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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)*
HealthExtras, Inc.
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(Name of Issuer)
Common Stock (par value, $.01 per share)
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(Title of Class of Securities)
422211102
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(CUSIP Number)
Highland Investments, LLC, c/o Thomas L. Blair, 2275 Research Blvd., Sixth
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Floor, Rockville, MD 20850 [301-548-1000]
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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 ss.ss.240.13d-1(e), 240.13d-1(f) or
240.13d-1(g), check the following box. |_|
NOTE: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See ss.240.13d-7(b)
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 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).
POTENTIAL PERSONS WHO ARE TO RESPOND TO THE COLLECTION OF INFORMATION
CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM
DISPLAYS A CURRENTLY VALID OMB CONTROL NUMBER.
SEC 1746 (2-98)
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CUSIP No. 422211102
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1. Names of Reporting Persons
I.R.S. Identification Nos. of Above Persons (entities only).
Highland Investments, LLC IRS Id. No. 52-2171747
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) |_|
(b) |X|
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3. SEC Use Only
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4. Source of Funds (See Instructions) 00
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5. Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) |_|
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6. Citizenship or Place of Reorganization: Maryland
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Number of 7. Sole Voting Power 17,680,000 shares
Shares Bene- ----------------------------------------------------------
ficially Owned 8. Shared Voting Power
by Each ----------------------------------------------------------
Reporting 9. Sole Dispositive Power 17,680,000 shares
Person With ----------------------------------------------------------
10. Shared Dispositive Power
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
17,680,000 shares
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) |_|
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13. Percent of Class Represented by Amount in Row (11) 64.1%
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14. Type of Reporting Person (See Instructions)
00
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CUSIP No. 422211102
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1. Names of Reporting Persons
I.R.S. Identification Nos. of Above Persons (entities only).
Principal Mutual Holding Company IRS Id. No.
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) |_|
(b) |X|
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3. SEC Use Only
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4. Source of Funds (See Instructions) 00
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5. Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) |_|
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6. Citizenship or Place of Reorganization: Iowa
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Number of 7. Sole Voting Power
Shares Bene- ----------------------------------------------------------
ficially Owned 8. Shared Voting Power 17,680,000 shares
by Each ----------------------------------------------------------
Reporting 9. Sole Dispositive Power
Person With ----------------------------------------------------------
10. Shared Dispositive Power 17,680,000 shares
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
17,680,000 shares
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) |_|
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13. Percent of Class Represented by Amount in Row (11) 64.1%
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14. Type of Reporting Person (See Instructions)
CO; HC
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CUSIP No. 422211102
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1. Names of Reporting Persons
I.R.S. Identification Nos. of Above Persons (entities only).
Thomas L. Blair IRS Id. No. ###-##-####
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) |_|
(b) |X|
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3. SEC Use Only
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4. Source of Funds (See Instructions) 00
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5. Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) |_|
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6. Citizenship or Place of Reorganization: USA
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Number of 7. Sole Voting Power
Shares Bene- ----------------------------------------------------------
ficially Owned 8. Shared Voting Power 17,680,000 shares
by Each ----------------------------------------------------------
Reporting 9. Sole Dispositive Power
Person With ----------------------------------------------------------
10. Shared Dispositive Power 17,680,000 shares
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
17,680,000 shares
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) |_|
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13. Percent of Class Represented by Amount in Row (11) 64.1%
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14. Type of Reporting Person (See Instructions)
IN
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ITEM 1. SECURITY AND ISSUER
This Schedule 13D (this "Schedule") relates to the shares of common stock
(the "Common Stock"), par value $.01 per share, of HealthExtras, Inc., a
corporation organized under the laws of the State of Delaware (the "Company").
The principal executive offices of the Company are located at 2275 Research
Boulevard, Seventh Floor, Rockville, Maryland 20850.
ITEM 2. IDENTITY AND BACKGROUND
(a) Name - This statement is being filed by Highland Investments, LLC, a
Maryland limited liability company ("Highland").
(b) Residence or business address - The business address of Highland
Investments, LLC, which also serves as its principal office, is 2275 Research
Boulevard, Sixth Floor, Rockville, Maryland 20850.
(c) Present occupation or employment:
(d) Whether or not, during the last five years, such person has been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors) and, if so, give the dates, nature of conviction, name and
location of court, any penalty imposed, or other disposition of the case:
No.
(e) Whether or not, during the last five years, such person was 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; and,
if so, identify and describe such proceedings and summarize the terms of
such judgment, decree or final order: No.
(f) Citizenship - Maryland.
The persons controlling Highland Investments, LLC are Thomas L. Blair, who
controls 49.5% of Highland Investments and Principal Mutual Holding Company,
which controls through an indirect wholly-owned subsidiary, Principal Holding
Company, 50% of Highland Investments. The following information pertains to
Thomas L. Blair:
(a) This statement is also being filed by Thomas L. Blair.
(b) The business address of Thomas L. Blair is 2275 Research
Boulevard, Sixth Floor, Rockville, Maryland 20850
(c) Chairman and Co-Chief Executive Officer of United Payors &
United Providers, Inc. (d) Whether or not, during the last
five years, such person has been convicted in a criminal
proceeding (excluding traffic violations or similar
misdemeanors) and, if so, give the dates, nature of
conviction, name and location of court, any penalty imposed,
or other disposition of the case: No.
(e) Whether or not, during the last five years, such person was 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; and,
if so, identify and describe such proceedings and summarize
the terms of such judgment, decree or final order: No.
(f) USA.
The following information pertains to Principal Mutual Holding Company:
(a) This statement is also being filed by Principal Mutual Holding
Company.
(b) The business address of Principal Holding Company and
Principal Mutual's principal business address is 711 High
Street, Des Moines, Iowa 50392.
(c) Insurance holding company.
(d) Whether or not, during the last five years, such person has
been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) and, if so, give the
dates,
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nature of conviction, name and location of court, any penalty
imposed, or other disposition of the case: No.
(e) Whether or not, during the last five years, such person was 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; and,
if so, identify and describe such proceedings and summarize
the terms of such judgment, decree or final order: No.
(f) Iowa.
The following information pertains to each executive officer and director
of Principal Mutual Holding Company:
The information pertaining to such persons is incorporated by
reference from Exhibit 99.1 attached.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
On May 27, 1999, Highland Investments, LLC contributed substantially all
of its assets to HealthExtras, LLC, a Delaware limited liability company in
exchange for a 100% ownership interest in HealthExtras, LLC. Thomas L. Blair and
Principal Mutual Holding Company each had invested $5 million in Highland
Investments, LLC.
On December 17, HealthExtras, LLC merged into HealthExtras, Inc., a
corporation it had formed in order to change its corporate identity from a
Delaware limited liability company to a Delaware corporation and to effect a
public offering of the Common Stock. In such merger, Highland Investments
received 17,680,000 shares of HealthExtras, Inc. Common Stock in exchange for
its membership interest in HealthExtras, LLC., which at that time represented
ownership of 80% of HealthExtras, LLC.
ITEM 4. PURPOSE OF TRANSACTION
State the purpose or purposes of the acquisition of securities of the
issuer. Describe any plans or proposals which the reporting persons may have
which relate to or would result in:
(a) The acquisition by any person of additional securities of the issuer, or
the disposition of securities of the issuer:
(b) An extraordinary corporate transaction, such as a merger, reorganization
or liquidation, involving the issuer or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of the issuer or any of
its subsidiaries;
(d) Any change in the present board of directors or management of the issuer,
including any plans or proposals to change the number or term of directors
or to fill any existing vacancies on the board;
(e) Any material change in the present capitalization or dividend policy of
the issuer;
(f) Any other material change in the issuer's business or corporate structure
including but not limited to, if the issuer is a registered closed-end
investment company, any plans or proposals to make any changes in its
investment policy for which a vote is required by Section 13 of the
Investment Company Act of 1940;
(g) Changes in the issuer's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control of
the issuer by any person;
(h) Causing a class of securities of the issuer to be delisted from a national
securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities
association;
(i) A class of equity securities of the issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Act; or
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(j) Any action similar to any of those enumerated above.
The Reporting Persons made investments in predecessors to the Company as
discussed in Item 3 above. As the owner of 64.1% of the Company's outstanding
Common Stock, the Reporting Person may be considered to control the Company.
Except as set forth in this Item 4 (including the matters described in Item 6
below which are incorporated in this Item 4 by reference), the Reporting Persons
have no present plans or proposals that relate to or that would result in any of
the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D of
the Exchange Act. However, the Reporting Persons reserve the right to take any
action regarding the management of the affairs of the Company as they deem
appropriate, consistent with their legal obligations. In addition, the Reporting
Persons may review, as appropriate, their investment in the Company. Depending
upon future evaluations of the business prospects of the Company and upon other
developments, including, but not limited to, general economic and business
conditions and stock market conditions, the Reporting Persons may retain or from
time to time increase their holdings or dispose of all or a portion of their
holdings, subject to any applicable legal and contractual restrictions on their
ability to do so.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) Highland Investments, LLC is the record and beneficial owner of 17,680,000
shares of Common Stock, which based on calculations made in accordance
with Rule 13d-3(d) of the Exchange Act represents 64.1% of the outstanding
shares of Common Stock.
In addition, by virtue of their controlling relationship to Highland
Investments, as described in Item 2, each of Thomas L. Blair and Principal
Mutual Holding Company may be deemed to beneficially own the 17,680,000
shares of Common Stock owned by Highland Investments, 64.1% of outstanding
shares of Common Stock.
(b) Highland Investments has sole power to vote or direct the vote with regard
to 17,680,000 shares of Common Stock. Thomas L. Blair and Principal Mutual
Holding Company as the controlling persons able to direct the actions of
Highland Investments may be deemed to share the power to vote or direct
the vote with regard to the shares.
(c) Except as set forth herein, none of the persons named in response to
paragraph (a) have affected any transactions in shares of Common Stock
during the past sixty (60) days.
(d) Each of the Reporting Persons affirms that no person other than the
Reporting Persons has the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of, the shares of
Common Stock, owned by the Reporting Persons.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
Describe any contracts, arrangements, understandings or 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, naming the
persons with whom such contracts, arrangements, understandings or relationships
have been entered into. Include such information for any of the securities that
are pledged or otherwise subject to a contingency the occurrence of which would
give another person voting power or investment power over such securities except
that disclosure of standard default and similar provisions contained in loan
agreements need not be included.
The matters set forth in Item 2 are incorporated in this Item 6 by
reference as if fully set forth herein.
In connection with the Company's public offering of common stock, Highland
Investments has agreed pursuant to a "lock-up" agreement that it will not offer,
sell, contract to sell, pledge, grant any option to sell, or otherwise dispose
of, directly or indirectly, any shares of common stock or securities convertible
into or exercisable or exchangeable for
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common stock for a period of 180 days after December 17, 1999. Warburg Dillon
Read LLC may release the shares subject to this lock-up agreement in whole or in
part at anytime.
On May 27, 1999, HealthExtras, which was then a Maryland limited liability
company, contributed substantially all of its assets to HealthExtras, LLC, a
Delaware limited liability company, in exchange for a 100% ownership interest in
HealthExtras, LLC. Immediately thereafter, Capital Z Healthcare Holding Corp.
("CZHH") invested $5 million in HealthExtras, Inc. in exchange for a 20%
ownership interest. In connection with this transaction, HealthExtras agreed to
indemnify CZHH for any losses arising from any breach of HealthExtras'
representations or warranties or its failure to give effect to the restructuring
as contemplated by its Amended and Restated Limited Liability Company Agreement.
CZHH serves only as a vehicle for its sole stockholder, Health Partners, to
invest in HealthExtras and does not conduct any other operations.
HealthExtras, Inc., HealthExtras, LLC and CZHH entered into a
Reorganization Agreement dated as of December 9, 1999 pursuant to which CZHH
merged into HealthExtras, Inc. on December 17, 1999. Immediately after that
merger, HealthExtras, LCC merged into HealthExtras, Inc. As a result of these
mergers, Health Partners, the sole stockholder of CZHH, received Common Stock in
HealthExtras, Inc. representing the same proportionate ownership position which
CZHH had in HealthExtras, LLC and Highland Investments received Common Stock in
HealthExtras, Inc. representing the same proportionate ownership position which
it had in HealthExtras, LLC. We refer to the matters covered by this
Reorganization Agreement as the reorganization.
In connection with the reorganization, HealthExtras, Inc., Highland
Investments, LLC and Health Partners entered into a Stockholders Agreement dated
as of December 9, 1999. This Stockholders Agreement contains provisions
regarding registration rights, the composition of the Board of Directors, and
tag-along rights, rights of first offer and preemptive rights with respect to
certain sales of Common Stock.
REGISTRATION RIGHTS
Health Partners and Highland Investments have been granted certain
registration rights with respect to shares of HealthExtras' Common Stock held by
them and their assigns. The Stockholders Agreement provides for an aggregate of
four demand registration statements under the Securities Act of 1933 beginning
180 days after December 13, 1999. Health Partners or Highland Investments each
may require that HealthExtras file two of those demand registration statements,
subject to certain conditions. If Health Partners or Highland Investments
exercises a demand registration right, the other also can participate in the
offering on a proportionate basis to their respective ownership positions. These
stockholders are also entitled to require HealthExtras to register their shares
of HealthExtras' Common Stock on a registration statement on Form S-3 once
HealthExtras is eligible to use a Form S-3 in connection with such
registrations. In addition, these stockholders are entitled to require
HealthExtras to include their shares of HealthExtras' Common Stock in future
registration statements HealthExtras files under the Securities Act, often
referred to as "piggyback" registration rights. However, holders of these
registration rights will be restricted from exercising those rights until 180
days after the date of this prospectus and, under certain circumstances, for
agreed-upon periods after the filing of subsequent registration statements.
Also, the shares required to be included in a registration relating to an
underwritten offering generally are subject to underwriter cut back provisions.
Registration of shares of Common Stock pursuant to the exercise of demand
registration rights, piggyback registration rights or Form S-3 registration
rights would result in the shares covered by those registrations becoming freely
tradable without restriction under the Securities Act immediately upon the
effectiveness of the registration, subject to any lock-up agreements
HealthExtras has with these stockholders. HealthExtras is required to bear
substantially all registration expenses in connection with the above-described
registrations, except for underwriting discounts, income and transfer taxes, if
any, selling expenses and the fees and expenses of counsel representing the
holders of the registrable securities. These registration rights are
transferable in certain circumstances and may be amended or waived only with the
consent of the affected party.
DIRECTORS
Under the Stockholders Agreement, Highland Investments and Health
Partners, the sole stockholder of CZHH, were granted certain rights to designate
persons for election as HealthExtras' Directors. The Stockholders Agreement
provides that:
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Highland Investments may designate five people for election as
HealthExtras' Directors if Highland Investments owns at least 40% of
HealthExtras' outstanding Common Stock; three people for election as
HealthExtras' Directors if Highland Investments owns at least 25% of
HealthExtras' outstanding Common Stock; two people for election as HealthExtras'
Directors if Highland Investments owns at least 10% of HealthExtras' outstanding
Common Stock; and one person for election as HealthExtras' Director if Highland
Investments owns at least 5% of HealthExtras' outstanding Common Stock.
Health Partners may designate two people for election as HealthExtras'
Directors if Health Partners owns at least 10% of HealthExtras' outstanding
Common Stock; and one person for election as HealthExtras' Director if Health
Partners owns at least 5% of HealthExtras' outstanding Common Stock.
Highland Investments and Health Partners also may be entitled to increase
the number of Directors that they may designate for election if the total number
of directors is increased. This would maintain Highland Investments' and Health
Partners' control of HealthExtras' Board of Directors, even if the total number
of directors increases.
Under the Stockholders Agreement, five representatives of Highland
Investments, initially Thomas L. Blair, David T. Blair, Thomas J. Graf, Julia M.
Lawler, and Karen E. Shaff, and two representatives of Health Partners, Julian
A.L. Allen and Paul H. Warren, are HealthExtras, Inc.'s Directors.
RIGHTS OF FIRST OFFER AND TAG-ALONG RIGHTS
The Stockholders Agreement provides that Highland Investments and Health
Partners must give notice to HealthExtras and to each other if either proposes
to transfer Common Stock aggregating more than 10% of HealthExtras outstanding
Common Stock to a single person or group who is not a family member (if a
natural person), an affiliate (if an entity), or an employee or manager of
HealthExtras.
Upon receipt of notice, the non-transferring stockholder (either Highland
Investments or Health Partners) may elect to participate in the transfer by
delivering written notice to the transferring stockholder. This right to
participate in the transfer is called "tag-along" rights. If a stockholder
elects to participate in the transfer, the aggregate sales proceeds shall be
divided proportionally according to the electing stockholder's and the
transferring stockholder's respective shares of the proceeds of a hypothetical
liquidation. In order to calculate the proceeds of a hypothetical liquidation,
the value of HealthExtras will be implied by the transferring stockholder's
proposed sales price.
Alternately, upon receipt of notice, HealthExtras may elect to purchase
all of the shares that the transferring shareholder proposes to sell. If
HealthExtras does not elect to purchase the shares, the non-transferring
shareholder (either Highland Investments or Health Partners) may elect to
purchase all of the shares offered. This right to preempt a sale, and therefore
a possible change in control, by purchasing the shares offered is called "first
offer right." If HealthExtras exercises its first offer rights, HealthExtras
must purchase all of the shares offered upon the same terms and conditions as
originally offered. If the non-transferring shareholder exercises its first
offer rights, it may purchase a pro rata portion of the shares offered upon the
same terms and conditions as originally offered.
These tag-along and first offer rights and obligations would apply also to
controlling persons of Health Partners and Highland Investments, to whom those
entities might distribute shares of HealthExtras' Common Stock.
PREEMPTIVE RIGHTS
The Stockholders Agreement prohibits HealthExtras from offering its Common
Stock for sale other than in a public offering, in connection with an
acquisition or pursuant to employee benefit plan or arrangement, unless
HealthExtras first offers such shares to Highland Investments and Health
Partners. The preemptive offer must be in writing, on the same terms and
conditions as the offering and at the equivalent price, and must enable Highland
Investments and Health Partners to retain the same proportionate ownership of
Common Stock that it holds prior to the offering. This provision allows Highland
Investments and Health Partners to retain control of HealthExtras even if
HealthExtras decides to privately issue additional Common Stock at a later date.
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AFFILIATE TRANSACTIONS
The Stockholders Agreement also provides that HealthExtras will not engage
in transactions with affiliates other than on terms no less favorable than could
be obtained on an arms-length basis or which are approved by a majority of
directors who are independent of the affiliate. Further, the Stockholders
Agreement requires that prior to any merger or purchase or sale of stock
transaction with an affiliate, where the value of such transaction exceeds $1
million, HealthExtras must obtain a fairness opinion from a nationally
recognized investment bank.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following shall be filed as exhibits: copies of written agreements
relating to the filing of joint acquisition statements as required by Section
240.13d-1(k) and copies of all written agreements, contracts, arrangements,
understandings, plans or proposals relating to (1) the borrowing of funds to
finance the acquisition as disclosed in Item 3; (2) the acquisition of issuer
control, liquidation, sale of assets, merger, or change in business or corporate
structure or any other matter as disclosed in Item 4; and (3) the transfer or
voting of the securities, finder's fees, joint ventures, options, puts, calls,
guarantees of loans, guarantees against loss or of profit, or the giving or
withholding of any Proxy as disclosed in Item 6.
Exhibits.
2.1 Form of Reorganization Agreement by and among HealthExtras, Inc.,
HealthExtras, LLC, and CZHH is incorporated by reference as Exhibit
2.1 to Registration Statement on Form S-1, No. 333-83761, filed on
September 21, 1999.
4.2 Form of Stockholders Agreement by and among Highland Investments,
LLC, HealthExtras, LLC, HealthExtras, Inc., Principal Mutual Holding
Company, Thomas L. Blair, Health Partners, Capital Z Financial
Services Fund, II, L.P., Capital Z Financial Services Private Fund,
II, L.P., Capital Z Partners, Ltd., and Capital Z Management, LLC.
is incorporated by reference as Exhibit 4.2 to Registration
Statement on Form S-1, No. 333-83761, filed on September 21, 1999.
10.10 Form of Registration Rights Agreement by and among Health Partners,
Highland Investments, LLC and HealthExtras, Inc. is incorporated by
reference as Exhibit 10.10 to Registration Statement on Form S-1,
No. 333-83761, filed on September 21, 1999.
99.1 Information regarding executive officers and directors of Principal
Mutual Holding Company.
99.2 Lock-up Agreement by Highland Investments, LLC with Warburg Dillon
Read LLC.
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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.
HIGHLAND INVESTMENTS, LLC
By: /s/ Thomas L. Blair
-----------------------------------------
Thomas L. Blair, Administrative Member
- ---------------------------------------
/s/ Thomas L. Blair
- ---------------------------------------
Thomas L. Blair, Individually
PRINCIPAL MUTUAL HOLDING COMPANY
By:/s/ Thomas J. Graf
-------------------------------------
Thomas J. Graf, Senior Vice President
December 27, 1999
- ----------------------------------------
Date
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statement, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name and any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL
CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
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EXHIBIT 99.1
------------
DIRECTORS AND EXECUTIVE OFFICERS OF THE REPORTING PERSONS
---------------------------------------------------------
PRINCIPAL MUTUAL HOLDING COMPANY,
---------------------------------
PRINCIPAL FINANCIAL GROUP, INC.,
--------------------------------
PRINCIPAL FINANCIAL SERVICES, INC.,
-----------------------------------
AND
---
PRINCIPAL LIFE INSURANCE COMPANY
--------------------------------
DIRECTORS:
Betsy J. Bernard
Executive Vice President - Retail Markets
U S WEST
1801 California Street, 52nd Floor
Denver, CO 80202
Jocelyn Carter-Miller
Corporate Vice President and
Chief Marketing Officer
Motorola, Inc.
1000 Corporate Drive, Suite 700
Fort Lauderdale, FL 33334
David J. Drury
Chairman and Chief Executive Officer
Principal Financial Group
711 High Street
Des Moines, IA 50392-0100
Daniel Gelatt
President
NMT Corporation
Post Office Box 2287
La Crosse, WI 54602-2287
J. Barry Griswell
President
Principal Financial Group
711 High Street
Des Moines, IA 50392-0100
G. David Hurd
Principal Financial Group
711 High Street
Des Moines, IA 50392-0100
Charles S. Johnson
Executive Vice President
DuPont
400 Locust
Suite 700 Capital Square
Des Moines, IA 50309
<PAGE> 2
William T. Kerr Elizabeth E. Tallett
Chairman and Chief Executive Officer President and Chief Executive
Meredith Corporation Officer
1716 Locust Street Dioscor Inc.
Des Moines, IA 50309-3023 48 Federal Twist Road
Stockton, NJ 08559
Lee Liu
Chairman of the Board
Alliant Energy Corporation
Post Office Box 351
Cedar Rapids, IA 52406
Victor H. Loewenstein
Partner and Member of the Board
Egon Zehnder International
Cours de Rive #10
CH-1204 Geneva, Switzerland
Ronald D. Pearson
Chairman, President and Chief Executive Officer
Hy-Vee, Inc.
5820 Westown Parkway
West Des Moines, IA 50266
Federico F. Pena
Senior Advisor
Vestar Capital Partners
1225 17th Street, Suite 1660
Denver, CO 80202
John R. Price
Managing Director
The Chase Manhattan Corporation
270 Park Avenue - 44th Floor
New York, NY 10017
Donald M. Stewart
Senior Program Officer and
Special Advisor to the President
Carnegie Corporation of New York
437 Madison Avenue
New York, NY 10022
<PAGE> 3
Fred W. Weitz
President and Chief Executive Officer
Essex Meadows, Inc.
800 Second Avenue, Suite 150
Des Moines, IA 50309
The principal business address for all Executive Officers is 711 High Street,
Des Moines, Iowa 50392.
EXECUTIVE OFFICERS:
David J. Drury Robb B. Hill
Chairman and Chief Executive Officer Senior Vice President
J. Barry Griswell Ellen Z. Lamale
President Senior Vice President and Chief
Actuary
John E. Aschenbrenner Mary A. O'Keefe
Senior Vice President Senior Vice President
Paul F. Bognanno Richard L. Prey
Senior Vice President Senior Vice President
Gary M. Cain Karen E. Shaff
Senior Vice President Senior Vice President and Deputy
General Counsel
C. Robert Duncan Robert A. Slepicka
Senior Vice President Senior Vice President
Dennis P. Francis Norman R. Sorensen
Senior Vice President Senior Vice President
Michael H. Gersie Carl C. Williams
Senior Vice President Senior Vice President and Chief
Information Officer
Thomas J. Graf Larry D. Zimpleman
Senior Vice President Senior Vice President
<PAGE> 4
PRINCIPAL HOLDING COMPANY
-------------------------
The principal business address for all Directors and Executive Officers of
Principal Holding Company is 711 High Street, Des Moines, Iowa 50392.
DIRECTORS:
David J. Drury
Chairman
John E. Aschenbrenner J. Barry Griswell
Dennis P. Francis Ellen Z. Lamale
Michael H. Gersie Julia M. Lawler
Thomas J. Graf Richard L. Prey
EXECUTIVE OFFICERS:
David J. Drury Mary A. O'Keefe
Chairman and Chief Executive Officer Senior Vice President
J. Barry Griswell Richard L. Prey
President Senior Vice President
John E. Aschenbrenner Robert A. Slepicka
Senior Vice President Senior Vice President
Paul F. Bognanno Norman R. Sorensen
Senior Vice President Senior Vice President
C. Robert Duncan Carl C. Williams
Senior Vice President Senior Vice President and Chief
Information Officer
Dennis P. Francis Douglas C. Cunningham
Senior Vice President Vice President and Controller
Michael H. Gersie Joyce N. Hoffman
Senior Vice President Vice President and Corporate
Secretary
Thomas J. Graf Craig L. Bassett
Senior Vice President Treasurer
Robb B. Hill
Senior Vice President
<PAGE> 1
HealthExtras, Inc.
Initial Public Offering of Common Stock
---------------------------------------
September 30, 1999
Warburg Dillon Read LLC
299 Park Avenue
New York, New York 10171
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
proposed Underwriting Agreement (the "Underwriting Agreement"), between
HealthExtras, Inc., a Delaware corporation (the "Company"), and each of you as
Underwriters with respect to an underwritten public offering of Common Stock,
$0.01 par value (the "Common Stock"), of the Company.
In order to induce you to enter into the Underwriting Agreement, the
undersigned will not, without the prior written consent of Warburg Dillon Read
LLC, offer, sell, contract to sell, pledge or otherwise dispose of, or file (or
participate in the filing of) a registration statement with the Securities and
Exchange Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the meaning
of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Securities and Exchange Commission promulgated thereunder
with respect to, any shares of capital stock of the Company or any securities
convertible into or exercisable or exchangeable for such capital stock, or
publicly announce an intention to effect any such transaction, for a period of
180 days after the date of execution of the Underwriting Agreement.
If for any reason the Underwriting Agreement shall be terminated
prior to the Closing Date (as defined in the Underwriting Agreement), the
agreement set forth above shall likewise be terminated.
Yours very truly,
/s/ Thomas L. Blair
-------------------------------
Name: T. L. Blair
Title: Administrative Member
Highland Investments LLC
