-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DGlM17b1P3MTDLn13I76aag+vpcZv475kAYCTNuuw2TZVcI7Dm7QFmwvTgt3YNGo xl107IZJsByNn3n0bvjtaw== 0000912057-96-024126.txt : 19961031 0000912057-96-024126.hdr.sgml : 19961031 ACCESSION NUMBER: 0000912057-96-024126 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19961030 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HBO & CO CENTRAL INDEX KEY: 0000310377 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 370986839 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-15093 FILM NUMBER: 96650326 BUSINESS ADDRESS: STREET 1: 301 PERIMETER CTR N CITY: ATLANTA STATE: GA ZIP: 30346 BUSINESS PHONE: 77036000 MAIL ADDRESS: STREET 1: 301 PERIMETER CTR N CITY: ATLANTA STATE: GA ZIP: 30346 S-3 1 FORM S-3 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 30, 1996 REGISTRATION NO. 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------------ FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------------ HBO & COMPANY (Exact Name of Registrant as Specified in Its Charter) DELAWARE 37-0986839 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification Number)
------------------------------ 301 PERIMETER CENTER NORTH ATLANTA, GEORGIA 30346 (770) 393-6000 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) ------------------------------ CHARLES W. MCCALL PRESIDENT AND CHIEF EXECUTIVE OFFICER HBO & COMPANY 301 PERIMETER CENTER NORTH ATLANTA, GEORGIA 30346 (770) 393-6000 (Name, address, including zip code, and telephone number, including area code, of agent for service) ------------------------------ COPIES TO: LISA A. STATER, ESQ. RICHARD M. HULL, ESQ. Jones, Day, Reavis & Pogue Gardere & Wynne, L.L.P. 3500 One Peachtree Center 1601 Elm Street 303 Peachtree Street, N.E. Suite 3000 Atlanta, Georgia 30308-3242 Dallas, Texas 75201 (404) 521-3939 (214) 999-3000
------------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT. ------------------------------ If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / / If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. /X/ If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / - ------------------------------ If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / - ------------------------------ If delivery of a prospectus is expected to be made pursuant to Rule 434, please check the following box. / / ------------------------------ CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE REGISTRATION SECURITIES TO BE REGISTERED BE REGISTERED PER SHARE(1) OFFERING PRICE(1) FEE(2) Common Stock, par value $.05 per share, and Preferred Share Purchase Rights (3)....... 893,748 shares $56.50 $50,496,762 $15,302
(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) of the Securities Act of 1933, as amended (the "Securities Act"), based upon the average of the reported high and low sales prices of the Common Stock of the registrant on the Nasdaq Stock Market National Market ("Nasdaq NM") on October 29, 1996 of $56.50 per share. (2) The registration fee for the securities registered hereby, $15,302, is calculated pursuant to Rule 457(c) under the Securities Act, as follows: one thirty-third of one percent of the product of $56.50, the average of the reported high and low sales prices of the Common Stock of the registrant on the Nasdaq NM on October 29, 1996, multiplied by 893,748, the number of shares of Common Stock to be registered. (3) The Preferred Share Purchase Rights, which are attached to the shares of the Common Stock of the registrant being registered, will be issued for no additional consideration; no additional registration fee is required. ------------------------------ THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- EXPLANATORY NOTE HBO & Company has submitted a request for waiver to the Office of Chief Accountant of the Securities and Exchange Commission (the "Commission") of inclusion of certain financial information in the Registration Statement pursuant to the rules adopted by the Commission in Release Nos. 33-7355 and 34-37802. Accordingly, pending the response to such request, such financial information has not been included herein. ii INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. SUBJECT TO COMPLETION DATED OCTOBER 30, 1996 PROSPECTUS 893,748 SHARES HBO & COMPANY COMMON STOCK ------------------ This Prospectus relates to 893,748 shares (the "Shares") of common stock, par value $.05 per share (the "Common Stock"), of HBO & Company, a Delaware corporation ("HBOC" or the "Company"), to be offered for the account of certain stockholders of the Company (the "Selling Stockholders"). The Shares being offered hereby were issued to the Selling Stockholders on September 19, 1996 in connection with the acquisition by HBOC of all of the issued and outstanding shares of capital stock of Management Software, Inc., a Missouri corporation ("MSI"). The Common Stock is quoted on the Nasdaq Stock Market National Market ("Nasdaq NM") under the symbol "HBOC." The Company has been advised by the Selling Stockholders that any or all of the Shares may be offered for sale and sold by or on behalf of the Selling Stockholders from time to time in varying amounts, including in block transactions, on the Nasdaq NM or the over-the-counter market, in privately negotiated transactions, or otherwise, at prices prevailing in such market or as may be negotiated at the time of the sale. The Shares may be sold by the Selling Stockholders directly to one or more purchasers, through agents designated from time to time or to or through broker-dealers designated from time to time. In the event the Shares are publicly offered through broker-dealers or agents, the Selling Stockholders may enter into agreements with respect thereto. In order to comply with the securities laws of certain states, sales of Shares offered hereby to the public in such states may be made only through broker-dealers who are registered or licensed in such states. To the extent required, the number of Shares to be sold, the purchase price, the public offering price, if applicable, the name of any such agent or broker-dealer, and any applicable commissions, discounts or other items constituting compensation to such agents or broker-dealers with respect to a particular offering will be set forth in a supplement or supplements to this Prospectus (each, a "Prospectus Supplement"). As of the date of this Prospectus, the Company is not aware of any selling arrangement between any agent or broker-dealer and the Selling Stockholders. The aggregate proceeds to the Selling Stockholders from the sale of the Shares so offered will be the purchase price of the Shares sold, less the aggregate commissions, discounts and other compensation, if any, paid by the Selling Stockholders to agents or broker-dealers. See "Plan of Distribution." The Company will not receive any proceeds directly from the sale of the Shares, but will bear certain expenses thereof. See "Use of Proceeds" and "Plan of Distribution." The Selling Stockholders and any broker-dealers or agents that participate with the Selling Stockholders in the distribution of any of the Shares may be deemed to be "underwriters" within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), and any discount or commission received by them and any profits on the resale of the Shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. ------------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------ THE DATE OF THIS PROSPECTUS IS , 1996. TABLE OF CONTENTS
PAGE ----- AVAILABLE INFORMATION AND SOURCES OF INFORMATION......................... 3 INCORPORATION OF CERTAIN INFORMATION BY REFERENCE........................ 4 SUMMARY.................................................................. 5 USE OF PROCEEDS.......................................................... 7 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF HBOC... 7 SELLING STOCKHOLDERS..................................................... 9 PLAN OF DISTRIBUTION..................................................... 9 CERTAIN LEGAL MATTERS.................................................... 10 EXPERTS.................................................................. 10
2 AVAILABLE INFORMATION AND SOURCES OF INFORMATION HBOC is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). The reports, proxy statements and other information filed by HBOC with the Commission can be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices at 7 World Trade Center, 13th Floor, New York, New York 10048, and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material also may be obtained by mail from the Public Reference Section of the Commission, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Additionally, the Commission maintains a Web site on the Internet that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission and that is located at http://www.sec.gov. HBOC has filed with the Commission a Registration Statement on Form S-3 (including the exhibits and amendments thereto, the "Registration Statement") under the Securities Act with respect to the Common Stock offered hereby. This Prospectus does not contain all the information set forth in the Registration Statement, certain portions of which are omitted in accordance with the rules and regulations of the Commission and to which reference is hereby made. Statements contained in this Prospectus as to the contents of any contract, agreement or other document referred to are not necessarily complete. With respect to each such contract, agreement or other document filed as an exhibit to the Registration Statement or otherwise filed with the Commission, reference is made to the exhibit or other filing for a more complete description of the matter involved, and each such statement shall be deemed qualified in its entirety by such reference. Copies of the Registration Statement together with exhibits may be inspected at the office of the Commission in Washington, D.C., as indicated above, without charge and copies thereof may be obtained therefrom upon payment of a prescribed fee. All information contained in this Prospectus relating to the Selling Stockholders and to the proposed or potential methods of distribution of Common Stock being offered hereby has been supplied by the Selling Stockholders. NO PERSONS HAVE BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY HBOC. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY DISTRIBUTION OF SECURITIES MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. 3 INCORPORATION OF CERTAIN INFORMATION BY REFERENCE The information in the following documents filed by HBOC with the Commission (File No. 0-9900) pursuant to the Exchange Act is incorporated by reference in this Prospectus: 1. Annual Report on Form 10-K for the fiscal year ended December 31, 1995 filed with the Commission on March 13, 1996; 2. Quarterly Reports on Form 10-Q for the quarter ended March 31, 1996 filed with the Commission on May 3, 1996 and for the quarter ended June 30, 1996 filed with the Commission on July 31, 1996; 3. Current Reports on Form 8-K: (i) dated and filed with the Commission on June 23, 1995, as amended by Form 8-K(A), dated and filed with the Commission on July 31, 1995, as amended by Form 8-K(A)(2), dated and filed with the Commission on August 8, 1995, and as amended by Form 8-K(A)(3), dated and filed with the Commission on June 5, 1996; (ii) dated and filed with the Commission on February 27, 1996; (iii) dated and filed with the Commission on May 21, 1996; (iv) dated and filed with the Commission on August 27, 1996; (v) dated and filed with the Commission on September 11, 1996; (vi) dated and filed with the Commission on September 23, 1996; and (vii) dated and filed with the Commission on September 27, 1996; 4. Proxy Statement, dated as of April 3, 1996, filed in definitive form on April 3, 1996 with the Commission with respect to the information required to be included herein by Items 401 (management), 402 (executive compensation) and 404 (certain relationships and related transactions) of Regulation S-K promulgated under the Securities Act and the Exchange Act; and 5. The description of Common Stock and Preferred Share Purchase Rights contained in HBOC's Registration Statements on Form 8-A, filed with the Commission on August 19, 1981, as amended, and February 19, 1991, as amended, respectively. All documents filed by HBOC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of the offering of the Shares made hereby, shall be deemed to be incorporated by reference in this Prospectus and to be a part hereof from the date of filing of such documents. Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or was deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The information relating to HBOC contained in this Prospectus should be read together with the information in the documents incorporated by reference. THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS (OTHER THAN EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE) ARE AVAILABLE WITHOUT CHARGE TO ANY PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST. REQUESTS FOR SUCH DOCUMENTS SHOULD BE DIRECTED TO HBO & COMPANY, 301 PERIMETER CENTER NORTH, ATLANTA, GEORGIA 30346, ATTENTION: ANNE DAVENPORT, TELEPHONE: (800) 426-2411. 4 SUMMARY THE FOLLOWING SUMMARY SHOULD BE READ IN CONJUNCTION WITH, AND IS QUALIFIED IN ITS ENTIRETY BY, THE MORE DETAILED INFORMATION AND CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING NOTES THERETO, AND PRO FORMA FINANCIAL INFORMATION INCLUDED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS. ALL SHARE AND PER SHARE DATA REGARDING THE COMMON STOCK IN THIS PROSPECTUS HAVE BEEN ADJUSTED TO GIVE EFFECT TO A TWO-FOR-ONE STOCK SPLIT OF THE COMMON STOCK, EFFECTED IN THE FORM OF A STOCK DIVIDEND PAID JUNE 10, 1996 TO STOCKHOLDERS OF RECORD ON MAY 27, 1996. THE COMPANY GENERAL HBOC develops integrated patient care, clinical, financial and strategic management software solutions for the healthcare industry. These open systems applications facilitate the integration of clinical, financial and administrative data from a wide range of customer systems and software. HBOC's broad product portfolio can be implemented in a variety of combinations from stand-alone to enterprisewide, enabling customers to add incremental capabilities to existing information systems without making prior capital investments obsolete. HBOC also provides a full complement of network communications technologies, including wireless capabilities, as well as outsourcing services that are offered under contract management agreements whereby its staff manages and operates data centers, information systems, organizations and business offices of healthcare institutions of various sizes and structures. HBOC markets its products and services to integrated health delivery networks, hospitals, physicians' offices, home health providers, pharmacies, reference laboratories, managed care providers and payers. At December 31, 1995, HBOC had 2,700 customers of which 2,200 were United States community hospitals. There were a total of 5,300 community hospitals in the United States at December 31, 1995. HBOC also sells its products and services internationally through subsidiaries and/or distribution agreements in the United Kingdom, Canada, Ireland, Saudi Arabia, Australia, Puerto Rico and New Zealand. The address and telephone number of the principal executive offices of HBOC are 301 Perimeter Center North, Atlanta, Georgia 30346, (770) 393-6000. RECENT DEVELOPMENTS CYCARE TRANSACTION. On August 21, 1996, the Company acquired all of the outstanding capital stock of CyCare Systems, Inc. ("CyCare") in exchange for approximately 4,400,000 shares of HBOC Common Stock. CyCare was a leading provider of physician practice management software systems and electronic data interchange services to the healthcare industry, including physicians, medical group practices, faculty practice plans and medical enterprises. MSI TRANSACTION. On September 19, 1996, the Company acquired all of the issued and outstanding shares of capital stock of MSI from the Selling Stockholders in exchange for the 893,748 Shares and cash in lieu of two additional shares. MSI was a Missouri based provider of software solutions for the homecare industry with approximately 600 customers. The Company has filed the Registration Statement of which this Prospectus is a part in satisfaction of its obligations to register such Shares for resale by the Selling Stockholders. CONCURRENT OFFERING. On September 23, 1996, the Company, HBO & Company of Georgia, a wholly owned subsidiary of the Company ("HBOC-GA"), and GMIS Inc. ("GMIS") entered into an Agreement of Merger (the "Merger Agreement") pursuant to which GMIS is to be merged (the "Merger") with and into HBOC-GA and each outstanding share of the common stock of GMIS is to be converted into .42 of a share of Common Stock of HBOC, subject to certain adjustments. GMIS, a Pennsylvania based company, is a developer of data quality and decision support software for the payer marketplace. On October 18, 1996, the Company filed a registration statement registering 4,932,624 shares of Common Stock, the maximum number of shares to be issued in connection with the GMIS transaction. The availability for sale of a substantial number of shares of HBOC Common Stock as a result of such offering or otherwise could have a significant adverse effect on the market price for the HBOC Common Stock. 5 SUMMARY FINANCIAL DATA The following summary historical financial data for HBOC should be read in conjunction with the financial statements and notes thereto of HBOC, incorporated by reference in this Prospectus. HBO & COMPANY (1) (FROM CONTINUING OPERATIONS) (000 OMITTED EXCEPT FOR PER SHARE DATA)
AT AND FOR THE SIX AT AND FOR THE YEAR ENDED DECEMBER 31, MONTHS ENDED JUNE 30, ---------------------------------------------------------- ---------------------- 1991(2) 1992 1993 1994 1995(3) 1995(4) 1996 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Income Statement Data: Revenue............................. $ 184,859 $ 228,988 $ 267,147 $ 357,436 $ 495,595 $ 209,099 $ 307,202 Operating Income.................... $ 6,560 $ 22,600 $ 31,883 $ 53,042 $ 95,722 $ 39,622 $ 69,763 Income Before Income Taxes.......... $ 5,129 $ 22,165 $ 31,495 $ 52,592 $ 94,423 $ 38,837 $ 70,821 Net Income.......................... $ 3,949 $ 14,629 $ 18,897 $ 31,555 $ 56,654 $ 23,302 $ 42,493 Primary Earnings Per Share.......... $ .06 $ .21 $ .27 $ .43 $ .72 $ .31 $ .51 Fully Diluted Earnings Per Share.... $ .06 $ .21 $ .26 $ .43 $ .72 $ .31 $ .50 Weighted Average Shares Outstanding (Fully Diluted)................... 64,148 69,904 72,020 73,334 79,023 75,136 84,513 Cash Dividends Per Share............ $ .075 $ .075 $ .075 $ .08 $ .08 $ .04 $ .04 Balance Sheet Data: Working Capital..................... $ 18,369 $ 23,969 $ 34,627 $ 11,160 $ 47,250 $ 11,779 $ 105,621 Total Assets........................ $ 114,490 $ 125,689 $ 156,182 $ 264,132 $ 535,134 $ 475,656 $ 574,950 Long-Term Debt...................... $ 20,752 $ -- $ -- $ 252 $ 582 $ 880 $ 340 Stockholders' Equity................ $ 25,706 $ 61,608 $ 83,182 $ 124,777 $ 318,730 $ 278,014 $ 371,735
- ------------------------ (1) Does not give effect to the acquisitions of CyCare and MSI in pooling transactions after June 30, 1996. All share and per share amounts have been restated to reflect the 1996 two-for-one stock split effected in the form of a stock dividend. (2) 1991 Income Statement related items exclude the nonrecurring charge of $10,883 and include the dilutive effect of stock options. The net loss was ($4,442) and fully diluted loss per share was ($.07) including the nonrecurring charge. (3) 1995 Income Statement related items exclude the nonrecurring charge of $136,481 and include the dilutive effect of stock options. The net loss was ($25,235) and fully diluted loss per share was ($.33) including the nonrecurring charge. (4) June 1995 Income Statement related items exclude the nonrecurring charge of $125,520 and include the dilutive effect of stock options. The net loss was ($52,010) and fully diluted loss per share was ($.73) including the nonrecurring charge. 6 USE OF PROCEEDS The Company will not receive any proceeds directly from the sale of any of the Shares offered hereby. A portion of the proceeds, at the option of the Selling Stockholders, may be used to replace any of the 89,373 Shares which are currently held in escrow pursuant to the terms of the Stock Purchase Agreement, dated September 10, 1996, by and among HBOC, MSI and the Selling Stockholders (the "Stock Purchase Agreement"). Under the terms of the Stock Purchase Agreement, if HBOC is entitled to indemnification thereunder, it shall first collect the amount of such indemnification from the funds in escrow. See "Selling Stockholders." SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF HBOC The following table sets forth, as of September 30, 1996, unless otherwise indicated, certain information with respect to all stockholders known to HBOC to beneficially own more than five percent of the HBOC Common Stock, and information with respect to HBOC Common Stock beneficially owned by each director of HBOC, the Chief Executive Officer of HBOC, HBOC's other executive officers who were the most highly compensated for the year ended December 31, 1995 and who continued to be employed by HBOC on September 30, 1996 and all directors and executive officers of HBOC as a group. Except as otherwise indicated, the stockholders listed in the table have sole voting and investment powers with respect to HBOC Common Stock owned by them.
AMOUNT AND NATURE OF NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS - ------------------------------------------------------------------------- ---------------------- ------------------- American Express Financial Corporation................................... 5,035,614(1) 5.8% IDS Tower 10 Minneapolis, Minnesota 55440 FMR Corp................................................................. 5,166,500(2) 6.0% 82 Devonshire Street Boston, Massachusetts 02109 Putnam Investments, Inc.................................................. 5,196,136(3) 6.0% One Post Office Square Boston, Massachusetts 02109 Alfred C. Eckert III..................................................... 30,000(4) * Holcombe T. Green, Jr.................................................... 1,238,860(5) 1.4% Philip A. Incarnati...................................................... 35,000(4) * Alton F. Irby III........................................................ 30,000(4) * Gerald E. Mayo........................................................... 82,000(4) * Charles W. McCall........................................................ 1,476,120(6) 1.7% James V. Napier.......................................................... 67,088(7) * Charles E. Thoele........................................................ 22,000(8) * Donald C. Wegmiller...................................................... 15,000(4) * Jay P. Gilbertson........................................................ 25,098(9) * Albert J. Bergonzi....................................................... 50,372(10) * Russell G. Overton....................................................... 10,198 * All Directors and Executive Officers as a Group (12 persons)............. 3,081,736 3.6%
- -------------------------- * Less than 1% (1) According to the joint Schedule 13G as of December 31, 1995, of American Express Company ("AEC") and American Express Financial Corporation ("AEFC"), each of AEC and AEFC has shared voting 7 power with respect to 2,123,814 shares and has shared dispositive power with respect to 5,035,614 shares. Neither has sole voting nor sole dispositive power with respect to such shares. AEC, the parent holding company of AEFC, disclaims beneficial ownership of all such shares. (2) According to the Schedule 13G as of December 31, 1995, of FMR Corp. ("FMR"), FMR has sole dispositive power with respect to all of such shares and sole voting power with respect to 499,700 shares. (3) According to the joint Schedule 13G as of December 31, 1995, of Putnam Investments, Inc. ("PI"), its parent, Marsh & McLennan Companies, Inc. and PI's subsidiaries, Putnam Investment Management, Inc. ("PIM") and The Putnam Advisory Company, Inc. ("PAC"), PAC has shared voting and shared dispositive power with respect to 4,419,136 of such shares and PI has shared voting and shared dispositive power with respect to 535,300 and 5,196,136 of such shares. (4) Represents shares that may be acquired through the exercise of presently exercisable stock options. (5) Includes 440,000 shares that Mr. Green may acquire through the exercise of presently exercisable stock options; 11,460 shares held in an IRA for the benefit of Mr. Green; 663,300 shares held by a limited partnership of which Mr. Green's wife is a general partner and with respect to which beneficial ownership is disclaimed, except to the extent of his pecuniary interest therein; and 124,100 shares held by HTG Corp. which is wholly owned by Mr. Green. (6) Includes 845,322 shares that may be acquired through the exercise of presently exercisable stock options. (7) Includes 600 shares owned by Mr. Napier's daughter and 40,000 shares that may be acquired through the exercise of presently exercisable stock options. (8) Includes 20,000 shares that may be acquired through the exercise of presently exercisable stock options. (9) Includes 16,000 shares that may be acquired through the exercise of presently exercisable stock options. (10) Includes 48,400 shares that may be acquired through the exercise of presently exercisable stock options. 8 SELLING STOCKHOLDERS All of the 893,748 Shares offered hereby are being sold by the Selling Stockholders. Such Shares were issued to the Selling Stockholders on September 19, 1996 in connection with the sale of all of the outstanding capital stock of MSI to the Company. The Company has filed the Registration Statement in satisfaction of its obligations to register the Shares for resale by the Selling Stockholders. HBOC has agreed to indemnify the Selling Stockholders against certain liabilities, including liabilities under the Securities Act. HBOC is entitled to indemnification from the Selling Stockholders in the event of a breach of certain representations, warranties and covenants set forth in the Stock Purchase Agreement, and an aggregate of 89,373 Shares are presently held in escrow pursuant to the Stock Purchase Agreement, which Shares may be used to satisfy any indemnification obligations of the Selling Stockholders. The Selling Stockholders may elect to sell such escrowed Shares and substitute the proceeds of such sale in the escrow. The following table sets forth certain information as of the date of this Prospectus regarding the beneficial ownership of Common Stock by the Selling Stockholders:
BENEFICIAL OWNERSHIP PRIOR TO THE OFFERING BENEFICIAL OWNERSHIP AFTER ------------------------------------- THE OFFERING(1) NUMBER OF -------------------------------------------- SHARES OF PERCENTAGE OF NUMBER OF SHARES OF PERCENTAGE OF NAME COMMON STOCK COMMON STOCK(2) SHARES OFFERED COMMON STOCK COMMON STOCK(2) - ------------------------------ ---------------- ------------------- -------------- ----------------------- ------------------- Jim Atteberry................. 288,979 * 288,979 0 -- Wayne W. Clements............. 288,979(3) * 288,979 0 -- Russell L. Still.............. 288,979(4) * 288,979 0 -- Stanley Bell.................. 8,937 * 8,937 0 -- Dan Cobb...................... 8,937 * 8,937 0 -- Charles Daniels............... 8,937 * 8,937 0 -- - ------- --- ------- --- Total................... 893,748 1.0% 893,748 0 -- - - ------- --- ------- --- ------- --- ------- ---
- ------------------------ * Less than 1%. (1) Assuming that each Selling Stockholder sells all of the Shares owned by such person in this offering. (2) Represents the number of Shares beneficially owned by each Selling Stockholder, expressed as a percentage of all shares of Common Stock actually outstanding as of September 30, 1996. (3) Represents Shares held as tenants in common with Susan Clements. (4) Represents Shares held as tenants in common with Sara S. Still. Each of the Selling Stockholders is employed by HBOC-GA, a wholly owned subsidiary of HBOC, and is subject to a Confidentiality and Noncompetition Agreement in favor of HBOC-GA. Prior to the acquisition of MSI by HBOC, the Selling Stockholders were stockholders, and Messrs. Atteberry, Clements and Still were executive officers, of MSI. In connection with the sale of the Shares to the Selling Stockholders, HBOC, MSI and Messrs. Atteberry, Still and Clements entered into an agreement dated September 10, 1996, pursuant to which HBOC agreed to grant to each of Messrs. Atteberry, Still and Clements incentive stock options to purchase 15,000 shares and to grant to each of Messrs. Bell, Cobb and Daniels incentive stock options to purchase 6,000 shares. Each option will vest over a period of five (5) years at twenty percent (20%) per year and is conditioned upon the option holder's compliance with the terms of the Confidentiality and Noncompetition Agreement. PLAN OF DISTRIBUTION Any or all of the Shares offered by the Selling Stockholders hereby may be offered for sale and sold by or on behalf of the Selling Stockholders from time to time in varying amounts, including in block 9 transactions, on the Nasdaq NM or the over-the-counter market, in privately negotiated transactions, or otherwise, at prices prevailing in such market or as may be negotiated at the time of the sale. The Shares may be sold by the Selling Stockholders directly to one or more purchasers, through agents designated from time to time or to or through broker-dealers designated from time to time. In the event the Shares are publicly offered through broker-dealers or agents, the Selling Stockholders may enter into agreements with respect thereto. Such broker-dealers or agents may receive compensation in the form of discounts, concessions or commissions from the Selling Stockholders and/or the purchasers of the Shares. The Selling Stockholders and any such broker-dealers or agents that participate in the distribution of the Shares may be deemed to be underwriters within the meaning of the Securities Act, and any profit on the sale of the Shares by them and any discounts, commissions or concessions received by them may be deemed to be underwriting discounts and commissions under the Securities Act. Any such broker-dealers and agents may engage in transactions with, and perform services for, the Company. At the time a particular offer of Shares is made by the Selling Stockholders, to the extent required, a Prospectus Supplement will be distributed which will set forth the aggregate number of Shares being offered, and the terms of the offering, including the public offering price thereof, the name or names of any broker-dealers or agents, any discounts, commissions and other items constituting compensation from, and the resulting net proceeds to, the Selling Stockholders. In order to comply with the securities laws of certain states, sales of Shares offered hereby to the public in such states may be made only through broker-dealers who are registered or licensed in such states. Sales of Shares offered hereby must also be made by the Selling Stockholders in compliance with other applicable state securities laws and regulations. The Company has been advised by the Selling Stockholders that they have not, as of the date of this Prospectus, entered into any arrangement with an agent or broker-dealer for the sale of the Shares owned by them being offered hereby. CERTAIN LEGAL MATTERS The validity of the Shares of HBOC Common Stock offered hereby will be passed upon for HBOC by Jones, Day, Reavis & Pogue, Atlanta, Georgia. EXPERTS The audited financial statements and schedule of HBOC incorporated by reference in this Prospectus and elsewhere in the Registration Statement of which this Prospectus is a part, to the extent and for the periods indicated in their reports, have been audited by Arthur Andersen LLP, independent public accountants, and are included herein in reliance upon the authority of said firm as experts in giving said reports. With respect to the unaudited interim financial information of HBOC for the quarters ended March 31, and June 30, 1995 and 1996, which are incorporated by reference herein, Arthur Andersen LLP has applied limited procedures in accordance with professional standards for a review of that information. However, their separate report thereon states that they did not audit and they do not express an opinion on that interim financial information. Accordingly, the degree of reliance on their report on that information should be restricted in light of the limited nature of the review procedure applied. In addition, the accountants are not subject to the liability provisions of Section 11 of the Securities Act, for their report on the unaudited interim financial information because that report is not a "report" or a "part" of the Registration Statement prepared or certified by the accountants within the meaning of Sections 7 and 11 of the Securities Act. The financial statements of the Health Services Business of First Data Health Systems Corporation at December 31, 1993 and 1994, and for each of the three years in the period ended December 31, 1994 incorporated herein and in the Registration Statement of which this Prospectus is a part have been audited by Ernst & Young LLP, independent auditors, as set forth in their reports thereon, and are incorporated herein in reliance upon such reports given upon the authority of such firm as experts in accounting and auditing. 10 INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. Estimated expenses in connection with the issuance and distribution of the securities to be registered, other than underwriting discounts and commissions, are as follows:
ITEM AMOUNT* - ----------------------------------------------------------------------------------- --------- Registration fee................................................................... $ 15,302 Printing and engraving expenses.................................................... 10,000 Legal fees and expenses............................................................ 30,000 Accounting fees and expenses....................................................... 9,000 Miscellaneous expenses............................................................. 5,698 --------- Total.......................................................................... $ 70,000 --------- ---------
- ------------------------ * All amounts estimated except the Registration fee. All such expenses will be borne by the Company. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS HBO & Company's (the "Company") 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 General Corporation Law of the State of Delaware, 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 thereafter acquire and, without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any bylaw, agreement, vote of stockholders, provision of law or otherwise, as well as their rights under such article. Article IX, Section 2 of the Company's By-Laws provides that the Board of Directors may cause the corporation to purchase and maintain insurance on behalf of any person who is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the corporation would have the power to indemnify such person. With respect to indemnification of officers and directors, Section 145 of the Delaware General Corporation Law provides that a corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably II-1 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 General Corporation Law of Delaware enables 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 as a director. The statute provides, however, that liability for (a) breach of the director's duty of 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) transactions from which a director derived an improper personal benefit cannot be eliminated or limited in this manner. The Company's Certificate of Incorporation contains such provisions. ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (a) Exhibits. The following exhibits are filed as part of this Registration Statement.
EXHIBIT NUMBER DESCRIPTION - ------- ----------------------------------------------------------------------- 4 Registration Rights Agreement, dated September 19, 1996, by and among HBO & Company and the Shareholders (as defined therein). 5 Form of opinion of Jones, Day, Reavis & Pogue re legality. 23(a) Consent of Arthur Andersen LLP. 23(b) Consent of Ernst & Young LLP. 23(c) Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5). 24 Power of Attorney (included in signature page).
II-2 The following exhibits filed with the Securities and Exchange Commission are incorporated by reference as shown below.
EXHIBIT NUMBER DESCRIPTION - ------ ---------------------------------------------------------------------- ON MAY 13, 1981, AS PART OF ITS REGISTRATION STATEMENT ON FORM S-1 (REGISTRATION NUMBER 2-72275): 4 a) -- Specimen forms of certificates for Common Stock of Registrant. ON FEBRUARY 15, 1991, AS PART OF ITS FORM S-8 (REGISTRATION NUMBER 2-75987): 4 -- HBO & Company 1981 Incentive Stock Option Plan, as amended. ON FEBRUARY 22, 1991, AS PART OF ITS FORM 8-K: 4 -- HBO & Company Rights Agreement. ON MARCH 26, 1991, AS PART OF ITS FORM S-8 (REGISTRATION NUMBER 2-92030): 4 -- HBO & Company Nonqualified Stock Option Plan, as amended. ON MARCH 27, 1991, AS PART OF ITS FORM S-8 (REGISTRATION NUMBER 33-12051): 4 -- HBO & Company 1986 Employee Nonqualified Stock Option Plan, as amended. ON AUGUST 12, 1993, AS PART OF ITS FORM S-8 (REGISTRATION NUMBER 33-67300): 4 -- HBO & Company 1993 Stock Option Plan for Nonemployee Directors. ON JUNE 14, 1994, AS PART OF ITS FORM 8-K REPORT DATED JUNE 13, 1994, AS AMENDED BY FORM 8-KA DATED JUNE 30, 1994 AND FILED WITH THE COMMISSION ON JULY 1, 1994: 2 -- Asset Purchase Agreement among IBAX Healthcare Systems, Baxter Healthcare Corporation, International Business Machines Corporation, Baxter Systems, Inc., HCPG Corporation, HBO & Company and HBO & Company of Georgia dated May 31, 1994. ON JULY 20, 1994, AS PART OF THE FORM S-4 REGISTRATION STATEMENT DATED JULY 19, 1994, AS AMENDED BY AMENDMENT NO. 1 TO FORM S-4 DATED AUGUST 10, 1994, AND FILED WITH THE COMMISSION ON AUGUST 11, 1994, AND FURTHER AMENDED BY AMENDMENT NO. 2 TO FORM S-4 DATED AUGUST 10, 1994, AND FILED WITH THE COMMISSION AUGUST 11, 1994: 2 -- Agreement of Merger dated June 30, 1994, by and among HBO & Company, HBO & Company of Georgia and Serving Software, Inc. 3 -- Amended Bylaws. ON AUGUST 17, 1994, AS PART OF ITS FORM S-8 (REGISTRATION NUMBER 33-82962): 4 -- HBO & Company 1990 Executive Incentive Plan, as amended. ON SEPTEMBER 15, 1994, AS PART OF ITS FORM S-8 (REGISTRATION NUMBER 33-84034): 4 -- 1986 Incentive Stock Option Plan of Serving Software, Inc. ON MARCH 17, 1995, AS PART OF ITS FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1994: 4 -- Chief Executive Officer Incentive Plan. ON MAY 9, 1995, AS PART OF ITS FORM S-8 (REGISTRATION NUMBER 33-59173): 4 -- HBO & Company 1986 Nonqualified Stock Option Agreement, HBO & Company 1991 Nonqualified Stock Option Agreement 1 and HBO & Company 1991 Nonqualified Stock Option Agreement 2. ON JUNE 23, 1995, AS PART OF ITS FORM 8-K DATED JUNE 23, 1995, AS AMENDED BY FORM 8-KA DATED JULY 31, 1995, AND FILED WITH THE COMMISSION ON JULY 31, 1995, AS FURTHER AMENDED BY FORM 8-KA2 DATED AUGUST 8, 1995 AND FILED WITH THE COMMISSION ON AUGUST 8, 1995: 2 -- Stock Purchase Agreement, dated as of May 16, 1995, among First Data Corporation, FDC Health, Inc., First Data Health Systems Corporation, HBO & Company, and HBO & Company of Georgia, as amended by letter agreement dated June 17, 1995.
II-3
EXHIBIT NUMBER DESCRIPTION - ------ ---------------------------------------------------------------------- ON AUGUST 17, 1995, AS PART OF ITS FORM S-4 REGISTRATION STATEMENT DATED AUGUST 17, 1995, AS AMENDED BY AMENDMENT NO. 1 TO FORM S-4 DATED SEPTEMBER 1, 1995, AND FILED WITH THE COMMISSION ON SEPTEMBER 1, 1995: 2 -- Agreement of Merger dated July 14, 1995, by and among HBO & Company, HBO & Company of Georgia and CliniCom Incorporated. ON OCTOBER 5, 1995, AS PART OF ITS FORM S-8 (REGISTRATION NUMBER 33-63213): 4 -- 1985 Employee Stock Option Plan of CliniCom Incorporated. ON MARCH 13, 1996, AS PART OF ITS FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1995: 4 -- HBO & Company 1983 Employee Discount Stock Purchase Plan, as restated. ON MAY 21, 1996, AS PART OF ITS FORM 8-K DATED MAY 21, 1996, AND FILED WITH THE COMMISSION ON MAY 21, 1996: 3 i) -- Amended and Restated Certificate of Incorporation of Registrant. ON OCTOBER 18, 1995, AS PART OF ITS FORM S-4 REGISTRATION STATEMENT AS FILED WITH THE COMMISSION ON OCTOBER 18, 1996: 4 -- Agreement of Merger dated September 23, 1996, by and among HBO & Company, HBO & Company of Georgia and GMIS Inc.
(b) Financial Statement Schedules. No financial statement schedules are required to be filed herewith. ITEM 17. UNDERTAKINGS. The undersigned Registrant hereby undertakes: (1) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; (2) That, for the purpose of determining any liability under the Securities Act of 1933 each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) 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. Insofar as indemnification for liabilities arising under the Securities Act of 1933 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 Securities and Exchange Commission such indemnification is against public policy as expressed in the 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 II-4 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 Act and will be governed by the final adjudication of such issue. II-5 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-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Atlanta, in the State of Georgia, on the 29th day of October, 1996. HBO & COMPANY By: _______/s/_CHARLES W. MCCALL______ Charles W. McCall PRESIDENT AND CHIEF EXECUTIVE OFFICER 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, 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 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 below by the following persons in the capacities and on the dates indicated:
SIGNATURE TITLE DATE - ------------------------------ -------------------------- ------------------- /s/ CHARLES W. MCCALL Director, President and - ------------------------------ Chief Executive Officer October 29, 1996 (Charles W. McCall) (Principal Executive Officer) /s/ JAY P. GILBERTSON Senior Vice - ------------------------------ President--Finance, October 29, 1996 (Jay P. Gilbertson) Chief Financial Officer, Principal Accounting Officer, Treasurer and Assistant Secretary (Principal Financial Officer and Principal Accounting Officer) /s/ HOLCOMBE T. GREEN, JR. - ------------------------------ Chairman of the Board of October 29, 1996 (Holcombe T. Green, Jr.) Directors /s/ ALFRED C. ECKERT III - ------------------------------ Director October 29, 1996 (Alfred C. Eckert III)
II-6
SIGNATURE TITLE DATE - ------------------------------ -------------------------- ------------------- /s/ PHILIP A. INCARNATI - ------------------------------ Director October 29, 1996 (Philip A. Incarnati) /s/ ALTON F. IRBY III - ------------------------------ Director October 29, 1996 (Alton F. Irby III) /s/ GERALD E. MAYO - ------------------------------ Director October 29, 1996 (Gerald E. Mayo) /s/ JAMES V. NAPIER - ------------------------------ Director October 29, 1996 (James V. Napier) /s/ CHARLES E. THOELE - ------------------------------ Director October 29, 1996 (Charles E. Thoele) /s/ DONALD C. WEGMILLER - ------------------------------ Director October 29, 1996 (Donald C. Wegmiller)
II-7 INDEX TO EXHIBITS
EXHIBITS PAGE - --------- --------- 4 Registration Rights Agreement, dated September 19, 1996, by and among HBO & Company and the Shareholders (as defined therein). 5 Form of opinion of Jones, Day, Reavis & Pogue re legality. 23(a) Consent of Arthur Andersen LLP. 23(b) Consent of Ernst & Young LLP. 23(c) Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5). 24 Power of Attorney (included in signature page).
EX-4 2 EXHIBIT 4 REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement dated September 19, 1996 (the "Agreement") by and among HBO & Company, a Delaware corporation ("Parent"), and the Shareholders as defined in Section 2.11 hereof is an exhibit to and incorporated by reference in that certain Stock Purchase Agreement (the "SPA") of even date herewith by and among Parent, Management Software, Inc., a Missouri Corporation ("MSI"), and the Shareholders. Capitalized terms used in this Agreement and not otherwise defined shall have the meanings ascribed to them in the SPA. Certain capitalized terms used herein are defined in Section 2.11 of this Agreement. 1.1 DEMAND REGISTRATIONS. (a) DEMAND REGISTRATIONS. With the exception of the anticipated procedure set forth in the second sentence of this Section 1.1(a), at any time after the date on which Parent shall have published combined results of operations of Parent and MSI for not less than a 30 day period following the acquisition of MSI, as required by Section 2.26 of the SPA (the "Commencement Date") and prior to the termination of this Agreement, upon receipt of a written request (the "DEMAND NOTICE"), given by one or more Shareholders that own an aggregate of 60% or more of the Registrable Securities, to register Registrable Securities held by such Shareholders, the Parent shall, as promptly as practicable after receiving such Demand Notice, file a Registration Statement and shall include in the Registration Statement the Registrable Securities requested to be registered by the Shareholders. It is the current intention of the parties that, the first sentence of this Section 1.1(a) notwithstanding, at the Closing (as defined in the SPA), the Shareholders will submit to Parent a Demand Notice requesting that all of the Registrable Securities be registered under the Securities Act and any applicable State securities laws. In that event, and subject to the provisions of Section 1.1(e), Parent agrees to file a Registration Statement covering the Registrable Securities on or before November 1, 1996, and shall use its best efforts to have such Registration Statement declared effective as soon as possible after the Commencement Date. A registration effected pursuant to this Section 1.1(a) is referred to as a "Demand Registration." (b) NUMBER OF DEMAND REGISTRATIONS. The Shareholders shall be entitled to one (1) Demand Registration PROVIDED that if the Demand Registration is not declared effective other than by reason of the actions of the Shareholders, then the Shareholders shall be entitled to an additional Demand Registration in lieu thereof. (c) MINIMUM AMOUNT OF REGISTRABLE SECURITIES. The Parent shall not be required to effect any Demand Registration unless the aggregate number of shares of Registrable Securities requested to be registered by the Shareholders shall equal at least 50% of the total number of shares of Registrable Securities (adjusted to take account of any stock splits, combinations or other similar events). (d) FILING AND EFFECTIVENESS. Each Demand Registration shall be on Form S-3 or other available form permitting registration of such securities for resale by such Shareholders in the manner or manners designated by them (but NOT including an underwritten offering). Subject to the provisions of the second sentence of Section 1.1(a) and the obligations of the Parent set forth therein, the Parent shall promptly use its best efforts to file the Demand Registration and shall use its best efforts to cause the same to be declared effective by the SEC (in each case, the "EFFECTIVENESS DATE"). Subject to the provisions of the second sentence of Section 1.1(a) and the obligations of the Parent set forth therein, within ten days after receipt of such Demand Notice, the Parent shall provide written notice (the "Registration Notice") of such registration request to all other Shareholders and shall include in such registration all Registrable Securities with respect to which the Parent received written requests for inclusion therein within thirty (30) days after the date of delivery of the Demand Notice. Subject to the provisions of Section 1.1(e), the Parent hereby agrees to comply with all necessary provisions of the federal securities laws in order to keep such Registration Statement effective until the earlier of: (i) the date upon which all Registrable Securities which are the subject of such Registration Statement have been sold or (ii) the date which is 30 calendar days from its Effectiveness Date; PROVIDED, HOWEVER, if the average closing price of Parent's Common Stock on the NASDAQ Stock Market National Market for such 30 calendar day period is less than $55 per share and Registrable Securities 2 remain unsold at the end of such period, the Parent will, subject to the provisions of Section 1.1(e), keep such Registration Statement effective until the earlier of an additional 30 calendar days or the date upon which all Registrable Securities which are the subject of such Registration Statement have been sold. (e) POSTPONEMENT OF REGISTRATION. Notwithstanding anything to the contrary contained herein, the Parent may postpone for up to seventy-five (75) days the filing or the effectiveness of a Registration Statement for a Demand Registration that has been requested, or suspend transfers of Registrable Securities pursuant to an effective Demand Registration Statement, in either case if its Board of Directors reasonably believes the requested registration might (i) affect or interfere with any proposal or plan by the Parent to engage in any transaction contemplated by the Company (other than in the ordinary course of business), or (ii) involve disclosure obligations which might not be in the best interests of the Parent or its stockholders and where the failure to disclose would result in a material omission, provided, however, that in the case of a postponement or suspension under (ii) above the period of such postponement or suspension shall be for up to fifteen (15) days and; provided further that the period of any such postponement or suspension will be added to the period specified under 1(d), which Parent will use its Best Efforts to minimize; (f) OTHER SHAREHOLDERS. The Shareholders understand that registration rights similar to those contained in this Agreement may be extended in the future to other holders of securities of the Parent. The Demand Registration may include other securities of Parent that are held by persons who, by virtue of agreements with Parent, are entitled to include their securities in a Demand Registration effected pursuant to this Agreement; PROVIDED, HOWEVER, that any such other registration rights shall not modify the obligations of Parent with respect to the filing of the Demand Registration Statement as provided for herein. 1.2 INCIDENTAL REGISTRATIONS. (a) "PIGGY-BACK" REGISTRATIONS. If the Parent at any time after the Commencement Date and prior to the termination of this Agreement proposes to register its Common Stock under the Securities Act (other than a registration on Form S-8, S-4 or any successor or similar forms) for a public offering for cash, whether or not for its own account, it will, each such time, give prompt written notice to all Shareholders of record of Registrable Securities of its intention to do so and of such Shareholders' rights under this Section 1.2, at least 30 calendar days prior to the anticipated date of the initial filing of the 3 registration statement relating to such registration. Upon the written request of any such Shareholder made within 20 calendar days after the receipt of the Parent's notice (which request shall specify the number of Registrable Securities intended to be disposed of by such Shareholder), the Parent shall use its best efforts to effect the registration under the Securities Act of all Registrable Securities which the Parent has been so requested to register by the Shareholders (subject to Section 1.2(b) hereof), to permit the disposition of the Registrable Securities so to be registered, PROVIDED that: (i) if such registration involves an underwritten offering, all Shareholders requesting Registrable Securities to be included in the Parent's registration must sell their Registrable Securities to the underwriters selected by the Parent or other party entitled thereto on the same terms and conditions as have been agreed to by Parent or such other party; (ii) if, at any time after giving written notice of its intention to register its Common Stock pursuant to this Section 1.2 and prior to the effective date of the registration statement filed in connection with such registration, the Parent or other party on whose behalf such registration statement has been filed shall determine for any reason not to register such Common Stock, the Parent shall give written notice to all Shareholders and, thereupon, shall be relieved of its obligation to register any Registrable Securities in connection with such registration. A registration effected pursuant to this Section 1.2(a) is referred to herein as an "INCIDENTAL REGISTRATION." (b) PRIORITY IN INCIDENTAL REGISTRATIONS. If a registration pursuant to this Section 1.2 involves an underwritten offering and the managing Underwriter advises the Parent that, in its opinion, the number of securities (including all Registrable Securities) which the Parent, the Shareholders and any other persons propose to include in such registration exceeds the largest number of securities which can be sold without having an adverse effect on such offering, including the price at which such securities can be sold, the Parent will include in such registration up to such maximum number of securities (i) in the case such registration was undertaken initially by Parent for its own account: (1) FIRST, all the securities the Parent initially proposes to sell for its own account, and (2) SECOND, to the extent that the number of securities referred to in clause (i)1 is less than the number of securities which the Parent has been advised can be sold in such offering without having the adverse effect referred to above, then all Registrable Securities requested to be included in such registration by the Shareholders pursuant to Section 1.2(a) or by any other holder of securities electing to register securities pursuant to any similar registration rights agreement pro rata on the basis of the relative number of securities requested by each 4 of them to be included in such registration or (ii) in the case such registration was undertaken on behalf of holders (the "Demanding Holders") other than the Shareholders: (1) FIRST, all of the securities such Demanding Holders propose to include and (2) SECOND, to the extent that the number of securities referred to in clause (ii)1 is less than the number of securities which the Parent has been advised can be sold in such offering without having the adverse effect referred to above, then all Registrable Securities requested to be included in such registration by the Shareholders pursuant to Section 1.2(a) or by any other holder of securities electing to register securities pursuant to any similar registration rights agreement pro rata on the basis of the relative number of securities requested by each of them to be included in such registration. (c) HOLD-BACK AGREEMENTS. Each Shareholder whose Registrable Securities are covered by a Registration Statement filed pursuant to Section 1.2 hereof agrees, if requested (pursuant to a timely written notice) by the managing Underwriter if there is an underwritten offering, not to effect any public sale or distribution of any of the issue being registered or a similar security of the Parent or any securities convertible or exchangeable or exercisable for such securities, including a sale pursuant to Rule 144 (except as part of such underwritten offering), during the period beginning 10 days prior to, and ending up to 180 days (as may be requested by the managing Underwriter) after, the closing date of such underwritten offering made pursuant to such Registration Statement (or such shorter period as the managing Underwriter may agree), to the extent timely notified in writing by the Parent or by the managing Underwriter. 1.3 REGISTRATION PROCEDURES. In connection with the registration of any Registrable Securities, the Parent shall effect such registration to permit the sale of such Registrable Securities in accordance with the intended method or methods of disposition thereof, and pursuant thereto the Parent shall as expeditiously as possible: (a) Prepare and file with the SEC a Registration Statement on Form S-3 or such other form available for the sale of the Registrable Securities by the Shareholders in accordance with the intended method of distribution thereof, and use its best efforts to cause such Registration Statement to become effective and remain effective as provided herein, and in any event, to file the Registration Statement relating to the Demand Registration and use its best efforts to cause such Registration Statement to become effective in accordance with Section 1.1(a) and to keep such Registration Statement effective for the effective period as 5 set forth in Section 1.1(d), subject to the provisions of Section 1.1(e). (b) Prepare and file with the SEC such amendments and post-effective amendments to such Registration Statement as may be necessary to keep such Registration Statement continuously effective for the effectiveness period as set forth in Section 1.1(d); cause the related Prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act; and comply with the provisions of the Securities Act, the Exchange Act and the rules and regulations of the SEC promulgated thereunder applicable to it with respect to the disposition of all securities covered by such Registration Statement as so amended or in such Prospectus as so supplemented. (c) Prior to any public offering of Registrable Securities, register or qualify, and cooperate with the Shareholders selling Registrable Securities, the Underwriter, if any, and their respective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of, such Registrable Securities for offer and sale under the securities or "blue sky" laws of such jurisdictions within the United States as any such selling Shareholder or the managing Underwriter, if any, reasonably request in writing, and the Parent agrees to cause its counsel to perform "blue sky" investigations and file registrations and qualifications required to be filed pursuant to this Section 1.3(c) (unless the Registrable Securities are offered through an underwritten offering); to keep each such registration or qualification (or exemption therefrom) effective during the period during which the related Registration Statement is required to be kept effective as provided in Section 1.1(d); and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by the applicable Registration Statement; PROVIDED, HOWEVER, that the Parent will not be required to (A) qualify generally to do business in any jurisdiction where it is not then so qualified or (B) take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject. (d) Notify the Shareholders who are selling Registrable Securities, their counsel and the managing or sole Underwriter, if any, promptly (i) of the issuance by the SEC of any stop order suspending the effectiveness of a 6 Registration Statement or of any order preventing or suspending the use of any Prospectus or the initiation of any proceedings for that purpose or (ii) of the receipt by the Parent of any notification with respect to the suspension of the qualification or exemption from qualification of a Registration Statement or any of the Registrable Securities for offer or sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose and use its best efforts (including, if necessary, the filing of any amendments or supplements to the Registration Statement or the Prospectus) to prevent the issuance of any order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of a Prospectus or suspending the qualification (or exemption from qualification) of a Registration Statement for any of the Registrable Securities for sale in any jurisdiction. If a stop-order or suspension of qualification is issued, the Parent shall use its best efforts to obtain as soon as possible the withdrawal thereof. (e) Notify the Shareholders who are selling Registrable Securities, their counsel and the managing or sole underwriter, if any, promptly if at any time when a Prospectus is required by the Securities Act to be delivered in connection with sales of the Registrable Securities there occurs any development or any event that makes any statement made in such Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in such Registration Statement, Prospectus or document so that it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements, in light of the circumstances under which they were made, not misleading, and, as soon as reasonably possible, prepare a post-effective amendment to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any such document or other required document so that, as thereafter delivered to the purchasers of the Registrable Securities being sold thereunder, such Registration Statement, Prospectus or documents will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Each Shareholder agrees that upon receipt of any notice from the Parent pursuant to this Section 1.3(e), such holder 7 shall forthwith discontinue disposition of Registrable Securities until it shall have received copies of such amended or supplemented Prospectus; PROVIDED, HOWEVER, that in such event, the period of time from such notice until delivery of such amended or supplemented Prospectus shall be added to the period of effectiveness as set forth in Section 1.1(d). (f) If requested by the managing or sole Underwriter, if any, or the Shareholders owning a majority of the Registrable Securities being sold in connection with an underwritten offering, (i) promptly incorporate in a prospectus supplement or post-effective amendment such information as the managing or sole Underwriter, if any, or such Shareholders reasonably request to be included therein to comply with applicable law, (ii) make all required filings of such prospectus supplement or such post-effective amendment as soon as practicable after the Parent has received notification of the matters to be incorporated in such prospectus supplement or post- effective amendment, and (iii) supplement or make amendments to such Registration Statement; PROVIDED, HOWEVER, that the Parent shall not be required to take any actions under this Section 1.3(f) that are not, in the opinion of counsel for the Parent, in compliance with applicable law. (g) Furnish to each Shareholder selling Registrable Securities who so requests and to his counsel and each managing Underwriter, if any, without charge, one conformed copy of the Registration Statement and each post- effective amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference and all exhibits. (h) Furnish to the Representative as soon as is reasonable practicable, copies of all documents proposed to be filed, which documents will be subject to the review of the Representative, and Parent will not file any Registration Statement or amendment thereto, or any Prospectus or any supplement thereto, if the Representative shall reasonably object on the basis of the requirements of the Securities Act and any other applicable laws and regulations. (i) Deliver to each Shareholder selling Registrable Securities, their counsel, and the managing Underwriter, if any, without charge, as many copies of the Prospectus (including each form of prospectus) and each amendment or supplement thereto as they may reasonably request. 8 (j) If the offering is to be underwritten, enter into an underwriting agreement in form, scope and substance as is customary in underwritten offerings and take all such other actions as are reasonably requested by the managing or sole Underwriter in order to expedite or facilitate the registration or the disposition of such Registrable Securities. (k) Cause all Registrable Securities covered by such Registration Statement to be (i) listed on each securities exchange on which securities issued by the Parent are then listed, or (ii) authorized to be quoted on the NASDAQ or the National Market System of the NASDAQ. Each Shareholder who is selling Registrable Securities as to which any registration is being effected shall furnish to the Parent such information regarding such Shareholder and the distribution of such Registrable Securities as the Parent may, from time to time, reasonably request, PROVIDED that such information shall be used only in connection with such registration. The Parent may exclude from such registration the Registrable Securities of any Shareholder who unreasonably fails to furnish such information as promptly as practicable after receiving such request. 1.4 REGISTRATION EXPENSES. (a) All fees and expenses incident to the performance of or compliance with this Agreement by the Parent shall be borne by the Parent whether or not any Registration Statement is filed or becomes effective, including, without limitation, (i) all registration and filing fees (including, without limitation, (A) fees with respect to filings required to be made with the National Association of Securities Dealers, Inc. in connection with an underwritten offering and (B) fees and expenses of compliance with state securities or "blue sky" laws (including, without limitation, fees and disbursements of counsel for the Underwriters or counsel for the Parent, in connection with "blue sky" qualifications of the Registrable Securities and determination of the eligibility of the Registrable Securities for investment under the laws of such jurisdictions as provided in Section 1.4(c), in the case of Registrable Securities), (ii) printing expenses, (iii) fees and disbursements of counsel for the Parent, (iv) fees and disbursements of the Company's independent certified public accountants (including, without limitation, the expenses of any special audit and "cold comfort" letters required by or incident to such performance), and (v) the fees and expenses incurred in connection with the listing of the securities to be registered on any securities exchange or NASDAQ. 9 (b) In connection with any Registration Statement hereunder, the Shareholders selling the Registrable Securities being registered shall bear the discounts, commissions, or fees of Underwriters, selling brokers, dealer managers or similar securities industry professionals relating to the distribution of the Registrable Securities and the fees and disbursements of any counsel engaged by the Shareholders. (c) The Parent shall not be required to pay for the expenses of any registration proceeding begun pursuant to a Demand Registration if the registration is subsequently withdrawn at the request of the Shareholders who delivered the Demand Notice and, in such event, the Shareholders will promptly reimburse Parent for such expenses. If the Shareholders fail to promptly reimburse the Company, then such registration, even though, subsequently withdrawn, shall be deemed to have satisfied Parent's obligations under Section 1.1 hereof. 1.5 INDEMNIFICATION, CONTRIBUTION. (a) INDEMNIFICATION BY THE PARENT. The Parent shall indemnify and hold harmless, to the full extent permitted by law, each Shareholder selling Registrable Securities (each, a "SHAREHOLDER INDEMNIFIED PARTY"), from and against any and all losses, claims, damages, liabilities, actions or proceedings (whether commenced or threatened), reasonable costs (including, without limitation, reasonable costs of preparation and reasonable attorneys' fees and reasonable expenses) (collectively, "LOSSES"), as incurred, arising out of or based upon (i) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus or form of prospectus or in any amendments or supplements thereto or in any preliminary prospectus, or arising out of or based upon any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or any amendment or supplement thereto or any preliminary prospectus, in light of the circumstances under which they were made) not misleading, except to the extent that the same arise out of or are based upon information furnished in writing to the Parent by such Indemnified Party for use therein or (ii) any violation by the Parent of any federal, state or common law rule or regulation applicable to the Parent and relating to action required of or inaction by the Parent in connection with any such registration; PROVIDED, HOWEVER, that the Parent shall not be liable to any Indemnified Party to the extent that any such Losses arise out of or are based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any preliminary prospectus if (x) such Shareholder Indemnified Party failed to send or deliver a copy of the Prospectus with or prior to the 10 delivery of written confirmation of the sale by such Indemnified Party to the Person asserting the claim from which such Losses arise, and the Prospectus would have corrected such untrue statement or alleged untrue statement or such omission or alleged omission. Such indemnity and reimbursement of costs and expenses shall remain in full force and effect regardless of any investigation made by or on behalf of such Shareholder Indemnified Party. (b) INDEMNIFICATION BY SHAREHOLDER SELLING REGISTRABLE SECURITIES. In connection with any Registration Statement in which a Shareholder is offering Registrable Securities, such Shareholder shall furnish to the Parent in writing such information as the Parent reasonably requests for use in connection with any Registration Statement or Prospectus and such Shareholder shall, severally and not jointly, indemnify, to the full extent permitted by law, the Parent and its respective directors, officers, agents and employees, each Person who controls the Parent (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors officers, agents or employees of such controlling persons (each a "PARENT INDEMNIFIED PARTY"), from and against all Losses arising out of or based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus, or form of prospectus, or arising out of or based upon any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, to the extent, but only to the extent, that such untrue or alleged untrue statement is contained in, or such omission or alleged omission is required to be contained in, any information furnished in writing by such Shareholder to the Parent expressly for use in such Registration Statement or Prospectus. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of any such Parent Indemnified Party. (c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any Person shall be entitled to indemnity hereunder (for purposes of this Section 1.5(c) an "INDEMNIFIED PARTY"), such indemnified party shall give prompt notice to the party or parties from which such indemnity is sought (for purposes of this Section 1.6(c) the "INDEMNIFYING PARTIES") of the commencement of any action, suit, proceeding or investigation or written threat thereof (a "PROCEEDING") with respect to which such indemnified party seeks indemnification or contribution pursuant hereto; PROVIDED, HOWEVER, that the failure to so notify the indemnifying parties shall not relieve the indemnifying parties from any obligation or liability except to the extent that the indemnifying parties have been prejudiced by such failure. The indemnifying parties shall have the right, exercisable by giving written notice to an 11 indemnified party promptly after the receipt of written notice from such indemnified party of such Proceeding, to assume, at the indemnifying parties' expense, the defense of any such Proceeding, with counsel reasonably satisfactory to such indemnified party; PROVIDED, HOWEVER, that an indemnified party or parties (if more than one such indemnified party is named in any Proceeding) shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless: (1) the indemnifying parties agree to pay such fees and expenses; (2) the indemnifying parties fail promptly to assume the defense of such Proceeding or fail to employ counsel reasonably satisfactory to such indemnified party or parties; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such indemnified party or parties and the indemnifying parties or an affiliate of the indemnifying parties or such indemnified parties, and there may be one or more defenses available to such indemnified party or parties that are different from or additional to those available to the indemnifying parties, in which case, if such indemnified party or parties notifies the indemnifying parties in writing that it elects to employ separate counsel at the expense of the indemnifying parties, the indemnifying parties shall not have the right to assume the defense thereof and such counsel shall be at the expense of the indemnifying parties, it being understood, however, that, unless there exists a conflict among indemnified parties, the indemnifying parties shall not, in connection with any one such Proceeding but substantially similar or related Proceedings in the same jurisdiction, arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (together with appropriate local counsel) at any time for such indemnified party or parties. Whether or not such defense is assumed by the indemnifying parties, such indemnifying parties or indemnified party or parties will not be subject to any liability for any settlement made without its or their consent (but such consent will not be unreasonably withheld). The indemnifying parties shall not consent to entry of any judgment or enter into any settlement (i) which provides for other than monetary damages without the consent of the indemnified party or parties (which consent shall not be unreasonably withheld or delayed) or (ii) that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party or parties of a release, in form and substance satisfactory to the indemnified party or parties, from all liability in respect of such Proceeding for which such indemnified party would be entitled to indemnification hereunder. 12 (d) CONTRIBUTION. If the indemnification provided for in this Section 1.5 is unavailable to an indemnified party, then the indemnifying party, in lieu of indemnifying such indemnified party, shall have an obligation to contribute to the amount paid or payable by such indemnified party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and such indemnified party, on the other hand, in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such indemnifying party, on the one hand, and indemnified party, on the other hand, shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been taken by, or relates to information supplied by, such indemnifying party or indemnified party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent any such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include any legal or other fees or expenses incurred by such party in connection with any Proceeding, to the extent such party would have been indemnified for such expenses if the indemnification provided for in Section 1.5(a) or 1.5(b) was available to such party. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 1.5(d) were determined by PRO RATA allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provision of this Section 1.5(d), an indemnifying party that is a Shareholder selling Registrable Securities shall not be required to contribute any amount in excess of the amount by which the net proceeds received by such indemnifying party exceeds the amount of any damages that such indemnifying party has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. [The suggested changes were not made because the concept of risk sharing in this paragraph is applicable to contribution but not to indemnification.] (e) The provisions of Section 1.5 shall not be affected by termination of this Agreement pursuant to Section 2.9. 13 Section 2. MISCELLANEOUS. 2.1 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF. 2.2 NOTICES. All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given or delivered when delivered personally or when sent by registered or certified mail or by private courier addressed as follows: If to Parent or HBO-GA, to: HBO & Company 301 Perimeter Center North Atlanta, Georgia 30346 Attention: Jay M. Lapine, Esq. Vice President and General Counsel With a copy to: Jones, Day, Reavis & Pogue 3500 One Peachtree Center 303 Peachtree Street, N.E. Atlanta, Georgia 30308-3242 Attention: Robert W. Smith, Esq. If to the Shareholders, to: Mr. Russell L. Still, as Representative of the Shareholders c/o Management Software, Inc. 1550 East Republic Road Springfield, Missouri 65804 With a copy to: Gardere & Wynne 1601 Elm Street, Suite 3000 Dallas, Texas 75201 Attention: Richard Hull, Esq. or to such other address as such party may indicate by a notice delivered to the other party hereto. 2.3 ENTIRE AGREEMENT; INTEGRATION. This Agreement supersedes all prior agreements between or among any of the 14 parties hereto with respect to the subject matter contained herein and therein, and such agreements embody the entire understanding among the parties relating to such subject matter with the exception of the SPA to which this Agreement constitutes Exhibit 2.16. 2.4 INJUNCTIVE RELIEF. Each of the parties hereto acknowledges that in the event of a breach by any of them of any material provision of this Agreement, the aggrieved party may be without an adequate remedy at law. Each of the parties therefore agrees that in the event of such a breach hereof the aggrieved party may elect to institute and prosecute proceedings in any court of competent jurisdiction to enforce specific performance or to enjoin the continuing breach hereof. By seeking or obtaining any such relief, the aggrieved party shall not be precluded from seeking or obtaining any other relief to which it may be entitled. 2.5 SECTION HEADINGS. Section headings are for convenience of reference only and shall not affect the meaning of any provision of this Agreement. 2.6 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which shall together constitute one and the same instrument. All signatures need not be on the same counterpart. 2.7 SEVERABILITY. If any provision of this Agreement shall be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity and enforceability of the remaining provisions of this Agreement, unless the result thereof would be unreasonable, in which case the parties hereto shall negotiate in good faith as to appropriate amendments hereto. 2.8 FILING. A copy of this Agreement and of any amendments hereto shall be filed at the principal executive office of the Parent with the corporate recorder of the Parent. 2.9 TERMINATION. This Agreement may be terminated at any time by a written instrument signed by all the parties hereto. Unless sooner terminated in accordance with the preceding sentence, this Agreement shall terminate in its entirety on the earlier of (a) such date as all Registrable Securities have been sold by the Shareholders, (b) two years from the date hereof or (c) in the event that the holding period for purposes of subsection (d) of Rule 144 is reduced from two years, the date which ends on the period specified in Rule 144(d) as so amended. The parties hereto agree that any shares of Common Stock previously subject to this Agreement shall not be Registrable 15 Securities following the sale of any such shares in an offering registered pursuant to this Agreement. 2.10 ATTORNEYS' FEES. In any action or proceeding brought to enforce any provision of this Agreement, or where any provision hereof is validly asserted as a defense, the successful party shall be entitled to recover reasonable attorneys' fees (including any fees incurred in any appeal) in addition to its costs and expenses and any other available remedy. 2.11 DEFINITIONS. Capitalized terms used in this Agreement shall have the meanings set forth below: "COMMON STOCK" means the Parent's Common Stock, par value $.05 per share, and shares of capital stock of the Parent issued in respect of or in exchange for shares of such Common Stock in connection with any stock split or dividend or distribution, recapitalization or exchange by Parent generally of such shares. "DEMAND NOTICE" shall have the meaning specified in Section 1.1(a). "DEMAND REGISTRATION" shall have the meaning specified in Section 1.1(a). "EFFECTIVENESS DATE" shall have the meaning specified in Section 1.1(d). "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder. "LOSSES" shall have the meaning specified in Section 1.5(a). "NASDAQ" means the National Association of Securities Dealers Automated Quotation System. "PARENT INDEMNIFIED PARTY" shall have the meaning specified in 1.5(b). "PERSON" means any individual, corporation, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated organization, or government or other agency or political subdivision thereof. "PROCEEDING" shall have the meaning specified in Section 1.5(c). "PROSPECTUS" means the prospectus included in the Registration Statement, including any form of prospectus or any 16 preliminary prospectus, as amended or supplemented by any prospectus supplement and by all other amendments or supplements to such prospectus, including all post-effective amendments and all material, if any, incorporated by reference or deemed to be incorporated by reference into such prospectus. "REGISTRABLE SECURITIES" means, collectively, (a) the shares of Common Stock acquired by the Shareholders on the date of the Closing under the SPA, and (b) all securities issued in respect of, in exchange for, or in substitution of, the securities described in clause (a). "REGISTRATION NOTICE" shall have the meaning specified in Section 1.1(d). "REGISTRATION STATEMENT" means any registration statement of the Parent under which any of the Registrable Securities are included therein pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement. "RULE 144" means Rule 144 promulgated by the SEC under the Securities Act as such rule may be amended from time to time, or any similar rule then in force. "SEC" means the Securities and Exchange Commission. "SECURITIES ACT" means the Securities Act of 1933, as amended, and all rules and regulations promulgated thereunder, as the same may be amended from time to time. "SHAREHOLDER" means each of Dr. Jim Atteberry, Russell L. Still and Sara S. Still, as Tenants in Common, Wayne W. Clements and Susan Clements, as Tenants in Common, Stanley Bell, Dan Cobb and Charlie Daniels who collectively shall be termed the "Shareholders." "SHAREHOLDER INDEMNIFIED PARTY" shall have the meaning specified in Section 1.5(a). "UNDERWRITER" has the meaning set forth in Section 2(11) of the Securities Act. 17 IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereof as of the date first written above. HBO & COMPANY By: /S/ JAY P. GILBERTSON ------------------------------------------ Its: Senior Vice President - Finance SHAREHOLDERS /s/ Jim Atteberry ------------------------------------------ Dr. Jim Atteberry /s/ Russell L. Still ------------------------------------------ Russell L. Still and Sara S. Still, As Tenants in Common /s/ Wayne W. Clements ------------------------------------------ Wayne W. Clements and Susan Clements As Tenants in Common /s/ Stanley Bell ------------------------------------------ Stanley Bell /s/ Dan Cobb ------------------------------------------ Dan Cobb /s/ Charlie Daniels ------------------------------------------ Charlie Daniels 18 EX-5 3 EXHIBIT 5 JONES, DAY, REAVIS & POGUE 3500 ONE PEACHTREE CENTER 303 PEACHTREE STREET ATLANTA, GEORGIA 30308 November , 1996 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 893,748 shares of Common Stock, $.05 par value per share, of the Company (the "Shares"), pursuant to a Registration Statement on Form S-3 (File No. 333- ) (the "Registration Statement"), filed with the Securities and Exchange Commission, 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 have been duly authorized and are validly issued, fully paid and nonassessable. We hereby consent to the filing of this opinion as Exhibit 5 to the Registration Statement and the reference to this Firm under the heading "Certain Legal Matters" in the Prospectus constituting part of the Registration Statement. Sincerely, JONES, DAY, REAVIS & POGUE EX-23.A 4 EX-23(A) EXHIBIT 23(A) CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this registration statement of our reports dated February 6, 1996 included or incorporated by reference in HBO & Company's Form 10-K for the year ended December 31, 1995 and to all references to our firm included in this registration statement. /s/ ARTHUR ANDERSEN LLP ARTHUR ANDERSEN LLP Atlanta, Georgia October 29, 1996 EX-23.B 5 EX_23(B) EXHIBIT 23(B) CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in the Registration Statement (Form S-3) and related Prospectus of HBO & Company for the registration of 893,748 shares of its common stock and to the incorporation by reference therein of our reports dated January 26, 1995 (except for Note 12, as to which the date is June 17, 1995) and March 31, 1995 (except for Note 11, as to which the date is June 17, 1995), with respect to the financial statements of the Health Services Business of First Data Health Systems Corporation included in the Current Report on Form 8-K of HBO & Company dated July 31, 1995, filed with the Securities and Exchange Commission. /s/ ERNST & YOUNG LLP ERNST & YOUNG LLP Denver, Colorado October 29, 1996 -----END PRIVACY-ENHANCED MESSAGE-----