim & Co. Incorporated, as Representatives (the
"Representatives") of the several underwriters (the
"Underwriters"), propose to enter into an Underwriting Agreement
with United Payors & United Providers, Inc. (the "Company"),
providing for the initial public offering by the Underwriters,
including the Representatives, of common stock, par value $0.01
per share ("the Common Stock") of the Company (the "Initial
Public Offering").
In consideration of the Underwriters' agreement to purchase, and
undertake the Initial Public Offering of, the Company's Common
Stock and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the undersigned
agrees not to, directly or indirectly, offer, sell, contract to
sell, grant any option to purchase tr otherwise dispose of any
Common Stock (including, without limitation, shares of Common
Stock which may be deemed to be beneficially owned by the
undersigned in accordance with the rules and regulations of the
Securities and Exchange Commission and shares of Common Stock
which may be issued upon exercise of a stock option or warrant)
or, any securities convertible into or exercisable or
exchangeable for such Common Stock or, in any manner, transfer
all or a portion of the economic consequences associated with the
ownership of the Common Stock, for a period of 180 days after the
effective date of the Company's Registration Statement on Form
S-1 relating to the Initial Public Offering (the "Registration
Statement"), other than (i) as a gift or gifts, provided the
donee or donees thereof agree in writing to be bound by this
letter agreement, (ii) transfers to a transferor's affiliates, as
such term is defined in Rule 405 promulgated under the Securities
Act of 1933, provided the transferee agrees in writing to be
bound by this letter agreement, or (iii) with the prior written
consent of Bear, Stearns & Co. Inc. The undersigned further
agrees that for a period of 180 days after the effective date of
the Registration Statement, the undersigned will not exercise any
rights that the undersigned may have to cause the Company to
register (under the Securities Act of 1933 or otherwise) any
shares of Common Stock or securities convertible into or
<PAGE>
exercisable or exchangeable for shares of Common Stock, without
the prior written consent of Bear, Stearns & Co. Inc.
In addition, the undersigned agrees that the Company may, with
respect to any shares of Common Stock for which the undersigned
is the record holder, cause the transfer agent for the Company to
note stop transfer instructions with respect to such shares of
Common Stock on the transfer books and records of the Company.
The undersigned further agrees that the undersigned will, if
requested by the Company, with respect to any shares of Common
Stock for which the undersigned is the beneficial holder but not
the record holder, cause the record holder of such shares of
Common Stock to cause the transfer agent for the Company to note
stop transfer instructions with respect to such shares of Common
Stock on the transfer books and records of the Company.
The undersigned hereby represents and warrants that the
undersigned has full power and authority to enter into this
letter agreement, and that, upon request, the undesigned will
execute any additional documents necessary or desirable in
connection with the enforcement hereof. All authority herein
conferred or agreed to be conferred shall survive the death or
incapacity of the undersigned and any obligations of the
undersigned shall be binding upon the heirs, personal
representatives, successors, and assigns of the undersigned.
Very truly yours,
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
By: /s/ Karen E. Shaff
Its: Vice President and Associate General Counsel
(Taxpayer ID No.): 42-0127290
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