<PAGE>
As filed with the Securities and Exchange Commission on June 11, 1998
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)
--------------------
NON-QUALIFIED STOCK OPTION AGREEMENT
BETWEEN HBO & COMPANY AND DUANE TISETH
NON-QUALIFIED STOCK OPTION AGREEMENT
BETWEEN HBO & COMPANY AND DAVID S. TISETH
--------------------
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 One Peachtree Center
303 Peachtree Street, N.E.
Atlanta, Georgia 30308-3242
(404) 521-3939
Exhibit Index Appears on Page 9
Page 1 of 25 Pages
<PAGE>
<TABLE>
<CAPTION>
Calculation of Registration Fee
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Proposed maximum Proposed maximum
Title of securities Amount to be offering price per aggregate offering Amount of
to be registered registered share price registration fee
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.05
par value, and 45,788 $17.265(1) $790,530(1) $233.21(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. All share
and per share information set forth herein has been adjusted to give effect to
the 2-for-1 stock split effected on June 9, 1998. Because all shares are
presently subject to options, the offering price is based upon the actual
exercise price of $17.265 per share.
(2) The registration fee is calculated by multiplying the product of $17.265,
the exercise price per share, and 45,788 the number of shares subject 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. Such additional indeterminable
number of shares as may be required pursuant to the antidilution provisions of
the non-qualified stock option agreements filed as exhibits to this Registration
Statement are also registered hereby; no additional registration fee is
required.
Page 2 of 25 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 25 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, 1997.
(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,
1997.
(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 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.
Page 4 of 25 Pages
<PAGE>
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.
Item 7. Exemption from Registration Claimed.
Inapplicable.
Page 5 of 25 Pages
<PAGE>
Item 8. Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
Included in Part II of the Registration Statement:
4(a) Non-Qualified Stock Option Agreement, dated May 26, 1998, by and
between HBO & Company and Duane Tiseth
4(b) Non-Qualified Stock Option Agreement, dated May 26, 1998, by and between
HBO & Company and David S. Tiseth
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>
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended
(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.
(b) 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, 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.
(c) The undersigned registrant undertakes 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.
(d) The undersigned registrant undertakes that, for the purpose of
determining any liability under 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.
(e) The undersigned registrant undertakes 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.
Page 6 of 25 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
11th day of June, 1998.
HBO & COMPANY
By: /s/ Charles W. McCall
---------------------------------------------
Charles W. McCall
Chairman, 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 Chairman, President and Chief Executive June 11, 1998
- ------------------------------------ Officer (Principal Executive Officer)
Charles W. McCall
/s/ Jay P. Gilbertson President, Co-Chief Operating Officer, June 11, 1998
- ------------------------------------ Chief Financial Officer, Principal
Jay P. Gilbertson Accounting Officer, Treasurer and Secretary
(Principal Financial Officer and Principal
Accounting Officer)
/s/ Alfred C. Eckert III Director June 11, 1998
- ------------------------------------
Alfred C. Eckert III
/s/ Philip A. Incarnati Director June 11, 1998
- ------------------------------------
Philip A. Incarnati
</TABLE>
Page 7 of 25 Pages
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Alton F. Irby III Director June 11, 1998
- ------------------------------------
Alton F. Irby III
/s/ M. Christine Jacobs Director June 11, 1998
- ------------------------------------
M. Christine Jacobs
/s/ Gerald E. Mayo Director June 11, 1998
- ------------------------------------
Gerald E. Mayo
/s/ James V. Napier Director June 11, 1998
- ------------------------------------
James V. Napier
/s/ Donald C. Wegmiller Director June 11, 1998
- ------------------------------------
Donald C. Wegmiller
</TABLE>
Page 8 of 25 Pages
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
Number Description Number
- ------ ----------- ------
Included in Part II of the Registration Statement:
<S> <C> <C>
4(a) Non-Qualified Stock Option Agreement, dated May 26, 1998, by and between HBO &
Company and Duane Tiseth
4(b) Non-Qualified Stock Option Agreement, dated May 26, 1998, by and between HBO
& Company and David S. Tiseth
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 9 of 25 Pages
<PAGE>
Exhibit 4(a)
May 26, 1998
Duane Tiseth
17100 28th Avenue North
Plymouth, MN 55447
Re: Grant of Nonqualified Stock Option
Dear Duane:
This letter sets forth the terms of your nonqualified stock option (the
"Option") to purchase shares of common stock of HBO & Company (the
"Company"). The Option was originally granted by Enterprise Systems, Inc.
("Enterprise Systems") on June 26, 1997, and was assumed by the Company as a
result of the Company's acquisition of Enterprise Systems.
1. Definitions. For the purposes of this Agreement, the
following terms shall have the meanings set forth below:
"Board" shall mean the Board of Directors of the Company.
"Cause" shall mean (i) your theft or embezzlement, or attempted
theft or embezzlement, of money or property of the Company, your perpetration
or attempted perpetration of fraud, or your participation in a fraud or
attempted fraud, on the Company or your unauthorized appropriation of, or
your attempt to misappropriate, any tangible or intangible assets or property
of the Company, (ii) any act or acts of disloyalty, dishonesty, misconduct,
moral turpitude, or any other act or acts by you injurious to the interest,
property, operations, business or reputation of the Company, (iii) your
conviction of a crime the commission of which results in injury to the
Company, or (iv) any material violation of any restriction on the disclosure
or use of confidential information of the Company or on competition with the
Company or any of its businesses then conducted or planned to be conducted,
in each case as determined in the reasonable judgment of the Board.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
any successor statute.
"Common Stock" shall mean the Company's Common Stock, $.05 par
value, or, in the event that the outstanding Common Stock is hereafter
changed into or exchanged for different stock or securities of the Company,
such other stock or securities.
"Company" shall mean HBO & Company, a Delaware corporation, and any
subsidiary corporation of HBO & Company as such term is defined in Section
425(f) of the Code.
"Disability" shall mean your inability, due to illness, accident,
injury, physical or mental incapacity or other disability, to carry out
effectively your duties and obligations to the Company or to participate
effectively and actively in the management of the Company for a period of at
least 90 consecutive days or for shorter periods aggregating at least 120
days (whether or not consecutive) during any twelve-month period, as
determined in the reasonable judgment of the Board.
"Fair Market Value" of the Common Stock shall be determined by the
Board.
"Option Shares" shall mean (i) all shares of Common Stock issued or
issuable upon the exercise of the Option and (ii) all shares of Common Stock,
or other equity securities, issued with respect to the Common Stock referred
to in clause (i) above by way of stock dividend or stock split or in
connection with any conversion, merger,
Page 10 of 25 Pages
<PAGE>
consolidation or recapitalization or other reorganization affecting the
Common Stock. Option Shares will continue to be Option Shares in the hands of
any holder other than you (except for the Company or, to the extent that you
are permitted to transfer Option Shares pursuant to paragraph 14 or 16
hereof, purchasers pursuant to a public offering under the Securities Act),
and each such transferee thereof will succeed to the rights and obligations
of a holder of Option Shares hereunder.
"Retirement" shall mean the voluntary termination of employment
after the age of 60 with no present intention of undertaking full-time
employment at a later date.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and any successor statute.
2. Option.
(a) Terms. Your Option is to purchase up to 13,462 shares
of Common Stock (the "Option Shares") at an option price per share of $34.53
(the "Exercise Price"), payable upon exercise as set forth in paragraph 2(b)
below. Your Option will expire at the close of business on June 26, 2007 (the
"Expiration Date"), subject to earlier expiration in connection with the
termination of your employment or your death as provided in paragraph 4(b)
below. Your Option is not intended to be an "incentive stock option" within
the meaning of Section 422 of the Code.
(b) Payment of Option Price. Subject to paragraph 3 below,
your Option may be exercised in whole or in part upon payment of an amount
(the "Option Price") equal to the product of (i) the Exercise Price
multiplied by (ii) the number of Option Shares to be acquired. Payment shall
be made in cash (including check, bank draft or money order).
3. Exercisability/Vesting.
(a) Normal Vesting. In accordance with the original terms
of your Option, your Option became fully vested and exercisable upon the
acquisition of Enterprise Systems by the Company.
4. Expiration of Option.
(a) Normal Expiration. In no event shall any part of your
Option be exercisable after the Expiration Date set forth in paragraph 2(a)
above.
(b) Early Expiration Upon Termination of Employment. Any
portion of your Option that was not vested and exercisable on the date your
employment with the Company terminated (for any reason whatsoever) will
expire and be forfeited on such date, and any portion of your Option that was
vested and exercisable on the date your employment with the Company
terminated (for any reason whatsoever) will also expire and be forfeited;
provided, however, that: (i) if you die or become subject to any Disability,
the portion of your Option that is vested and exercisable will expire 90 days
form the date of your death or Disability, but in no event after the
Expiration Date, (ii) if you Retire, the portion of your Option that is
vested and exercisable will expire 90 days from the date of your Retirement,
but in no event after the Expiration Date, and (iii) if you are discharged
for any reason other than for Cause, the portion of your Option that is
vested and exercisable will expire 30 days form the date of your discharge,
but in no event after the Expiration Date.
5. Procedure for Exercise. You may exercise all or any
portion of your Option, to the extent it has vested and is outstanding, at
any time and from time to time prior to its expiration, by delivering (i)
written notice to the Company (to the attention of the Company's Secretary),
(ii) your written acknowledgment that you have read and have been afforded an
opportunity to ask questions of management of the Company regarding all
financial and other information provided to you regarding the Company,
together with (iii) payment of the Option Price in accordance with the
provisions of paragraph 2(b) above. As a condition to any exercise of your
Option, you will permit the Company to deliver to your all financial and
other information regarding the Company it believes necessary to enable you
to make an informed investment decision, and you will make all customary
investment representations which the Company requires. All of the foregoing
representations, warranties, covenants and agreements shall be made in a form
satisfactory to the Company and its counsel.
Page 11 of 25 Pages
<PAGE>
6. Rights of Optionee. Nothing in this Agreement shall
interfere with or limit in any way the right of the Company to terminate your
employment at any time (with or without Cause), nor confer upon you any right
to continue in the employ of the Company for any period of time or to
continue your present (or any other) rate of compensation, and in the event
of your termination of employment (including, but not limited to, your
termination of employment by the Company without Cause) any portion of your
Option that was not previously vested and exercisable will be forfeited.
7. Withholding of Taxes. The Company shall be entitled, if
necessary or desirable, to withhold from you from any amounts due and payable
by the Company to you (or secure payment from you in lieu of withholding) the
amount of any withholding or other tax due from the Company with respect to
any Option Shares issuable under this Option, and the Company may defer such
issuance unless indemnified by you to its satisfaction.
8. Adjustments. In the event of a reorganization,
recapitalization, stock dividend or stock split, or combination or other
change in the shares of Common Stock, the Board shall, in order to prevent
the dilution or enlargement of rights under your Option, make such
adjustments in the number and type of shares covered by your Option and the
Exercise Price specified herein as may be determined to be appropriate and
equitable.
9. Right to Purchase Option Shares Upon Your Termination of
Employment.
(a) Repurchase of Option Shares. If your employment with
the Company shall terminate for any reason whatsoever, including your death,
Disability, resignation or termination (the date on which such termination
occurs being referred to as the "Termination Date"), then the Company shall
have the option to repurchase all or any part of the Option Shares issued or
issuable upon exercise of your Option, whether held by you or by one or more
of your transferees, at the price determined in accordance with the
provisions of paragraph 11 hereof (the "Repurchase Option").
(b) Repurchase by Company. The Company may elect to
purchase all or any portion of the Option Shares by delivery of written
notice (the "Repurchase Notice") to you or any other holder(s) of the Option
Shares within 90 days after the Termination Date. The Repurchase Notice shall
set forth the number of Option Shares to be acquired from you and such other
holder(s), the aggregate consideration to be paid for such shares and the
time and place for the closing of the transaction. The number of Option
Shares to be repurchased by the Company shall first be satisfied to the
extent possible from the Option Shares held by you at the time of delivery of
the Repurchase Notice. If the number of Option Shares then held by you is
less than the total number of Option Shares the Company has elected to
purchase, then the Company shall purchase the remaining shares elected to be
purchased from the other holder(s) thereof, pro rata according to the number
of shares held by each such holder at the time of delivery of such Repurchase
Notice.
(c) Repurchase by the Company's Designees. If for any
reason the Company does not elect to purchase all of the Option Shares
pursuant to the Repurchase Option, then the Company may designate such other
persons ("Designees") to exercise the Company's Repurchase Option in the
manner set forth in paragraph 10(b) for all or any portion of the number of
Option Shares the Company has not elected to purchase (the "Available
Shares"). As soon as practicable after the Company has determined that there
will be Available Shares, but in any event within 90 days after the
Termination Date, the Company shall deliver written notice (the "Option
Notice") to the Designees setting forth the number of Available Shares and
the price for each Available Share. Each Designee may elect to purchase any
number of Available Shares by delivering written notice to the Company within
20 days after receipt of the Option Notice from the Company. If more than one
Designee elects to purchase the Available Shares and such elections exceed
the number of Available Shares, the number of Available Shares to be
purchased by the electing Designees will be allocated among them pro rata
based upon their relative percentage ownership of Common Stock at the time of
the Option Notice. As soon as practicable, and in any event within five days
after the expiration of such 20-day period, the Company shall notify you and
any other holder(s) of Option Shares as to the number of Option Shares being
purchased from you by the Designees (the "Supplemental Repurchase Notice").
At the time the Company delivers the Supplemental Repurchase Notice to you
and such other holder(s) of Option Shares, each Designee shall also receive
written notice from the Company setting forth the number of shares it is
entitled to purchase, the aggregate purchase price and the time and place of
the closing of the transaction.
Page 12 of 25 Pages
<PAGE>
(d) Closing of Repurchase of Option Shares. The purchase of
Option Shares pursuant to this paragraph 10 will be closed at the Company's
executive offices within 20 days after the expiration of the 90-day period
referred to in paragraph 10(b). At the closing, the purchaser or purchasers
shall pay the purchase price in the manner specified in paragraph 11(b) and
you and any other holders of Option Shares being purchased shall deliver the
certificate or certificates representing such shares to the purchaser or
purchasers or their nominees, accompanied by duly executed stock powers. Any
purchaser of Option Shares under the paragraph 10 shall be entitled to
receive customary representations and warranties from you and any other
selling holder(s) of Option Shares regarding the sale of such shares
(including representations and warranties regarding good title to such
shares, free and clear of any liens or encumbrances).
(e) No Purchase Obligation. Notwithstanding any other
provision of this Agreement, you acknowledge that the Company has no
obligation to repurchase your Option Shares in any circumstances whatsoever.
The Repurchase Option is an option in favor of the Company, and not an
obligation, and shall not impose any obligation on behalf of the Company, and
that the Company has not made, and no person is authorized on behalf of the
Company to make, and any representations contrary to this Section 10(e).
10. Purchase Price for Option Shares.
(a) Purchase Price. The purchase price per share to be paid
for the Option Shares purchased by the Company pursuant to paragraph 10 shall
be equal to the Fair Market Value of such Option Shares as of the Termination
Date.
(b) Manner of Payment. If the Company elects to purchase
all or any part of the Option Shares, including Option Shares held by one or
more transferees, the Company may pay for the Shares (i) first, up to 50% of
the aggregate purchase price for the Option Shares, by delivery of a
cashier's or certified check or wire transfer of funds, to the extent such
payment would not cause the Company to violate the Business Corporation Act
of the State of Illinois and would not cause the Company to breach any
agreement to which it is a party relating to the indebtedness for borrowed
money or other material agreement, and (ii) thereafter, the balance of the
purchase price by delivery of a subordinated promissory note of the Company,
bearing interest per annum at the prime rate in effect at LaSalle National
Bank, N.A. on the date of issuance of such promissory note plus 2% (which
shall be payable annually in cash unless otherwise prohibited), shall have
all principal payment due on the second anniversary of the date of issuance
and shall be subordinated on terms and conditions satisfactory to the holders
of the Company's outstanding indebtedness for borrowed money. If any
Designees elect to purchase all or any portion of the Available Shares, such
Designee(s) shall pay the purchase price for that portion of such Option
Shares by certified or cashier's check or wire transfer of funds.
11. Securities Laws Restrictions on Transfer of Option Shares.
You represent that when you exercise your Option you will be purchasing
Option Shares for your own account and not on behalf of others. You
understand and acknowledge that federal and state securities laws govern and
restrict your right to offer, sell or otherwise dispose of any Option Shares
unless your offer, sale or other disposition thereof is registered under the
Securities Act and state securities laws, or in the opinion of the Company's
counsel, such offer, sale or other disposition is exempt from registration or
qualification thereunder. You agree that you will not offer, sell or
otherwise dispose of any Option Shares in any manner which would: (i) require
the Company to file any registration statement with the Securities and
Exchange Commission (or any similar filing under state law) or to amend or
supplement any such filing or (ii) violate or cause the Company to violate
the Securities Act, the rules and regulations promulgated thereunder or any
other state or federal law. You further understand that the certificates for
any Option Shares you purchase will bear such legends as the Company deems
necessary or desirable in connection with the Securities Act or other rules,
regulations or laws.
12. Non-Transferability of Option. Your Option is personal to
you and is not transferable by you other than to your estate by will or the
laws of descent and distribution. During your lifetime only you (or your
guardian or legal representative) may exercise your Option. In the event of
your death, your Option may be exercised only (i) by the executor or
administrator of your estate and (ii) to the extent that you were entitled
hereunder at the date of your death.
Page 13 of 25 Pages
<PAGE>
13. Additional Restrictions on Transfer.
(a) Restrictive Legend. The certificates representing
the Option Shares will bear the following legend:
"The securities represented by this certificate under
any state securities laws and may not be sold or
transferred in the absence of an effective
registration statement under the Securities Act of
1933, as amended, and applicable state securities
laws or an exemption from registration thereunder.
The securities represented by this certificate are
also subject to additional restrictions on transfer,
certain repurchase options and certain other
agreements set forth in and option agreement between
the Company and Duane Tiseth, a copy of which may be
obtained by the holder hereof at the Company's
principal place of business without charge."
(b) Opinion of Counsel. The Company may condition any
sale, transfer or disposition by you of any Option Shares (except pursuant to
an effective registration statement under the Securities Act upon your
delivery to the Company an opinion of counsel reasonably acceptable in form
and substance to the Company that registration under the Securities Act or
any applicable state securities law is not required in connection with such
transfer.
(c) Holdback. You agree not to effect any public sale
or distribution of any equity securities of the Company, or any securities
convertible into or exchangeable or exercisable for such securities, during
the seven days prior to and the 180 days after the effectiveness of any
underwritten registration of securities of the Company under the Securities
Act, except as part of such underwritten registration if otherwise permitted.
(d) Transfers in Violation of Agreement. Any transfer
or attempted transfer of the Option or Option Shares in violation of any
provision of this Agreement shall be void, and the Company shall not record
such transfer on its books or treat any purported transferee of the Option or
such Option Shares as the owner of the Option or such Option Shares for any
purpose.
14. Remedies. The parties hereto will be entitled to enforce
their rights under this Agreement specifically, to recover damages by reason
of any breach of any provision of this Agreement and to exercise all other
rights existing in their favor. The parties hereto acknowledge and agree that
money damages may not be an adequate remedy for any breach of the provisions
of this Agreement and that any party hereto may in its sole discretion, apply
to any court of law or equity of competent jurisdiction for specific
performance and/or injunctive relief (without posting bond or other security)
in order to enforce or prevent any violation of the provisions of this
Agreement.
15. Amendment. Except as otherwise provided herein, any
provision of this Agreement may be amended or waived only with the prior
written consent of you and the Company.
16. Successors and Assigns. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement by
or on behalf of any of the parties hereto will bind and inure to the benefit
of the respective successors and permitted assigns of the parties hereto
whether so expressed or not.
17. Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.
18. Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall constitute an
original, but all of which taken together shall constitute one and the same
Agreement.
Page 14 of 25 Pages
<PAGE>
19. Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
20. Governing Law. All questions concerning the construction,
validity and interpretation of this Agreement will be governed by the
internal law, and not the law of conflicts, of Georgia.
21. Notices. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally or mailed by certified or registered mail, return receipt
requested and postage prepaid, to the recipient. Such notices, demands and
other communications shall be sent to you and to the Company at the addresses
indicated below:
(a) If to the Optionee:
Duane Tiseth
17100 28th Avenue North
Plymouth, MN 55447
(b) If to the Company:
HBO & Company
301 Perimeter Center North
Atlanta, GA 30346
Attention: Secretary
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
22. Entire Agreement. This Agreement constitutes the entire
understanding between you and the Company, and supersedes all other agreements,
whether written or oral, with respect to the acquisition by you of Common Stock
of the Company.
Please execute the extra copy of this Agreement in the space below and
return it to the Company's Secretary at its executive officers to confirm your
understanding and acceptance of the agreements contained in this Agreement.
Very truly yours,
HBO & COMPANY
By: /s/ Jay P. Gilbertson
-------------------------------
Title: President, Co-COO & CFO
-----------------------------
The undersigned hereby acknowledges having read this Agreement and hereby
agrees to be bound by all provisions set forth herein.
OPTIONEE:
/s/ Duane Tiseth
------------------------------------
Page 15 of 25 Pages
<PAGE>
Exhibit 4(b)
May 26, 1998
Mr. David S. Tiseth
1400 North Lake Shore Drive
Suite 17F
Chicago, IL 60610
Re: Grant of Nonqualified Stock Option
Dear David:
This letter sets forth the terms of your nonqualified stock option (the
"Option") to purchase shares of common stock of HBO & Company (the "Company").
The Option was originally granted by Enterprise Systems, Inc. ("Enterprise
Systems") on June 26, 1997, and was assumed by the Company as a result of the
Company's acquisition of Enterprise Systems.
1. Definitions. For the purposes of this Agreement, the
following terms shall have the meanings set forth below:
"Board" shall mean the Board of Directors of the Company.
"Cause" shall mean (i) your theft or embezzlement, or attempted theft
or embezzlement, of money or property of the Company, your perpetration or
attempted perpetration of fraud, or your participation in a fraud or attempted
fraud, on the Company or your unauthorized appropriation of, or your attempt to
misappropriate, any tangible or intangible assets or property of the Company,
(ii) any act or acts of disloyalty, dishonesty, misconduct, moral turpitude, or
any other act or acts by you injurious to the interest, property, operations,
business or reputation of the Company, (iii) your conviction of a crime the
commission of which results in injury to the Company, or (iv) any material
violation of any restriction on the disclosure or use of confidential
information of the Company or on competition with the Company or any of its
businesses then conducted or planned to be conducted, in each case as determined
in the reasonable judgment of the Board.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
any successor statute.
"Common Stock" shall mean the Company's Common Stock, $.05 par value,
or, in the event that the outstanding Common Stock is hereafter changed into or
exchanged for different stock or securities of the Company, such other stock or
securities.
"Company" shall mean HBO & Company, a Delaware corporation, and any
subsidiary corporation of HBO & Company as such term is defined in Section
425(f) of the Code.
"Disability" shall mean your inability, due to illness, accident,
injury, physical or mental incapacity or other disability, to carry out
effectively your duties and obligations to the Company or to participate
effectively and actively in the management of the Company for a period of at
least 90 consecutive days or for shorter periods aggregating at least 120 days
(whether or not consecutive) during any twelve-month period, as determined in
the reasonable judgment of the Board.
Page 16 of 25 Pages
<PAGE>
"Fair Market Value" of the Common Stock shall be determined by the
Board.
"Option Shares" shall mean (i) all shares of Common Stock issued or
issuable upon the exercise of the Option and (ii) all shares of Common Stock, or
other equity securities, issued with respect to the Common Stock referred to in
clause (i) above by way of stock dividend or stock split or in connection with
any conversion, merger, consolidation or recapitalization or other
reorganization affecting the Common Stock. Option Shares will continue to be
Option Shares in the hands of any holder other than you (except for the Company
or, to the extent that you are permitted to transfer Option Shares pursuant to
paragraph 14 or 16 hereof, purchasers pursuant to a public offering under the
Securities Act), and each such transferee thereof will succeed to the rights and
obligations of a holder of Option Shares hereunder.
"Retirement" shall mean the voluntary termination of employment after
the age of 60 with no present intention of undertaking full-time employment at a
later date.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
any successor statute.
2. Option.
(a) Terms. Your Option is to purchase up to 9,432 shares of
Common Stock (the "Option Shares") at an option price per share of $34.53 (the
"Exercise Price"), payable upon exercise as set forth in paragraph 2(b) below.
Your Option will expire at the close of business on June 26, 2007 (the
"Expiration Date"), subject to earlier expiration in connection with the
termination of your employment or your death as provided in paragraph 4(b)
below. Your Option is not intended to be an "incentive stock option" within the
meaning of Section 422 of the Code.
(b) Payment of Option Price. Subject to paragraph 3 below,
your Option may be exercised in whole or in part upon payment of an amount (the
"Option Price") equal to the product of (i) the Exercise Price multiplied by
(ii) the number of Option Shares to be acquired. Payment shall be made in cash
(including check, bank draft or money order).
3. Exercisability/Vesting.
(a) Normal Vesting. In accordance with the original terms of
your Option, your Option became fully vested and exercisable upon the
acquisition of Enterprise Systems by the Company.
4. Expiration of Option.
(a) Normal Expiration. In no event shall any part of your
Option be exercisable after the Expiration Date set forth in paragraph 2(a)
above.
(b) Early Expiration Upon Termination of Employment. Any
portion of your Option that was not vested and exercisable on the date your
employment with the Company terminated (for any reason whatsoever) will expire
and be forfeited on such date, and any portion of your Option that was vested
and exercisable on the date your employment with the Company terminated (for any
reason whatsoever) will also expire and be forfeited; provided, however, that:
(i) if you die or become subject to any Disability, the portion of your Option
that is vested and exercisable will expire 90 days form the date of your death
or Disability, but in no event after the Expiration Date, (ii) if you Retire,
the portion of your Option that is vested and exercisable will expire 90 days
from the date of your Retirement, but in no event after the Expiration Date, and
(iii) if you are discharged for any reason other than for Cause, the portion of
your Option that is vested and exercisable will expire 30 days form the date of
your discharge, but in no event after the Expiration Date.
5. Procedure for Exercise. You may exercise all or any portion of your
Option, to the extent it has vested and is outstanding, at any time and from
time to time prior to its expiration, by delivering (i) written notice to the
Company (to the attention of the Company's Secretary), (ii) your written
acknowledgment that you have read and have been afforded an opportunity to ask
questions of management of the Company regarding all financial and other
information provided to you regarding the Company, together with (iii) payment
of the Option Price in accordance with the provisions of paragraph 2(b) above.
As a condition to any exercise of your Option, you will permit the Company to
Page 17 of 25 Pages
<PAGE>
deliver to your all financial and other information regarding the Company it
believes necessary to enable you to make an informed investment decision, and
you will make all customary investment representations which the Company
requires. All of the foregoing representations, warranties, covenants and
agreements shall be made in a form satisfactory to the Company and its counsel.
6. Rights of Optionee. Nothing in this Agreement shall interfere with
or limit in any way the right of the Company to terminate your employment at any
time (with or without Cause), nor confer upon you any right to continue in the
employ of the Company for any period of time or to continue your present (or any
other) rate of compensation, and in the event of your termination of employment
(including, but not limited to, your termination of employment by the Company
without Cause) any portion of your Option that was not previously vested and
exercisable will be forfeited.
7. Withholding of Taxes. The Company shall be entitled, if necessary or
desirable, to withhold from you from any amounts due and payable by the Company
to you (or secure payment from you in lieu of withholding) the amount of any
withholding or other tax due from the Company with respect to any Option Shares
issuable under this Option, and the Company may defer such issuance unless
indemnified by you to its satisfaction.
8. Adjustments. In the event of a reorganization, recapitalization,
stock dividend or stock split, or combination or other change in the shares of
Common Stock, the Board shall, in order to prevent the dilution or enlargement
of rights under your Option, make such adjustments in the number and type of
shares covered by your Option and the Exercise Price specified herein as may be
determined to be appropriate and equitable.
9. Right to Purchase Option Shares Upon Your Termination of Employment.
(a) Repurchase of Option Shares. If your employment with the
Company shall terminate for any reason whatsoever, including your death,
Disability, resignation or termination (the date on which such termination
occurs being referred to as the "Termination Date"), then the Company shall have
the option to repurchase all or any part of the Option Shares issued or issuable
upon exercise of your Option, whether held by you or by one or more of your
transferees, at the price determined in accordance with the provisions of
paragraph 11 hereof (the "Repurchase Option").
(b) Repurchase by Company. The Company may elect to purchase
all or any portion of the Option Shares by delivery of written notice (the
"Repurchase Notice") to you or any other holder(s) of the Option Shares within
90 days after the Termination Date. The Repurchase Notice shall set forth the
number of Option Shares to be acquired from you and such other holder(s), the
aggregate consideration to be paid for such shares and the time and place for
the closing of the transaction. The number of Option Shares to be repurchased by
the Company shall first be satisfied to the extent possible from the Option
Shares held by you at the time of delivery of the Repurchase Notice. If the
number of Option Shares then held by you is less than the total number of Option
Shares the Company has elected to purchase, then the Company shall purchase the
remaining shares elected to be purchased from the other holder(s) thereof, pro
rata according to the number of shares held by each such holder at the time of
delivery of such Repurchase Notice.
(c) Repurchase by the Company's Designees. If for any reason
the Company does not elect to purchase all of the Option Shares pursuant to the
Repurchase Option, then the Company may designate such other persons
("Designees") to exercise the Company's Repurchase Option in the manner set
forth in paragraph 10(b) for all or any portion of the number of Option Shares
the Company has not elected to purchase (the "Available Shares"). As soon as
practicable after the Company has determined that there will be Available
Shares, but in any event within 90 days after the Termination Date, the Company
shall deliver written notice (the "Option Notice") to the Designees setting
forth the number of Available Shares and the price for each Available Share.
Each Designee may elect to purchase any number of Available Shares by delivering
written notice to the Company within 20 days after receipt of the Option Notice
from the Company. If more than one Designee elects to purchase the Available
Shares and such elections exceed the number of Available Shares, the number of
Available Shares to be purchased by the electing Designees will be allocated
among them pro rata based upon their relative percentage ownership of Common
Stock at the time of the Option Notice. As soon as practicable, and in any event
within five days after the expiration of such 20-day period, the Company shall
notify you and any other holder(s) of Option Shares as to the number of Option
Shares being purchased from you by the Designees (the "Supplemental Repurchase
Notice"). At the time the Company delivers the Supplemental Repurchase Notice to
you and such other holder(s) of Option Shares, each Designee shall also receive
Page 18 of 25 Pages
<PAGE>
written notice from the Company setting forth the number of shares it is
entitled to purchase, the aggregate purchase price and the time and place of the
closing of the transaction.
(d) Closing of Repurchase of Option Shares. The purchase of
Option Shares pursuant to this paragraph 10 will be closed at the Company's
executive offices within 20 days after the expiration of the 90-day period
referred to in paragraph 10(b). At the closing, the purchaser or purchasers
shall pay the purchase price in the manner specified in paragraph 11(b) and you
and any other holders of Option Shares being purchased shall deliver the
certificate or certificates representing such shares to the purchaser or
purchasers or their nominees, accompanied by duly executed stock powers. Any
purchaser of Option Shares under the paragraph 10 shall be entitled to receive
customary representations and warranties from you and any other selling
holder(s) of Option Shares regarding the sale of such shares (including
representations and warranties regarding good title to such shares, free and
clear of any liens or encumbrances).
(e) No Purchase Obligation. Notwithstanding any other
provision of this Agreement, you acknowledge that the Company has no obligation
to repurchase your Option Shares in any circumstances whatsoever. The Repurchase
Option is an option in favor of the Company, and not an obligation, and shall
not impose any obligation on behalf of the Company, and that the Company has not
made, and no person is authorized on behalf of the Company to make, and any
representations contrary to this Section 10(e).
10. Purchase Price for Option Shares.
(a) Purchase Price. The purchase price per share to be paid
for the Option Shares purchased by the Company pursuant to paragraph 10 shall be
equal to the Fair Market Value of such Option Shares as of the Termination Date.
(b) Manner of Payment. If the Company elects to purchase all
or any part of the Option Shares, including Option Shares held by one or more
transferees, the Company may pay for the Shares (i) first, up to 50% of the
aggregate purchase price for the Option Shares, by delivery of a cashier's or
certified check or wire transfer of funds, to the extent such payment would not
cause the Company to violate the Business Corporation Act of the State of
Illinois and would not cause the Company to breach any agreement to which it is
a party relating to the indebtedness for borrowed money or other material
agreement, and (ii) thereafter, the balance of the purchase price by delivery of
a subordinated promissory note of the Company, bearing interest per annum at the
prime rate in effect at LaSalle National Bank, N.A. on the date of issuance of
such promissory note plus 2% (which shall be payable annually in cash unless
otherwise prohibited), shall have all principal payment due on the second
anniversary of the date of issuance and shall be subordinated on terms and
conditions satisfactory to the holders of the Company's outstanding indebtedness
for borrowed money. If any Designees elect to purchase all or any portion of the
Available Shares, such Designee(s) shall pay the purchase price for that portion
of such Option Shares by certified or cashier's check or wire transfer of funds.
11. Securities Laws Restrictions on Transfer of Option Shares. You
represent that when you exercise your Option you will be purchasing Option
Shares for your own account and not on behalf of others. You understand and
acknowledge that federal and state securities laws govern and restrict your
right to offer, sell or otherwise dispose of any Option Shares unless your
offer, sale or other disposition thereof is registered under the Securities Act
and state securities laws, or in the opinion of the Company's counsel, such
offer, sale or other disposition is exempt from registration or qualification
thereunder. You agree that you will not offer, sell or otherwise dispose of any
Option Shares in any manner which would: (i) require the Company to file any
registration statement with the Securities and Exchange Commission (or any
similar filing under state law) or to amend or supplement any such filing or
(ii) violate or cause the Company to violate the Securities Act, the rules and
regulations promulgated thereunder or any other state or federal law. You
further understand that the certificates for any Option Shares you purchase will
bear such legends as the Company deems necessary or desirable in connection with
the Securities Act or other rules, regulations or laws.
12. Non-Transferability of Option. Your Option is personal to you and
is not transferable by you other than to your estate by will or the laws of
descent and distribution. During your lifetime only you (or your guardian or
legal representative) may exercise your Option. In the event of your death, your
Option may be exercised only (i) by the executor or administrator of your estate
and (ii) to the extent that you were entitled hereunder at the date of your
death.
Page 19 of 25 Pages
<PAGE>
13. Additional Restrictions on Transfer.
(a) Restrictive Legend. The certificates representing
the Option Shares will bear the following legend:
"The securities represented by this certificate under
any state securities laws and may not be sold or
transferred in the absence of an effective
registration statement under the Securities Act of
1933, as amended, and applicable state securities
laws or an exemption from registration thereunder.
The securities represented by this certificate are
also subject to additional restrictions on transfer,
certain repurchase options and certain other
agreements set forth in and option agreement between
the Company and David S. Tiseth, a copy of which may
be obtained by the holder hereof at the Company's
principal place of business without charge."
(b) Opinion of Counsel. The Company may condition any sale,
transfer or disposition by you of any Option Shares (except pursuant to an
effective registration statement under the Securities Act upon your delivery to
the Company an opinion of counsel reasonably acceptable in form and substance to
the Company that registration under the Securities Act or any applicable state
securities law is not required in connection with such transfer.
(c) Holdback. You agree not to effect any public sale or
distribution of any equity securities of the Company, or any securities
convertible into or exchangeable or exercisable for such securities, during the
seven days prior to and the 180 days after the effectiveness of any underwritten
registration of securities of the Company under the Securities Act, except as
part of such underwritten registration if otherwise permitted.
(d) Transfers in Violation of Agreement. Any transfer or
attempted transfer of the Option or Option Shares in violation of any provision
of this Agreement shall be void, and the Company shall not record such transfer
on its books or treat any purported transferee of the Option or such Option
Shares as the owner of the Option or such Option Shares for any purpose.
14. Remedies. The parties hereto will be entitled to enforce their
rights under this Agreement specifically, to recover damages by reason of any
breach of any provision of this Agreement and to exercise all other rights
existing in their favor. The parties hereto acknowledge and agree that money
damages may not be an adequate remedy for any breach of the provisions of this
Agreement and that any party hereto may in its sole discretion, apply to any
court of law or equity of competent jurisdiction for specific performance and/or
injunctive relief (without posting bond or other security) in order to enforce
or prevent any violation of the provisions of this Agreement.
15. Amendment. Except as otherwise provided herein, any provision of
this Agreement may be amended or waived only with the prior written consent of
you and the Company.
16. Successors and Assigns. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto will bind and inure to the benefit of the
respective successors and permitted assigns of the parties hereto whether so
expressed or not.
17. Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.
18. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall constitute an original, but all of
which taken together shall constitute one and the same Agreement.
Page 20 of 25 Pages
<PAGE>
19. Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
20. Governing Law. All questions concerning the construction, validity
and interpretation of this Agreement will be governed by the internal law, and
not the law of conflicts, of Georgia.
21. Notices. All notices, demands or other communications to be given
or delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally or
mailed by certified or registered mail, return receipt requested and postage
prepaid, to the recipient. Such notices, demands and other communications shall
be sent to you and to the Company at the addresses indicated below:
(a) If to the Optionee:
Mr. David S. Tiseth
1400 North Lake Shore Drive
Suite 17F
Chicago, IL 60610
(b) If to the Company:
HBO & Company
301 Perimeter Center North
Atlanta, GA 30346
Attention: Secretary
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
22. Entire Agreement. This Agreement constitutes the entire
understanding between you and the Company, and supersedes all other agreements,
whether written or oral, with respect to the acquisition by you of Common Stock
of the Company.
Page 21 of 25 Pages
<PAGE>
Please execute the extra copy of this Agreement in the space below and return it
to the Company's Secretary at its executive officers to confirm your
understanding and acceptance of the agreements contained in this Agreement.
Very truly yours,
HBO & COMPANY
By: /s/ Jay P. Gilbertson
--------------------------------------
Title: President, Co-COO & CFO
-----------------------------------
The undersigned hereby acknowledges having read this Agreement and hereby agrees
to be bound by all provisions set forth herein.
OPTIONEE:
/s/ David S. Tiseth
-----------------------------------------
Page 22 of 25 Pages
<PAGE>
JONES, DAY, REAVIS & POGUE
3500 SunTrust Plaza
303 Peachtree Street, N.E.
Atlanta, Georgia 30308
Exhibit 5
June 8, 1998
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 45,788 shares of Common
Stock, $.05 par value per share, of the Company (the "Shares"), to be issued
by the Company in accordance with that certain Non-Qualified Stock Option
Agreement dated May 26, 1998 by and between the Company and Duane Tiseth and
that certain Non-Qualified Stock Option Agreement dated May 26, 1998 by and
between the Company and David S. Tiseth 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
Registration Statement, 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 23 of 25 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 Annual Report on Form 10-K for the fiscal year
ended December 31, 1997 and its Form 10-Q for the quarter ended March 31,
1998 which includes our report dated May 6, 1998, 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
June 10, 1998
Page 24 of 25 Pages
<PAGE>
Exhibit 23(b)
Arthur Andersen LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-8 of our reports dated
February 6, 1998 included or incorporated by reference in HBO & Company's
Form 10-K for the year ended December 31, 1997.
Arthur Andersen LLP
Atlanta, Georgia
June 10, 1998
Page 25 of 25 Pages
