<PAGE>
As filed with the Securities and Exchange Commission on January 2, 1997
Registration No. 333-___________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form S-8
Registration Statement Under The Securities Act of 1933
____________________
HBO & COMPANY
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
37-0986839
(I.R.S. Employer Identification No.)
301 Perimeter Center North
Atlanta, Georgia 30346
(Address of principal executive offices) (zip code)
____________________
National Health Enhancement Systems, Inc.
Amended 1988 Stock Option Plan
(Full title of the plan)
____________________
Charles W. McCall
HBO & Company
301 Perimeter Center North
Atlanta, Georgia 30346
(Name and address of agent for service)
____________________
(770) 393-6000
(Telephone number, including area code, of agent for service)
____________________
WITH COPY TO:
Lisa A. Stater, Esq.
Jones, Day, Reavis & Pogue
3500 SunTrust Plaza
303 Peachtree Street, N.E.
Atlanta, Georgia 30308-3242
(404) 521-3939
Exhibit Index Appears on Page 9
Page 1 of 19 Pages
<PAGE>
Calculation of Registration Fee
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Proposed
Proposed maxi- maximum
Title of mum offering aggregate Amount of
securities to be Amount to be price offering registration
registered registered per share price fee
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.05 par value,
and Preferred
Share Purchase
Rights(3) 411,457 $5.9344(1) $2,441,750( 1) $720.32(2)
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 $720.32 is calculated by multiplying the product of
$5.9344, the weighted average exercise price per share, and 411,457, the number
of shares subjected to option, by .000295.
(3) The Preferred Share Purchase Rights, which are attached to the shares of
Common Stock being registered, will be issued for no additional consideration;
no additional registration fee is required.
Page 2 of 19 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 19 Pages
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 3. Incorporation of Documents by Reference.
HBO & Company (the "Company") hereby incorporates by reference into this
Registration Statement the following documents:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1996.
(b) All other reports filed with the Securities and Exchange Commission (the
"Commission") pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934, as amended (the "1934 Act"), since December 31, 1996.
(c) The description of the Common Stock and Preferred Share Purchase Rights
contained in the Company's Registration Statement on Form 8-A filed with
the Commission on August 19, 1981, as amended, and February 19, 1991, as
amended, respectively.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the 1934 Act prior to the filing of a post-effective
amendment which indicates that all securities have been sold or which
deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing such documents.
Item 4. Description of Securities.
Inapplicable.
Item 5. Interests of Named Experts and Counsel.
Inapplicable.
Item 6. Indemnification of Directors and Officers.
Set forth below is a description of certain provisions of the Certificate
of Incorporation of the Company, the By-Laws, as amended (the "By-Laws") of the
Company and the General Corporation Law of the State of Delaware (the "Delaware
General Corporation Law"), as such provisions relate to the indemnification of
the directors and officers of the Company. This description is intended only as
a summary and is qualified in its entirety by reference to the Certificate of
Incorporation, the By-Laws and the Delaware General Corporation Law.
The Company's By-Laws (Article IX, Section 1) provide that every person who
was or is a party or is threatened to be made a party to or is involved in any
action, suit, or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he or a person of whom he is the legal
representative is or was a director or officer of the corporation or is or was
serving at the request of the corporation or for its benefit as a director or
officer of another corporation, or as its representative in a partnership, joint
venture, trust or other enterprise, shall be indemnified and held harmless to
the fullest extent legally permissible under and pursuant to any procedure
specified in the Delaware General Corporation Law, as amended from time to time,
against all expenses, liabilities and losses (including attorneys' fees,
judgments, fines and amounts paid or to be paid in settlement) reasonably
incurred or suffered by him in connection therewith. Such right of
indemnification shall be a contract right that may be enforced in any manner by
such person. Such right of indemnification shall not be exclusive of any other
right which such directors, officers or representatives may have or hereafter
acquire and, without limiting the
Page 4 of 19 Pages
<PAGE>
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.
Item 8. Exhibits.
Page 5 of 19 Pages
<PAGE>
Exhibit
Number Description
- -------- -------------
Included in Part II of the Registration Statement:
4 National Health Enhancement Systems, Inc. Amended 1988 Stock Option
Plan
5 Opinion of Counsel re: legality
15 Letter re: unaudited interim financial information
23(a) Consent of Counsel (contained in Exhibit 5)
23(b) Consent of independent public accountants
24 Power of Attorney (included in signature page)
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes 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 19 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 31st day of
December, 1997.
HBO & COMPANY
By:/s/ Charles W. McCall
----------------------
Charles W. McCall
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Charles W. McCall and Jay P. Gilbertson, jointly
and severally, each in his own capacity, his true and lawful attorneys-in-fact
and agents, each with full power of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to sign any and all
amendments to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that each of said attorneys-in-fact and agents, or
his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
<TABLE>
<CAPTION>
Signature Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ Charles W. McCall
- ------------------------- Director, President and Chief Executive
Charles W. McCall Officer (Principal Executive Officer) December 31, 1997
/s/ Jay P. Gilbertson
- ------------------------- President, Co-Chief Operating Officer, December 31, 1997
Jay P. Gilbertson Chief Financial Officer, Principal
Accounting Officer, Treasurer and
Secretary (Principal Financial Officer
and Principal Accounting Officer)
/s/ Holcombe T. Green, Jr.
- -------------------------
Holcombe T. Green, Jr. Chairman of the Board of Directors December 31, 1997
/s/ Alfred C. Eckert III
- -------------------------
Alfred C. Eckert III Director December 31, 1997
</TABLE>
Page 7 of 19 Pages
<PAGE>
Signature Title Date
--------- ----- ----
/s/ Philip A. Incarnati
- ----------------------
Philip A. Incarnati Director December 31, 1997
/s/ Alton F. Irby III
- ----------------------
Alton F. Irby III Director December 31, 1997
/s/ Gerald E. Mayo
- ----------------------
Gerald E. Mayo Director December 31, 1997
/s/ James V. Napier
- ----------------------
James V. Napier Director December 31, 1997
/s/ Donald C. Wegmiller
- ----------------------
Donald C. Wegmiller Director December 31, 1997
Page 8 of 19 Pages
<PAGE>
EXHIBIT INDEX
Exhibit Page
Number Description Number
- -------- ----------- -------
Included in Part II of the Registration Statement:
4 National Health Enhancement Systems, Inc.
Amended 1988 Stock Option Plan
5 Opinion of Counsel re: legality
15 Letter re: unaudited interim financial information
23(a) Consent of Counsel (contained in Exhibit 5)
23(b) Consent of independent public accountants
24 Power of Attorney (included in signature page)
<PAGE>
NATIONAL HEALTH ENHANCEMENT SYSTEMS, INC.
AMENDED 1988 STOCK OPTION PLAN
1. Purpose
The purpose of the 1988 Stock Option Plan (the "Plan") is to attract and
retain the best available directors and salaried employees for positions of
substantial responsibility in National Health Enhancement Systems, Inc., a
Delaware corporation (the "Company"), or any successor or any parent or
subsidiary of the Company which now exists or hereafter is organized or acquired
by or acquires the Company, and to promote the success of the business of the
Company.
2. Incentive and Nonqualified Stock Options
Two types of options may be granted under the Plan; options intended to
qualify as incentive stock options ("Incentive Stock Options") under Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"); and other
options not specifically authorized or qualified for favorable income tax
treatment by the Code ("Nonqualified Stock Options").
3. Eligibility and Administration
(a) Except as provided in Section 3(b) hereof, only key employees of
the Company or any of its subsidiaries who are not directors and/or officers
shall be eligible to receive Incentive Stock Options or Nonqualified Stock
Options under the Plan under the terms and conditions set forth in Paragraph 5.
An employee may receive more than one option under the Plan. For the purposes
of the Plan, the term "subsidiary" shall mean any corporation which the company
controls either directly or indirectly through ownership of fifty percent (50%)
or more of the total combined voting power of all classes of stock of such
corporation.
(b) Any (i) director or officer of the Company who is not an employee
of the Company or any of its subsidiaries shall be eligible to receive only
Nonqualified Stock Options; (ii) Consultant shall be eligible to receive only
Nonqualified Stock Options; and (iii) director or officer of the Company who is
a key employee of the Company or any of its subsidiaries shall be eligible to
receive Incentive Stock Options and/or Nonqualified Stock Options, all pursuant
to the Plan under the terms and conditions set forth in Paragraph 6.
"Consultant," for purposes of this Plan, shall mean any person who is engaged by
the Company or any of its subsidiaries as a consultant or advisor; provided that
bona fide services shall be rendered by consultants and advisors and such
consultants and advisors are compensated for their consulting services.
(c) Options granted under the Plan shall be administered by the Board
of Directors or a committee of directors or others (the "Committee") appointed
by the Board of Directors.
4. Shares Subject to Options
The stock available for grant of options under the Plan shall be shares of
Common Stock of the Company not reserved for any other purposes or shares of
Common Stock held in or acquired for the treasury of the Company. The aggregate
number of shares which may be issued pursuant to exercise of Incentive Stock
Options granted under the Plan shall be 50,000 shares. The aggregate number of
shares which may be issued pursuant to exercise of Nonqualified Stock Option
shall be 50,000 shares. If any outstanding option under the plan for any reason
expires or is terminated, the shares of Common Stock allocable to the
unexercised portion of the option shall again be available for options under the
Plan as if no options had been granted with respect to such shares.
Page 10 of 19 Pages
<PAGE>
5. Terms and Conditions of Options for Optionees Described in Paragraph
3(a)
The Board or the Committee shall determine, within the limits of the
express provisions of the Plan, the individuals to whom, and the time or times
at which, options shall be granted, the type of option to be granted (i.e.,
Incentive Stock Options or Nonqualified Stock Options), the number of shares to
be subject to each option, the duration of each option, the option price under
each option, and the time or times within which (during the term of the option)
all or portions of each option may be exercised. In making such determinations,
the Board or the Committee may take into account the nature of the services
rendered by such individual or classes of individuals, their present and
potential contributions to the Company's success, and such other factors as the
Board or the Committee in its discretion shall deem relevant.
Subject to the express provisions of the Plan, the Board or the Committee
may interpret the Plan, prescribe, amend, and rescind rules and regulations
relating to it, determine the terms and provisions of the respective Option
Agreements (defined below and which need not be identical), and make all other
determinations necessary or advisable for the administration of the Plan.
Options granted under the Plan shall be evidenced by agreements in such
form and containing such provisions which are consistent with the Plan as the
Board or Committee shall from time to time approve ("Option Agreements"). Such
agreements may incorporate all or any of the terms hereof by reference and shall
comply with and be subject to the terms and conditions set forth below.
(a) Each employee to whom an option is granted shall enter into an
Option Agreement with the Company setting forth terms and conditions of the
options granted to the employee. Each such agreement shall contain terms and
conditions consistent with the Plan as the Board or Committee shall approve.
(b) The purchase price for the shares subject to any option shall not
be less than 100% of the fair market value of the stock on the date the option
is granted; provided, however, that the option price for the Incentive Stock
Option shall not be less than 110% of the fair market value of such stock on the
date the option is granted to an individual then owning (after the application
of the family and other attribution rules of Section 425(d) of the Code), more
than 10% of the total combined voting power of all classes of stock of the
Company or any subsidiary or parent corporation. For purposes of the Plan, the
"fair market value" of any shares subject to the Plan at the date the option is
granted shall be (i) the reported closing price of such stock on the New York
Stock Exchange or other established stock exchange on such date, or if no sale
of such stock shall have been made on such exchange on that date, on the
preceding date on which there was such a sale, (ii) if such stock is not then
listed on an exchange, the average of the closing bid and asked prices per share
for such stock in the over-the-counter market as quoted on NASDAQ on such date,
or (iii) if such stock is not then listed on an exchange or quoted on NASDAQ, an
amount determined in good faith by the Board or the Committee. In no event
shall the initial exercise price for any option be less than the par value of
the stock subject to the option.
(c) The purchase price for any shares purchased pursuant to exercise
of an option granted under the Plan shall be paid in full upon exercise of the
option in cash, by check or by transferring to the Company any shares of such
stock at their fair market value as determined by Paragraph 5(b).
Notwithstanding the foregoing, the Company may extend and maintain, or arrange
for the extension and maintenance of, credit to an optionee to finance the
exercise of the option, on such terms as may be approved by the Board or
Committee, subject to applicable regulations of the Federal Reserve Board,
Sections 483, 1274 and 7872 of the Code and regulations promulgated thereunder,
and any other laws regulations in effect at the time such credit is extended.
Page 11 of 19 Pages
<PAGE>
(d) No option shall be exercisable after the expiration of the
earliest of (i) in the case of an Incentive Stock Option, ten years from the
date the option is granted or, five years from the date the option is granted to
an individual owning (after the application of the family and other attribution
rules of Section 425(d) of the Code) at the time such option was granted, more
than 10% of the total combined voting power of all classes of stock of the
Company or any subsidiary or parent corporation, (ii) in the case of a
Nonqualified Stock Option, eleven years from the date the option is granted,
(iii) three months after the date the optionee's employment with the Company or
any of its subsidiaries terminates, if such termination is for any reason other
than permanent and total disability (defined below), death or cause, (iv) the
date the optionee's employment with the Company or any of its subsidiaries
terminates, if such termination is for cause, as determined by the Board or
Committee in its sole discretion, or (v) one year after the date the optionee's
employment with the Company or any of its subsidiaries terminates if such
termination is the result of death or permanent and total disability within the
meaning of Section 22(e)(3) of the Code; provided, however, that the Option
Agreement for any option may provide for shorter periods of exercisability in
each of the foregoing instances.
(e) No option shall be exercisable during the lifetime of an optionee
by any person other than the optionee, his guardian or legal representative.
The Board or the Committee shall have the power to set the time or times within
which each option shall be exercisable and to accelerate the time or times of
exercise. To the extent that an optionee has the right to exercise an option
and purchase shares pursuant thereto, the option may be exercised from time to
time by written notice to the Company stating the number of shares being
purchased and accompanied by payment in full of the purchase price for such
shares. If shares of stock are used in part or full payment for the shares to
be acquired upon exercise of the option, such shares shall be valued for the
purpose of such exchange at their fair market value as of the date of exercise
of the option in accordance with the provisions of Paragraph 5(b). Any
certificate for shares of outstanding stock used to pay the purchase price shall
be accompanied by a stock power duly endorsed in blank by the registered owner
of the certificate (with the signature thereon guaranteed). If the certificate
tendered by the optionee in such payment covers more shares than are required
for such payment, the certificate shall also be accompanied by instructions from
the optionee to the Company's transfer agent with respect to the disposition of
the balance of the shares covered thereby.
(f) No option shall be transferable by an optionee otherwise than by
will or the laws of descent and distribution.
(g) The aggregate fair market value (determined as of the time the
option is granted) of the stock with respect to which Incentive Stock Options
are exercisable for the first time by such optionee during any calendar year
(under all such plans of the Company and any subsidiary corporation) shall not
exceed $100,000.
(h) Unless the shares of stock covered by the Plan have been
registered with the Securities and Exchange Commission pursuant to Section 5 of
the Securities Act of 1933, as amended, each optionee accepting an option shall
represent, warrant, and agree, for himself and his transferees by will or the
laws of descent and distribution, that all shares of stock purchased upon the
exercise of the option will be acquired for investment and not for resale or
distribution. Upon such exercise of any portion of an option, the person
entitled to exercise the same shall, upon request of the Company, furnish
evidence satisfactory to the Company (including a written and signed
representation) to the effect that the shares of stock are being acquired in
good faith for investment and not for resale or distribution. Furthermore, the
Company may if it deems appropriate affix a legend to certificates representing
shares of stock purchased upon exercise of options indicating that such shares
have not been registered with the Securities and Exchange Commission and may so
notify its transfer agent.
Page 12 of 19 Pages
<PAGE>
(i) An optionee or transferee of an optionee shall have no rights as
a shareholder of the Company with respect to any shares covered by any option
until the date of the issuance of a share certificate for such shares. No
adjustment shall be made for dividends (ordinary or extraordinary, whether cash,
securities or other property) or distributions or other rights for which the
record date is prior to the date such share certificate is issued, except as
provided for in Paragraph 5(k). Nothing in the Plan or in any Option Agreement
shall confer upon any employee any right to continue in the employ of the
Company or any of its subsidiaries, or interfere in any way with any right of
the Company or any subsidiary of the Company to terminate the optionee's
employment at any time.
(j) In no event shall the Company be required to issue fractional
shares upon the exercise of an option.
(k) If the outstanding shares of stock of the class then subject to
this Plan are increased or decreased, or are changed into or exchanged for a
different number or kind of shares or securities, as a result of one or more
reorganizations, recapitalizations, stock splits, reverse stock splits, stock
dividends or similar transactions, appropriate adjustments shall be made in the
number and/or type of shares or securities for which options may thereafter be
granted under the Plan and for which options then outstanding under the Plan may
thereafter be exercised. In the event of an adjustment to the number and/or
type of shares or securities for which options may thereafter be granted under
the Plan, the exercise price applicable to the unexercised portions of options
under the Plan shall be appropriately adjusted by the Board or the Committee.
(l) Subject to the terms and conditions and within the limitations of
the Plan, the Board or the Committee may modify, extend or renew outstanding
options granted under the Plan, accept the surrender of outstanding options (to
the extent not theretofore exercised), and authorize the granting of new options
in substitution therefor (to the extent not theretofore exercised).
Notwithstanding the foregoing, no modification of an option shall, without the
consent of the optionee, alter or impair any rights of the optionee under the
option.
(m) Each option may contain such other terms, provisions and
conditions not inconsistent with the Plan as may be determined by the Board or
Committee, such as, without limitation, discretionary performance standards,
mandatory purchase of shares on the open market on a pro rata basis or tax
withholding provisions. The Company's obligation to deliver shares of stock
pursuant to Paragraph 5 shall be subject to applicable federal, state and local
tax withholding requirements.
(n) In the event the market value of stock subject to option under
the Plan shall be less than the option price for such stock, the Board or
Committee may, in its discretion and with the consent of the optionee, cancel
such options and grant new options consistent with the terms of the Plan.
6. Terms and Conditions of Options for Optionees Described in Paragraph
3(b)
The Board or the Committee shall determine, within the limits of the
express provisions of the Plan, the individuals to whom, and the time or times
at which, options shall be granted, the type of option to be granted (i.e.,
Incentive Stock Options or Nonqualified Stock Options), the number of shares to
be subject to each option, the duration of each option, the option price under
each option, and the time or times within which (during the term of the option)
all or portions of each option may be exercised. In making such determinations,
the Board or the Committee may take into account the nature of the services
rendered by such individual or classes of individuals, their present and
potential contributions to the Company's success, and such other factors as the
Board or the Committee in its discretion shall deem relevant.
Subject to the express provisions of the Plan, the Board or the Committee
may interpret the Plan, prescribe, amend, and rescind rules and regulations
relating to it, determine the terms and provisions of the respective Option
Agreements (which need not be identical), and make all other determinations
necessary or advisable for the administration of the Plan.
Page 13 of 19 Pages
<PAGE>
Options granted under the Plan shall be evidenced by Option Agreements in
such form and containing such provisions which are consistent with the Plan as
the Board or Committee shall from time to time approve. Such agreements may
incorporate all or any of the terms hereof by reference and shall comply with
and be subject to the following terms and conditions:
(a) Each director or officer to whom an option is granted shall enter
into an Option Agreement with the Company setting forth the terms and conditions
of the options granted to the director or officer. Each such agreement shall
contain terms and conditions consistent with the Plan as the Board or Committee
shall approve.
(b) The purchase price for the shares subject to an Incentive Stock
Option shall not be less than 100% of the fair market value of the stock on the
date the option is granted; provided, however, that the option price for an
Incentive Stock Option shall not be less than 110% of the fair market value of
such stock on the date the option is granted to an individual then owning (after
the application of family and other attribution rules of Section 425(d) of the
Code), more than 10% of the total combined voting power of all classes of stock
of the Company or any subsidiary or parent corporation. The purchase price for
the shares subject to a Nonqualified Stock Option shall be determined by the
Board or the Committee in its discretion. For purposes of the Plan, the "fair
market value" of any shares subject to the Plan at any date shall be (i) the
reported closing price of such stock on the New York Stock Exchange or other
established stock exchange on such date, or if no sale of such stock shall have
been made on such exchange on that date, on the preceding date on which there
was such a sale, (ii) if such stock is not then listed on an exchange, the
average of the closing bid and asked prices per share for such stock in the
over-the-counter market as quoted on NASDAQ on such date, or (iii) if such stock
is not then listed on an exchange or quoted on NASDAQ, an amount determined in
good faith by the Board or Committee. In no event shall the initial exercise
price for any option be less than the par value of stock subject to the option.
(c) The purchase price for any shares purchased pursuant to exercise
of an option granted under the Plan shall be paid in full upon exercise of the
option in cash, by check or by transferring to the Company shares of such stock
at their fair market value as determined by Paragraph 6(b). Notwithstanding the
foregoing, the Company may extend and maintain, or arrange for the extension and
maintenance of, credit to an optionee to finance the exercise of the option, on
such terms which are no more favorable than as may be approved by the Board or
Committee for optionees described in Paragraph 3(a), subject to applicable
regulations of the Federal Reserve Board, Sections 483, 1274 and 7872 of the
Code and regulations promulgated thereunder, and any other laws or regulations
in effect at the time such credit is extended.
(d) No option shall be exercisable after the expiration of the
earliest of (i) in the case of an Incentive Stock Option, ten years from the
date the option is granted or, five years from the date the option is granted to
an individual owning (after application of the family and other attribution
rules of Section 425(d) of the Code) at the time such option was granted, more
than 10% of the total combined voting power of all classes of stock of the
Company or any subsidiary or parent corporation, (ii) in the case of a
Nonqualified Stock Option, eleven years from the date the option is granted,
(iii) three months after the date the optionee's employment with the Company or
any of its subsidiaries terminates, if such termination is for any reason other
than permanent and total disability (defined below), death or cause, (iv) three
months after the date the optionee's position as an officer or director of the
Company terminates if such termination is for any reason other than permanent
and total disability (defined below), death or cause, (v) the date the
optionee's employment with the Company or any of its subsidiaries terminates if
such termination is for cause, as determined by the Board or Committee in its
sole discretion, (vi) the date the optionee's position as an officer or director
of the Company terminates if such termination is for cause, as determined by the
Board or Committee in its sole discretion, (vii) one year after the date the
optionee's employment with the Company or any of its subsidiaries terminates, if
such termination is the result of death or permanent and total disability within
the meaning of Section 22(e)(3) of the Code, or (viii) one year after the date
the optionee's position as an officer or director of the Company terminates if
such termination is the result of death or permanent and total disability within
the meaning of Section 22(e)(3) of the Code; provided, however, that the Option
Agreement for any option may provide for shorter periods in each of the
foregoing instances.
Page 14 of 19 Pages
<PAGE>
(e) No option shall be exercisable during the lifetime of an optionee
by any person other than the optionee, his guardian or legal representative.
The Board or the Committee shall have the power to set the time or times within
which each option shall be exercisable and to accelerate the time or times of
exercise. To the extent that an optionee has the right to exercise an option
and purchase shares pursuant thereto, the option may be exercised from time to
time by written notice to the Company stating the number of shares being
purchased and accompanied by payment in full of the purchase price for such
shares. If shares of stock are used in part or full payment for the shares to
be acquired upon exercise of the option, such shares shall be valued for the
purposes of such exchange at their fair market value as of the date of exercise
of the option in accordance with the provisions of Paragraph 6(b). Any
certificates for shares of outstanding stock used to pay the purchase price
shall be accompanied by a stock power duly endorsed in blank by the registered
owner of the certificate (with the signature thereon guaranteed). If the
certificate tendered by the optionee in such payment covers more shares than are
required for such payment, the certificate shall also be accompanied by
instructions from the optionee to the Company's transfer agent with respect to
the disposition of the balance of the shares covered thereby.
(f) No option shall be transferable by an optionee otherwise than by
will or the laws of descent and distribution.
(g) The aggregate fair market value (determined as of the time the
option is granted) of the stock with respect to which Incentive Stock Options
are exercisable for the first time by such optionee during any calendar year
(under all such plans of the Company and any subsidiary corporation) shall not
exceed $100,000.
(h) Unless the shares of stock covered by the Plan have been
registered with the Securities and Exchange Commission pursuant to Section 5 of
the Securities Act of 1933, as amended, each optionee accepting an option shall
represent, warrant and agree, for himself and his transferees by will or the
laws of descent and distribution, that all shares of stock purchased upon the
exercise of the option will be acquired for investment and not for resale or
distribution. Upon such exercise of any portion of an option, the person
entitled to exercise the same shall, upon request of the Company, furnish
evidence satisfactory to the Company (including a written and signed
representation) to the effect that the shares of stock are being acquired in
good faith for investment and not for resale or distribution. Furthermore, the
Company may if it deems appropriate affix a legend to certificates representing
shares of stock purchased upon exercise of options indicating that such shares
have not been registered with the Securities and Exchange Commission and may so
notify its transfer agent.
(i) An optionee or transferee of an optionee shall have no rights as
a shareholder of the Company with respect to any shares covered by any option
until the date of the issuance of a share certificate for such shares. No
adjustment shall be made for dividends (ordinary or extraordinary, whether cash,
securities or other property) or distributions or other rights for which the
record date is prior to the date such share certificate is issued, except as
provided for in Paragraph 6(k). Nothing in the Plan or in any Option Agreement
shall confer upon any optionee any right to continue in the employ of the
Company or any of its subsidiaries or to continue as a director or officer of
the Company or any of its subsidiaries, or to interfere in any way with the
right of the Company or any of its subsidiaries to terminate the optionee's
status as an employee, officer or director at any time.
(j) In no event shall the Company be required to issue fractional
shares upon the exercise of an option.
(k) If the outstanding shares of stock of the class then subject to
this Plan are increased or decreased, or are changed into or exchanged for a
different number or kind of shares or securities, as a result of one or more
reorganizations, recapitalizations, stock splits, reverse stock splits, stock
dividends or similar transactions, appropriate adjustments shall be made in the
number and/or type of shares or securities for which options may thereafter be
granted under the Plan and for which options then outstanding under the Plan may
thereafter be exercised. In the event of an adjustment to the number and/or
type of shares or securities for which options may thereafter be granted under
the Plan, the exercise price applicable to the unexercised portions of options
under the Plan shall be appropriately adjusted by the Board or the Committee.
Page 15 of 19 Pages
<PAGE>
(l) No Nonqualified Stock Options shall vest until at least one year
from the date of grant.
(m) Options may be exercised only during the ten-day period following
the release of quarterly or annual financial information by the Company.
(n) In the event the market value of stock subject to option under
the Plan shall be less than the price for such stock, the Board or Committee
may, in its discretion and with the consent of the optionee, cancel such options
and grant new options consistent with the terms of the Plan.
(o) The Company's obligation to deliver shares of stock pursuant to
Paragraph 6 shall be subject to applicable federal, state and local tax
withholding requirements.
7. Termination or Amendment of the Plan
The Board or Committee may at any time terminate the Plan. With respect to
Incentive Stock Options, the Board or Committee may at any time amend the Plan
and may correct any defect or supply any omission or reconcile any inconsistency
in the Plan or in any option in the manner and to the extent it shall deem
desirable to carry the Plan into effect without further action on the part of
the shareholders of the Company; but the Board or the Committee may not, without
the approval of the Company's shareholders, make any alteration or amendment of
the Plan which (i) makes any change in the class of persons eligible to receive
options under the Plan; (ii) increases, other than by operation of paragraphs
5(k) or 6(k) hereof, the total number of shares of stock for which options may
be granted under the Plan; (iii) extends the term of the Plan or the maximum
option period provided under the Plan; or (iv) decreases the minimum option
price provided under the Plan; and provided further that, without the consent of
the optionee, no amendment may adversely affect any outstanding option or any
unexercised portion thereof. With respect to Nonqualified Stock Options, the
Board or Committee may at any time amend the Plan and may correct any defect or
supply any omission or reconcile any inconsistency in the Plan or in any option
in the manner and to the extent it shall deem desirable to carry the Plan into
effect without further action on the part of the shareholders of the Company.
Notwithstanding any other provision to the contrary, any provision of this Plan
may be amended by the Board or Committee as required to obtain necessary
approvals of governmental agencies if (i) such change does not materially alter
the rights and interests of shareholders of the Company and (ii) such change
does not result in a failure of options granted to directors or officers to
comply with the provisions of Section 16(b) of the Securities Exchange Act of
1934 and Rule 16b-3 thereunder.
8. Shareholder Approval and Term of the Plan
The Plan shall be effective upon the first day of the month after which
the Board approves the Plan, subject to approval by the shareholders of the
Company. Unless sooner terminated by the Board, the Plan will expire ten
years after the date of adoption of the Plan by the Board in May 1998. Any
option outstanding under the Plan at the time of the Plan's termination shall
remain in effect in accordance with the option's terms and conditions and the
terms and conditions of the Plan.
9. Use of Proceeds
The proceeds from the sale of Stock pursuant to the Plan will be used for
general corporate purposes.
10. Governing Law
The Plan shall be governed by and interpreted according to the laws of the
State of Delaware.
Page 16 of 19 Pages
<PAGE>
Exhibit 5
JONES, DAY, REAVIS & POGUE
3500 SunTrust Plaza
303 Peachtree Street, N.E.
Atlanta, Georgia 30308-3242
(404) 521-3939
December 29, 1997
HBO & Company
301 Perimeter Center North
Atlanta, Georgia 30346
Gentlemen:
We have acted as counsel to HBO & Company, a Delaware corporation
(the "Company"), in connection with the registration of 411,457 shares of
Common Stock, $.05 par value per share, of the Company (the "Shares"), to be
issued by the Company in accordance with the National Health Enhancement
Systems, Inc. Amended 1988 Stock Option Plan (the "Plan") 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,
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 17 of 19 Pages
<PAGE>
ARTHUR ANDERSEN LLP
LETTER REGARDING UNAUDITED
INTERIM FINANCIAL INFORMATION
We are aware that HBO & Company has incorporated by reference in this Form
S-8 Registration Statement, its Form 10-Q's for the quarters ended March 31,
1997, June 30, 1997 and September 30, 1997 which include our reports dated
April 16, 1997, July 16, 1997 and October 17, 1997, respectively, covering
the unaudited interim financial information contained therein. Pursuant to
Regulation C of the Securities Act of 1933 (the "Act"), those reports are not
considered to be a part of the Registration Statement prepared or certified
by our firm within the meaning of Sections 7 and 11 of the Act.
Arthur Andersen LLP
Atlanta, Georgia
December 29, 1997
Page 18 of 19 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, 1997 included or
incorporated by reference in HBO & Company's Form 10-K for the
year ended December 31, 1996.
Arthur Andersen LLP
Atlanta, Georgia
December 29, 1997
Page 19 of 19 Pages
