<PAGE>
As filed with the Securities and Exchange Commission on October 29, 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)
--------------------
IMNET Systems, Inc. 1993 Employee
Stock Option and Rights Plan
IMNET Systems, Inc.
Key Employee Stock Options
(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 9
Page 1 of 27 Pages
<PAGE>
Calculation of Registration Fee
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Proposed maxi- Proposed maxi-
Title of securities to Amount to be mum offering price mum aggregate Amount of
be registered registered per share offering price registration fee
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.01 par value, and 1,612,962 $ 16.2128(1) $26,150,630.31(1) $7,269.88(2)
Preferred Share
Purchase Rights(3) shares
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
</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 upon
the actual weighted average exercise price.
(2) The registration fee of $7,269.88 is calculated by multiplying the
product of $16.2128, the weighted average exercise price per share, and
1,612,962, the number of shares subjected to option, by .000278.
(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 27 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 27 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,
Page 4 of 27 Pages
<PAGE>
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.
Item 7. Exemption from Registration Claimed.
Inapplicable.
Page 5 of 27 Pages
<PAGE>
Item 8. Exhibits.
Exhibit
Number Description
- -------- -----------
Included in Part II of the Registration Statement:
4(a) IMNET Systems, Inc. 1993 Employee Stock Option and Rights Plan
4(b) Form of IMNET Systems, Inc. Key Employee Stock Option Agreement
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 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 27 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 October, 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 October 29, 1998
- ---------------------- Officer (Principal Executive Officer)
Charles W. McCall
/s/ Jay P. Gilbertson President, Co-Chief Operating Officer, October 29, 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 October 29, 1998
- -------------------------
Alfred C. Eckert III
/s/ Philip A. Incarnati Director October 29, 1998
- ------------------------
Philip A. Incarnati
</TABLE>
Page 7 of 27 Pages
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Alton F. Irby III Director October 29, 1998
- ----------------------
Alton F. Irby III
/s/ M. Christine Jacobs Director October 29, 1998
- ------------------------
M. Christine Jacobs
/s/ Gerald E. Mayo Director October 29, 1998
- ----------------------
Gerald E. Mayo
/s/ James V. Napier Director October 29, 1998
- ----------------------
James V. Napier
/s/ Donald C. Wegmiller Director October 29, 1998
- ------------------------
Donald C. Wegmiller
</TABLE>
Page 8 of 27 Pages
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit Page
Number Description Number
- ------ ----------- ------
<S> <C> <C>
Included in Part II of the Registration Statement:
4(a) IMNET Systems, Inc. 1993 Employee Stock Option and Rights Plan
4(b) Form of IMNET Systems, Inc. Key Employee Stock Option Agreement
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 27 Pages
<PAGE>
Exhibit 4(a)
IMNET SYSTEMS, INC.
EMPLOYEE STOCK OPTION AND RIGHTS PLAN
SECTION 1. Purpose; Definitions.
The purpose of the IMNET Systems, Inc. 1993 Employee Stock Option and
Rights Plan (the "Plan") is to enable IMNET Systems, Inc. (the "Company") to
attract, retain and reward directors, employees, and key advisors to the Company
and its Subsidiaries and Affiliates, and strengthen the mutuality of interests
between such persons and the Company's shareholders, by offering them
performance-based stock incentives and/or other equity interests or equity-based
incentives in the Company, as well as performance-based incentives payable in
cash.
For purposes of the Plan, the following terms shall be defined as set
forth below:
a. "Affiliate" means any entity other than the Company and its
Subsidiaries that is designated by the Board as a participating
employer under the Plan, provided that the Company directly or
indirectly owns at least 20% of the combined voting power of all
classes of stock of such entity or more than 50% of the ownership
interests in such entity.
b. "Board" means the Board of Directors of the Company.
c. "Book Value" means, at any given date, (i) the
Stockholders' Equity in the Company as of the end of the immediately
preceding fiscal year as reflected in the Company's consolidated
balance sheet, subject to such adjustments as the Committee shall
specify at or after grant, divided by (ii) the number of shares of
"Outstanding Stock" as of such year-end date (as adjusted by the
Committee for subsequent events).
d. "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.
e. "Committee" means the Committee referred to in Section 2 of
the Plan. If at any time no Committee shall be in office, then the
functions of the Committee specified in the Plan may be exercised by
the Board, as set forth in Section 2 hereof.
f. "Company" means IMNET Systems, Inc., a corporation
organized under the laws of the State of Delaware, or any successor
corporation.
g. "Disability" means disability as determined under
procedures established by the Committee for purposes of this Plan and
shall in all events be consistent with the definition of disability
provided in Section 422 of the Code (or any successor provision).
(Section 422 of the Code sets forth the requirements for a stock option
to qualify as an incentive stock option under the Internal Revenue Code
of 1986, as amended, see "Incentive Stock Option" below.)
h. "Disinterested Person" shall have the meaning set forth in
Rule 16b-3 as promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934 (the "Exchange Act"), or any
successor definition adopted by the Commission. To be a "Disinterested
Person" pursuant to such rule, as of the date hereof, a director may
not, during the one-year period prior to service or during such
service, be granted or awarded equity securities of the Company
pursuant to the plan or any other plan of the Company (subject to
certain exceptions). (Note: Section 16 of the Securities Exchange Act
of 1934 is the "short-swing profits" provision of the federal
securities laws. Briefly, it provides that purchases and sales (or
sales and purchases) of a publicly held security, made within six
months, by
Page 10 of 27 Pages
<PAGE>
certain specified persons, such as officers, directors and ten percent
shareholders, are subject to review. If the purchase price was less
than the sale price, this "short-swing profit" must be paid over to the
Company. Rule 16b-3 provides that certain employee benefit plans
meeting specific conditions receive favorable treatment under the
short-swing profits rules. One of the conditions is that plans such as
this be administered by "disinterested persons".)
i. "Early Retirement" means retirement, with the express
written consent for purposes of this Plan of the Company at or before
the time of such retirement, from active employment with the Company
and any Subsidiary or Affiliate pursuant to the early retirement
provisions of the applicable pension plan of such entity.
j. "Fair Market Value" means, as of any given date, unless
otherwise determined by the Committee in good faith:
(i) if the Stock is listed on an established stock
exchange or exchanges, or traded on the NASDAQ National Market
System ("NASDAQ/NMS") the highest closing price of the Stock
as listed thereon on the applicable day, or if no sale of
Stock has been made on any exchange or on NASDAQ/NMS on that
date, on the next preceding day on which there was a sale of
Stock;
(ii) if the Stock is not listed on an established
stock exchange or NASDAQ/NMS but is instead traded
over-the-counter, the mean of the dealer "bid" and "ask"
prices of the Stock in the over-the-counter market on the
applicable day, as reported by the National Association of
Securities Dealers, Inc.;
(iii) if the Stock is not listed on any exchange or
traded over-the-counter, the value determined in good faith by
the Committee.
k. "Incentive Stock Option" means any Stock Option intended to
be and designated as an "Incentive Stock Option" within the meaning of
Section 422 of the Code (or any successor provision). (NOTE: Generally
an Incentive Stock Option which meets the requirements of Section 422
of the Code receives certain tax benefits. The grant of the option does
not result in the recognition of taxable income by the employee, as of
the date of the adoption of this Plan. Similarly, the employee does not
recognize income on the exercise of Incentive Stock Option, as of the
date of the adoption of this Plan. After a specified holding period,
the employee recognizes as capital gain, rather than compensation
income, the difference between the amount received at sale and the
employee's basis in the optioned stock -- generally the option exercise
price.)
l. "Non-Qualified Stock Option" means any Stock Option that is
not an Incentive Stock Option.
m. "Normal Retirement" means retirement from active employment
with the Company and any Subsidiary or Affiliate on or after age 65.
n. "Other Stock-Based Award" means an award under Section 7
below that is valued in whole or in part by reference to, or is
otherwise based on, Stock.
o. "Outstanding Stock" shall include all shares of Common
Stock, $.01 par value, of the Company as well as the number of shares
of Common Stock into which then outstanding shares of capital stock of
the Company, of whatever class, are convertible as of the year-end
immediately preceding the date of calculation thereof (as adjusted by
the Committee for certain events).
Page 11 of 27 Pages
<PAGE>
p. "Plan" means this IMNET Systems, Inc. 1993 Employee Stock
Option and Rights Plan, as hereinafter amended from time to time.
q. "Retirement" means Normal or Early Retirement.
r. "Stock" means the Common Stock, $.01 par value per share,
of the Company.
s. "Stock Appreciation Right" means the right pursuant to an
award granted under Section 6 below to surrender to the Company all (or
a portion) of a Stock Option in exchange for an amount computed
pursuant to Section 6(b)(ii).
t. "Stock Option" or "Option" means any option to purchase
shares of Stock granted pursuant to Section 5 below.
u. "Subsidiary" means any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company if each
of the corporations (other than the last corporation in the unbroken
chain) owns stock possessing 100% or more of the total combined voting
power of all classes of stock in one of the other corporations in the
chain.
In addition, the term "Cause" shall have the meaning set forth in
Section 5(i) below.
SECTION 2. Administration.
The Plan shall be administered by a Committee of not less than two
persons, who need not be Disinterested Persons unless the Company's securities
are registered under the Exchange Act, who shall be members of the Board and who
shall serve at the pleasure of the Board. The functions of the Committee
specified in the Plan may be exercised by the Board, if and to the extent that
no Committee exists which has the authority to so administer the Plan and if a
resolution to such effect is adopted by the Board after due consideration of the
impact of such resolution upon the status of the Plan under Rule 16b-3
promulgated pursuant to the Exchange Act.
The Committee shall have full authority to grant, pursuant to the terms
of the Plan, to directors, officers and other employees eligible under Section
4: (i) Stock Options, (ii) Stock Appreciation Rights and/or (iii) Other
Stock-Based Awards.
In particular, the Committee shall have the authority:
(i) subject to Section 4 hereof, to select the
directors, officers and other employees of the Company or its
Subsidiaries and Affiliates, or other eligible persons, to
whom Stock Options, Stock Appreciation Rights and/or Other
Stock-Based Awards may from time to time be granted hereunder;
(ii) to determine whether and to what extent
Incentive Stock Options, Non-Qualified Stock Options, Stock
Appreciation Rights and/or Other Stock-Based Awards, or any
combination thereof, are to be granted hereunder to one or
more eligible employees;
(iii) to determine the number of shares to be covered
by each such award granted hereunder;
(iv) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted
hereunder (including, but not limited to, the share price and
any restriction or limitation, or any vesting acceleration or
waiver of forfeiture restrictions regarding
Page 12 of 27 Pages
<PAGE>
any Stock Option or other award and/or the shares of Stock
relating thereto, based in each case on such factors as the
Committee shall determine, in its sole discretion);
(v) to determine whether and under what circumstances
a Stock Option may be settled in cash;
(vi) to determine whether, to what extent and under
what circumstances Option grants and/or other awards under the
Plan and/or other cash awards made by the Company are to be
made, and operate, on a tandem basis vis-a-vis other awards
under the Plan and/or cash awards made outside of the Plan, or
on an additive basis;
(vii) to determine whether, to what extent and under
what circumstances Stock and other amounts payable with
respect to an award under this Plan shall be deferred either
automatically or at the election of the participant (including
providing for and determining the amount (if any) of any
deemed earnings on any deferred amount during any deferral
period).
The Committee shall have the authority to adopt, alter and repeal such
rules, guidelines and practices governing the Plan as it shall, from time to
time, deem advisable; to interpret the terms and provisions of the Plan and any
award issued under the Plan (and any agreements relating thereto); and to
otherwise supervise the administration of the Plan.
All decisions made by the Committee pursuant to the provisions of the
Plan shall be made in the Committee's sole discretion and shall be final and
binding on all persons, including the Company and Plan participants.
SECTION 3. Stock Subject to Plan.
The total number of shares of Stock reserved and available for
distribution under the Plan shall be 146,563 shares. Such shares may consist, in
whole or in part, of authorized and unissued shares or treasury shares.
Subject to section 6(b)(iv) below, if any shares of Stock that have
been optioned hereunder cease to be subject to a Stock Option, or if any such
shares of Stock that are subject to any Other Stock-Based Award granted
hereunder are forfeited or any such award otherwise terminates without a payment
being made to the participant in the form of Stock, such shares shall again be
available for distribution in connection with future awards under the Plan.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividends, stock split or other changes in corporate
structure affecting the Stock, and subject to Sections 5(k) and 5(m), such
substitution or adjustment shall be made in the aggregate number of shares
reserved for issuance under the Plan, in the number and option price of shares
subject to outstanding Options granted under the Plan and in the number of
shares subject to other outstanding awards granted under the Plan as may be
determined to be appropriate by the Committee, in its sole discretion, provided
that the number of shares subject to any award shall always be a whole number.
Such adjusted option price shall be used to determine the amount payable by the
Company upon the exercise of any Stock Appreciation Right associated with any
Stock Option.
SECTION 4. Eligibility.
Directors, officers and other employees of the Company or its
Subsidiaries and Affiliates (but excluding members of the Committee and, as to
incentive stock options, any person who serves only as a director) who are
responsible for or contribute to the management, growth and/or profitability of
the business of the Company and/or its Subsidiaries and Affiliates are eligible
to be granted awards under the Plan. In addition, the Committee may
Page 13 of 27 Pages
<PAGE>
grant awards, other than Incentive Stock Options, to its consultants or advisors
who have provided bona fide services to the Company in connection with matters
other than the offer and sale or securities in a capital-raising transaction.
SECTION 5. Stock Options.
Stock Options may be granted alone, in addition to or in tandem with
other awards granted under the Plan and/or cash awards made outside of the Plan.
Any Stock Option granted under the Plan shall be in such form as the Committee
may from time to time approve.
Stock Options granted under the Plan may be of two types: (i) Incentive
Stock Options, and (ii) Non-Qualified Stock Options.
Subject to the restrictions contained in Section 4 hereof concerning
the grant of Incentive Stock Options, the Committee shall have the authority to
grant to any optionee Incentive Stock Options, Non-Qualified Stock Options, or
both types of Stock Options (in each case with or without Stock Appreciation
Rights).
Options granted under the Plan shall be subject to the following terms
and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:
(a) Option Price. The option price per share of Stock
purchasable under a Stock Option shall be determined by the Committee
at the time of grant but shall be (i) not less than 100% (or, in the
case of an employee who owns stock possessing more than 10 percent of
the total combined voting power of all classes of capital stock of the
Company or of any of its subsidiary or parent corporations, not less
than 110%) of the Fair Market Value of the Stock at grant, in the case
of Incentive Stock Options, and (ii) not less than 90% of the Fair
Market Value of the Stock at grant, in the case of Non-Qualified Stock
Options.
(b) Option Term. The term of each Stock Option shall be fixed
by the Committee, but no Stock Option shall be exercised more than ten
years (or, in the case of an employee who owns stock possessing more
than 10 percent of the total combined voting power of all classes of
stock of the Company or any of its subsidiary or parent corporations,
more than five years) after the date the Option is granted.
(c) Exercisability. Stock Options shall be exercised at such
time or times and subject to such terms and conditions as shall be
determined by the Committee at or after grant; provided, however, that,
except as provided in Section 5(f), 5(g), or 5(k) unless otherwise
determined by the Committee at or after grant, no Stock Option shall be
exercisable prior to the first anniversary date of the granting of the
Option. If the Committee provides, in its sole discretion, that any
Stock Option is exercisable only in installments, the Committee may
waive such installment exercise provisions at any time at or after
grant in whole or in part, based on such factors as the Committee shall
determine, in its sole discretion.
(d) Method of Exercise. Subject to whatever installment
exercise provisions apply under Section 5(c), Stock Options may be
exercised in whole or in part at any time during the option period, by
giving written notice of exercise to the Company specifying the number
of shares to be purchased.
Such notice shall be accompanied by payment in full of the
purchase price, either by check, note or such other instrument as the
Committee may accept. As determined by the Committee, in its sole
discretion, at or after grant, payment in full or in part may also be
made in the form of unrestricted Stock already owned by the optionee
based, in each case, on the Fair Market Value of the Stock on the date
the option is exercised.
Page 14 of 27 Pages
<PAGE>
No shares of Stock shall be issued until full payment therefor
has been made. An optionee shall generally have the rights to dividends
or other rights of a shareholder with respect to shares subject to the
Option when the optionee has given written notice of exercise, has paid
in full for such shares, and, if requested, has given the
representation described in Section 10(a).
(e) Non-Transferability of Options. No Stock Option shall be
transferable by the optionee otherwise than by will or by the laws of
descent and distribution or pursuant to a qualified domestic relations
order as defined by the Internal Revenue Code of 1986, as amended 26
U.S.C. ss. 1 et. seq. or Title I of the Employee Retirement Income
Security Act, or the rules thereunder, and all Stock Options shall be
exercisable, during the optionee's lifetime, only by the optionee.
(f) Termination by Death. Subject to Section 5(k), if an
optionee's employment by the Company and any Subsidiary or Affiliate
terminates by reason of death any Stock Option held by such optionee
may thereafter be exercised to the extent such option was exercisable
at the time of death or on such accelerated basis as the Committee may
determine at or after grant (or as may be determined in accordance with
procedures established by the Committee), by the legal representative
of the estate or by the legatee of the optionee under the will of the
optionee, for a period of one year (or such other period as the
Committee may specify at grant) from the date of such death or until
the expiration of the stated term of such Stock Option, whichever
period is the shorter.
(g) Termination by Reason of Disability. Subject to Section
5(k), if an optionee's employment by the Company and any Subsidiary or
Affiliate terminates by reason of Disability, any Stock Option held by
such optionee may thereafter be exercised by the optionee, to the
extent it was exercisable at the time of termination or on such
accelerated basis as the Committee may determine at or after grant (or
as may be determined in accordance with procedures established by the
Committee), for a period of three years (or such other period as the
Committee may specify at grant) from the date of such termination of
employment or until the expiration of the stated term of such Stock
Option, whichever period is the shorter; provided, however, that, if
the optionee dies within such three-year period (or such other period
as the Committee shall specify at grant), any unexercised Stock Option
held by such optionee shall thereafter be exercisable pursuant to
Section 5(f). In the event of termination of employment by Disability,
if a Stock Option heretofore designated as an Incentive Stock Option is
exercised more than one (1) year after such termination of employment,
such Stock Option shall be treated as a Non-Qualified Stock Option.
(h) Termination by Reason of Retirement. Subject to Section
5(k), if an optionee's employment by the Company and any Subsidiary or
Affiliate terminates by reason of Normal or Early Retirement, any Stock
Option held by such optionee may be exercised by the optionee, to the
extent it was exercisable at the time of such Retirement or on such
accelerated basis as the Committee may determine at or after grant (or
as may be determined in accordance with procedures established by the
Committee), for a period of three years (or such other period as the
Committee may specify at grant) from the date of such termination or
the expiration of the stated term of such Stock Option, whichever
period is the shorter; provided, however, that if the optionee dies
within such three-year period (or such other period as the Committee
may specify at grant), any unexercised Option held by such optionee
shall thereafter be exercisable pursuant to Section 5(f). In the event
of termination of employment by Retirement, if a Stock Option
theretofore designated as an Incentive Stock Option is exercised more
than three (3) months after such termination of employment, such Stock
Option shall be treated as a Non-Qualified Stock Option.
(i) Other Termination. Unless otherwise determined by the
Committee (or pursuant to procedures established by the Committee) at
or after grant, if an Employee's employment by the Company and any
Subsidiary or Affiliate terminates:
(i) due to voluntary resignation of employment by the
Optionee, the Stock Option shall thereupon terminate;
Page 15 of 27 Pages
<PAGE>
(ii) due to death, Disability, Normal or Early
Retirement, then the provisions of Sections 5(f), 5(g), 5( h),
as appropriate, shall apply;
(iii) due to involuntary termination of the
Optionee's employment by the Company, any Subsidiary or
Affiliate without "Cause", the Stock Option shall thereupon
terminate, except that the Stock Option may be exercised, to
the extent otherwise then exercisable, for the lesser of three
months or the balance of such Stock Option's term;
(iv) for any other reason, including termination of
the Optionee's employment for Cause, the Stock Option shall
thereupon terminate.
For purposes of this Plan, "Cause" means a felony conviction of a
participant or the failure of a participant to contest prosecution for
a felony, or a participant's willful misconduct or dishonesty, or other
unauthorized activity any of which, in the good faith opinion of the
Committee, is directly and materially harmful to the business or
reputation of the Company or any Subsidiary or Affiliate.
(j) Buyout Provisions. The Committee may at any time offer to
buy out for a payment in cash or Stock an option previously granted,
based on such terms and conditions as the Committee shall establish and
communicate to the optionee at the time that such offer is made.
(k) Certain Recapitalizations. In general, if the Company is
merged into or consolidated with another corporation under
circumstances in which the Company is not the surviving corporation, or
if the Company is liquidated, or sells or otherwise disposes of
substantially all of its assets to another corporation (any such
merger, consolidation, etc., being hereinafter referred to as a
"Non-Acquiring Transaction") while unexercised options are outstanding
under the Plan, after the effective date of a Non-Acquiring Transaction
each holder of an outstanding option shall be entitled, upon exercise
of such option, to receive such stock or other securities as the
holders of the same class of stock as those shares subject to the
option shall be entitled to receive in such Non-Acquiring Transaction
based upon the agreed upon conversion ratio or per share distribution.
However, in the discretion of the Board of Directors, any limitations
on exercisability of options may be waived so that all options, from
and after a date prior to the effective date of such Non-Acquiring
Transaction shall be exercisable in full. Furthermore, in the
discretion of the Committee, the right to exercise may be given to each
holder of an option during a 30-day period preceding the effective date
of such Non-Acquiring Transaction. Any outstanding options not
exercised within such 30-day period may be canceled by the Committee as
of the effective date of any such Non-Acquiring Transaction. To the
extent that the foregoing adjustments relate to stock or securities of
the Company, such adjustments shall be made by the Committee, whose
determination in that respect shall be final, binding and conclusive.
(l) Subdivision or Consolidation. Except as set forth in this
Plan, optionees shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class or the payment of any
stock dividend or any other increase of decrease in the number of
shares of stock of any class or by reason of any dissolution,
liquidation, merger, or consolidation or spinoff of stock of another
corporation, and no issue by the Company of shares of stock of any
class shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares subject to the option.
The grant of any option pursuant to the Plan shall not affect in any
way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or
business structure or to merge or to consolidate or to dissolve,
liquidate or sell, or to transfer all or any part of its business or
assets.
(m) Fractional Shares. If any adjustment referred to herein
shall result in a fractional share for any optionee under any option
hereunder, such fraction shall be completely disregarded and the
optionee shall only be entitled to the whole number of shares resulting
from such adjustment.
Page 16 of 27 Pages
<PAGE>
SECTION 6. Stock Appreciation Rights.
(a) Grant and Exercise. Stock Appreciation Rights may be
granted in conjunction with all or part of any Stock Option granted
under the Plan. In the case of a Non-Qualified Stock Option, such
rights may be granted either at or after the time of the grant of such
Stock Option. In the case of an Incentive Stock Option, such rights may
be granted only at the time of the grant of such Stock Option.
A Stock Appreciation Right or applicable portion thereof
granted with respect to a given Stock Option shall terminate and no
longer be exercisable upon the termination or exercise of the related
Stock Option, subject to such provisions as the Committee may specify
at grant where a Stock Appreciation Right is granted with respect to
less than the full number of shares covered by a related Stock Option.
A Stock Appreciation Right may be exercised by an optionee,
subject to Section 6(b), in accordance with the procedures established
by the Committee for such purpose. Upon such exercise, the optionee
shall be entitled to receive an amount determined in the manner
prescribed in Section 6(b). Stock Options relating to exercised Stock
Appreciation Rights shall no longer be exercisable to the extent that
the related Stock Appreciation Rights have been exercised.
(b) Terms and Conditions. Stock Appreciation Rights shall be
subject to such terms and conditions, not inconsistent with the
provisions of the Plan, as shall be determined from time to time by the
Committee, including the following:
(i) Stock Appreciation Rights shall be exercisable
only at such time or times and to the extent that the Stock
Options to which they relate shall be exercisable in
accordance with the provisions of Section 5 and this Section 6
wherever the market value of a share of Stock exceeds the
option price per share specified in the related Stock Option;
provided, however, that any Stock Appreciation Right granted
to an optionee subject to Section 16(b) of the Exchange Act
subsequent to the grant of the related Stock Option shall not
be exercisable during the first six months of its term, except
that this special limitation shall not apply in the event of
death or Disability of the optionee prior to the expiration of
the six-month period. The exercise of Stock Appreciation
Rights held by optionees who are subject to Section 16(b) of
the Exchange Act shall comply with Rule 16b-3(e)(3)
thereunder, or any successor provision, to the extent
applicable.
(ii) Upon the exercise of a Stock Appreciation Right,
an optionee shall be entitled to receive an amount in cash
and/or shares of Stock equal in value to the excess of Fair
Market Value of one share of Stock over the option price per
share specified in the related Stock Option multiplied by the
number of shares in respect of which the Stock Appreciation
Right shall have been exercised, with the Committee having the
right to determine the form of payment. When made in shares,
the number of shares to be paid shall be calculated on the
basis of the Fair Market Value on the date of exercise. [When
payment is to be made in cash, such amount shall be calculated
on the basis of the Fair Market Value during the applicable
period referred to in Rule 16b-3(e) under the Exchange Act.]
(iii) A Stock Appreciation Right shall be
transferable only when and to the extent that the underlying
Stock Option would be transferable under Section 5(e) of the
Plan.
(iv) Upon the exercise of a Stock Appreciation Right,
the Stock Option or part thereof to which such Stock
Appreciation Right is related shall be deemed to have been
exercised for the purpose of the limitation set forth in
Section 3 of the Plan on the number of shares of Stock to be
issued under the Plan, but only to the extent of the number of
shares issued under the Stock Appreciation Right at the time
of exercise based on the value of the Stock Appreciation Right
at such time.
Page 17 of 27 Pages
<PAGE>
(v) Stock Appreciation Rights issued in connection
with Incentive Stock Options shall contain such terms and
conditions as the Committee may determine to be necessary for
the qualification of the Incentive Stock Options.
SECTION 7. Other Stock-Based Awards.
(a) Administration. Other awards of Stock and other awards
that are valued in whole or in part by reference to, or are otherwise
based on, Stock ("Other Stock-Based Awards"), including, without
limitation, performance shares, convertible debentures, exchangeable
securities and Stock awards or options valued by reference to Book
Value or Subsidiary performance, may be granted either alone or in
addition to or in tandem with Stock Options or Stock Appreciation
Rights granted under the Plan and/or cash awards made outside of the
Plan.
Subject to the provisions of the Plan, the Committee
shall have authority to determine the persons to whom and the time or
times at which such awards shall be made, the number of shares of Stock
to be awarded pursuant to such awards, and all other conditions of the
awards. The Committee may also provide for the grant of Stock upon the
completion of a specified performance period.
The provisions of other Stock-Based Awards need not
be the same with respect to each recipient.
(b) Terms and Conditions. Other Stock-Based Awards made
pursuant to this Section 7 shall be subject to the following terms and
conditions:
(i) Subject to the provisions of this Plan and the
award agreement referred to in Section 7(b)(v) below, shares
subject to awards made under this Section 7 may not be sold,
assigned, transferred, pledged or otherwise encumbered prior
to the date on which the shares are issued, or, if later, the
date on which any applicable restriction, performance or
deferral period lapses.
(ii) Subject to the provisions of this Plan and the
award agreement and unless otherwise determined by the
Committee at grant, the recipient of an award under this
Section 7 shall be entitled to receive, currently or on a
deferred basis, interest or dividends or interest or dividend
equivalents with respect to the number of shares covered by
the award, as determined at the time of the award by the
Committee, in its sole discretion, and the Committee may
provide that such amounts (if any) shall be deemed to have
been reinvested in additional Stock or otherwise reinvested.
(iii) Any award under Section 7 and any Stock covered
by any such award shall vest or be forfeited to the extent so
provided in the award agreement, as determined by the
Committee, in its sole discretion.
(iv) In the event of the participant's Retirement,
Disability or death, or in cases of special circumstances, the
Committee may, in its sole discretion, waive in whole or in
part any or all of the remaining limitations imposed (if any)
with respect to any or all of an award under this Section 7.
(v) Each award under this Section 7 shall be
confirmed by, and subject to the terms of, an agreement or
other instrument executed by the Company and by the
participant.
(vi) Stock (including securities convertible into
Stock) issued on a bonus basis under this Section 7 may be
issued for no cash consideration. Stock (including securities
Page 18 of 27 Pages
<PAGE>
convertible into Stock) purchased pursuant to a purchase right
awarded under this Section 7 shall be priced at no less than
50% of the Fair Market Value of the Stock on the date of
grant.
(vii) Other Stock-Based Awards, to the extent they
constitute derivative securities for purposes of Section 16 of
the Exchange Act, and are owned by persons who are subject to
Section 16(b) of the Exchange Act, shall be transferable only
when and to the extent a Stock Option would be transferable
under Section 5(e) of the Plan. The Committee may also take
into account other provisions of Rule 16b-3, promulgated under
the Exchange Act.
SECTION 8. Amendments and Termination.
The Board may amend, alter, or discontinue the Plan, but, except as
otherwise provided herein, no amendment, alteration, or discontinuation shall be
made which would impair the rights of an optionee or participant under a Stock
Option, Stock Appreciation Right or Other Stock-Based Award theretofore granted,
without the optionee's or participant's consent, or which, without the approval
of the Company's stockholders, would:
(a) materially increase the benefits accruing to participants
under the Plan;
(b) materially increase the number of securities which may be
issued under the Plan; or
(c) materially modify the requirements as to eligibility for
participation in the Plan.
The Committee may amend the terms of any Stock Option or other award
theretofore granted, prospectively or retroactively, but, subject to Section 3
above, no such amendment shall impair the rights of any holder without the
holder's consent. The Committee may also substitute new Stock Options for
previously granted Stock Options (on a one for one or other basis), including
previously granted Stock Options having higher option exercise prices.
Subject to the above provisions, the Board shall have broad authority
to amend the Plan to take into account changes in applicable securities and tax
laws and accounting rules, as well as other developments.
SECTION 9. Unfunded Status of Plan.
The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
participant or optionee by the Company, nothing contained herein shall give any
such participant or optionee any rights that are greater than those of a general
creditor of the Company. In its sole discretion, the Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Stock or payments in lieu of or with respect to awards
hereunder; provided, however, that, unless the Committee otherwise determines
with the consent of the affected participant, the existence of such trusts or
other arrangements is consistent with the "unfunded" status of the Plan.
SECTION 10. General Provisions.
(a) The Committee may require each person purchasing shares
pursuant to a Stock Option or other award under the Plan to represent
to and agree with the Company in writing that the optionee or
participant is acquiring the shares for investment and without a view
to distribution thereof. The certificates for such shares may include
any legend which the Committee deems appropriate to reflect any
restrictions on transfer.
Page 19 of 27 Pages
<PAGE>
All certificates for shares of Stock or other
securities delivered under the Plan shall be subject to such
conditions, stop-transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock
exchange upon which the Stock is then listed, and any applicable
Federal or state securities law, and the Committee may cause a legend
or legends to be put on any such certificates to make appropriate
reference to such restrictions.
(b) Nothing contained in this Plan shall prevent the Board
from adopting other or additional compensation arrangements, subject to
stockholder approval if such approval is required; and such
arrangements may be either generally applicable or applicable only in
specific cases.
(c) The adoption of the Plan shall not confer upon any
employee of the Company or any Subsidiary or Affiliate any right to
continued employment with the Company or a Subsidiary or Affiliate, as
the case may be, nor shall it interfere in any way with the right of
the Company or a Subsidiary or Affiliate to terminate the employment of
any of its employees at any time.
(d) No later than the date as of which an amount first becomes
includable in the gross income of the participant for Federal income
tax purposes with respect to the exercise of any Option or Stock
Appreciation Right or any award under the Plan, the participant shall
pay to the Company, or make arrangements satisfactory to the Committee
regarding the payment of, any Federal, state, or local taxes of any
kind required by law to be withheld with respect to such amount. The
obligations of the Company under the Plan shall be conditional on such
payment or arrangements and the Company and its Subsidiaries or
Affiliates shall, to the extent permitted by law, have the right to
deduct any such taxes from any payment of any kind otherwise due to the
participant.
(e) The actual or deemed reinvestment of dividends or dividend
equivalents in additional types of Plan awards at the time of any
dividend payment shall only be permissible if sufficient shares of
Stock are available under Section 3 for such reinvestment, taking into
account other Plan awards then outstanding.
(f) The Plan and all awards made and actions taken thereunder
shall be governed by and construed in accordance with the laws of the
State of Georgia.
SECTION 11. Effective Date of Plan.
The Plan shall be effective as of October 27, 1993, upon the approval
of the Plan by a majority of the votes cast by the holders of the Company's
capital stock entitled to vote thereon.
SECTION 12. Term of Plan.
No Stock Option, Stock Appreciation Right or Other Stock-Based Award
shall be granted pursuant to the Plan on or after the tenth anniversary of the
effective date of the Plan, but awards granted prior to such tenth anniversary
may extend beyond that date.
Page 20 of 27 Pages
<PAGE>
Exhibit 4(b)
[IMNET LETTERHEAD]
[Grantee]
Dear _________:
This letter sets forth the agreement between you ("Employee") and IMNET Systems,
Inc., a Delaware corporation (the "Company"), regarding your option to acquire
shares of the Company's Common Stock.
1. Grant of Option. Subject to the terms set forth below, the Company
hereby grants to Employee the right, privilege, and option to purchase
up to _____ shares (the "Option Shares" of its Common Stock at the
purchase price of $_____ per share, which price is equal to the fair
market value thereof on the date of grant. The date of grant ("Grant
Date") of the option is ____________, 199_. This option is intended to
be a "non-qualified option".
2. Term. Except as otherwise provided herein or in the Employee Stock
Option and Rights Plan, the option shall terminate upon the earlier to
occur of (i) the expiration of ten years following the Grant Date, (ii)
the date of termination of the option in accordance with Section 6 in
the event of Disability, Death or Retirement, (iii) 30 days following
voluntary termination by Employee of Employee's employment by the
Company (other than by reason of Death, Disability or Retirement) or
(iv) termination of Employee's employment by the Company (other than by
reason of voluntary termination, Disability, Death, or Retirement).
3. Time of Exercise of Option. Subject to Sections 6 and 7 below, prior to
its termination as set forth herein or in the Plan, Employee may
exercise the option granted herein on a cumulative basis as described
below:
<TABLE>
<CAPTION>
Cumulative Percentage
of Option Shares
Exercise Date Exercisable
------------- -----------
<S> <C> <C>
First Anniversary of Grant Date 20%
Second Anniversary of Grant Date 20% (40% of total granted)
Third Anniversary of Grant Date 20% (60% of total granted)
Fourth Anniversary of Grant Date 20% (80% of total granted)
Fifth Anniversary of Grant Date 20% (100% of total granted)
</TABLE>
4. Method of Exercise. The option shall be exercised by written notice
directed to the Compensation Advisory Committee (the "Committee"), or
if none has been appointed, to the Board of Directors of the Company,
at the Company's principal executive office, accompanied by payment of
the option price for the number of Option Shares purchased in
accordance with the Plan's requirements. At Employee's discretion, the
Company shall make delivery of such shares in accordance with the Plan
provided that if any law or regulation requires the Company to take any
action with respect to the shares specified in such notice before the
issuance thereof, then the date of delivery of such shares shall be
extended for the period necessary to take such action.
5. The Plan. The Company's 1993 Employee Stock Option and Rights Plan, as
amended from time to time, by the Board of Directors of the Company
(the "Plan"), is hereby incorporated into this letter and to the
Page 21 of 27 Pages
<PAGE>
extent that anything in this letter is inconsistent with the Plan, the
terms of the Plan shall control. Employee acknowledges that the Company
has provided a copy of the Plan to Employee. The parties agree that, as
a matter of convenience, this agreement is to be governed by the Plan,
even though it is understood and agreed that the shares subject to the
option granted hereby are not among those expressly authorized to be
granted pursuant to the Plan.
6. Termination of Option. Except as otherwise stated herein, or in the
Plan, the option, to the extent not previously exercised, shall
terminate in accordance with the Plan and upon the first to occur of
the following events:
(a) Disability. The expiration of 36 months after the date on
which Employee's employment by the Company is terminated, if
such termination be by reason of Employee's permanent and
total Disability (as defined in the Plan), provided, however
that the option shall be exercisable only to the extent that
Employee had the right to exercise the option at the time of
termination, and if the Employee dies within such 36 month
period, any unexercised option held by such Employee shall
thereafter be exercisable in accordance with the provisions of
and shall terminate upon the first to occur of the events
described in Section 6(b).
(b) Death. In the event of Employee's death while in the employ of
the Company, the expiration of 12 months following the date of
his or her death, provided that the option shall be
exercisable following the Employee's death only to the extent
that Employee had the right to exercise the option at the time
of his or her death; or
(c) Retirement. In the event Employee's employment by the Company
terminates by reason of Normal or Early Retirement (as defined
in the Plan), any option held by such Employee may be
exercised by the Employee for a period of 36 months from the
date of such termination; provided, however, that if the
Employee dies within such 36 month period any unexercised
option held by Employee shall thereafter be exercisable in
accordance with the provisions of and shall terminate upon the
first to occur of the events described in Section 6(b).
Except as set forth above, the option may not be exercised
unless Employee, at the time he or she exercises the option,
is, and has been at all times since the date of grant of the
option, an employee of the Company. Employee shall be deemed
to be employed by the Company if he or she is employed by the
Company or any of its subsidiaries.
7. Reclassification, Consolidation, or Merger. The number of Option Shares
may be adjusted in accordance with the Plan if certain events such as
merger, reorganization, consolidation, recapitalization, stock
dividends, stock splits, or other changes in the Company's corporate
structure affecting its Common Stock occur.
8. Rights Prior to Exercise of Option. This option is not transferable by
Employee, except by will or by the laws of descent and distribution or
as otherwise set forth in the Plan, and during Employee's lifetime
shall be exercisable only by Employee. This option shall confer no
rights to the holder hereof to act as a stockholder with respect to any
of the Option Shares until payment of the option price and delivery of
a share certificate has been made.
9. Employee's Representations and Warranties. By execution of this
agreement, Employee represents and warrants to the Company as follows:
(a) Employee is accepting this option solely for his or her own
account for investment and not with a view to or for sale or
distribution of the option or any Option Shares and not with
any present intention of selling, offering to sell, or
otherwise disposing of or distributing the option or any
Option Shares. The entire legal and beneficial interest of the
option and the Option Shares are
Page 22 of 27 Pages
<PAGE>
for and will be held for the account of the Employee only and
neither in whole nor in part for any other person.
(b) Employee resides at the following address:
---------------------
---------------------
(c) Employee is familiar with the Company and its plans,
operations, and financial condition. Prior to the acceptance
of this option, Employee had received all information as he or
she deems necessary and appropriate to enable an evaluation of
the financial risk inherent in accepting and exercising the
option and has received satisfactory and complete information
concerning the business and financial condition of the Company
in response to all inquiries in respect thereof.
10. Restricted Securities. Employee recognizes and understands that this
option and the Option Shares are currently registered, under the
Securities Act of 1933, as amended (the "Act"), the Georgia Securities
Act of 1973, as amended (the "Georgia Act"), but may not remain so
registered and are not registered under any other state securities law.
Any transfer of the option (if otherwise permitted hereunder, and once
exercised, the Option Shares) will not be recognized by the Company
unless such transfer is registered under the Act, the Georgia Act, and
any other applicable state securities laws or effected pursuant to an
exemption from such registration which may then be available. Any share
certificates representing the Option Shares may be stamped with legends
restricting transfer thereof in accordance with the Company's policy
with respect to unregistered shares of its Common Stock issued to
employees as a result of exercise of options granted under the Plan.
The Company may make a notation in its stock transfer records of the
aforementioned restrictions on transfers and legends. Employee
recognizes and understands that the Option Shares may be restricted
securities within the meaning of Rule 144 promulgated under the Act;
that the exemption from registration under Rule 144 may not be
available under certain circumstances and that Employee's opportunity
to utilize Rule 144 to sell the Option Shares may be limited or denied.
The Company shall be under no obligation to maintain or promote a
public trading market for the class of shares for which the option is
granted or to make provision for adequate information concerning the
Company to be available to the public as contemplated under Rule 144.
The Company will be under no obligation to recognize any transfer or
sale of any Option Shares unless the terms and conditions of Rule 144
are complied with by the Employee. By acceptance hereof, Employee
agrees that no permitted disposition of this option or any Option
Shares shall be made unless and until (i) there is then in effect a
registration statement under the Act, the Georgia Act, and applicable
state securities laws covering such proposed disposition and such
disposition is made in accordance with such registration statement, or
(ii) Employee shall have notified the Company of a proposed disposition
and shall have furnished to the Company a detailed statement of the
circumstances surrounding such disposition, together with an opinion of
counsel acceptable in form and substance to the Company that such
disposition will not require registration of the shares so disposed
under the Act, the Georgia Act, and any applicable state securities
laws. The Company shall be under no obligation to permit such transfer
or disposition on its stock transfer books unless counsel for the
Company shall concur as to such matters.
11. Tax Matters. The Employee hereby agrees to comply with any applicable
federal, state, and local income and employment tax requirements which
might arise with regard to a disposition of any Option Shares and to
inform the Company of any such disposition which occurs prior to the
expiration of (i) two years from the date of grant of the option, and
(ii) one year from the date of transfer to him of Option Shares. No
later than the date as of which an amount first becomes includable in
the gross income of the Employee for federal income tax purposes with
respect to the exercise of any option under the Plan, Employee shall
pay to the Company, or make arrangements satisfactory to the Committee
regarding the payment of, any federal, state, or local taxes of any
kind required by law to be withheld with respect to such amount. The
obligations of the Company under the Plan are conditional on such
payment or
Page 23 of 27 Pages
<PAGE>
arrangements and the Company shall have the right to deduct any such
taxes from any payment of any kind otherwise due to Employee.
12. Binding Effect. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors,
administrators, successors, and permissible assigns.
13. Miscellaneous. This Agreement shall be governed by and construed under
the laws of the State of Georgia. If any term or provision hereof shall
be held invalid or unenforceable, the remaining terms and provisions
hereof shall continue in full force and effect. Any modification to
this Agreement shall not be effective unless the same shall be in
writing and such writing shall be signed by authorized representatives
of both of the parties hereto. The terms of paragraphs 9 and 10 shall
attach to the Option Shares. The option contained in this letter shall
not confer upon Employee any right to continued employment with the
Company, nor shall it interfere in any way with the right of the
Company to terminate the employment of Employee at any time. This
letter can be executed in two or more counterparts, each of which shall
be deemed an original and all of which together shall constitute but
one and the same instrument.
Please signify your acceptance of the option and your agreement to be
bound by the terms hereof by promptly signing one of the two original
letters provided to you and returning the same to the Chief Financial
Officer of the Company. The Company looks forward to a long and
mutually beneficial relationship.
Very truly yours,
IMNET SYSTEMS, INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
ACCEPTED AND AGREED
on ____ day of __________, 199_
EMPLOYEE:
Print Name:
------------------------------
Social Security No.:
---------------------
Page 24 of 27 Pages
<PAGE>
Exhibit 5
JONES, DAY, REAVIS & POGUE
3500 SunTrust Plaza 303
Peachtree Street, N.E.
Atlanta, Georgia 30308-3242
(404) 521-3939
October 29, 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 an
aggregate of 1,612,962 shares of Common Stock, $.05 par value per share, of the
Company (the "Shares"), to be issued by the Company in accordance with the
IMNET Systems, Inc. 1993 Employee Stock Option and Rights Plan (the "Plan")
and pursuant to the IMNET Systems, Inc. Key Employee Stock Options (the
"Options") 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 Plan
or the Options, as applicable, 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 25 of 27 Pages
<PAGE>
[ARTHUR ANDERSEN LLP]
LETTER REGARDING UNAUDITED
INTERIM FINANCIAL INFORMATION
We are aware that HBO & Company has incorporated by reference in this
Registration Statement on Form S-8, its Form 10-Q for the quarters ended
March 31, 1998, June 30, 1998 and September 30, 1998 which include our reports
dated May 6, 1998, July 20, 1998 and October 23, 1998, 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.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Atlanta, Georgia
October 29, 1998
Page 26 of 27 Pages
<PAGE>
[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, 1998 included or incorporated by reference in HBO & Company's Form
10-K for the year ended December 31, 1997.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Atlanta, Georgia
October 29, 1998
Page 27 of 27 Pages
