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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
(RULE 13D-101)
Under the Securities Exchange Act of 1934
HEALTHEXTRAS, INC.
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(Name of Issuer)
COMMON STOCK, $0.01 PAR VALUE PER SHARE
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(Title of Class of Securities)
422211102
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(CUSIP Number)
Health Partners
54 Thompson Street
New York, New York 10012
Attention: David A. Spuria
(212) 965-0800
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(Name, address and telephone number of person
authorized to receive notices and communications)
December 17, 1999
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(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 that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), (f) or (g), check the following box [ ].
33560.0024
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- ---------------------- -------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only)
Health Partners
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS: OO - Contributions from Partners
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION: Bermuda
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NUMBER OF 7 SOLE VOTING POWER: 0
SHARES ------------------- -------------------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 4,420,000
OWNED BY ------------------- -------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING ------------------- -------------------------------------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 4,420,000
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON:
4,420,000
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 16.0%
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14 TYPE OF REPORTING PERSON: PN
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</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only)
Capital Z Financial Servies Fund II, L.P.*
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS: Not Applicable
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION: Bermuda
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NUMBER OF 7 SOLE VOTING POWER: 0
SHARES ------------------- -------------------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 4,420,000*
OWNED BY ------------------- -------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING ------------------- -------------------------------------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 4,420,000*
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON:
4,420,000*
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 16.0%
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14 TYPE OF REPORTING PERSON: PN
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</TABLE>
* Solely in its capacity as general partner of Health Partners.
3
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only)
Capital Z Partners, L.P.*
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS: Not Applicable
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION: Bermuda
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NUMBER OF 7 SOLE VOTING POWER: 0
SHARES ------------------- -------------------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 4,420,000*
OWNED BY ------------------- -------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING ------------------- -------------------------------------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 4,420,000*
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON:
4,420,000*
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 16.0%
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14 TYPE OF REPORTING PERSON: PN
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</TABLE>
* Solely in its capacity as the sole general partner of Capital Z Financial
Services Fund II, L.P.
4
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- ---------------------- -------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only)
Capital Z Partners, Ltd.*
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS: Not Applicable
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION: Bermuda
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NUMBER OF 7 SOLE VOTING POWER: 0
SHARES ------------------- -------------------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 4,420,000*
OWNED BY ------------------- -------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING ------------------- -------------------------------------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 4,420,000*
- ---------------------- -------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON:
4,420,000*
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 16.0%
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14 TYPE OF REPORTING PERSON: CO
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</TABLE>
* Solely in its capacity as the sole general partner of Capital Z Partners, L.P.
5
<PAGE>
ITEM 1. SECURITY AND ISSUER
Common Stock, $0.01 par value per share (the "Common Stock")
HealthExtras, Inc. (the "Company")
2275 Research Boulevard, 7th Floor
Rockville, Maryland 20850
ITEM 2. IDENTITY AND BACKGROUND
(a) Name of Person(s) Filing this Statement (the "Filing
Parties"):
Health Partners, a Bermuda general partnership ("Health
Partners"); Capital Z Financial Services Fund II, L.P.,
a Bermuda limited partnership ("Capital Z Fund II");
Capital Z Partners, L.P., a Bermuda limited partnership
("Capital Z L.P."); and Capital Z Partners, Ltd., a
Bermuda corporation ("Capital Z Ltd.").
(b) Residence or Business Address:
The principal business address of the Filing Parties is
54 Thompson Street, New York, New York 10012.
(c) Present Principal Occupation:
Health Partners is a general partnership that invests in
the securities of healthcare services companies and related
businesses. Capital Z Fund II is a private equity fund formed to
engage in the investment in securities of financial services entities
and serves as a general partner of Health Partners. Capital Z L.P. is
a business entity formed to serve as the sole general partner of
Capital Z Fund II. Capital Z Ltd. is a business entity formed to
serve as the sole general partner of Capital Z L.P.
(d) Convictions in Criminal Proceedings during the last 5 Years:
None of the Filing Parties has been convicted in a
criminal proceeding during the last 5 years.
(e) Proceedings involving Federal or State Securities Laws:
None of the Filing Parties has, during the last 5 years,
been a party to any civil proceeding as a result of which he or it
was 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 violations with
respect to such laws.
6
<PAGE>
(f) Citizenship:
Each of the Filing Parties is organized under the
jurisdiction indicated in paragraph (a) of this Item 2.
Other Information
The attached Schedule I is a list of all of the general
partners of Health Partners that are not also Filing Parties, which
contains the following information with respect to each entity:
(i) name;
(ii) jurisdiction of organization;
(iii) principal business address; and
(iv) present principal occupation.
The attached Schedule II is a list of the directors and
executive officers of Capital Z Ltd., which contains the following
information with respect to each person:
(i) name;
(ii) principal business address; and
(iii) present principal occupation or employment.
None of the entities or persons identified on Schedule I
or Schedule II hereto has, during the last five years, been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors). None of the entities or persons identified on Schedule
I or Schedule II hereto has, during the last five years, 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. Each person identified on Schedule II hereto is
a United States citizen, except for Laurence W. Cheng, who is a
citizen of Canada.
Steven M. Gluckstern, who is the Chairman of the Board
of Capital Z Ltd., and Robert A. Spass, who is the Deputy Chairman of
the Board of Capital Z Ltd., may be deemed to be beneficial owners of
the Notes, and the underlying Common Stock of the Company, held by
Health Partners. Messrs. Gluckstern and Spass disclaim any such
beneficial ownership.
7
<PAGE>
ITEM 3. SOURCE AND AMOUNT OF FUNDS
As more fully described in Item 6 below, on May 27, 1999, Capital Z
Healthcare Holding Corp. ("Capital Z Healthcare") initially invested $5.0
million in HealthExtras, LLC in exchange for a 20% ownership interest in
HealthExtras, LLC. Health Partners, the sole shareholder of Capital Z
Healthcare, used contributions from its partners to fund the purchase of Capital
Z Healthcare's interest in HealthExtras, LLC. Such partners, in turn, used
contributions from their respective partners to fund such contributions to
Health Partners.
ITEM 4. PURPOSE OF TRANSACTION
The Filing Parties consummated the transactions described herein in
order to acquire a significant interest in the Company and for investment
purposes. Subject to market conditions, the provisions contained in that certain
Lock-Up Agreement, dated as of December 17, 1999, by and between Warburg Dillon
Read LLC and Health Partners and other factors, the Filing Parties or their
affiliates may acquire or dispose of the Common Stock of the Company from time
to time in future open-market, privately negotiated or other transactions, may
enter into agreements with third parties relating to acquisitions of securities
issued or to be issued by the Company or may effect other similar agreements or
transactions.
ITEM 5. INTEREST IN SECURITIES OF ISSUER
(a) and (b) Each of the Filing Parties may be deemed to beneficially
own in the aggregate 4,420,000 shares of the Common Stock of the Company by
virtue of Health Partners' ownership of the Common Stock of the Company. With
respect to such shares of Common Stock, (i) none of the Filing Parties has the
sole power to vote or to direct the vote, or to dispose or to direct the
disposition, of such shares, and (ii) each of the Filing Parties has the shared
power to vote or to direct the vote, and to dispose or to direct the
disposition, of such shares. The aggregate number of shares of Common Stock
covered by this Schedule 13D represents approximately 16.0% of the outstanding
shares of Common Stock (based on calculations made in accordance with Rule
13d-3(d) of the Exchange Act and based on the number of shares of Common Stock
outstanding as contained in the Company's most recently available filing with
the Securities and Exchange Commission).
Each of the Filing Parties disclaims beneficial ownership of all
securities covered by this Schedule 13D not owned of record by it.
(c) Except as set forth herein, to the knowledge of the Filing
Parties with respect to the other persons named in response to paragraph (a),
none of the persons named in response to paragraph (a) has effected any
transactions in shares of Common Stock during the past 60 days.
(d) None.
(e) Not applicable.
8
<PAGE>
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO THE SECURITIES OF THE ISSUER
On May 27, 1999, Capital Z Healthcare invested $5.0 million in
HealthExtras, LLC in exchange for a 20% ownership interest in HealthExtras, LLC.
Pursuant to that certain Reorganization Agreement (the "Reorganization
Agreement"), dated as of December 9, 1999, by and among the Company,
HealthExtras, LLC and Capital Z Healthcare, Capital Z Healthcare merged with and
into the Company and, immediately thereafter, HealthExtras, LLC merged with and
into the Company. As a result of such mergers, Health Partners, the sole
stockholder of Capital Z Healthcare, received 4,420,000 shares of Common Stock.
In connection with the transactions contemplated by the
Reorganization Agreement, Health Partners entered into that certain Stockholders
Agreement (the "Stockholders Agreement"), dated as of December 9, 1999, by and
among the Company, Health Partners and Highland Investments, LLC ("Highland").
Pursuant to the Stockholders Agreement, as more fully described in Article 3
thereof, the parties agreed that the Board of Directors of the Company would
initially consist of nine individuals (subject to certain exceptions and
adjustments) and that Health Partners would be entitled to designate two
directors. The Stockholders Agreement, as more fully described therein, also
contains provisions regarding registration rights, tag-along rights, rights of
first offer and preemptive rights with respect to certain sales of Common Stock.
Also in connection with the transactions contemplated by the Purchase
Agreement, Health Partners, Highland and the Company entered into that certain
Registration Rights Agreement (the "Registration Rights Agreement"), dated as of
December 17, 1999. As more fully described in the Registration Rights Agreement,
the Company granted to Health Partners and Highland four demand registration
rights and certain other incidental registration rights with respect to
offerings made by the Company under the Securities Act of 1933, as amended.
The descriptions of the Reorganization Agreement, the Stockholders
Agreement, and the Registration Rights Agreement contained herein are qualified
in their entirety by reference to the applicable agreements, which are
incorporated by reference herewith as Exhibits 99(a), 99(b) and 99(c),
respectively.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
99(a) Reorganization Agreement, dated as of December 9, 1999,
by and between the Company, HealthExtras, LLC and Capital
Z Healthcare.*
99(b) Stockholders Agreement, dated as of December 9, 1999, by
and among the Company, Health Partners and Highland
Investments, LLC.*
99(c) Registration Rights Agreement, dated as of December 17,
1999, by and among the Company, Health Partners and
Highland Investments, LLC.*
* Incorporated by reference to the form of such agreement
included in the Company's Pre-Effective Amendment No. 2 to
its Registration Statement on Form S-1 as filed with the
Securities and Exchange Commission on October 20, 1999.
9
<PAGE>
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.
Date: December 22, 1999
HEALTH PARTNERS
By: Capital Z Financial Services Fund II, L.P.,
its General Partner
By: Capital Z Partners, L.P., its General Partner
By: Capital Z Partners, Ltd., its General Partner
By: /s/ David A. Spuria
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David A. Spuria
General Counsel, Vice President of Administration and
Secretary
10
<PAGE>
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.
Date: December 22, 1999
CAPITAL Z FINANCIAL SERVICES
FUND II, L.P.
By: Capital Z Partners, L.P., its General Partner
By: Capital Z Partners, Ltd., its General Partner
By: /s/ David A. Spuria
--------------------------------------------------------
David A. Spuria
General Counsel, Vice President of Administration and
Secretary
11
<PAGE>
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.
Date: December 22, 1999
CAPITAL Z PARTNERS, L.P.
By: Capital Z Partners, Ltd., its General Partner
By: /s/ David A. Spuria
--------------------------------------------------------
David A. Spuria
General Counsel, Vice President of Administration and
Secretary
12
<PAGE>
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.
Date: December 22, 1999
CAPITAL Z PARTNERS, LTD.
By: /s/ David A. Spuria
-------------------------------------------------------
David A. Spuria
General Counsel, Vice President of Administration and
Secretary
13
<PAGE>
SCHEDULE I
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OTHER GENERAL PARTNERS OF HEALTH PARTNERS
Capital Z Financial Services Private Fund II, L.P. ("Private Fund
II"), a Bermuda limited partnership that was formed to engage in the investment
in securities of financial service entities, is a general partner of Health
Partners. The principal business address of Private Fund II is 54 Thompson
Street, New York, New York 10012.
International Managed Care Advisors, Inc. ("IMCA"), a Delaware
corporation that was formed to invest in and advise healthcare services
companies, is a general partner of Health Partners. The principal business
address of IMCA is 54 Thompson Street, New York, New York 10012.
14
<PAGE>
SCHEDULE II
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CAPITAL Z PARTNERS, LTD.
Name, business address and present principal occupation or employment of the
directors and executive officers:
Steven M. Gluckstern
Chairman of the Board
54 Thompson Street
New York, New York 10012
Robert A. Spass
Deputy Chairman of the Board
54 Thompson Street
New York, New York 10012
Laurence W. Cheng
President and Director
54 Thompson Street
New York, New York 10012
Bradley E. Cooper
Senior Vice President and Director
54 Thompson Street
New York, New York 10012
Mark K. Gormley
Senior Vice President and Director
54 Thompson Street
New York, New York 10012
Adam M. Mizel
Senior Vice President and Director
54 Thompson Street
New York, New York 10012
Paul H. Warren
Senior Vice President and Director
54 Thompson Street
New York, New York 10012
15
<PAGE>
Scott M. Delman
Senior Vice President and Director
54 Thompson Street
New York, New York 10012
David A. Spuria
General Counsel, Vice President of Administration and Secretary
54 Thompson Street
New York, New York 10012
Roland V. Bernardon
Chief Financial Officer, Treasurer and Assistant Secretary
54 Thompson Street
New York, New York 10012
16
<PAGE>
Exhibit Index
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<TABLE>
<CAPTION>
Name of Exhibit Page Number
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<S> <C>
99(a) Reorganization Agreement, dated as of December 9, 1999,
by and between the Company, HealthExtras, LLC and Capital
Z Healthcare.*
99(b) Stockholders Agreement, dated as of December 9, 1999, by
and among the Company, Health Partners and Highland
Investments, LLC.*
99(c) Registration Rights Agreement, dated as
of December 17, 1999, by and among
the Company, Health Partners and Highland
Investments, LLC.*
* Incorporated by reference to the form of such agreement
included in the Company's Pre-Effective Amendment No. 2 to
its Registration Statement on Form S-1 as filed with the
Securities and Exchange Commission on October 20, 1999.
17
</TABLE>
