<PAGE>
As filed with the Securities and Exchange Commission on December 29, 1997
Registration No. 333-_______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form S-8
Registration Statement Under The Securities Act of 1933
_______________
HBO & COMPANY
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation or Organization)
37-0986839
(I.R.S. Employer Identification No.)
301 Perimeter Center North
Atlanta, Georgia 30346
(Address of Principal Executive Offices) (Zip Code)
_______________
HPR INC.
AMENDED AND RESTATED
HPR 1995 STOCK PLAN
HPR INC.
AMENDED AND RESTATED
HPR 1991 STOCK PLAN
(Full Title of the Plan)
_______________
Charles W. McCall
HBO & Company
301 Perimeter Center North
Atlanta, Georgia 30346
(Name and Address of Agent For Service)
_______________
(770) 393-6000
(Telephone Number, Including Area Code, of Agent for Service)
_______________
WITH COPY TO:
Lisa A. Stater, Esq.
Jones, Day, Reavis & Pogue
3500 SunTrust Plaza
303 Peachtree Street, N.E.
Atlanta, Georgia 30308-3242
(404) 521-3939
Exhibit Index Appears on Page 10
Page 1 of 29 Pages
<PAGE>
Calculation of Registration Fee
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Proposed maxi- Proposed maxi-
Title of securities Amount to be mum offering price mum aggregate Amount of
to be registered registered per share offering price registration fee
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock,
$.05 par value, and 1,315,514 $17.80179(1) $23,418,504(1) $6,908.46(2)
Preferred Share shares
Purchase Rights(3)
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for calculating the amount of the registration fee,
pursuant to Rule 457(h) under the Securities Act of 1933, as amended. Because
all shares are presently subject to options, the offering price is based on
the actual weighted average exercise price.
(2) The registration fee of $6,908.46 is calculated by multiplying the
product of $17.80179, the weighted average exercise price per share, and
1,315,514, the number of shares subjected to option, by .000295.
(3) The Preferred Share Purchase Rights, which are attached to the shares of
Common Stock being registered, will be issued for no additional
consideration; no additional registration fee is required.
Page 2 of 29 Pages
<PAGE>
EXPLANATORY NOTE
In accordance with the Note to Part I of Form S-8, the information specified by
Part I has been omitted from this Registration Statement.
Page 3 of 29 Pages
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 3. Incorporation of Documents by Reference.
HBO & Company (the "Company") hereby incorporates by reference into this
Registration Statement the following documents:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1996.
(b) All other reports filed with the Securities and Exchange Commission (the
"Commission") pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934, as amended (the "1934 Act"), since December 31, 1996.
(c) The description of the Common Stock and Preferred Share Purchase Rights
contained in the Company's Registration Statement on Form 8-A filed with
the Commission on August 19, 1981, as amended, and February 19, 1991, as
amended, respectively.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the 1934 Act prior to the filing of a
post-effective amendment which indicates that all securities have been sold
or which deregisters all securities then remaining unsold shall be deemed to
be incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing such documents.
Item 4. Description of Securities.
Inapplicable.
Item 5. Interests of Named Experts and Counsel.
Inapplicable.
Item 6. Indemnification of Directors and Officers.
Set forth below is a description of certain provisions of the Certificate
of Incorporation of the Company, the By-Laws, as amended (the "By-Laws") of
the Company and the General Corporation Law of the State of Delaware (the
"Delaware General Corporation Law"), as such provisions relate to the
indemnification of the directors and officers of the Company. This
description is intended only as a summary and is qualified in its entirety by
reference to the Certificate of Incorporation, the By-Laws and the Delaware
General Corporation Law.
The Company's By-Laws (Article IX, Section 1) provide that every person
who was or is a party or is threatened to be made a party to or is involved
in any action, suit, or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that he or a person of whom he is the
legal representative is or was a director or officer of the corporation or is
or was serving at the request of the corporation or for its benefit as a
director or officer of another corporation, or as its representative in a
partnership, joint venture, trust or other enterprise, shall be indemnified
and held harmless to the fullest extent legally permissible under and
pursuant to any procedure specified in the Delaware General Corporation Law,
as amended from time to time, against all expenses, liabilities and losses
(including attorneys' fees, judgments, fines and amounts paid or to be paid
in settlement) reasonably incurred or suffered by him in connection
therewith. Such right of indemnification shall be a contract right that may
be enforced in any manner by such person. Such right of indemnification
shall
Page 4 of 29 Pages
<PAGE>
not be exclusive of any other right which such directors, officers or
representatives may have or hereafter acquire and, without limiting the
generality of such statement, they shall be entitled to their respective
rights of indemnification under any bylaw, agreement, vote of stockholders,
provision of law or otherwise, as well as their rights under such article.
Article IX, Section 2 of the Company's By-Laws provides that the Board of
Directors may cause the corporation to purchase and maintain insurance on
behalf of any person who is or was a director or officer of the corporation,
or is or was serving at the request of the corporation as a director or
officer of another corporation, or as its representative in a partnership,
joint venture, trust or other enterprise against any liability asserted
against such person and incurred in any such capacity or arising out of such
status, whether or not the corporation would have the power to indemnify such
person.
With respect to indemnification of officers and directors, Section 145 of
the Delaware General Corporation Law provides that a corporation shall have
the power to indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative, or investigative (other
than an action by or in the right of the corporation) by reason of the fact
that he is or was a director, officer, employee, or agent of the corporation,
or is or was serving at the request of the corporation as a director,
officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against expenses (including attorneys'
fees), judgments, fines, and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. Under this provision of the Delaware General
Corporation Law, the termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person
did not act in good faith and in a manner which he reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had reasonable cause to believe that
his conduct was unlawful.
Furthermore, the Delaware General Corporation Law provides that a
corporation shall have power to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending, or completed
action or suit by or in the right of the corporation to procure a judgment in
its favor by reason of the fact that he is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses (including attorneys' fees), actually and reasonably incurred by him
in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in
which such action or suit was brought shall determine upon application that,
despite the adjudication of liability, but in view of all circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
In addition, the Delaware General Corporation Law was amended in 1986 to
enable a Delaware corporation to include in its certificate of incorporation
a provision eliminating or limiting a director's liability to the corporation
or its stockholders for monetary damages for breaches of a director's
fiduciary duty of care. The statutory amendment provides, however, that (a)
liability for duty or loyalty, (b) acts or omissions not in good faith or
involving intentional misconduct or knowing violations of law, (c) the
unlawful purchase or redemption of stock or unlawful dividends or (d) the
right of improper personal benefits could not be eliminated or limited in
this manner. The Company's Certificate of Incorporation has been amended to
contain provisions substantially similar to those contained in the amended
Delaware General Corporation Law.
Page 5 of 29 Pages
<PAGE>
Item 7. Exemption from Registration Claimed.
Inapplicable.
Item 8. Exhibits.
Exhibit
Number Description
- ------ ------------
Included in Part II of the Registration Statement:
4.1 HPR Inc. Amended and Restated HPR 1995 Stock Plan
4.2 HPR Inc. Amended and Restated HPR 1991 Stock Plan
5 Opinion of Counsel re: legality
15 Letter re: unaudited interim financial information
23(a) Consent of Counsel (contained in Exhibit 5)
23(b) Consent of independent public accountants
24 Power of Attorney (included in signature page)
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include
any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change
to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended (the "1933 Act") each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the 1934 Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the 1934 Act) that is
incorporated by reference in the Registration Statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the 1933 Act may
be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the 1933 Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action,
Page 6 of 29 Pages
<PAGE>
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final adjudication of
such issue.
Page 7 of 29 Pages
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Atlanta, State of Georgia, on the
29th day of December, 1997.
HBO & COMPANY
By: /s/Charles W. McCall
---------------------------------------
Charles W. McCall
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Charles W. McCall and Jay P. Gilbertson,
jointly and severally, each in his own capacity, his true and lawful
attorneys-in-fact and agents, each with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming
all that each of said attorneys-in-fact and agents, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/Charles W. McCall
- ------------------------ Director, President and Chief Executive December 29, 1997
Charles W. McCall Officer (Principal Executive Officer)
/s/Jay P. Gilbertson
- ------------------------ President, Co-Chief Operating Officer, December 29, 1997
Jay P. Gilbertson Chief Financial Officer, Principal
Accounting Officer, Treasurer and
Secretary (Principal Financial Officer and
Principal Accounting Officer)
/s/Holcombe T. Green, Jr.
- ------------------------- Chairman of the Board of Directors December 29_, 1997
Holcombe T. Green, Jr.
</TABLE>
Page 8 of 29 Pages
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/Alfred C. Eckert III
- ------------------------- Director December 29, 1997
Alfred C. Eckert III
/s/Philip A. Incarnati
- ------------------------- Director December 29, 1997
Philip A. Incarnati
/s/Alton F. Irby III
- ------------------------- Director December 29, 1997
Alton F. Irby III
/s/Gerald E. Mayo
- ------------------------- Director December 29, 1997
Gerald E. Mayo
/s/James V. Napier
- ------------------------- Director December 29, 1997
James V. Napier
/s/Donald C. Wegmiller
- ------------------------- Director December 29, 1997
Donald C. Wegmiller
Page 9 of 29 Pages
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<S> <C> <C>
Exhibit Page
Number Description Number
- ------ ----------- ------
Included in Part II of the Registration Statement:
4.1 HPR Inc. Amended and Restated HPR 1995 Stock Plan
4.2 HPR Inc. Amended and Restated HPR 1991 Stock Plan
5 Opinion of Counsel re: legality
15 Letter re: unaudited interim financial information
23(a) Consent of Counsel (contained in Exhibit 5)
23(b) Consent of independent public accountants
24 Power of Attorney (included in signature page)
</TABLE>
Page 10 of 29 Pages
<PAGE>
Exhibit 4.1
As adopted 6/26/95 and amended and restated
7/22/96, effective 11/1/96
HPR INC.
AMENDED AND RESTATED HPR 1995 STOCK PLAN
1. Purpose. The purpose of this HPR 1995 Stock Plan (the "Plan") is to
advance the interests of HPR Inc., a Delaware corporation (the "Company"), by
strengthening the ability of the Company to attract, retain and motivate key
employees, consultants and other individual contributors of or to the Company
or any present or future parent or subsidiary of the Company (the "Company
Group") by providing them with an opportunity to purchase or receive as
bonuses stock of the Company and thereby permitting them to share in the
Company's success. It is intended that this purpose will be effected by
granting (i) incentive stock options ("Incentive Options") which are intended
to qualify under the provisions of Section 422 of the Internal Revenue Code
of 1986, as heretofore and hereafter amended (the "Code"), and nonstatutory
stock options ("Nonqualified Options") which are not intended to meet the
requirements of Section 422 of the Code and which are intended to be taxed
under Section 83 of the Code (both Incentive Options and Nonqualified Options
shall be collectively referred to as "Options"), (ii) stock purchase
authorizations ("Purchase Authorizations"), (iii) stock bonus awards
("Bonuses") and (iv) Stock Appreciation Rights ("SARs"). (Items (i) through
(iv) above shall collectively be referred to herein as "Awards".)
2. Effective Date. This Plan was adopted by the Board of Directors of
the Company (the "Board") on June 26, 1995 (the "effective date" of the Plan)
and approved by the stockholders on July 20, 1995. This Plan was amended and
restated by the Board of Directors on July 22, 1996, such amendment and
restatement to be effective on November 1, 1996, subject to approval by the
stockholders on or before July 22, 1997.
3. Stock Covered by the Plan. Subject to adjustment as provided in
Sections 10 and 11 below, the shares that may be made subject to Awards under
this Plan ("Shares") shall not exceed in the aggregate 2,035,000 shares of
the common stock, $.01 par value, of the Company ("Common Stock"). Any
Shares subject to an Option, SAR or Purchase Authorization which for any
reason expires or is terminated unexercised as to such Shares, any Shares
reacquired by the Company pursuant to forfeiture or a repurchase right
hereunder, and any Shares subject to an SAR which are not issued upon
exercise of the SAR may again be the subject of an Award under the Plan. The
Shares purchased pursuant to Purchase Authorizations or the exercise of
Options under this Plan or issued as Bonuses or pursuant to SARs may, in
whole or in part, be either authorized but unissued Shares or issued Shares
reacquired by the Company.
Page 11 of 29 Pages
<PAGE>
4. Administration. This Plan shall be administered by the Board of
Directors, whose construction and interpretation of the Plan's terms and
provisions shall be final and conclusive. The Board shall have the authority
to delegate to the Compensation Committee of the Board (the "Committee") the
authority to administer this Plan as set forth in this Section 4 and to
recommend that the Board grant Awards. Each member of the Committee shall
be, and shall have been at all times within the one-year period ending on the
date of his or her appointment to the Committee, a person who in the opinion
of counsel to the Company is an "outside director" as such term is used in
proposed regulation 1.162-27(e)(3) under Section 162(m) of the Code. The
Board shall have authority, subject to the express provisions of the Plan, to
construe the Plan and the respective Awards and related agreements to
prescribe, amend and rescind rules and regulations relating to the Plan, to
determine the terms and provisions of the respective Awards and related
agreements, and to make all other determinations in the judgment of the Board
necessary or desirable for the administration of the Plan. The Board may
correct any defect or supply any omission or reconcile any inconsistency in
the Plan or in any Award or related agreement in the manner and to the extent
it shall deem expedient to carry the Plan into effect, and it shall be the
sole and final judge of such expediency. No member of the Board and no
delegate of the Board shall be liable for any action or determination under
the Plan made in good faith. Notwithstanding the foregoing, the Board, or
the Committee as its delegate, shall have authority to establish guidelines
for the grant of Awards to key employees of the Company Group who are not
executive officers of the Company and to delegate to the Company's Chief
Executive Officer the authority to recommend to the Board the grant of
Awards, within such guidelines, to such eligible non-executive key employees.
5. Approval by Board of Directors. Notwithstanding anything in this
Plan to the contrary, including without limitation the delegation of
authority to the Committee, all grants of Awards shall be approved by the
Board of Directors.
6. Eligible Recipients. Awards may be granted to such key employees,
consultants or other individual contributors of or to the Company Group,
including without limitation members of the Board who are employees and
members of any medical scientific or technical advisory boards, as are
selected by the Board or (except as to employees who are Company executive
officers) by the Board's delegate pursuant to section 4 above (a
"Participant"); provided, that only employees of the Company Group shall be
eligible for grant of an Incentive Option.
7. Duration of the Plan. This Plan shall terminate ten (10) years from
the effective date hereof, unless terminated earlier pursuant to Section 14
hereafter, and no Awards may be granted or made thereafter.
8. Terms and Conditions of Options, Purchase Authorizations, SARs and
Bonuses. Awards granted or made under this Plan shall be evidenced by
agreements in such form and containing such terms and conditions as the Board
shall determine; provided, however, that such agreements shall evidence among
their terms and conditions the following:
Page 12 of 29 Pages
<PAGE>
(a) Price. The purchase price per Share payable upon the exercise
of each Option or the purchase pursuant to each Purchase Authorization
granted or made hereunder shall be determined by the Board at the time the
Option or Purchase Authorization is granted or made. Subject to the
condition of paragraph 8(k)(i), if applicable, the purchase price per Share
payable upon the exercise of each Incentive Option granted hereunder shall
not be less than one hundred percent (100%) of the Market Price (as such term
is defined below) per share of the Common Stock on the day the Incentive
Option is granted. The purchase price per Share payable on exercise of each
Nonqualified Option or upon the purchase of Shares pursuant to each Purchase
Authorization granted hereunder shall be not less than eighty-five percent
(85%) of the Market Price per Share of the Common Stock on the date of the
grant. Bonus Shares shall be issued in consideration of services previously
rendered, which shall be valued for such purposes by the Board. No Share
shall be issued for less than its par value, paid in cash, property or
services. As used herein, "Market Price" shall mean the closing price of the
Common Stock as reported on the Nasdaq National Market System for the
relevant date (or, if such date is not a trading date or if no trades took
place on such date, then such closing price for the last previous trading
date or the last previous date on which a trade occurred, as the case may
be); provided that if the Common Stock is no longer traded on the Nasdaq
National Market System on the relevant date, then the Market Price as of such
date shall be determined by the Board equal to the fair market value of the
Common Stock in accordance with applicable provisions of the Code then in
effect.
(b) Stock Appreciation Rights. Appreciation Rights shall be grants
entitling a Participant to receive an amount in cash or Shares or a
combination thereof having a value equal to or less than the excess of the
Market Price per share of the Company's Common Stock on the date of exercise
over the Market Price per share of the Company's Common Stock on the date of
grant, multiplied by the number of Shares with respect to which the SAR shall
have been exercised.
(c) Number of Shares. Each agreement shall specify the number of
Shares to which it pertains.
(d) Exercise of Options. Each Option shall be exercisable for the
full amount or for any part thereof and at such intervals or in such
installments as the Board may determine or as the Committee may determine at
the time it recommends that the Board grant such Option; provided, however,
that no Option shall be exercisable with respect to any Shares later than ten
(10) years after the date of the grant of such Option (or five (5) years in
the case of Incentive Options to which paragraph 8(k)(ii) applies). An
Option shall be exercisable only by delivery of a written notice to the
Company's Treasurer, or any other officer of the Company designated by the
Board to accept such notices on its behalf, specifying the number of Shares
for which the Option is exercised and accompanied by either (i) payment or
(ii) if permitted by the Board, irrevocable instructions to a broker to
promptly deliver to the Company full payment in accordance with paragraph
8(e)(ii) below of the amount necessary to pay the aggregate exercise price.
With respect to an Incentive Option, the permission of the Board referred to
in clause (ii) of the preceding sentence must be granted at the time the
Incentive Option is granted.
Page 13 of 29 Pages
<PAGE>
(e) Payment. Payment shall be made in full (i) at the time the
Option is exercised, (ii) promptly after the Participant forwards the
irrevocable instructions referred to in paragraph 8(d)(ii) above to the
appropriate broker, if exercise of an Option is made pursuant to paragraph
8(d)(ii) above, or (iii) at the time the purchase pursuant to a Purchase
Authorization is made. Payment shall be made either (a) in cash, (b) by
check, (c) if permitted by the Board (with respect to an Incentive Option,
such permission to have been granted at the time of the Incentive Option
grant), by delivery and assignment to the Company of shares of Company Stock
having a Market Price (as determined by the Board) determined by the Board)
equal to the exercise or purchase price, (d) if permitted by the Board,
stated in the agreement evidencing the Option or Purchase Authorization, and
to the extent permitted by any applicable law, by the Participant's recourse
promissory note, which note must be due and payable not more than five (5)
years after the date the Option or Purchase Authorization is exercised, or
(e) by a combination of (a), (b), (c) and/or (d). If shares of Company Stock
are to be used to pay the exercise price of an Incentive Option, the Company
prior to such payment must be furnished with evidence satisfactory to it that
the acquisition of such shares and their transfer in payment of the exercise
price satisfy the requirements of Section 422 of the Code and other
applicable laws. Notwithstanding the foregoing, the purchase or exercise
price of an Option or Purchase Authorization may not be paid by delivery and
assignment to the Company of shares of Company Stock or through irrevocable
instructions to a broker as referred to in Paragraph 8(d)(ii) above to the
extent that such delivery and assignment or the execution of such irrevocable
instructions would constitute a violation of the provisions of any law
(including without limitation Section 16 of the Exchange Act) or related
regulation or rule, or any agreement or policy of the Company, restricting
the transfer or redemption of the Company's stock.
(f) Withholding Taxes; Delivery of Shares. The Company's
obligation to deliver Shares upon exercise of an Option or SAR or upon
purchase pursuant to a Purchase Authorization or issuance pursuant to a Bonus
shall be subject to the Participant's satisfaction of all applicable federal,
state and local income and employment tax withholding obligations. Without
limiting the generality of the foregoing, the Company shall have the right to
deduct from payments of any kind otherwise due to the Participant any
federal, state or local taxes of any kind required by law to be withheld with
respect to any Shares issued upon exercise of Options or SARs or purchased or
issued pursuant to Purchase Authorizations or Bonuses. The Participant may
elect to satisfy such obligation(s), in whole or in part, by (i) delivering
to the Company a check for the amount required to be withheld or (ii) if the
Board in its sole discretion approves in any specific or general case, having
the Company withhold Shares or delivering to the Company already-owned shares
of Common Stock, having a value equal to the amount required to be withheld,
as determined by the Board.
(g) Non-Transferability. No Option, SAR, or Purchase Authorization
shall be transferable by the Participant otherwise than by will or the laws
of descent or distribution, and each Option, SAR or Purchase Authorization
shall be exercisable during the Participant's lifetime only by the
Participant, provided, however, that the Board may permit a Participant to
transfer an Award if such transfer is made pursuant to uniformly applied
criteria established by the Board prior to such transfer.
Page 14 of 29 Pages
<PAGE>
(h) Termination of Options, SARs and Purchase Authorizations.
Nothing in this Plan or in any agreement representing any Award shall
restrict the right of any member of the Company Group to terminate the
employment of any Participant at any time and for any reason, with or without
notice. Each Purchase Authorization and SAR shall terminate and may no
longer be exercised if the Participant ceases for any reason to provide
services to a member of the Company Group. Except to the extent the Board
provides specifically in agreement evidencing an Option for a lesser period
(or a greater period, provided that in the case of Incentive Options such
period shall not exceed three months), each Option shall terminate and may no
longer be exercised if the Participant ceases for any reason to provide
services to a member of the Company Group in accordance with the following
provisions:
(i) if the Participant ceases to perform services for any
reason other than death or disability (as defined in
Section 22(e)(3) of the Code), the Participant may, at
any time within a period of one month after the date of
such cessation of the Performance of services, exercise
the Option to the extent that the Option was exercisable
on the date of such cessation;
(ii) if the Participant ceases to perform services because of
disability (as defined in Section 22(e)(3) of the Code),
the Participant may, at any time within a period of six
months after the date of such cessation of the
performance of services, exercise the Option to the
extent that the Option was exercisable on the date of
such cessation; and
(iii) if the Participant ceases to perform services because
of death, the Option, to the extent that the
Participant was entitled to exercise it on the date of
death, may be exercised within a period of six months
after the Participant's death by the person or persons
to whom the Participant's rights under the Option pass
by will or by the laws of descent or distribution;
provided, however, that no Option, SAR or Purchase Authorization may be
exercised to any extent by anyone after the date of its expiration; and
provided, further, that Options, SARs and Purchase Authorizations may be
exercised only as to Vested Shares (as defined in the applicable agreement
with the Participant) after the Participant has ceased to perform services
for any member of the Company Group.
(i) Rights as Stockholder. A Participant shall have no rights as a
stockholder with respect to any Shares covered by an Award until the date of
issuance of a stock certificate, if any, in the Participant's name for such
Shares.
(j) Repurchase of Shares by the Company. Any Shares purchased or
acquired upon exercise of an Option or SAR or pursuant to a Purchase
Authorization or Bonus may in the discretion of the Board be subject to
repurchase by or forfeiture to the Company if
Page 15 of 29 Pages
<PAGE>
and to the extent and at the repurchase price, if any, specifically set forth
in the option, purchase, SAR or bonus agreement pursuant to which the Shares
were purchased or acquired. Certificates representing Shares subject to such
repurchase or forfeiture may be subject to such escrow and stock legending
provisions as may be set forth in the option, purchase, SAR or bonus
agreement pursuant to which the Shares were purchased or acquired.
(k) 10% Stockholder. If any Participant to whom an Incentive Option
is granted pursuant to the provisions of the Plan is on the date of grant the
owner of stock (as determined under Section 424(d) of the Code) possessing
more than 10% of the total combined voting power or value of all classes of
stock of the Company, its parent, if any, or subsidiaries, then the following
special provisions shall be applicable:
(i) The exercise price per Share subject to such Option shall
not be less than 110% of the fair market value of each Share
on the date of grant; and
(ii) The Option shall not have a term in excess of five years
from the date of grant.
(l) Confidentiality Agreements. Each Participant shall execute,
prior to or contemporaneously with the grant of any Award hereunder, the
Company's then standard form of agreement relating to nondisclosure of
confidential information, assignment of inventions and related matters.
(m) Aggregate Limitation. The maximum number of Shares with
respect to which any Awards may be granted under the Plan to any individual
during each successive twelve-month period commencing on the effective date
of the Plan shall not exceed 400,000 shares.
9. Restrictions on Incentive Options. Incentive Options granted under
this Plan shall be specifically designated as such and shall be subject to
the additional restriction that the aggregate Market Price, determined as of
the date the Incentive Option is granted, of the Shares with respect to which
Incentive Options are exercisable for the first time by a Participant during
any calendar year shall not exceed $100,000. If an Incentive Option which
exceeds the $100,000 limitation of this paragraph 9 is granted, the portion
of such Option which is exercisable for shares in excess of the $100,000
limitation shall be treated as a Nonqualified Option pursuant to Section
422(d) of the Code. In the event that such Participant is eligible to
participate in any other stock incentive plans of the Company, its parent, if
any, or a subsidiary which are also intended to comply with the provisions of
Section 422 of the Code, such annual limitation shall apply to the aggregate
number of shares for which options may be granted under all such plans.
10. Stock Dividends; Stock Splits; Stock Combinations;
Recapitalizations. Appropriate adjustment shall be made by the Board in the
maximum number of Shares subject to the Plan and in the number, kind, and
exercise or purchase price of Shares covered by
Page 16 of 29 Pages
<PAGE>
outstanding Options, SARs and Purchase Authorizations granted hereunder to
give effect to any stock dividends, stock splits, stock combinations,
recapitalizations and other similar changes in the capital structure of the
Company after the effective date of the Plan.
11. Merger; Sale of Assets. In the event of a change of the Common
Stock resulting from a merger or similar reorganization as to which the
Company is the surviving corporation, the number and kind of Shares which
thereafter may be purchased pursuant to an Option, SAR or Purchase
Authorization under the Plan and the number and kind of Shares then subject
to Options, SARs or Purchase Authorizations granted hereunder and the price
per Share thereof shall be appropriately adjusted in such manner as the Board
may deem equitable to prevent dilution or enlargement of the rights available
or granted hereunder. Except as otherwise determined by the Board, a merger
or a similar reorganization which the Company does not survive, or a sale of
all or substantially all of the assets of the Company, shall cause every
Option, SAR and Purchase Authorization hereunder to terminate, to the extent
not then exercised, unless any surviving entity agrees to assume the
obligations hereunder; provided, however, that, in the case of such a merger
or similar reorganization, or such a sale of all or substantially all of the
assets of the Company, if there is no such assumption, the Board may provide
that some or all of the unexercised portion of any one or more of the
outstanding Options, SARs or Purchase Authorizations and some or all of the
unvested Shares acquired upon exercise of any one or more of such Options,
SARs of Purchase Authorizations or acceptance of any one or more of the
outstanding Bonuses shall be immediately exercisable and vested or no longer
subject to the repurchase rights as of such date prior to such merger,
similar reorganization or sale of assets as the Board determines.
12. Investment Representations; Transfer Restrictions. The Company may
require Participants, as a condition of purchasing Shares pursuant to the
exercise of an Option or SAR or to a Purchase Authorization or receipt of
shares as a Bonus, to give written assurance in substance and form
satisfactory to the Company to the effect that such person is acquiring the
Shares for the Participant's own account for investment and not with any
present intention of selling or otherwise distributing the same, unless there
shall be an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), with respect thereto, and to such other
effects as the Company deems necessary or appropriate (including without
limitation confirmation that the Participant is aware of any applicable
restrictions on transfer of the Shares, as specified in the by-laws of the
Company or otherwise) in order to comply with federal and applicable state
securities laws.
13. Definitions.
(a) The term "employee" shall have, for purposes of this Plan, the
meaning ascribed to "employee" under Section 3401(c) of the Code and the
regulations promulgated thereunder.
(b) The term "Exchange Act" shall mean the Securities Exchange Act
of 1934, as heretofore and hereafter amended.
Page 17 of 29 Pages
<PAGE>
(c) The term "parent" shall have, for purposes of this Plan, the
meaning ascribed to it under Section 424(e) of the Code and the regulations
promulgated thereunder.
(d) The term "subsidiary" shall have, for all purposes under this
Plan, the meaning ascribed to it under Section 424(f) of the Code and the
regulations promulgated thereunder.
14. Termination or Amendment of Plan. The Board may at any time
terminate the Plan or make such changes in or additions to the Plan as it
deems advisable without further action on the part of the stockholders of the
Company, provided:
(a) that no such termination or amendment shall adversely affect or
impair any then outstanding Award or related agreement without the consent of
the Participant holding such Award or related agreement; and
(b) that no such amendment which, pursuant to the Code or
regulations thereunder, requires action by the stockholders may be made
without obtaining, or being conditioned upon, stockholder approval.
With the consent of the Participant affected, the Board may amend
outstanding Awards or related agreements in a manner not inconsistent with
the Plan. The Board shall have the right to amend or modify the terms and
provisions of the Plan and of any outstanding Incentive Options granted under
the Plan to the extent necessary to qualify any or all such Options for such
favorable federal income tax treatment (including deferral of taxation upon
exercise) as may be afforded incentive stock options under Section 422 of the
Code.
Page 18 of 29 Pages
<PAGE>
Exhibit 4.2
As adopted 12/17/91, amended and restated 3/31/92,
amended 4/7/95 and 6/26/95,
and amended and restated 7/22/96,
effective 11/1/96
HPR INC.
AMENDED AND RESTATED HPR 1991 STOCK PLAN
1. Purpose. The purpose of this HPR 1991 Stock Plan (the "Plan") is to
advance the interests of HPR Inc., a Delaware corporation (the "Company"), by
strengthening the ability of the Company to attract, retain and motivate key
employees, consultants and other individual contributors of or to the Company or
any present or future parent or subsidiary of the Company (the "Company Group")
by providing them with an opportunity to purchase or receive as bonuses stock of
the Company and thereby permitting them to share in the Company's success. It
is intended that this purpose will be effected by granting (i) incentive stock
options ("Incentive Options") which are intended to qualify under the provisions
of Section 422 of the Internal Revenue Code of 1986, as heretofore and hereafter
amended (the "Code"), and nonstatutory stock options ("Nonqualified Options")
which are not intended to meet the requirements of Section 422 of the Code and
which are intended to be taxed under Section 83 of the Code (both Incentive
Options and Nonqualified Options shall be collectively referred to as
"Options"), (ii) stock purchase authorizations ("Purchase Authorizations") and
(iii) stock bonus awards ("Bonuses"). (Items (i) through (iii) above shall
collectively be referred to herein as "Awards".)
2. Effective Date. This Plan was adopted by the Board of Directors of
the Company (the "Board") on December 17, 1991 (the "effective date" of the
Plan). This Plan retitles and replaces in its entirely the 1991 Stock Option
Plan of the Company, which was amended and restated, effective March 31, 1992,
the date of adoption of such amendment and restatement by the Board. The Plan
was further amended on April 7, 1995 and June 26, 1995. This Plan restates in
its entirety the HPR 1991 Stock Plan, which was amended and restated by the
Board on July 22, 1996, such amendment and restatement to be effective on
November 1, 1996, subject to approval by the stockholders on or before July 22,
1997.
3. Stock Covered by the Plan. Subject to adjustment as provided in
Sections 10 and 11 below, the shares that may be made subject to Awards under
this Plan ("Shares") shall not exceed in the aggregate 1,160,000 shares of the
common stock, $0.01 par value, of the Company ("Common Stock"). Any Shares
subject to an Option or Purchase Authorization which for any reason expires or
is terminated unexercised as to such Shares and any Shares reacquired by the
Company pursuant to forfeiture or a repurchase right hereunder may again be the
subject of an Award under the Plan. The Shares purchased pursuant to Purchase
Page 19 of 29 Pages
<PAGE>
Authorizations or the exercise of Options under this Plan or issued as Bonuses
may, in whole or in part, be either authorized but unissued Shares or issued
Shares reacquired by the Company.
4. Administration. This Plan shall be administered by the Board of
Directors, whose construction and interpretation of the Plan's terms and
provisions shall be final and conclusive. The Board shall have the authority to
delegate to the Compensation Committee of he Board (the "Committee") the
authority to administer this Plan as set forth in this Section 4 and to
recommend that the Board grant Awards hereunder. Each member of the Committee
shall be, and shall have been at all times within the one-year period ending on
the date of his or her appointment to the Committee, a person who in opinion of
counsel to the Company is an "outside director" as such term is used in proposed
regulation 1.162-27(e)(3) under Section 162(m) of the Code. The Board shall
have authority, subject to the express provisions of the Plan, to construe the
Plan and the respective Awards and related agreements, to prescribe, amend and
rescind rules and regulations relating to the Plan, to determine the terms and
provisions of the respective Awards and related agreements, and to make all
other determinations in the judgment of the Board necessary or desirable for the
administration of the Plan. The Board may correct any defect or supply any
omission or reconcile any inconsistency in the Plan or in any Award or related
agreement in the manner and to the extent it shall deem expedient to carry the
Plan into effect, and it shall be the sole and final judge of such expediency.
No member of the Board and no delegate of the Board shall be liable for any
action or determination under the Plan made in good faith. Notwithstanding the
foregoing, the Board, or the Committee as its delegate, shall have authority to
establish guidelines for the grant of Awards to key employees of the Company
Group who are not executive officers of the Company and to delegate to the
Company's Chief Executive Officer the authority to recommend to the Board the
grant of Awards, within such guidelines, to such eligible non-executive key
employees.
5. Approval by Board of Directors. Notwithstanding anything in this Plan
to the contrary, including without limitation the delegation of authority to the
Committee, all grants of Awards shall be approved by the Board of Directors.
6. Eligible Recipients. Awards may be granted to such key employees,
consultants or other individual contributors of or to the Company Group,
including without limitation members of the Board who are employees (but,
effective July 1, 1995, excluding members of the Board who are not employees)
and members of any medical, scientific or technical advisory boards, as are
selected by the Board or (except as to employees who are Company executive
officers) by the Board's delegate pursuant to section 4 above (a "Participant");
provided, that only employees of the Company Group shall be eligible for grant
of an Incentive Option.
7. Duration of the Plan. This Plan shall terminate ten (10) years from
the effective date hereof, unless terminated earlier pursuant to Section 14
hereafter, and no Awards may be granted or made thereafter.
Page 20 of 29 Pages
<PAGE>
8. Terms and Conditions of Options, Purchase Authorizations and Bonuses.
Awards granted or made under this Plan shall be evidenced by agreements in such
form and containing such terms and conditions as the Board shall determine;
provided, however, that such agreements shall evidence among their terms and
conditions the following:
(a) Price. The purchase price per Share payable upon the exercise of
each Option or the purchase pursuant to each Purchase Authorization granted or
made hereunder shall be determined by the Board at the time the Option or
Purchase Authorization is granted or made. Subject to the condition of
paragraph 8(j)(i), if applicable, the purchase price per Share payable upon the
exercise of each Incentive Option granted hereunder shall not be less than one
hundred percent (100%) of the Market Price (as such term is defined below) per
Share of the Common Stock on the day the Incentive Option or Purchase
Authorization is granted or made. The purchase price per Share payable on
exercise of each Nonqualified Option or upon the purchase of Shares pursuant to
each Purchase Authorization granted hereunder shall be not less than eighty-five
percent (85%) of the Market Price per Share of the Common Stock on the date of
the grant. Fair market value shall be determined by the Board in accordance
with applicable provisions of the Code then in effect. Bonus Shares shall be
issued in consideration of services previously rendered, which shall be valued
for such purposes by the Board. No Share shall be issued for less than its par
value, paid in cash, property or services. As used herein, "Market Price" shall
mean the closing price of the Common Stock as reported on the Nasdaq National
Market System for the relevant date (or, if such. date is not a trading date or
if no trades took place on such date, then such closing price for the last
previous trading date or the last previous date on which a trade occurred, as
the case may be); provided that if the Common Stock is no longer traded on the
Nasdaq National Market System on the relevant date, then the Market Price as of
such date shall be determined by the Board equal to the fair market value of the
Common Stock in accordance with applicable provisions of the Code then in
effect.
(b) Number of Shares. Each agreement shall specify the number of
Shares to which it pertains.
(c) Exercise of Options. Each Option shall be exercisable for the
full amount or for any part thereof and at such intervals or in such
installments as the Board may determine or as the Committee may determine at the
time it recommends that the Board grant such Option; provided, however, that no
Option shall be exercisable with respect to any Shares later than ten (10) years
after the date of the grant of such Option (or five (5) years in the case of
Incentive Options to which paragraph 8(j)(ii) applies). An Option shall be
exercisable only by delivery of a written notice to the Company's Treasurer, or
any other officer of the Company designated by the Board to accept such notices
on its behalf, specifying the number of Shares for which the Option is exercised
and accompanied by either (i) payment or (ii) if permitted by the Board,
irrevocable instructions to a broker to promptly deliver to the Company full
payment in accordance with paragraph 8(d)(ii) below of the amount necessary to
pay the aggregate exercise price. With respect to an Incentive Option, the
permission of the Board referred to in clause (ii) of the preceding sentence
must be granted at the time the Incentive Option is granted.
Page 21 of 29 Pages
<PAGE>
(d) Payment. Payment shall be made in full (i) at the time the
Option is exercised, (ii) promptly after the Participant forwards the
irrevocable instructions referred to in paragraph 8(c)(ii) above to the
appropriate broker, if exercise of an Option is made pursuant to paragraph
8(c)(ii) above, or (iii) at the time the purchase pursuant to a Purchase
Authorization is made. Payment shall be made either (a) in cash, (b) by check,
(c) if permitted by the Board (with respect to an Incentive Option, such
permission to have been granted at the time of the Incentive Option grant), by
delivery and assignment to the Company of shares of Company stock having a
Market Price (as determined by the Board) equal to the exercise or purchase
price, (d) if permitted by the Board, stated in the agreement evidencing the
Option or Purchase Authorization, and to the extent permitted by any applicable
law, by the Participant's recourse promissory note, which note must be due and
payable not more than five (5) years after the date the Option or Purchase
Authorization is exercised, or (e) by a combination of (a), (b), (c) and/or (d).
If shares of Company stock are to be used to pay the exercise price of an
Incentive Option, the Company prior to such payment must be furnished with
evidence satisfactory co it that the acquisition of such shares and their
transfer in payment of the exercise price satisfy the requirements of Section
422 of the Code and other applicable laws. Notwithstanding the foregoing, the
purchase or exercise price of an Option or Purchase Authorization may not be
paid by delivery and assignment to the Company of shares of Company stock or
through irrevocable instructions to a broker as referred to in Paragraph
8(c)(ii) above to the extent that such delivery and assignment or the execution
of such irrevocable instructions would constitute a violation of the provisions
of any law (including without limitation Section 16 of the Exchange Act) or
related regulation or rule, or any agreement or policy of the Company,
restricting the transfer or redemption of the Company's stock.
(e) Withholding Taxes; Delivery of Shares. The Company's obligation
to deliver Shares upon exercise of an Option or upon purchase pursuant to a
Purchase Authorization or issuance pursuant to a Bonus shall be subject to the
Participant's satisfaction of all applicable federal, state and local income and
employment tax withholding obligations. Without limiting the generality of the
foregoing, the Company shall have the right to deduct from payments of any kind
otherwise due to the Participant any federal, state or local taxes of any kind
required by law to be withheld with respect to any Shares issued upon exercise
of Options or purchased or issued pursuant to Purchase Authorizations or
Bonuses. The Participant may elect to satisfy such obligation(s), in whole or
in part, by (i) delivering to the Company a check for the amount required to be
withheld or (ii) if the Board in its sole discretion approves in any specific or
general case, having the Company withhold Shares or delivering to the Company
already-owned shares of Common Stock, having a value equal to the amount
required to be withheld, as determined by the Board.
(f) Non-Transferability. No Option or Purchase Authorization shall
be transferable by the Participant otherwise than by will or the laws of descent
or distribution, and each Option or Purchase Authorization shall be exercisable
during the Participant's lifetime only by the Participant, provided, however,
that the Board may permit a Participant to transfer a Award if such transfer is
made pursuant to uniformly applied criteria, established by the Board prior to
such transfer.
Page 22 of 29 Pages
<PAGE>
(g) Termination of Options and Purchase Authorizations. Nothing in
this Plan or in any agreement representing any Award shall restrict the right of
any member of the Company Group to terminate the employment of any Participant
at any time and for any reason, with or without notice. Each Purchase
Authorization shall terminate and may no longer be exercised if the Participant
ceases for any reason to provide services to a member of the Company Group.
Except to the extent the Board provides specifically in an agreement evidencing
an Option for a lesser period (or a greater period, provided that in the case of
Incentive Options such period shall not exceed three months), each Option shall
terminate and may no longer be exercised if the Participant ceases for any
reason to provide services to a member of the Company Group in accordance with
the following provisions:
(i) if the Participant ceases to perform services for any reason
other than death or disability (as defined in Section
22(e)(3) of the Code), the Participant may, at any time
within a period of one month after the date of such
cessation of the performance of services, exercise the
Option to the extent that the Option was exercisable on the
date of such cessation;
(ii) if the Participant ceases to perform services because of
disability (as defined in Section 22(e)(3) of the Code), the
Participant may, at any time within a period of six months
after the date of such cessation of the performance of
services, exercise the Option to the extent that the Option
was exercisable on the date of such cessation; and
(iii) if the Participant ceases to perform services because
of death, the Option, to the extent that the
Participant was entitled to exercise it on the date of
death, may be exercised within a period of six months
after the Participant's death by the person or persons
to whom the Participant's rights under the Option pass
by will of by the laws of descent or distribution;
provided, however, that no Option, or Purchase Authorization may be exercised to
any extent by anyone after the date of its expiration; and provided, further,
that Options and Purchase Authorizations may be exercised only as to Vested
Shares (as defined in the applicable agreement with the Participant) after the
Participant has ceased to perform services for any member of the Company Group.
(h) Rights as Stockholder. A Participant shall have no rights as a
stockholder with respect to any Shares covered by an Award until the date of
issuance of a stock certificate, if any, in the Participant's name for such
Shares.
(i) Repurchase of Shares by the Company. Any Shares purchased or
acquired upon exercise of an Option or pursuant to a Purchase Authorization or
Bonus may in the discretion of the Board be subject to repurchase by or
forfeiture to the Company if and to
Page 23 of 29 Pages
<PAGE>
the extent and at the repurchase price, if any, specifically set forth in the
option, purchase, or bonus agreement pursuant to which the Shares were purchased
or acquired. Certificates representing Shares subject to such repurchase or
forfeiture may be subject to such escrow and stock legending provisions as may
be set forth in the option, purchase, or bonus agreement pursuant to which the
Shares were purchased or acquired.
(j) 10% Stockholder. If any Participant to whom an Incentive Option
is granted pursuant to the provisions of the Plan is on the date of grant the
owner of stock (as determined under Section 424(d) of the Code) possessing more
than 10% of the total combined voting power or value of all classes of stock of
the Company, its parent, if any, or subsidiaries, then the following special
provisions shall be applicable:
(i) The exercise price per Share subject to such Option shall
not be less than 110% of the fair market value of each Share
on the date of grant; and
(ii) The Option shall not have a term in excess of five years
from the date of grant.
(k) Confidentiality Agreements. Each Participant shall execute,
prior to or contemporaneously with the grant of any Award hereunder, the
Company's then standard form of agreement relating to nondisclosure of
confidential information, assignment of inventions and related matters.
(l) Aggregate Limitation. The maximum number of Shares with respect
to which any Awards may be granted under the Plan to any individual during each
successive twelve-month period commencing on the effective date of the Plan
shall not exceed 500,000 shares.
9. Restrictions on Incentive Options. Incentive Options granted under
this Plan shall be specifically designated as such and shall be subject to the
additional restriction that the aggregate Market Price, determined as of the
date the Incentive Option is granted, of the Shares with respect to which
Incentive Options are exercisable for the first time by a Participant during any
calendar year shall not exceed $100,000. If an Incentive Option which exceeds
the $100,000 limitation of this paragraph 9 is granted, the portion of such
Option which is exercisable for shares in excess of the $100,000 limitation
shall be treated as a Nonqualified Option pursuant to Section 422(d) of the
Code. In the event that such Participant is eligible to participate in any
other stock incentive plans of the Company, its parent, if any, or a subsidiary.
which are also intended to comply with the provisions of Section 422 of the
Code, such annual limitation shall apply to the aggregate number of shares for
which options may be granted under all such plans.
10. Stock Dividends; Stock Splits; Stock Combinations; Recapitalizations.
Appropriate adjustment shall be made by the Board in the maximum number of
Shares subject to the Plan and in the number, kind, and exercise or purchase
price of Shares covered by
Page 24 of 29 Pages
<PAGE>
outstanding Options and Purchase Authorizations granted hereunder to give effect
to any stock dividends, stock splits, stock combinations, recapitalizations and
other similar changes in the capital structure of the Company after the
effective date of the Plan.
11. Merger; Sale of Assets. In the event of a change of the Common Stock
resulting from a merger or similar reorganization as to which the Company is the
surviving corporation, the number and kind of Shares which thereafter may be
purchased pursuant to an Option or Purchase Authorization under the Plan and the
number and kind of Shares then subject to Options or Purchase Authorizations
granted hereunder and the price per Share thereof shall be appropriately
adjusted in such manner as the Board may deem equitable to prevent dilution or
enlargement of the rights available or granted hereunder. Except as otherwise
determined by the Board, a merger or a similar reorganization which the Company
does not survive, or a sale of all or substantially all of the assets of the
Company, shall cause every Option and Purchase Authorization hereunder to
terminate, to the extent not then exercised, unless any surviving entity agrees
to assume the obligations hereunder; provided, however, that, in the case of
such a merger or similar reorganization, or such a sale of all or substantially
all of the assets of the Company, if there is no such assumption, the Board may
provide that some or all of the unexercised portion of any one or more of the
outstanding Options or Purchase Authorizations and some or all of the unvested
Shares acquired upon exercise of any one or more of such Options or Purchase
Authorizations or acceptance of any one or more of the outstanding Bonuses shall
be immediately exercisable and vested or no longer subject to repurchase rights
as of such date prior to such merger, similar reorganization or sale of assets
as the Board determines.
12. Investment Representations: Transfer Restrictions. The Company may
require Participants, as a condition of purchasing Shares pursuant to the
exercise of an Option or to a Purchase Authorization or receipt of shares as a
Bonus, to give written assurances in substance and form satisfactory to the
Company to the effect that such person is acquiring the Shares for the
Participant's own account for investment and not with any present intention of
selling or otherwise distributing the same, unless there shall be an effective
registration statement under the Securities Act of 1933, as amended (the "1933
Act"), with respect thereto, and to such other effects as the Company deems
necessary or appropriate (including without limitation confirmation that the
Participant is aware of any applicable restrictions on transfer of the Shares,
as specified in the bylaws of the Company or otherwise) in order to comply with
federal and applicable state securities laws.
13. Definitions.
(a) The term "employee" shall have, for purposes of this Plan, the
meaning ascribed to "employee" under Section 3401(c) of the Code and the
regulations promulgated thereunder.
(b) The term "Exchange Act" shall mean the Securities Exchange Act of
1934, as heretofore and hereafter amended.
Page 25 of 29 Pages
<PAGE>
(c) The term "parent" shall have, for purposes of this Plan, the
meaning ascribed to it under Section 424(e) of the Code and the regulations
promulgated thereunder.
(d) The term "subsidiary" shall have, for all purposes under this
Plan, the meaning ascribed to it under Section 424(f) of the Code and the
regulations promulgated thereunder.
14. Termination or Amendment of Plan. The Board may at any time terminate
the Plan or make such changes in or additions to the Plan as it deems advisable
without further action on the part of the stockholders of the Company, provided:
(a) that no such termination or amendment shall adversely affect or
impair any then outstanding Award or related agreement without the consent of
the Participant holding such Award or related agreement; and
(b) that no such amendment which, pursuant to the Code or regulations
thereunder, requires action by the stockholders may be made without obtaining,
or being conditioned upon, stockholder approval.
With the consent of the Participant affected, the Board may amend
outstanding Awards or related agreements in a manner not inconsistent with the
Plan. The Board shall have the right to amend or modify the terms and
provisions of the Plan and of any outstanding Incentive Options granted under
the Plan to the extent necessary to qualify any or all such Options for such
favorable federal income tax treatment (including deferral of taxation upon
exercise) as may be afforded incentive stock options under Section 422 of the
Code.
Page 26 of 29 Pages
<PAGE>
Exhibit 5
JONES, DAY, REAVIS & POGUE
3500 SunTrust Plaza
303 Peachtree Street
Atlanta, Georgia 30308
(404) 521-3939
December 29, 1997
HBO & Company
301 Perimeter Center North
Atlanta, Georgia 30346
Gentlemen:
We have acted as counsel to HBO & Company, a Delaware corporation (the
"Company"), in connection with the registration of 1,315,514 shares of Common
Stock, $.05 par value per share, of the Company (the "Shares"), to be issued by
the Company in accordance with the HPR Inc. Amended and Restated HPR 1995 Stock
Plan and the HPR Inc. HPR 1991 Stock Plan (together, the "Plans") pursuant to a
Registration Statement on Form S-8 filed with the Securities and Exchange
Commission (the "Registration Statement") to which this opinion appears as
Exhibit 5.
We have examined originals or certified or photostatic copies of such
records of the Company, certificates of officers of the Company, and public
officials and such other documents as we have deemed relevant or necessary as
the basis of the opinion set forth below in this letter. In such examination,
we have assumed the genuineness of all signatures, the conformity to original
documents submitted as certified or photostatic copies, and the authenticity of
originals of such latter documents. Based on the foregoing, we are of the
following opinion:
The Shares, when issued in the manner contemplated by the Plans, will
be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement.
Sincerely,
/s/ Jones, Day, Reavis & Pogue
------------------------------
JONES, DAY, REAVIS & POGUE
Page 27 of 29 Pages
<PAGE>
Exhibit 15
ARTHUR ANDERSEN LLP
LETTER REGARDING UNAUDITED
INTERIM FINANCIAL INFORMATION
We are aware that HBO & Company has incorporated by reference in this Form S-8
Registration Statement, its Form 10-Q's for the quarters ended March 31, 1997,
June 30, 1997 and September 30, 1997 which include our reports dated April 16,
1997, July 16, 1997 and October 17, 1997, respectively, covering the unaudited
interim financial information contained therein. Pursuant to Regulation C of
the Securities Act of 1933 (the "Act"), those reports are not considered to be a
part of the Registration Statement prepared or certified by our firm within the
meaning of Sections 7 and 11 of the Act.
Arthur Andersen LLP
Atlanta, Georgia
December 29, 1997
Page 28 of 29 Pages
<PAGE>
Exhibit 23(b)
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accounts, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-8 of our reports dated
February 6, 1997 included or incorporated by reference in HBO & Company's
Form 10-K for the year ended December 31, 1996.
Arthur Andersen LLP
Atlanta, Georgia
December 29, 1997
Page 29 of 29 Pages
