<PAGE>
As filed with the Securities and Exchange Commission on April 8, 1997
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------------
IBAH, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-1670189
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Four Valley Square
512 Township Line Road
Blue Bell, Pennsylvania 19422
(Address of principal executive offices) (Zip Code)
IBAH, INC.
1997 EQUITY COMPENSATION PLAN
(Full title of the plan)
GERALDINE A. HENWOOD
Chief Executive Officer
Four Valley Square
512 Township Line Road
Blue Bell, PA 19422
(Name and address of agent for service)
(215) 283-0770
(Telephone number, including area code, of agent for service)
-----------------------
Copy of all communications to:
THOMAS J. SHARBAUGH JANE H. HOLLINGSWORTH
Morgan, Lewis & Bockius LLP General Counsel
2000 One Logan Square IBAH, Inc.
Philadelphia, PA 19103 Four Valley Square
(215) 963-5000 512 Township Line Road
Blue Bell, PA 19422
(215) 283-0770
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed maximum Proposed maximum
Title of securities Amount to be offering price aggregate Amount of
to be registered registered per share (1) offering price (1) registration fee
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 1,500,000(2) $6.125 $9,187,500.00 $2,784.00
========================================================================================================
</TABLE>
(1) Estimated pursuant to Rule 457(h) solely for the purpose of calculating the
registration fee, based upon the average of the high and low sales prices
of shares of Common Stock on April 2, 1997, as reported on the Nasdaq
National Market.
(2) Pursuant to Rule 416 under the Securities Act of 1933, this Registration
Statement also covers such additional shares as may hereinafter be offered
or issued to prevent dilution resulting from stock splits, stock dividends,
recapitalizations or certain other capital adjustments.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
---------------------------------------
The following documents, as filed by IBAH, Inc. (the "Registrant") with the
Securities and Exchange Commission (the "Commission"), are incorporated by
reference in this Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996.
(b) The description of the Common Stock of the Registrant contained in
the Registrant's Registration Statement on Form 8-A filed by the Registrant
with the Commission to register such securities under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), including any
amendment or reports filed for the purpose of updating such description.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act, after the date of this Registration Statement and
prior to the filing of a post-effective amendment to this Registration Statement
that indicates that all securities offered hereby have been sold or that
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes hereof to the extent
that a statement contained herein (or in any other subsequently filed document
that is also 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 hereof.
Experts
-------
The financial statements contained in the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1996 incorporated by reference in this
Registration Statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
such reports.
Item 4. Description of Securities.
-------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
--------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers.
-----------------------------------------
A. Section 145 of the Delaware General Corporation Law ("Section 145")
permits indemnification of directors, officers, agents and controlling persons
of a corporation under certain conditions and subject to certain limitations.
Section 145 empowers a corporation 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, by reason of the fact that such person is or was a director,
officer or agent of the corporation or another enterprise if serving at the
request of the corporation. Depending on the character of the proceeding, a
corporation may indemnify against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
in connection with such action, suit or proceeding if the person indemnified
acted in good faith and in a manner the person reasonably believed to be in or
not opposed to, the best interests of the corporation, and, with respect to any
criminal action or
II-1
<PAGE>
proceeding, had no reasonable cause to believe such person's conduct was
unlawful. In the case of an action by or in the right of the corporation, no
indemnification may be made with respect to 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 that despite the adjudication of
liability such person is fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper. Section 145 further provides that to
the extent a director or officer of a corporation has been successful in the
defense of any action, suit or proceeding referred to above or in defense of any
claim, issue or matter therein, such person shall be indemnified against
expenses (including attorneys' fees) actually or reasonably incurred by such
person in connection therewith.
B. As permitted by the Delaware General Corporation Law, the Registrant
has included a provision in its Certificate of Incorporation, as amended, that,
subject to certain limitations, eliminates the ability of the Registrant and its
stockholders to recover monetary damages from a director of the Registrant for
breach of fiduciary duty as a director. Article VI of the Registrant's By-Laws
provides for indemnification of the Registrant's directors and officers in
certain circumstances to the fullest extent authorized by the Delaware General
Corporation Law.
C. As authorized by Section 145 of the Delaware General Corporation Law
and Article VI of the Registrant's By-Laws, the Registrant maintains, on behalf
of its directors and officers, insurance protection against certain liabilities
arising out of the discharge of their duties, as well as insurance covering the
Registrant for indemnification payments made to its directors and officers for
certain liabilities. The premiums for such insurance are paid by the
Registrant.
Item 7. Exemption from Registration Claimed.
-----------------------------------
Not applicable.
Item 8. Exhibits.
--------
The following exhibits are filed as part of this Registration Statement.
Exhibit
Number Exhibit
- ------ -------
5.1 Opinion of Morgan, Lewis & Bockius LLP
10.1 IBAH, Inc. 1997 Equity Compensation Plan
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Morgan, Lewis & Bockius LLP (included in its opinion
filed as Exhibit 5.1 hereto)
24.1 Power of Attorney (included on signature page of this
Registration Statement)
II-2
<PAGE>
Item 9. Undertakings.
------------
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement; and
(iii) 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;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
-------- -------
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with the Securities
and Exchange Commission by the Registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
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 that remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for the purpose 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 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 this Registration Statement shall be deemed
to be a new registration statement relating to the securities offered herein and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
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
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-3
<PAGE>
SIGNATURES AND POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Blue Bell, Pennsylvania, on April 4, 1997.
IBAH, INC.
By:/s/Geraldine A. Henwood
------------------------------
Geraldine A. Henwood
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
EACH PERSON IN SO SIGNING ALSO MAKES, CONSTITUTES AND APPOINTS GERALDINE A.
HENWOOD AND LEONARD F. STIGLIANO, AND EACH OF THEM ACTING ALONE, HIS OR HER TRUE
AND LAWFUL ATTORNEY-IN-FACT, WITH FULL POWER OF SUBSTITUTION, TO EXECUTE AND
CAUSE TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO THE
REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, ANY AND ALL AMENDMENTS
AND POST-EFFECTIVE AMENDMENTS TO THIS REGISTRATION STATEMENT, WITH EXHIBITS
THERETO AND OTHER DOCUMENTS IN CONNECTION THEREWITH, AND HEREBY RATIFIES AND
CONFIRMS ALL THAT SAID ATTORNEY-IN-FACT OR HIS OR HER SUBSTITUTE OR SUBSTITUTES
MAY DO OR CAUSE TO BE DONE BY VIRTUE HEREOF.
Signature Capacity Date
--------- -------- ----
/s/Geraldine A. Henwood Chief Executive Officer and April 4, 1997
- ---------------------------- Director (principal executive
Geraldine A. Henwood officer)
/s/Leonard F. Stigliano Chief Financial Officer April 4, 1997
- ---------------------------- (principal financial and
Leonard F. Stigliano accounting officer)
/s/Winston J. Churchill Chairman of the Board of April 4, 1997
- ---------------------------- Directors
Winston J. Churchill
/s/Ernst-Gunter Afting Director April 4, 1997
- ----------------------------
Ernst-Gunter Afting, M.D.
/s/Victor J. Bauer Director April 4, 1997
- ----------------------------
Victor J. Bauer, Ph.D.
/s/Edwin A. Bescherer, Jr. Director April 4, 1997
- ----------------------------
Edwin A. Bescherer, Jr.
<PAGE>
/s/Martyn D. Greenacre Director April 4, 1997
- ----------------------------
Martyn D. Greenacre
____________________________ Director April _, 1997
Judith L. Hardardt
____________________________ Director April _, 1997
Sidney Jevons, Ph.D.
/s/Sandra Panem Director April 4, 1997
- ----------------------------
Sandra Panem, Ph.D.
/s/Richard L. Sherman Director April 4, 1997
- ----------------------------
Richard L. Sherman, Esq.
<PAGE>
IBAH, INC.
REGISTRATION STATEMENT ON FORM S-8
EXHIBIT INDEX
-------------
Exhibit
Number Exhibit
- ------ -------
5.1 Opinion of Morgan, Lewis & Bockius LLP
10.1 IBAH, Inc. 1997 Equity Compensation Plan
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Morgan, Lewis & Bockius LLP (included in its opinion
filed as Exhibit 5.1 hereto)
24.1 Power of Attorney (included on signature page of this
Registration Statement)
<PAGE>
EXHIBIT 5.1
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, Pennsylvania 19103
April 4, 1997
IBAH, Inc.
Four Valley Square
512 Township Line Road
Blue Bell, Pennsylvania 19422
Re: IBAH, Inc. - Registration Statement on Form S-8
Relating to the IBAH, Inc. 1997 Equity Compensation Plan
--------------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to IBAH, Inc., a Delaware corporation (the "Company"),
in connection with the preparation of the subject Registration Statement on Form
S-8 (the "Registration Statement") to be filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act"), relating to 1,500,000 shares of the Company's common stock, par value
$.01 per share (the "Common Stock"), issuable under the IBAH, Inc. 1997 Equity
Compensation Plan (the "Plan").
In rendering the opinion set forth below, we have examined the Registration
Statement and the exhibits thereto, including the Plan, certain records of the
Company's corporate proceedings as reflected in its minute books and such
statutes, records and other documents as we have deemed relevant. In our
examination, we have assumed the genuineness of documents submitted to us as
originals and the conformity with the originals of all documents submitted to us
as copies thereof.
Based on the foregoing, it is our opinion that the shares of Common Stock
issuable under the Plan will be, when issued in accordance with the terms of the
Plan, validly issued, fully paid and nonassessable.
The opinion set forth above is limited to the General Corporation Law of the
State of Delaware, as amended.
<PAGE>
IBAH, Inc.
April 4, 1997
Page 2
We hereby consent to the use of this opinion as Exhibit 5.1 to the Registration
Statement. In giving such consent, we do not thereby admit that we are acting
within the category of persons whose consent is required under Section 7 of the
Act and the rules or regulations of the Commission thereunder.
The opinion expressed herein is solely for your benefit and may be relied upon
only by you.
Very truly yours,
/s/ Morgan, Lewis & Bockius LLP
<PAGE>
EXHIBIT 10.1
IBAH, INC.
1997 EQUITY COMPENSATION PLAN
-----------------------------
The purpose of the IBAH, Inc. 1997 Equity Compensation Plan (the "Plan") is
to provide (i) designated employees of IBAH, Inc. (the "Company") and its
subsidiaries, (ii) certain key advisors who perform services for the Company or
its subsidiaries and (iii) non-employee members of the Board of Directors of the
Company (the "Board") with the opportunity to receive grants of incentive stock
options and nonqualified stock options. The Company believes that the Plan will
encourage the participants to contribute materially to the growth of the
Company, thereby benefitting the Company's stockholders, and will align the
economic interests of the participants with those of the stockholders.
1. Administration
--------------
(a) Committee. The Plan shall be administered and interpreted by a
---------
committee (the "Committee"), which shall consist of two or more persons
appointed by the Board, all of whom shall be "outside directors" as defined
under section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code") and related Treasury regulations. The Committee may also consist of
"non-employee directors" as defined in Rule 16b-3 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). However, notwithstanding anything
in the Plan to the contrary, the Board must ratify or approve any grants made to
Non-Employee Directors. References in the Plan to the "Committee" shall be
deemed to include the Board, with respect to ratification or approval of grants
made to Non-Employee Directors.
(b) Committee Authority. The Committee shall have the sole authority to
-------------------
(i) determine the individuals to whom grants shall be made under the Plan, (ii)
determine the type, size and terms of the grants to be made to each such
individual, (iii) determine the time when the grants will be made and the
duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability and (iv) deal
with any other matters arising under the Plan.
(c) Committee Determinations. The Committee shall have full power and
-----------------------
authority to administer and interpret the Plan, to make factual determinations
and to adopt or amend such rules, regulations, agreements and instruments for
implementing the Plan and for the conduct of its business as it deems necessary
or advisable, in its sole discretion. The Committee's interpretations of the
Plan and all determinations made by the Committee pursuant to the powers vested
in it hereunder shall be conclusive and binding on all persons having any
interest in the Plan or in any awards granted hereunder. All powers of the
Committee shall be executed in its sole
<PAGE>
discretion, in the best interest of the Company, not as a fiduciary, and in
keeping with the objectives of the Plan and need not be uniform as to similarly
situated individuals.
2. Options
-------
Awards under the Plan may consist of grants of incentive stock options
("Incentive Stock Options") or nonqualified stock options ("Nonqualified Stock
Options") as described in Section 5 (Incentive Stock Options and Nonqualified
Stock Options are collectively referred to as "Options"). All Options shall be
subject to the terms and conditions set forth herein and to such other terms and
conditions consistent with this Plan as the Committee deems appropriate and as
are specified in writing by the Committee to the individual in a grant
instrument (the "Grant Instrument") or an amendment to the Grant Instrument.
The Committee shall approve the form and provisions of each Grant Instrument.
Options need not be uniform as among the grantees.
3. Shares Subject to the Plan
--------------------------
(a) Shares Authorized. Subject to the adjustment specified below, the
-----------------
aggregate number of shares of common stock of the Company ("Company Stock") that
may be issued or transferred under the Plan is 1,500,000 shares, and the maximum
aggregate number of shares of Company Stock that shall be subject to Options
granted under the Plan to any individual during any calendar year shall be
200,000 shares. The shares may be authorized but unissued shares of Company
Stock or reacquired shares of Company Stock, including shares purchased by the
Company on the open market for purposes of the Plan. If and to the extent
Options granted under the Plan terminate, expire, or are canceled, forfeited,
exchanged or surrendered without having been exercised, the shares subject to
such grants shall again be available for purposes of the Plan.
(b) Adjustments. If there is any change in the number or kind of shares of
-----------
Company Stock outstanding (i) by reason of a stock dividend, spinoff,
recapitalization, stock split, or combination or exchange of shares, (ii) by
reason of a merger, reorganization or consolidation in which the Company is the
surviving corporation, (iii) by reason of a reclassification or change in par
value, or (iv) by reason of any other extraordinary or unusual event affecting
the outstanding Company Stock as a class without the Company's receipt of
consideration, or if the value of outstanding shares of Company Stock is
substantially reduced as a result of a spinoff or the Company's payment of an
extraordinary dividend or distribution, the maximum number of shares of Company
Stock available for Options, the maximum number of shares of Company Stock for
which any individual participating in the Plan may be granted Options in any
year, the number of shares covered by outstanding Options, the kind of shares
issued under the Plan, and the price per share of such Options shall be
appropriately adjusted by the Committee to reflect any increase or decrease in
the number of, or change in the kind or value of, issued shares of Company Stock
to preclude, to the extent practicable, the enlargement or dilution of rights
and benefits under such Options; provided, however, that any fractional shares
resulting from such adjustment shall be eliminated. Any adjustments determined
by the Committee shall be final, binding and conclusive.
-2-
<PAGE>
4. Eligibility for Participation
-----------------------------
(a) Eligible Persons. All employees of the Company and its subsidiaries
----------------
("Employees"), including Employees who are officers or members of the Board, and
members of the Board who are not Employees ("Non-Employee Directors") shall be
eligible to participate in the Plan. Key advisors who perform services to the
Company or any of its subsidiaries ("Key Advisors") shall be eligible to
participate in the Plan if the Key Advisors render bona fide services and such
services are not in connection with the offer or sale of securities in a
capital-raising transaction.
(b) Selection of Grantees. The Committee shall select the Employees, Non-
---------------------
Employee Directors and Key Advisors to receive Options and shall determine the
number of shares of Company Stock subject to a particular Option in such manner
as the Committee determines. Employees, Key Advisors and Non-Employee Directors
who receive Options under this Plan shall hereinafter be referred to as
"Grantees".
5. Granting of Options
-------------------
(a) Number of Shares. The Committee shall determine the number of shares
----------------
of Company Stock that will be subject to each grant of Options to Employees,
Non-Employee Directors and Key Advisors.
(b) Type of Option and Price.
------------------------
(i) The Committee may grant Incentive Stock Options that are intended
to qualify as "incentive stock options" within the meaning of section 422 of the
Code or Nonqualified Stock Options that are not intended so to qualify, or any
combination of Incentive Stock Options and Nonqualified Stock Options, all in
accordance with the terms and conditions set forth herein. Incentive Stock
Options may be granted only to Employees. Nonqualified Stock Options may be
granted to Employees, Non-Employee Directors and Key Advisors.
(ii) The purchase price (the "Exercise Price") of Company Stock
subject to an Option shall be determined by the Committee and may be equal to,
greater than, or less than the Fair Market Value (as defined below) of a share
of Company Stock on the date the Option is granted; provided, however, that (x)
the Exercise Price of an Incentive Stock Option shall be equal to, or greater
than, the Fair Market Value of a share of Company Stock on the date the
Incentive Stock Option is granted and (y) an Incentive Stock Option may not be
granted to an Employee who, at the time of grant, owns stock possessing more
than 10 percent of the total combined voting power of all classes of stock of
the Company or any parent or subsidiary of the Company, unless the Exercise
Price per share is not less than 110% of the Fair Market Value of Company Stock
on the date of grant.
-3-
<PAGE>
(iii) If the Company Stock is publicly traded, then the Fair Market
Value per share shall be determined as follows: (x) if the principal trading
market for the Company Stock is a national securities exchange or the Nasdaq
National Market, the mean between the reported high and low sale prices thereof
on the relevant date or (if there were no trades on that date) the latest
preceding date upon which a sale was reported, or (y) if the Company Stock is
not principally traded on such exchange or market, the mean between the last
reported "bid" and "asked" prices of Company Stock on the relevant date, as
reported on Nasdaq or, if not so reported, as reported by the National Daily
Quotation Bureau, Inc. or as reported in a customary financial reporting
service, as applicable and as the Committee determines. If the Company Stock is
not publicly traded or, if publicly traded, is not subject to reported
transactions or "bid" or "asked" quotations as set forth above, the Fair Market
Value per share shall be as determined by the Committee.
(c) Option Term. The Committee shall determine the term of each Option.
-----------
The term of any Option shall not exceed ten years from the date of grant.
However, an Incentive Stock Option that is granted to an Employee who, at the
time of grant, owns stock possessing more than 10 percent of the total combined
voting power of all classes of stock of the Company, or any parent or subsidiary
of the Company, may not have a term that exceeds five years from the date of
grant.
(d) Exercisability of Options. Options shall become exercisable in
-------------------------
accordance with such terms and conditions, consistent with the Plan, as may be
determined by the Committee and specified in the Grant Instrument or an
amendment to the Grant Instrument. The Committee may accelerate the
exercisability of any or all outstanding Options at any time for any reason.
(e) Termination of Employment, Disability or Death.
----------------------------------------------
(i) Except as provided below, an Option may only be exercised while
the Grantee is employed by, or providing services to, the Company as an
Employee, Key Advisor or member of the Board. In the event that a Grantee
ceases to be employed by, or provide services to, the Company for any reason
other than a "disability", death, or "termination for cause", any Option which
is otherwise exercisable by the Grantee shall terminate unless exercised within
90 days after the date on which the Grantee ceases to be employed by, or provide
services to, the Company (or within such other period of time as may be
specified by the Committee), but in any event no later than the date of
expiration of the Option term. Any of the Grantee's Options that are not
otherwise exercisable as of the date on which the Grantee ceases to be employed
by, or provide services to, the Company shall terminate as of such date.
(ii) In the event the Grantee ceases to be employed by, or provide
services to, the Company on account of a "termination for cause" by the Company,
any Option held by the Grantee shall terminate as of the date the Grantee ceases
to be employed by, or provide services to, the Company.
-4-
<PAGE>
(iii) In the event the Grantee ceases to be employed by, or provide
services to, the Company because the Grantee is "disabled", any Option which is
otherwise exercisable by the Grantee shall terminate unless exercised within one
year after the date on which the Grantee ceases to be employed by, or provide
services to, the Company (or within such other period of time as may be
specified by the Committee), but in any event no later than the date of
expiration of the Option term. Any of the Grantee's Options which are not
otherwise exercisable as of the date on which the Grantee ceases to be employed
by, or provide services to, the Company shall terminate as of such date.
(iv) If the Grantee dies while employed by, or providing services to,
the Company or within 90 days after the date on which the Grantee ceases to be
employed by, or provide services to, the Company on account of a termination of
employment specified in Section 5(e)(i) above (or within such other period of
time as may be specified by the Committee), any Option that is otherwise
exercisable by the Grantee shall terminate unless exercised within one year
after the date on which the Grantee ceases to be employed by, or provide
services to, the Company (or within such other period of time as may be
specified by the Committee), but in any event no later than the date of
expiration of the Option term. Any of the Grantee's Options that are not
otherwise exercisable as of the date on which the Grantee ceases to be employed
by, or provide services to, the Company shall terminate as of such date.
(v) For purposes of this Section 5(e):
(A) The term "Company" shall mean the Company and its parent and
subsidiary corporations.
(B) "Employed by, or provide services to, the Company" shall mean
employment or service as an Employee, Key Advisor or member of the Board,
so that, for purposes of exercising Options, a Grantee shall not be
considered to have terminated employment until the Grantee ceases to be an
Employee, Key Advisor and member of the Board, unless the Committee
determines otherwise.
(C) "Disability" shall mean a Grantee's becoming disabled within the
meaning of section 22(e)(3) of the Code.
(D) "Termination for cause" shall mean, except to the extent specified
otherwise by the Committee, a finding by the Committee that the Grantee has
committed a material breach of his or her employment or service contract
with the Company, or has been engaged in disloyalty to the Company,
including, without limitation, fraud, embezzlement, theft, commission of a
felony or proven dishonesty in the course of his or her employment or
service, or has disclosed trade secrets or confidential information of the
Company to persons not entitled to receive such information. In the event
a Grantee's employment is terminated for cause, in addition to the
immediate termination of all Options, the Grantee shall automatically
forfeit all shares underlying any exercised portion of an Option for
-5-
<PAGE>
which the Company has not yet delivered the share certificates, upon refund
by the Company of the Exercise Price paid by the Grantee for such shares.
(f) Exercise of Options. A Grantee may exercise an Option that has become
-------------------
exercisable, in whole or in part, by delivering a notice of exercise to the
Company with payment of the Exercise Price. The Grantee shall pay the Exercise
Price for an Option as specified by the Committee (x) in cash, (y) with the
approval of the Committee, by delivering shares of Company Stock owned by the
Grantee (including Company Stock acquired in connection with the exercise of an
Option, subject to such restrictions as the Committee deems appropriate) and
having a Fair Market Value on the date of exercise equal to the Exercise Price
or (z) by such other method as the Committee may approve, including payment
through a broker in accordance with procedures permitted by Regulation T of the
Federal Reserve Board. Shares of Company Stock used to exercise an Option shall
have been held by the Grantee for the requisite period of time to avoid adverse
accounting consequences to the Company with respect to the Option. The Grantee
shall pay the Exercise Price and the amount of any withholding tax due (pursuant
to Section 6) at the time of exercise.
(g) Limits on Incentive Stock Options. Each Incentive Stock Option shall
---------------------------------
provide that, if the aggregate Fair Market Value of the stock on the date of the
grant with respect to which Incentive Stock Options are exercisable for the
first time by a Grantee during any calendar year, under the Plan or any other
stock option plan of the Company or a parent or subsidiary, exceeds $100,000,
then the Option, as to the excess, shall be treated as a Nonqualified Stock
Option. An Incentive Stock Option shall not be granted to any person who is not
an Employee of the Company or a parent or subsidiary (within the meaning of
section 424(f) of the Code).
6. Withholding of Taxes
--------------------
(a) Required Withholding. All Options under the Plan shall be subject to
--------------------
applicable federal (including FICA), state and local tax withholding
requirements. The Company may require the Grantee or other person receiving
shares upon the exercise of Options to pay to the Company the amount of any
federal, state or local taxes that the Company is required to withhold with
respect to such Options, or the Company may deduct from other wages paid by the
Company the amount of any withholding taxes due with respect to such Options.
(b) Election to Withhold Shares. If the Committee so permits, a Grantee
---------------------------
may elect to satisfy the Company's income tax withholding obligation with
respect to an Option by having shares withheld up to an amount that does not
exceed the Grantee's maximum marginal tax rate for federal (including FICA),
state and local tax liabilities. The election must be in a form and manner
prescribed by the Committee and shall be subject to the prior approval of the
Committee.
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7. Transferability of Options
--------------------------
(a) Nontransferability of Options. Except as provided below, only the
-----------------------------
Grantee may exercise rights under an Option during the Grantee's lifetime. A
Grantee may not transfer those rights except by will or by the laws of descent
and distribution or, with respect to Nonqualified Stock Options, if permitted in
any specific case by the Committee, pursuant to a domestic relations order (as
defined under the Code or Title I of the Employee Retirement Income Security Act
of 1974, as amended, or the regulations thereunder). When a Grantee dies, the
personal representative or other person entitled to succeed to the rights of the
Grantee ("Successor Grantee") may exercise such rights. A Successor Grantee
must furnish proof satisfactory to the Company of his or her right to receive
the Option under the Grantee's will or under the applicable laws of descent and
distribution.
(b) Transfer of Nonqualified Stock Options. Notwithstanding the foregoing,
--------------------------------------
the Committee may provide, in a Grant Instrument, that a Grantee may transfer
Nonqualified Stock Options to family members or other persons or entities
according to such terms as the Committee may determine; provided that the
Grantee receives no consideration for the transfer of an Option and the
transferred Option shall continue to be subject to the same terms and conditions
as were applicable to the Option immediately before the transfer.
8. Change of Control of the Company
--------------------------------
As used herein, a "Change of Control" shall be deemed to have occurred if:
(a) Any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) becomes a "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
more than 50% of the voting power of the then outstanding securities of the
Company, except where the acquisition is approved by the Board;
(b) The stockholders of the Company approve (or, if stockholder approval is
not required, the Board approves) an agreement providing for (i) the merger or
consolidation of the Company with another corporation where the stockholders of
the Company, immediately prior to the merger or consolidation, will not
beneficially own, immediately after the merger or consolidation, shares
entitling such stockholders to more than 50% of all votes to which all
stockholders of the surviving corporation would be entitled in the election of
directors (without consideration of the rights of any class of stock to elect
directors by a separate class vote), or where the members of the Board,
immediately prior to the merger or consolidation, would not, immediately after
the merger or consolidation, constitute a majority of the board of directors of
the surviving corporation, (ii) the sale or other disposition of all or
substantially all of the assets of the Company, or (iii) a liquidation or
dissolution of the Company;
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(c) Any person has commenced a tender offer or exchange offer for or more
than 50% of the voting power of the then outstanding shares of the Company; or
(d) At least a majority of the Board does not consist of individuals who
were elected, or nominated for election, by the directors in office at the time
of such election or nomination.
9. Consequences of a Change of Control
-----------------------------------
(a) Notice and Acceleration. Upon a Change of Control, unless the
-----------------------
Committee determines otherwise, (i) the Company shall provide each Grantee with
outstanding Options written notice of such Change of Control and (ii) all
outstanding Options that are not then exercisable shall automatically accelerate
and become fully exercisable.
(b) Assumption of Options. Upon a Change of Control where the Company is
---------------------
not the surviving corporation (or survives only as a subsidiary of another
corporation), unless the Committee determines otherwise, all outstanding Options
that are not exercised shall be assumed by, or replaced with comparable options
by, the surviving corporation.
(c) Other Alternatives. Notwithstanding the foregoing, subject to
------------------
subsection (e) below, in the event of a Change of Control, the Committee may
take one or both of the following actions: the Committee may (i) require that
Grantees surrender their outstanding Options in exchange for a payment by the
Company, in cash or Company Stock as determined by the Committee, in an amount
equal to the amount by which the then Fair Market Value of the shares of Company
Stock subject to the Grantee's unexercised Options exceeds the Exercise Price of
the Options, or (ii) after giving Grantees an opportunity to exercise their
outstanding Options, terminate any or all unexercised Options at such time as
the Committee deems appropriate. Such surrender or termination shall take place
as of the date of the Change of Control or such other date as the Committee may
specify.
(d) Committee. The Committee making the determinations under this Section
---------
9 following a Change of Control must be comprised of the same members as those
on the Committee immediately before the Change of Control. If the Committee
members do not meet this requirement, the automatic provisions of Subsections
(a) and (b) shall apply, and the Committee shall not have discretion to vary
them with respect to an outstanding Option without the consent of the Grantee.
(e) Limitations. Notwithstanding anything in the Plan to the contrary, in
-----------
the event of a Change of Control, the Committee shall not have the right to take
any actions described in the Plan (including without limitation actions
described in subsection (c) above) that would make the Change of Control
ineligible for pooling of interests accounting treatment or that would make the
Change of Control ineligible for desired tax treatment if, in the absence of
such right, the Change of Control would qualify for such treatment and the
Company intends to use such treatment with respect to the Change of Control.
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<PAGE>
10. Amendment and Termination of the Plan
-------------------------------------
(a) Amendment. The Board may amend or terminate the Plan at any time;
---------
provided, however, that the Board shall not amend the Plan without stockholder
approval if such approval is required by Section 162(m) of the Code.
(b) Termination of Plan. The Plan shall terminate on the day immediately
-------------------
preceding the tenth anniversary of its effective date, unless the Plan is
terminated earlier by the Board or is extended by the Board with the approval of
the stockholders.
(c) Termination and Amendment of Outstanding Options. A termination or
------------------------------------------------
amendment of the Plan that occurs after an Option is made shall not materially
impair the rights of a Grantee unless the Grantee consents or unless the
Committee acts under Section 17(b). The termination of the Plan shall not
impair the power and authority of the Committee with respect to an outstanding
Option. Whether or not the Plan has terminated, an outstanding Option may be
terminated or amended under Section 17(b) or may be amended by agreement of the
Company and the Grantee consistent with the Plan.
(d) Governing Document. The Plan shall be the controlling document. No
------------------
other statements, representations, explanatory materials or examples, oral or
written, may amend the Plan in any manner. The Plan shall be binding upon and
enforceable against the Company and its successors and assigns.
11. Funding of the Plan
-------------------
This Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Options under this Plan. In no event shall
interest be paid or accrued on any Option.
12. Rights of Participants
----------------------
Nothing in this Plan shall entitle any Employee, Non-Employee Director, Key
Advisor or other person to any claim or right to be granted an Option under this
Plan. Neither this Plan nor any action taken hereunder shall be construed as
giving any individual any rights to be retained by or in the employ of the
Company or any other employment rights.
13. No Fractional Shares
--------------------
No fractional shares of Company Stock shall be issued or delivered pursuant
to the Plan or any Option. The Committee shall determine whether cash, other
awards or other property shall
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be issued or paid in lieu of such fractional shares or whether such fractional
shares or any rights thereto shall be forfeited or otherwise eliminated.
14. Requirements for Issuance or Transfer of Shares
-----------------------------------------------
No Company Stock shall be issued or transferred in connection with any
Option hereunder unless and until all legal requirements applicable to the
issuance or transfer of such Company Stock have been complied with to the
satisfaction of the Committee. The Committee shall have the right to condition
any Option granted to any Grantee hereunder on such Grantee's undertaking in
writing to comply with such restrictions on his or her subsequent disposition of
such shares of Company Stock as the Committee shall deem necessary or advisable
as a result of any applicable law, regulation or official interpretation
thereof, and certificates representing such shares may be legended to reflect
any such restrictions. Certificates representing shares of Company Stock issued
or transferred under the Plan will be subject to such stop-transfer orders and
other restrictions as may be required by applicable laws, regulations and
interpretations, including any requirement that a legend be placed thereon.
15. Headings
--------
Section headings are for reference only. In the event of a conflict
between a title and the content of a Section, the content of the Section shall
control.
16. Effective Date of the Plan.
--------------------------
Subject to approval by the Company's stockholders, the Plan shall be
effective on January 1, 1997.
17. Miscellaneous
-------------
(a) Grants in Connection with Corporate Transactions and Otherwise.
--------------------------------------------------------------
Nothing contained in this Plan shall be construed to (i) limit the right of the
Committee to make grants under this Plan in connection with the acquisition, by
purchase, lease, merger, consolidation or otherwise, of the business or assets
of any corporation, firm or association, including grants to employees thereof
who become Employees of the Company, or for other proper corporate purposes, or
(ii) limit the right of the Company to grant stock options or make other awards
outside of this Plan. Without limiting the foregoing, the Committee may grant
an Option to an employee of another corporation who becomes an Employee by
reason of a corporate merger, consolidation, acquisition of stock or property,
reorganization or liquidation involving the Company or any of its subsidiaries
in substitution for a stock option granted by such corporation. The terms and
conditions of the substitute grants may vary from the terms and conditions
required by the Plan and from those of the substituted stock incentives. The
Committee shall prescribe the provisions of the substitute grants.
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(b) Compliance with Law. The Plan, the exercise of Options and the
-------------------
obligations of the Company to issue or transfer shares of Company Stock under
Options shall be subject to all applicable laws and to approvals by any
governmental or regulatory agency as may be required. With respect to persons
subject to Section 16 of the Exchange Act, it is the intent of the Company that
the Plan and all transactions under the Plan comply with all applicable
provisions of Rule 16b-3 or its successors under the Exchange Act. The
Committee may revoke any Option if it is contrary to law or modify an Option to
bring it into compliance with any valid and mandatory government regulation.
The Committee may also adopt rules regarding the withholding of taxes on
payments to Grantees. The Committee may, in its sole discretion, agree to limit
its authority under this Section.
(c) Governing Law. The validity, construction, interpretation and effect
-------------
of the Plan and Grant Instruments issued under the Plan shall exclusively be
governed by and determined in accordance with the law of the State of Delaware.
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<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-8 Registration Statement of our report dated February
5, 1997, included in IBAH, Inc.'s Form 10-K for the year ended December 31,
1996, and to all references to our Firm included in this Form S-8 Registration
Statement.
ARTHUR ANDERSEN LLP
Philadelphia, Pa.
April 4, 1997
