U.S. SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 4 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(f) of the Investment Company Act of 1940 [X] Check box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b). ________________________________________________________________________________ 1. Name and Address of Reporting Person* Waveland International Ltd. -------------------------------------------------------------------------------- (Last) (First) (Middle) 227 West Monroe, Suite 4800 -------------------------------------------------------------------------------- (Street) Chicago, IL 60606 -------------------------------------------------------------------------------- (City) (State) (Zip) ________________________________________________________________________________ 2. Issuer Name and Ticker or Trading Symbol Highlands Insurance Group, Inc. (NYSE: HIC) ________________________________________________________________________________ 3. IRS Identification Number of Reporting Person, if an Entity (Voluntary) ________________________________________________________________________________ 4. Statement for Month/Year November 2000 ________________________________________________________________________________ 5. If Amendment, Date of Original (Month/Year) ________________________________________________________________________________ 6. Relationship of Reporting Person to Issuer (Check all applicable) [_] Director [_] 10% Owner [_] Officer (give title below) [x] Other (specify below) Former 10% Owner ----------------------------- ________________________________________________________________________________ 7. Individual or Joint/Group Filing (Check applicable line) [_] Form filed by one Reporting Person [_] Form filed by more than one Reporting Person ________________________________________________________________________________ ================================================================================ Table I -- Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned ================================================================================

~~Table~~6. I4. ~~Non~~5. Owner-~~Derivative~~ Securities Acquired, (A) or Amount of ship 3. Disposed of (D) Securities Form: 7. Transaction (Instr. 3, or4 and 5) Beneficially Direct Nature of 2. Code ------------------------------- Owned at End (D) or Indirect 1. Transaction (Instr. 8) (A) of Month Indirect Beneficial Title of Security Date ------------ Amount or Price (Instr. 3 (I) Ownership (Instr. 3) (mm/dd/yy) Code V (D) and 4) (Instr.4) (Instr. 4) ------------------------------------------------------------------------------------------------------------------------ ~~1)Title of Security 2)Trans~~- ~~3.Trans~~----------- ~~4.Securities~~Common ~~Acquired(A)~~Stock ~~5)Amount of 6) 7)Nature of action action or Disposed of (D) Securities Indirect Date Code A Beneficially D Beneficial (Month~~11/ ~~or Owned at or Ownership Day~~03/~~Year)~~00 ~~Code~~S V8,800 ~~Amount~~ D ~~Price~~$9.0000 ~~End of Month I~~ ------------------------------------------------------------------------------------------------------------------------------------ Common Stock 11/06/~~01/~~00 JS 416,~~000.00~~200 AD $~~29500~~9.000058 D------------------------------------------------------------------------------------------------------------------------------------ ~~Direct~~ Common Stock 0611/0115/00 JS 1113,000~~.00~~ AD $~~7125~~9.001875 ~~784,546.00 D Direct Table II (PART~~ 1~~) Derivative Securities Acquired~~, ~~Disposed of~~257,700 orD ~~Beneficially Owned (Columns 1 through 6)~~ ------------------------------------------------------------------------------------------------------------------------------------ ~~1)Title of Derivative 2)Conversion 3)Trans~~- ~~4)Trans~~----------------------------------------------------------------------------------------------------------------------------------- 5)Number of Derivative 6)Date Exercisable and Security or Exercise action action Securities Acquired (A) Expiration Date Price of Date Code or Disposed of (D) Derivative Security Code V A D Exercisable Expiration ------------------------------------------------------------------------------------------------------------------------------------ ~~Incentive Stock Option (right $8.13 05/09/01 05/09/10 to buy) Non~~-~~Qualified~~----------------------------------------------------------------------------------------------------------------------------------- ~~Stock Option $11.00 05/10/00 05/10/09 (right to buy) Table II (PART 2) Derivative Securities Acquired, Disposed of, or Beneficially Owned (Columns 1,3 and 7 through 11)~~ ------------------------------------------------------------------------------------------------------------------------------------ ~~1)Title of Derivative 3)Trans~~- ~~7)Title and Amount 8)Price 9)Number of 10) 11)Nature of Security action of Underlying of Deri~~----------------------------------------------------------------------------------------------------------------------------------- ~~Derivative Indirect Date Securities vative Securities D Beneficial Amount or Security Beneficially or Ownership Number of Owned at I~~ ------------------------------------------------------------------------------------------------------------------------------------ ~~Title Shares End of Month~~ ------------------------------------------------------------------------------------------------------------------------------------ ~~Incentive Stock Option (right Common Stock 120,000.00 120,000.00 D Direct to buy) Non~~-~~Qualified~~----------------------------------------------------------------------------------------------------------------------------------- ~~Stock Option Common Stock 150,000.00 150,000.00 D Direct (right to buy) Explanation of Responses:~~====================================================================================================================================

* If the Form is filed by more than one Reporting Person, see Instruction 4(b)(v). Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly. (Print or Type Responses) (Over) (Form 4-07/99) Page 1 of 3 FORM 4 (continued) Table II -- Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities) ================================================================================

Explanation of Responses: WAVELAND INTERNATIONAL, LTD. /s/ David S. Richter, Director December 11, 2000 --------------------------------------------- ----------------------- **Signature of Reporting Person Date ** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a). Note: File three copies of this Form, one of which must be manually signed. If space provided is insufficient, see Instruction 6 for procedure. Page 2 of 3 EDGARLink 7.0 (8/00) Ver. 3.1 ATTACHMENT Pursuant to Rules 16a-1(a)(3) and 16a-3(j) of the Securities Exchange Act of 1934 and General Instruction 4(b)(v) of Form 4, the undersigned hereby execute this attachment as joint filers with respect to the foregoing Statement of Changes in Beneficial Ownership (Statement for November 2000 ) regarding certain Common Stock of Highlands Insurance Group, Inc. (NYSE: HIC): WAVELAND PARTNERS, L.P. 227 West Monroe, Suite 4800 Chicago, Illinois 60606 By: Waveland Capital Management, L.P. Its: General Partner By: Clincher Capital Corporation Its: General Partner By: /s/ David S. Richter ----------------------------- David S. Richter, President WAVELAND CAPITAL MANAGEMENT, L.P. 227 West Monroe, Suite 4800 Chicago, Illinois 60606 By: Clincher Capital Corporation Its: General Partner By: /s/ David S. Richter ---------------------------- David S. Richter, President CLINCHER CAPITAL CORPORATION 227 West Monroe, Suite 4800 Chicago, Illinois 60606 By: /s/ David S. Richter -------------------------------- David S. Richter, President WAVELAND CAPITAL MANAGEMENT, LLC 227 West Monroe, Suite 4800 Chicago, Illinois 60606 By: /s/ David S. Richter --------------------------- David S. Richter, Manager WAVELAND PARTNERS, LTD. 227 West Monroe, Suite 4800 Chicago, Illinois 60606 By: /s/ David S. Richter ---------------------------- David S. Richter, Director Page 3 of 3

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