HEALTHEXTRAS INC
EXHIBIT 10.12
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<TYPE>EX-10
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<FILENAME>0002.txt
<DESCRIPTION>EXHIBIT 10.12
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Exhibit 10.12

                               HealthExtras, Inc.

                             2000 STOCK OPTION PLAN
                             ----------------------

1.  PURPOSE OF THE PLAN AND TYPES OF AWARDS
-------------------------------------------

HealthExtras, Inc., a Delaware corporation, intends for the HealthExtras,
Inc. 2000 Stock Option Plan (the "Plan") to provide additional incentive to
certain valued and trusted officers, employees, and other individuals who
perform services for HealthExtras, Inc. and its subsidiaries or other affiliates
(HealthExtras, Inc. and/or its subsidiaries and other affiliates, as the context
may require, is/are referred to herein as the "Company"), by encouraging them to
acquire shares of common stock of the Company (the "Stock") through options to
purchase Stock granted pursuant to the Plan ("Options"), thereby increasing each
individual's proprietary interest in the business of the Company and providing
them with an increased personal interest in the continued success and progress
of the Company, the result of which will promote both the interests of the
Company and its shareholders.

The Committee (as described below) will grant Options under the Plan either
intended to qualify as incentive stock options ("ISOs") within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or
non-qualified options ("NQOs"). Each individual granted an Option (an
"Optionee") under the Plan shall enter into an agreement with the Company (an
"Option Agreement") setting forth the terms and conditions of the Option, as
determined in accordance with the Plan.

2.  ADMINISTRATION OF PLAN
--------------------------

A committee of the Board of Directors of the Company (the "Committee"),
composed of two (2) or more members of the Board of Directors of the Company
(the "Board of Directors") who shall be appointed from time to time by the Board
of Directors, shall administer this Plan. The Committee shall have the sole and
absolute power:

a.  subject to the provisions of the Plan, to determine the terms and
    conditions of all Options; to construe and interpret the Plan and any Option
    Agreement; to determine the time or times an Option may be exercised, the
    number of shares as to which an Option may be exercised at any one time,
    and when an Option may terminate; to establish, amend and revoke rules and
    regulations relating to the Plan and its administration; and to correct any
    defect, supply any omission, or reconcile any inconsistency in the Plan, or
    in any Option Agreement, in a manner and to the extent it shall deem
    necessary, all of which determinations and interpretations made by the
    Committee shall be conclusive and binding on all Optionees, any other
    holders of Options and on their legal representatives and beneficiaries;

b.  to determine all questions of policy and expediency that may arise in
    the administration of the Plan and generally exercise such powers and
    perform such acts as are deemed necessary or expedient to promote the best
    interests of the Company; and

<PAGE>


c.  except to the extent prohibited by, or impermissible in order to obtain
    treatment desired by the Committee under, applicable law or rule, to
    allocate or delegate all or any portion of its powers and responsibilities
    to any one or more of its members or to any person(s) selected by it,
    subject to revocation or modification by the Committee of such allocation or
    delegation.

3.  SHARES SUBJECT TO THE PLAN
------------------------------

Subject to the provisions of Paragraph 13 of the Plan, the Stock which may
be issued pursuant to Options granted under the Plan shall not exceed in the
aggregate 1,000,000 shares. If any Options granted under the Plan terminate,
expire or are surrendered without having been exercised in full, the number of
shares of Stock not purchased under such Options shall be available again for
the purpose of the Plan.

4.  PERSONS ELIGIBLE FOR OPTIONS
--------------------------------

a.  All officers, employees, directors and independent contractors of the
    Company shall be eligible to receive Options under the Plan. The Committee,
    or the Board, shall determine the individuals to whom Options shall be
    granted, the time or times such Options shall be granted, the type of Option
    to be granted, the number of shares to be subject to each Option, the times
    when each Option may be exercised, and any other terms and conditions
    associated with the Option. The Committee may grant an employee ISOs or NQOs
    or both under the Plan.

b.  With respect to the granting of ISOs only, no ISO will be granted to an
    employee, and an attempted grant of such an ISO will be void, if the
    aggregate Fair Market Value Per Share (as defined below), determined by the
    Committee at the time an ISO is granted, of the Stock with respect to which
    the ISO and previously granted ISOs are exercisable for the first time by
    such employee during any calendar year (under all such plans of the Company)
    exceeds $100,000.00 or such other amount as may be specified in Section 422
    (d) of the Code.

5.  PURCHASE PRICE
------------------

The purchase price of each share of Stock covered by each ISO shall not be
less than one hundred percent (100%) of the Fair Market Value Per Share (as
defined below) of the Stock on the date the ISO is granted; provided, however,
if when an ISO is granted the Optionee receiving the ISO owns, or will be
considered to own by reason of Section 424(d) of the Code, more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company,
the purchase price of the Stock covered by such ISO shall not be less than one
hundred and ten percent (110%) of the Fair Market Value Per Share of the Stock
on the date the ISO is granted. The purchase price of each share of Stock
covered by each NQO shall be set from time to time by the Committee; provided,
however, that the Committee shall set the purchase price for each share of Stock
covered by an Option at the time of the grant of the Option.

For  purposes  of this Plan,  "Fair  Market  Value Per Share" of the Stock shall
mean:  (i) if the Stock is not publicly  traded,  the amount  determined  by the
Committee  in good  faith on the date of the  grant of the  Option;  (ii) if the
Stock is traded only otherwise than on a securities exchange and is not reported

<PAGE>

on The Nasdaq  National Market  ("Nasdaq"),  the closing quoted selling price of
the  Stock on the  date of  grant  of the  Option  as  quoted  in "pink  sheets"
published by the National Daily Quotation  Bureau;  (iii) if the Stock is traded
only  otherwise  than on a securities  exchange  and is reported on Nasdaq,  the
closing  Nasdaq  reported  sales  price of the Stock on the date of grant of the
Option, as reported in the Wall Street Journal; or (iv) if the Stock is admitted
to trading on a securities  exchange,  the closing  quoted  selling price of the
Stock on the  date of  grant  of the  Option,  as  reported  in the Wall  Street
Journal.

6.  DURATION OF OPTIONS
-----------------------

a.  Non-Qualified Options

    TERMINATION OF EMPLOYMENT OR SERVICE (GENERAL). Unless otherwise determined
    by the Committee, upon the termination of an Optionee's employment or other
    service for any reason other than retirement, disability or death, or
    Termination for Cause, the Optionee may exercise only those NQOs that were
    immediately exercisable by the Optionee at the date of such termination and
    only for a period of three (3) months following the date of such
    termination, or, if sooner, until the expiration of the term of the NQOs.

    TERMINATION OF EMPLOYMENT OR SERVICE (RETIREMENT). Unless otherwise
    determined by the Committee, in the event of an Optionee's retirement (as
    described in the Optionee's Option Agreement), the Optionee may exercise
    only those NQOs that were immediately exercisable by the Optionee at the
    date of retirement and only for a period of one (1) year following the date
    of retirement, or, if sooner, until the expiration of the term of the NQOs.

    TERMINATION OF EMPLOYMENT OR SERVICE (DISABILITY OR DEATH). Unless
    otherwise determined by the Committee, in the event of the termination of an
    Optionee's employment or other service due to disability (as described in
    the Optionee's Option Agreement) or death, all NQOs held by such Optionee
    shall immediately become exercisable and remain exercisable for a period two
    (2) years following the date of such termination, or, if sooner, until the
    expiration of the term of the NQOs.

    TERMINATION OF EMPLOYMENT OR SERVICE (TERMINATION FOR CAUSE). In the event
    of an Optionee's Termination for Cause, all rights with respect to the
    Optionee's NQOs shall expire immediately upon the effective date of such
    Termination for Cause. For purposes of this Plan, "Termination for Cause"
    shall include termination because of an Optionee's personal dishonesty,
    incompetence, willful misconduct, breach of fiduciary duty involving
    personal profit, intentional failure to perform stated duties, willful
    violation of any law, rule, or regulation (other than traffic violations or
    similar infractions).

<PAGE>

b.  Incentive Stock Options

    TERMINATION OF EMPLOYMENT OR SERVICE (GENERAL). Unless otherwise determined
    by the Committee, upon the termination of an Optionee's employment or other
    service for any reason other than retirement, disability or death, or
    Termination for Cause, the Optionee may exercise only those ISOs that were
    immediately exercisable by the Optionee at the date of such termination and
    only for a period of three (3) months following the date of such termination
    or, if sooner, the expiration of the term of the ISOs.

    TERMINATION OF EMPLOYMENT (RETIREMENT). Unless otherwise determined by the
    Committee, in the event of an Optionee's retirement (under circumstances
    described in the Optionee's Option Agreement), the Optionee may exercise
    only those ISOs that were immediately exercisable by the Optionee at the
    date of retirement and only for a period of one (1) year following the date
    of cessation of employment by reason of retirement or, if sooner, the
    expiration of the term of the ISOs. Any Option originally designated an ISO
    shall be treated as a NQO to the extent the Optionee exercises such Option
    more than three (3) months following the date of the Optionee's cessation of
    employment by reason of retirement.

    TERMINATION OF EMPLOYMENT (DISABILITY OR DEATH). Unless otherwise determined
    by the Committee, in the event of the termination of an Optionee's
    employment or other service due to disability (as described in the
    Optionee's Option Agreement) or death, all ISOs held by such Optionee shall
    immediately become exercisable and remain exercisable for a period of one
    (1) year following the date of such termination, or, if sooner, until the
    expiration of the term of the ISOs.

    TERMINATION OF EMPLOYMENT (TERMINATION FOR CAUSE). In the event of an
    Optionee's Termination for Cause, all rights under such Optionee's ISOs
    shall expire immediately upon the effective date of such Termination for
    Cause. For purposes of this provision, "Termination for Cause" shall have
    the same meaning as when applied to NQOs.

c.  Effect of a Change in Control

    Unless otherwise determined by the Committee at the time of grant and
    notwithstanding anything in this Plan to the contrary, in the event of a
    Change in Control, all outstanding Options shall be vested as of the
    effective date of the Change in Control. If, in connection with or as a
    consequence of a Change in Control, the Company is merged into or
    consolidated with another corporation, if the Company becomes a subsidiary
    of another corporation or if the Company sells or otherwise disposes of
    substantially all of its assets to another corporation, then unless
    provisions are made in connection with such transactions for the continuance
<PAGE>

    of the Plan and/or the assumption or substitution of then outstanding
    Options with new options covering the stock of the successor corporation, or
    parent or subsidiary thereof, with appropriate adjustments as to the number
    and kind of shares and prices, such Options shall be canceled as of the
    effective date of the merger, consolidation, or sale and the Optionee shall
    be paid in cash an amount equal to the difference between the Fair Market
    Value of the Stock subject to the Options on the effective date of such
    corporate event and the exercise price of the Options. Notwithstanding
    anything in this Section 6(c) or any Option agreement to the contrary, in
    the event that the consummation of a Change in Control is contingent on
    using pooling of interests accounting methodology, the Board may, in its
    discretion, take any action necessary to preserve the use of pooling of
    interests accounting.

    For purposes of this Plan, a Change in Control is defined as the occurrence
of:

    (a)  Any "person" (as such term is used in Sections 13(d) and 14(d) of the
    Securities Exchange Act of 1934) is or becomes the beneficial owner,
    directly or indirectly, of securities of the Company representing 20% or
    more of the combined voting power of the Company's then outstanding
    securities; or

    (b)  During any period of twenty-four consecutive months, individuals who at
    the beginning of such period constitute the Board cease for any reason to
    constitute at least a majority thereof unless the election, or the
    nomination for election by the Company's shareholders, of each new director
    was approved by a vote of at least two-thirds of the directors then still in
    office who were directors at the beginning of the period; or

    (c)  The stockholders of the Company approve a definitive agreement,
     regarding:

         (i)   for the merger or other business combination of the Company with
         or into another corporation pursuant to which the Company will not
         survive or will survive only as a subsidiary of another corporation;

         (ii)  for the sale or other disposition of all or substantially all of
         the assets of the Company;

         (iii) for the merger of another corporation into the Company which
         survives if, as a result of such merger less than fifty percent (50%)
         of the outstanding voting securities of the Company shall be owned in
         the aggregate immediately after such merger by the owners of the voting
         shares of the Company outstanding immediately prior to such merger;

         (iv)  for the liquidation or dissolution of the Company; or

         (v)   any combination of the foregoing.

<PAGE>

7.  EXERCISE OF OPTIONS
-----------------------

     An Option may be exercisable in installments or otherwise upon such terms
as the Committee shall determine when the Option is granted. As a condition of
the exercise, in whole or in part, of any Option, the Committee may require the
Optionee to pay, in addition to the purchase price of the Stock covered by the
Option, an amount equal to any Federal, state, local and foreign taxes that may
be required to be withheld in connection with the exercise of such Option.
Notwithstanding the foregoing, the Committee may authorize the Company's
officers to establish procedures for the satisfaction of an Optionee's
withholding tax liability incurred upon exercise of an Option by enabling the
Optionee to authorize the Company to retain from the total number of shares to
be issued pursuant to such Option exercise that number of shares (based on the
then Fair Market Value Per Share as determined by the Committee) that will
satisfy the withholding tax due.

8.  METHOD OF EXERCISE
----------------------

a.  When the right to purchase shares accrues, Options may be exercised by
    giving written notice to the Company stating the number of shares for which
    the Option is being exercised, accompanied by payment in full by cash, or
    its equivalent, acceptable to the Company, of the purchase price for the
    shares being purchased and, if applicable, any Federal, state, local or
    foreign taxes required to be withheld in accordance with the provisions of
    Paragraph 7 of the Plan. The Committee may establish or direct such
    additional or different procedures or requirements for the exercise of
    Options from time to time.

b.  In the Committee's discretion, payment of the purchase price for the
    shares may be made in whole or in part with other shares of Stock of the
    Company which are free and clear of all liens and encumbrances. The value of
    the shares of Stock tendered in payment for the shares being purchased shall
    be the Fair Market Value Per Share on the date of the Optionee's notice of
    exercise.

c.  Notwithstanding the foregoing, the Company shall have the right to
    postpone the time of delivery of the shares for such period as may be
    required for the Company, with reasonable diligence, to comply with any
    applicable listing requirements of any national securities exchange or
    Nasdaq or any Federal, state, local or foreign law. If the Optionee, or
    other person entitled to exercise the Option, fails to timely accept
    delivery of and pay for the shares specified in such notice, the Committee
    shall have the right to terminate the Option with respect to such shares.

d.  Each Option Agreement with respect to an ISO shall require the Optionee
    to notify the Committee of any disposition of Stock issued pursuant to the
    exercise of such Option under the circumstances described in Section 421(b)
    of the Code (relating to certain disqualifying dispositions), within 10 days
    of such disposition.

<PAGE>


9.  TRANSFERABILITY OF OPTIONS
------------------------------

Except as otherwise determined by the Committee, no Option granted under
the Plan shall be assignable or transferable by the Optionee, either voluntarily
or by operation of law, other than by will or the laws of descent and
distribution, and, during the lifetime of the Optionee, shall be exercisable
only by the Optionee.

10. CONTINUANCE OF EMPLOYMENT OR SERVICE
----------------------------------------

Nothing contained in the Plan or in any Option Agreement shall confer upon
any Optionee any rights with respect to the continuation of employment by, or
service with, the Company or interfere in any way with the right of the Company
(subject to the terms of any separate employment agreement to the contrary) at
any time to terminate such employment or service or to increase or decrease the
compensation of the Optionee from the rate in existence at the time of the
granting of any Option.

11. RESTRICTIONS ON SHARES
--------------------------

If the Company shall be advised by counsel that certain requirements under
the Federal, state or foreign securities laws must be met before Stock may be
issued under this Plan, the Company shall notify all persons who have been
issued Options, and the Company shall have no liability for failure to issue
Stock under any exercise of Options because of delay while such requirements are
being met or the inability of the Company to comply with such requirements.

12. PRIVILEGE OF STOCK OWNERSHIP
--------------------------------

No person entitled to exercise any Option granted under the Plan shall have
the rights or privileges of a shareholder of the Company for any shares of Stock
issuable upon exercise of such Option until such person has become the holder of
record of such shares. No adjustment shall be made for dividends or other rights
for which the record date is prior to the date on which such person becomes the
holder of record, except as provided in Paragraph 13 of the Plan.

13. ADJUSTMENT
--------------

a.  If the number of outstanding shares of Stock are increased or decreased,
    or such shares are exchanged for a different number or kind of shares or
    securities of the Company through reorganization, merger, recapitalization,
    reclassification, stock dividend, stock split, reverse stock split,
    combination of shares, or other similar transaction, the aggregate number of
    shares of Stock subject to the Plan as provided in paragraph 3 above, the
    maximum number of shares under Options that may be granted to an Optionee
    during any calendar year specified in paragraph 4(a) above, and the shares
    subject to issued and outstanding Options under the Plan shall be
    appropriately and proportionately adjusted by the Committee. Any such
    adjustment in an outstanding Option shall be made without change in the
    aggregate purchase price applicable to the unexercised portion of the Option
    but with an appropriate adjustment in the price for each share or other unit
    of any security  covered by the Option. In the event the Committee
    determines that any dividend or other distribution (whether in the form of

<PAGE>

    cash, shares of Stock, other securities, or other property),
    recapitalization, stock split, reverse stock split, reorganization, merger,
    consolidation, split-up, spin-off, combination, repurchase, or exchange of
    shares of Stock or other securities of the Company, issuance of warrants or
    other rights to purchase shares of Stock or other securities of the Company,
    or other similar transaction or event affects the shares of Stock or other
    securities or property then covered by Options such that an adjustment other
    than as provided in the foregoing portion of this subparagraph (a) is
    appropriate in order to prevent dilution or enlargement of the benefits or
    potential benefits intended to be made available under the Plan and Options
    granted thereunder, then the Committee shall, in such manner as it may deem
    equitable, adjust any or all of (i) the number and kind of shares of
    stock (or other securities or property) which thereafter may be made the
    subject of Options, (ii) the number and kind of shares of stock (or other
    securities or property) subject to outstanding Options, (iii) the purchase
    price with respect to any outstanding Options, or, if deemed appropriate,
    make provision for a cash payment to the holders of outstanding Options, and
    (iv) the aggregate number of shares of Stock or number and kind of other
    securities or property subject to the Plan and the maximum number of shares
    or other securities or property under Options that may be granted to an
    Optionee during any calendar year specified in Paragraph 4(a) of the Plan.


b.  Adjustments under this Paragraph 13 shall be made by the Committee whose
    determination as to what adjustments shall be made, and the extent thereof,
    shall be final, binding and conclusive. No fractional shares of Stock shall
    be issued under the Plan or in connection with any such adjustment.

<PAGE>

14. AMENDMENT AND TERMINATION OF PLAN
    ---------------------------------

a.  The Board of Directors, may, from time to time, suspend or terminate the
    Plan or amend or revise the terms of the Plan or any Option Agreement;
    provided that if and to the extent required by applicable law or rule, any
    such amendment to the Plan shall be subject to approval by a majority of
    votes cast at a meeting of shareholders at which a quorum representing a
    majority of the Stock is present in person or by proxy or such other vote as
    may be required by such law or rule.

b.  Subject to the provisions in Paragraph 13 of the Plan, the Plan shall
    terminate on the date which is ten years after its effective date.

c.  Subject to the provisions in Paragraph 13 of the Plan, no amendment,
    suspension or termination of this Plan or any Option Agreement shall,
    without the consent of the Optionee, adversely affect the rights of such
    Optionee under any Option previously granted to such Optionee under the
    Plan.

15. EFFECTIVE DATE OF PLAN
--------------------------

The Plan shall become effective upon adoption by the Board of Directors
subject to approval by a majority of shareholders of the Company present or
represented by proxy at a meeting of shareholders occurring within twelve (12)
months of the date of Board action. Options may be granted under the Plan prior
to the date of shareholder approval; provided, however, that such Options shall
be null and void in the event shareholder approval is not obtained.

<PAGE>


16. Term of Plan
----------------

No Option shall be granted pursuant to the Plan after 10 years after the
effective date of the Plan.

17. Governing Law
-----------------

The Plan shall be governed by and construed in accordance with the laws of
the State of Delaware, except to the extent that Federal law shall be deemed to
apply.
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