SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Highlands Insurance Group, Inc.
(Name of Issuer)
Common Stock, Par Value $0.01
(Title of Class of Securities)
431032101
(CUSIP Number)
Peter A. Hochfelder
c/o Brahman Management, L.L.C.
277 Park Avenue, 26th Floor
New York, New York 10172
(212) 941-1400
(Name, address and telephone number of person
authorized to receive notices and communications)
October 20, 1998
(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.
* 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 the disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not
be deemed to be "filed" for purposes 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).
<PAGE
SCHEDULE 13D
CUSIP No. 431032101 Page 2 of 18 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Brahman Partners II, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A (a) [x]
GROUP* (b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS [ ]
IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 105,700
9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON
WITH 10 SHARED DISPOSITIVE POWER
105,700
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
105,700
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW
(11)
0.8%
14 TYPE OF REPORTING PERSON*
PN
<PAGE>
SCHEDULE 13D
CUSIP No. 431032101 Page 3 of 18 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Brahman Institutional Partners, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A (a) [x]
GROUP* (b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS [ ]
IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 243,200
9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON
WITH 10 SHARED DISPOSITIVE POWER
243,200
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
243,200
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW
(11)
1.8%
14 TYPE OF REPORTING PERSON*
PN
<PAGE>
SCHEDULE 13D
CUSIP No. 431032101 Page 4 of 18 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
BY Partners, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A (a) [x]
GROUP* (b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS [ ]
IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 299,207
9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON
WITH 10 SHARED DISPOSITIVE POWER
299,207
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
299,207
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW
(11)
2.3%
14 TYPE OF REPORTING PERSON*
PN
<PAGE>
SCHEDULE 13D
CUSIP No. 431032101 Page 5 of 18 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Brahman Management, L.L.C.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A (a) [x]
GROUP* (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
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 648,107
9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON
WITH 10 SHARED DISPOSITIVE POWER
648,107
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
648,107
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW
(11)
4.9%
14 TYPE OF REPORTING PERSON*
OO;IA
<PAGE>
SCHEDULE 13D
CUSIP No. 431032101 Page 6 of 18 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Brahman Capital Corp.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A (a) [x]
GROUP* (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
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 299,207
9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON
WITH 10 SHARED DISPOSITIVE POWER
299,207
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
299,207
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW
(11)
2.3%
14 TYPE OF REPORTING PERSON*
CO;IA
<PAGE>
SCHEDULE 13D
CUSIP No. 431032101 Page 7 of 18 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Peter A. Hochfelder
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A (a) [x]
GROUP* (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
United States
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 648,107
9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON
WITH 10 SHARED DISPOSITIVE POWER
648,107
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
648,107
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW
(11)
4.9%
14 TYPE OF REPORTING PERSON*
IN
<PAGE>
SCHEDULE 13D
CUSIP No. 431032101 Page 8 of 18 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Robert J. Sobel
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A (a) [x]
GROUP* (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
United States
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 648,107
9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON
WITH 10 SHARED DISPOSITIVE POWER
648,107
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
648,107
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW
(11)
4.9%
14 TYPE OF REPORTING PERSON*
IN
<PAGE>
SCHEDULE 13D
CUSIP No. 431032101 Page 9 of 18 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Mitchell A. Kuflik
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A (a) [x]
GROUP* (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
United States
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 648,107
9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON
WITH 10 SHARED DISPOSITIVE POWER
648,107
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
648,107
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW
(11)
4.9%
14 TYPE OF REPORTING PERSON*
IN
<PAGE>
Page 10 of 18 Pages
The Schedule 13D initially filed on July 21, 1997, as amended by
Amendment No. 1 to such Schedule 13D filed on September 25, 1997, by the
signatories hereto relating to the Common Stock, par value $0.01 per share
(the "Common Stock"), issued by Highlands Insurance Group, Inc., a Delaware
corporation (the "Company"), whose principal executive offices are at 1000
Lenox Drive, Lawrenceville, New Jersey 08648, is hereby amended by this
Amendment No. 2 to the Schedule 13D as follows:
Item 3. Source and Amount of Funds or Other Consideration.
- ------ -------------------------------------------------
Item 3 is hereby amended to add the following:
During the past 60 days, (i) Brahman II purchased 6,600 shares of
Common Stock at a net investment cost of $72,944 (including commissions) and
Brahman II sold 61,600 shares of Common Stock for which it received net
proceeds of $637,858 (including commissions), (ii) Brahman Institutional
purchased 8,400 shares of Common Stock at a net investment cost of $99,055
(including commissions)and Brahman Institutional sold 133,600 shares of Common
Stock for which it received net proceeds of $1,382,904 (including
commissions), (iii) BY Partners purchased 13,800 shares of Common Stock at a
net investment cost of $164,218 (including commissions)and BY Partners sold
136,800 shares of Common Stock for which it received net proceeds of
$1,417,043 (including commissions), and (iv) Brahman Capital for the account
of Brahman Offshore purchased 2,900 shares of Common Stock at a net investment
cost of $34,325 (including commissions) and sold 101,000 shares of Common
Stock for which it received net proceeds of $1,034,039 (including
commissions). As of the close of business on October 23, 1998, Brahman
<PAGE>
Page 11 of 18 Pages
Capital held no shares of Common Stock for the account of Brahman Offshore.
In (i) through (iv) above, the funds, with respect to purchases of shares of
Common Stock, were furnished from the investment capital of the respective
entity.
Item 5. Interest in Securities of the Issuer.
- ------ -------------------------------------
Item 5(a) is hereby deleted and the following inserted in its place:
(a) As of the close of business on October 23, 1998, (i) Brahman II
owns beneficially 105,700 shares of Common Stock, constituting approximately
0.8% of the shares outstanding; (ii) Brahman Institutional owns beneficially
243,500 shares of Common Stock, constituting approximately 1.8% of the shares
outstanding; (iii) BY Partners owns beneficially 299,207 shares of Common
Stock, constituting approximately 2.3% of the shares outstanding; (iv) Brahman
Management owns beneficially 648,107 shares of Common Stock, constituting
approximately 4.9% of the shares outstanding (such amounts are inclusive of
the amounts reported by Brahman II, BY Partners and Brahman Institutional
pursuant to clauses (i)-(iii) herein); (v) Brahman Capital owns beneficially
299,207 shares of Common Stock, constituting approximately 2.3% of the shares
outstanding (such amounts reflect the 299,207 shares held by BY Partners); and
(vi) each of Messrs. Hochfelder, Sobel and Kuflik own beneficially 648,107
shares of Common Stock, constituting approximately 4.9% of the shares
outstanding. On October 23, 1998, Brahman Management, and each of Messrs.
Hochfelder, Sobel and Kuflik ceased to be the beneficial owner of more than
five percent of the shares of Common Stock outstanding. Brahman Management,
<page
Page 12 of 18 Pages
Brahman Capital and Messrs. Hochfelder, Sobel and Kuflik own directly no
shares of Common Stock. By reason of the provisions of Rule 13d-5(b)(1) under
the Act, the Reporting Persons comprising the foregoing group may be deemed to
own 648,107 shares, constituting approximately 4.9% of the shares of Common
Stock outstanding. The percentages used herein are calculated based upon the
13,200,831 shares of Common Stock stated to be issued and outstanding at June
30, 1998, as reflected in the Company's quarterly report on Form 10-Q filed
with the Securities and Exchange Commission for the quarterly period ended
June 30, 1998.
Item 5(b) is hereby amended to add the following:
The trading dates, number of shares purchased or sold and price per
share (excluding commissions) for all transactions by the Reporting Persons
during the past 60 days are set forth in Schedule A hereto. All such
transactions were open market transactions and were effected on the New York
Stock Exchange. No other transactions were effected by any of the persons
named in response to Item 5(a) above during such period.
<PAGE>
Page 13 of 18 Pages
SIGNATURES
After reasonable inquiry and to the best of our knowledge and
belief, the undersigned certify that the information set forth in this
statement is true, complete and correct.
Dated: October 27, 1998
BRAHMAN PARTNERS II, L.P.
By: BRAHMAN MANAGEMENT, L.L.C.
By:/s/ Peter A. Hochfelder
---------------------------------------
Name: Peter A. Hochfelder
Title: Managing Member
BRAHMAN INSTITUTIONAL PARTNERS, L.P.
By: BRAHMAN MANAGEMENT, L.L.C.
By:/s/ Peter A. Hochfelder
---------------------------------------
Name: Peter A. Hochfelder
Title: Managing Member
BY PARTNERS, L.P.
By: BRAHMAN MANAGEMENT, L.L.C.
By:/s/ Peter A. Hochfelder
---------------------------------------
Name: Peter A. Hochfelder
Title: Managing Member
BRAHMAN MANAGEMENT, L.L.C.
By:/s/ Peter A. Hochfelder
---------------------------------------
Name: Peter A. Hochfelder
Title: Managing Member
<PAGE>
Page 14 of 18 Pages
BRAHMAN CAPITAL CORP.
By:/s/ Peter A. Hochfelder
---------------------------------------
Name: Peter A. Hochfelder
Title: President
/s/ Peter A. Hochfelder
------------------------------------------
Peter A. Hochfelder
/s/ Robert J. Sobel
------------------------------------------
Robert J. Sobel
/s/ Mitchell A. Kuflik
------------------------------------------
Mitchell A. Kuflik
<PAGE>
Page 15 of 18 Pages
Schedule A
Brahman Partners II, L.P.
Transactions in the Common Stock
Date of Number of Price Per Share
Transaction Shares Purchased/(Sold) (excluding commissions)
- ------------------------------------------------------------------------------
08-24-98 800.000 13.725
08-25-98 300.000 13.932
10-01-98 500.000 11.475
10-06-98 300.000 11.375
10-07-98 200.000 11.063
10-09-98 200.000 10.125
10-12-98 2,500.000 9.985
10-13-98 200.000 10.250
10-15-98 600.000 10.750
10-15-98 (8,000.000) 10.632
10-15-98 (2,500.000) 10.438
10-16-98 300.000 10.500
10-16-98 (18,200.000) 10.500
10-16-98 (7,700.000) 10.313
10-19-98 700.000 10.556
10-19-98 (700.000) 10.375
10-20-98 (4,100.000) 10.250
10-20-98 (4,100.000) 10.375
10-23-98 (16,300.000) 10.313
<PAGE>
Page 16 of 18 Pages
Schedule A
Brahman Institutional Partners, L.P.
Transactions in the Common Stock
Date of Number of Price Per Share
Transaction Shares Purchased/(Sold) (excluding commissions)
- ------------------------------------------------------------------------------
08-24-98 1,800.000 13.725
08-25-98 800.000 13.932
10-01-98 800.000 11.475
10-06-98 700.000 11.375
10-07-98 500.000 11.063
10-09-98 300.000 10.125
10-13-98 300.000 10.250
10-15-98 900,000 10.750
10-15-98 (14,700.000) 10.632
10-15-98 (5,500.000) 10.438
10-16-98 700.000 10.500
10-16-98 (40,400.000) 10.500
10-16-98 (17,400.000) 10.313
10-19-98 1,600.000 10.556
10-19-98 (1,700.000) 10.375
10-20-98 (7,000.000) 10.250
10-20-98 (9,400.000) 10.375
10-23-98 (37,500.000) 10.313
<PAGE>
Page 17 of 18 Pages
Schedule A
BY Partners, L.P.
Transactions in the Common Stock
Date of Number of Price Per Share
Transaction Shares Purchased/(Sold) (excluding commissions)
- ------------------------------------------------------------------------------
08-24-98 1,900.000 13.725
08-25-98 900.000 13.932
08-31-98 2,000.000 12.625
09-04-98 2,000.000 12.188
10-01-98 900.000 11.475
10-06-98 800.000 11.375
10-07-98 700.000 11.063
10-09-98 400,000 10.125
10-13-98 400.000 10.250
10-15-98 1,200.000 10.750
10-16-98 800.000 10.500
10-16-98 (47,100.000) 10.500
10-16-98 (20,200.000) 10.313
10-19-98 1,800.000 10.556
10-19-98 (2,100.000) 10.375
10-20-98 (9,700.000) 10.250
10-20-98 (11,500.000) 10.375
10-23-98 (46,200.000) 10.313
<PAGE>
Page 18 of 18 Pages
Schedule A
Brahman Capital Corp. for the account of
Brahman Partners II Offshore, Ltd.
Transactions in the Common Stock
Date of Number of Price Per Share
Transaction Shares Purchased/(Sold) (excluding commissions)
- ------------------------------------------------------------------------------
08-24-98 500.000 13.725
08-25-98 200.000 13.932
09-04-98 500.000 12.188
10-01-98 300.000 11.475
10-06-98 200.000 11.375
10-07-98 100.000 11.063
10-09-98 100,000 10.125
10-13-98 100.000 10.250
10-15-98 300.000 10.750
10-15-98 (3,800.000) 10.632
10-15-98 (2,000.000) 10.438
10-16-98 200.000 10.500
10-16-98 (10,800.000) 10.500
10-16-98 (4,700.000 10.313
10-19-98 400.000 10.556
10-19-98 (500.000) 10.375
10-20-98 (20,900.000) 10.250
10-20-98 (58,300.000) 10.250
