<PAGE> 1
As filed with the Securities and Exchange Commission on December 10, 1997
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------------------
DSC COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 54-1025763
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1000 COIT ROAD 75075
PLANO, TEXAS (Zip Code)
(Address of principal executive offices)
CELCORE, INC. 1995 STOCK OPTION PLAN
(Full title of the plan)
GEORGE B. BRUNT
DSC COMMUNICATIONS CORPORATION
1000 COIT ROAD
PLANO, TEXAS 75075
(972) 519-3000
(Name and address of agent for service)
with a copy to:
DANIEL W. RABUN
BAKER & MCKENZIE
2001 ROSS AVENUE, SUITE 4500
DALLAS, TEXAS 75201
(214) 978-3000
----------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Each Class of Proposed Maximum Proposed Maximum Amount of
Securities to be Amount to be Offering Price Per Aggregate Offering Registration
Registered (1) Registered (2) Security (3) Price (3) Fee (4)
- --------------------------------- -------------- ------------------ ------------------ --------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 236,330 Shares $23.375 $5,524,214 $1,630
Preferred Stock Purchase Rights 236,330 Rights Not Applicable Not Applicable Not Applicable
</TABLE>
(1) Shares of common stock of DSC Communications Corporation (the
"Company"), $.01 par value per share (the "Common Stock"), being
registered hereby relate to the Celcore, Inc. 1995 Stock Option Plan
(the "Plan") assumed by the Company. Pursuant to Rule 416 promulgated
under the Securities Act of 1933, as amended (the "Securities Act"),
there are also being registered such additional shares of Common Stock
as may become issuable pursuant to the anti-dilution provisions of the
Plan.
(2) The shares covered by this Registration Statement were previously
registered under the Company's Registration Statement, Registration No.
333-39903 (which covers 4,936,663 shares of Common Stock). A
registration fee in the amount of $37,540.00 was paid with respect to
such Registration Statement.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and (h) promulgated under the Securities Act
on the basis of the average of the high and low sale prices of the
Common Stock on December 9, 1997, as reported on the Nasdaq Stock
Market.
(4) In accordance with rule 457(g), no additional registration fee is
required in respect of Preferred Stock Purchase Rights.
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The documents listed in (a) through (h) below are hereby incorporated
by reference into this Registration Statement. All documents subsequently
filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), prior to the
filing of a post-effective amendment to the Registration Statement which
indicates that all shares of Common Stock, including the preferred stock
purchase rights attaching to such stock pursuant to that certain Rights
Agreement dated April 25, 1996 by and between the Company and Harris Trust and
Savings Bank, formerly KeyCorp Shareholder Services, Inc. (the "Preferred Stock
Purchase Rights"), offered hereunder have been sold or which deregisters all
shares then remaining unsold, shall be deemed to be incorporated herein by
reference and to be a part hereof from the date of filing of such documents.
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996;
(b) The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1997;
(c) The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1997;
(d) The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 1997;
(e) The Company's Current Report on Form 8-K filed August 26,
1997;
(f) The Company's Current Report on Form 8-K filed November 3,
1997;
(g) The Company's Current Report on Form 8-K filed November 13,
1997; and
(h) The description of the Company's Common Stock as contained in
the Company's Registration Statement on Form 8-A dated October
27, 1981, including all amendments and reports filed for the
purpose of updating such descriptions; and the description of
the Company's Preferred Stock Purchase Rights as contained in
the Company's Registration Statement on Form 8-A dated May 13,
1996, including all amendments and reports filed for the
purpose of updating such descriptions.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's bylaws require that directors and officers be
indemnified to the maximum extent permitted by law. The Company's Restated
Certificate of Incorporation includes a provision eliminating, to the fullest
extent permitted by the General Corporation Law of the State of Delaware (the
"DGCL"), director liability for monetary damages for breaches of fiduciary
duty.
Section 145 of the DGCL provides that a director or officer of a
corporation (i) shall be indemnified by the corporation for all expenses of
litigation or other legal proceedings brought against such person by reason of
the fact that such person is or was a director or an officer of the corporation
when he is successful on the merits, (ii) may be indemnified by the corporation
for the expenses, judgments, fines, and amounts paid in settlement of such
litigation (other than a derivative suit) even if he is not successful on the
merits if he acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the corporation (and, in the case of
a criminal proceeding, had no reason to believe his conduct was unlawful), and
(iii) may be indemnified by the corporation for
-2-
<PAGE> 3
expenses of a derivative suit (a suit by a stockholder alleging a breach by a
director or officer of a duty owed to the corporation), even if he is not
successful on the merits, 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, provided that no such indemnification may be made in accordance
with this clause (iii) if the director or officer is adjudged liable to the
corporation, unless a court determines that, despite such adjudication but in
view of all circumstances, he is fairly and reasonably entitled to
indemnification of such expenses. The indemnification described in clauses
(ii) and (iii) above shall be made only upon order by a court or a
determination by (a) a majority of directors who are not parties to such
action, (b) a majority vote of a committee consisting of such disinterested
directors, (c) independent legal counsel in a written opinion if no such
disinterested directors exist, or if such disinterested directors so direct, or
(d) the stockholders, that indemnification is proper because the applicable
standard of conduct is met. Expenses incurred by a director or officer in
defending an action may be advanced by the corporation prior to the final
disposition of such action upon receipt of an undertaking by such director or
officer to repay such expenses if it is ultimately determined that he is not
entitled to be indemnified in connection with the proceeding to which the
expenses relate.
The Company has purchased and currently has in force directors' and
officers' liability insurance policies which cover certain liabilities of
directors and officers arising out of claims based on certain acts or omissions
by them in their capacity as directors or officers. The Company has entered
into indemnification agreements with certain of its directors and executive
officers. Each of these agreements, among other things, contractually
obligates the Company to, under certain circumstances, indemnify the officer or
director against certain expenses and liabilities arising out of legal
proceedings which may be brought against such officer or director by reason of
his status or service as a director or officer. In addition, in a related
trust agreement (the "Trust Agreement"), the Company has provided $1 million to
be held in trust by a third-party trustee to be used to satisfy the Company's
obligations pursuant to the indemnification agreements which have been executed
and any similar agreements which may be executed in the future. The Trust
Agreement further provides that the Company's Board of Directors may, in its
discretion, provide up to an additional $1 million to the trustee.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
None.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
4 .1 Indenture, dated August 12, 1997, between the Company and The Bank of New York, as Trustee
(incorporated by reference to Exhibit No. 4.1 to the Company's Current Report on Form 8-K, Commission
File No. 0-10018, dated August 26, 1997)
4 .2 Registration Rights Agreement, dated as of August 12, 1997, among the Company, Goldman, Sachs & Co. and
NationsBanc Capital Markets, Inc. (incorporated by reference to Exhibit No. 4.2 to the Company's
Current Report on Form 8-K, Commission File No. 0-10018, dated August 26, 1997)
4 .3 Restated Certificate of Incorporation of the Company, dated November 3, 1997 (incorporated by reference
to Exhibit 3.1 to the Company's Registration Statement on Form S-8, Registration No. 333-41929, dated
December 10, 1997)
4 .4 Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit No. 3.4 to the
Company's Annual Report on Form 10-K for the year ended December 31, 1996, Commission File No. 0-10018,
dated March 31, 1997)
4 .5 Rights Agreement, dated April 25, 1996 between the Company and Harris Trust and Savings Bank, formerly
KeyCorp Shareholder Services, Inc., as rights agent (incorporated by reference to Exhibit No. 4 to the
Company's Current Report on Form 8-K, Commission File No. 0-010018, dated May 9, 1996)
</TABLE>
-3-
<PAGE> 4
<TABLE>
<S> <C>
4.6 Form of Notes (included in Exhibit 4.1)
*4.7 Celcore, Inc. 1995 Stock Option Plan
*5.1 Opinion of Baker & McKenzie
*23.1 Consent of Baker & McKenzie (included in Exhibit 5.1)
*23.2 Consent of Ernst & Young LLP
*24 Power of Attorney (see signature pages of Registration
Statement)
</TABLE>
- ------------------------
*Filed herewith.
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;
(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. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective Registration
Statement;
(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
Registration Statement is on Form S-3, or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(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.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
-4-
<PAGE> 5
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities 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 Securities Act and will be governed
by the final adjudication of such issue.
-5-
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Plano, State of Texas, on December 10, 1997.
DSC COMMUNICATIONS CORPORATION
By: /s/ James L. Donald
--------------------------------
Name: JAMES L. DONALD
Title: Chairman of the Board,
President and
Chief Executive Officer
POWER OF ATTORNEY
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 whose signature appears
below hereby authorizes and appoints James L. Donald and Gerald F. Montry, and
each of them, either one of whom may act without joinder of the other, as his
attorney-in-fact to sign on his behalf individually and in the capacity stated
below all amendments and post-effective amendments to this Registration
Statement as that attorney-in-fact may deem necessary or appropriate.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C> <C>
/s/ James L. Donald Chairman of the Board, President and Chief December 10, 1997
-------------------------------------- Executive Officer (Principal Executive
JAMES L. DONALD Officer)
/s/ Gerald F. Montry Senior Vice President, Chief Financial December 10, 1997
-------------------------------------- Officer, and Director (Principal Financial
GERALD F. MONTRY Officer)
/s/ Kenneth R. Vines Vice President, Finance (Principal December 10, 1997
-------------------------------------- Accounting Officer)
KENNETH R. VINES
/s/ Raymond J. Dempsey Director December 10, 1997
--------------------------------------
RAYMOND J. DEMPSEY
/s/ Sir John Fairclough Director December 10, 1997
--------------------------------------
SIR JOHN FAIRCLOUGH
/s/ James L. Fischer Director December 10, 1997
--------------------------------------
JAMES L. FISCHER
</TABLE>
-6-
<PAGE> 7
<TABLE>
<CAPTION>
SIGNATURE Title Date
--------- ----- ----
<S> <C> <C>
/s/ Robert S. Folsom Director December 10, 1997
--------------------------------------
ROBERT S. FOLSOM
/s/ William O. Hunt Director December 10, 1997
--------------------------------------
WILLIAM O. HUNT
/s/ Morton L. Topfer Director December 10, 1997
--------------------------------------
MORTON L. TOPFER
</TABLE>
-7-
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
4.1 Indenture, dated August 12, 1997, between the Company and The Bank of New York, as Trustee
(incorporated by reference to Exhibit No. 4.1 to the Company's Current Report on Form 8-K,
Commission File No. 0-10018, dated August 26, 1997)
4.2 Registration Rights Agreement, dated as of August 12, 1997, among the Company, Goldman, Sachs &
Co. and NationsBanc Capital Markets, Inc. (incorporated by reference to Exhibit No. 4.2 to the
Company's Current Report on Form 8-K, Commission File No. 0-10018, dated August 26, 1997)
4.3 Restated Certificate of Incorporation of the Company, dated November 3, 1997 (incorporated by
reference to Exhibit 3.1 to the Company's Registration Statement on Form S-8, Registration No.
333-41929, dated December 10, 1997)
4.4 Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit No. 3.4 to the
Company's Annual Report on Form 10-K for the year ended December 31, 1996, Commission File No.
0-10018, dated March 31, 1997)
4.5 Rights Agreement, dated April 25, 1996 between the Company and Harris Trust and Savings Bank, formerly
KeyCorp Shareholder Services, Inc., as rights agent (incorporated by reference to Exhibit No. 4 to the
Company's Current Report on Form 8-K, Commission File No. 0-010018, dated May 9, 1996)
4.6 Form of Notes (included in Exhibit 4.1)
*4.7 Celcore, Inc. 1995 Stock Option Plan
*5.1 Opinion of Baker & McKenzie
*23.1 Consent of Baker & McKenzie (included in Exhibit 5.1)
*23.2 Consent of Ernst & Young LLP
*24 Power of Attorney (see signature pages of Registration Statement)
</TABLE>
- ------------------------
* Filed herewith.
<PAGE> 1
EXHIBIT 4.7
CELCORE, INC.
1995 STOCK OPTION PLAN
<PAGE> 2
CELCORE, INC.
1995 STOCK OPTION PLAN
Table of Contents
-----------------
<TABLE>
<S> <C> <C>
1. Purpose of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Stock Subject to the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Administration of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
4. Type of Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
5. Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
6. Restrictions on ISOs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
7. Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
8. Option Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
9. Manner of Payment; Manner of Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
10. Exercise of Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
11. Term of Options; Exercisability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
12. Options Not Transferable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
13. Recapitalization, Reorganizations and the Like . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
14. No Special Employment Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
15. Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
16. Restrictions on Exercise of Options and Issuance of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 8
17. Purchase for Investment; Rights of Holder on Subsequent Registration . . . . . . . . . . . . . . . . . . . . . 8
18. Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
19. Modification of Outstanding Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
20. Approval of Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C> <C>
21. Termination and Amendment of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
22. Limitation of Rights in the Option Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
23. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
-ii-
<PAGE> 4
CELCORE, INC.
1995 STOCK OPTION PLAN
1. Purpose of the Plan.
The purpose of the Celcore, Inc. 1995 Stock Option Plan (the "Plan")
is to advance the interests of Celcore, Inc., a Delaware corporation (the
"Company"), by providing an opportunity for ownership of the stock of the
Company by employees of, or other persons providing services to, the Company or
any subsidiary corporation (herein called "subsidiary" or "subsidiaries"), as
defined in Section 424(f) of the Code and the Treasury regulations promulgated
thereunder (the "Regulations"). By providing an opportunity for such stock
ownership, the Company seeks to attract and retain qualified personnel, and
otherwise to provide additional incentive for optionees to promote the success
of its business.
2. Stock Subject to the Plan.
(a) The total number of shares of the authorized but unissued or
treasury shares of the common stock, $.10 par value per share, of the Company
(the "Common Stock") for which options may be granted under the Plan (the
"Options") shall be 1,000,000, subject to adjustment as provided in Section 13
hereof.
(b) If an Option granted or assumed hereunder shall expire or
terminate for any reason without having been exercised in full, the unpurchased
shares subject thereto shall again be available for subsequent Option grants
under the Plan.
(c) Common Stock issuable upon exercise of an Option may be
subject to such restrictions on transfer, repurchase rights or other conditions
or restrictions as shall be determined by the Board of Directors of the Company
(the "Board").
3. Administration of the Plan.
The Plan shall be administered by the Board. No member of the Board
shall act upon any matter affecting any Option granted or to be granted to
himself or herself under the Plan; provided, however, that nothing contained
herein shall be deemed to prohibit a member of the Board from acting upon any
matter generally affecting the Plan or any Options granted thereunder. A
majority of the members of the Board shall constitute a quorum, and any action
may be taken by a majority of those present and voting at any meeting. The
decision of the Board as to all questions of interpretation and application of
the Plan shall be final, binding and conclusive on all persons. The Board, in
its sole discretion, may grant Options to purchase shares of the Common Stock
only as provided in the Plan, and shares shall be issued upon exercise of such
Options as provided in the Plan. The Board shall have authority, subject to the
express provisions of the Plan, to amend the Plan, to determine the terms and
provisions of the respective option agreements, which may but need not be
identical, to construe the respective option agreements and the Plan, and to
make all other determinations in the judgment of the Board necessary or
desirable for the administration of the Plan. The Board may correct any defect
or supply any omission or reconcile any inconsistency in the Plan
<PAGE> 5
or in any option agreement in the manner and to the extent it shall deem
expedient to implement the Plan and shall be the sole and final judge of such
expediency. The Board, in its discretion, may delegate its power, duties and
responsibilities to a committee, consisting of two or more members of the Board,
all of whom are "disinterested persons" (as hereinafter defined). If a
committee is so appointed, all references to the Board herein shall mean and
relate to such committee. For the purposes of the Plan, a director or member of
such committee shall be deemed to be "disinterested" only if such person
qualified as a "disinterested person" within the meaning of paragraph (c)(2) of
Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as such term is interpreted from time to time.
4. Type of Option.
Options granted pursuant to the Plan shall be either (i) incentive
stock options ("ISOs") meeting the requirements of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), or (ii) non-qualified stock
options ("NSOs").
5. Eligibility.
ISOs may be granted only to directors, officers and employees of the
Company or of any subsidiary of the Company. Directors who are not otherwise
employees of the Company or of any subsidiary of the Company shall not be
eligible to be granted ISOs pursuant to the Plan. NSOs may be granted to any
person who has rendered services to the Company or any subsidiary of the
Company (including managerial, technical, financial, advisory or consulting
services).
The Board shall take into account such factors as it may deem relevant
in determining the number of shares of Common Stock to be included in an Option
and the nature of such Option (i.e., ISO or NSO) to be granted to any director,
officer or employee of the Company.
6. Restrictions on ISOs.
ISOs granted under this Plan shall be subject to the following
restrictions:
(a) Limitation on Number of Shares. The aggregate fair market
value of the shares of Common Stock with respect to which ISOs are granted
(determined as of the date the ISOs are granted), exercisable for the first
time by an individual during any calendar year, shall not exceed $100,000. In
determining the fair market value under this clause (a), the provisions of
Section 8 hereof shall apply. In the event that an individual is eligible to
participate in any other stock option plan of the Company or any subsidiary of
the Company which is also intended to comply with the provisions of Section 422
of the Code, such $100,000 limitation shall apply to the aggregate number of
shares for which incentive stock options may be granted under the Plan and all
such other plans.
(b) Ten Percent Shareholder. If any employee to whom an ISO is
granted pursuant to the provisions of the Plan is on the date of grant the
owner of stock (as determined under Section 424(d) of the Code) possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or any subsidiary of the Company, then the following special provisions
shall be applicable to the ISOs granted to such individual:
-2-
<PAGE> 6
(i) The Option price per share subject to such ISOs shall
be not less than 110% of the fair market value of the
shares of Common Stock with respect to which ISOs are
granted (determined as of the date such ISO was
granted). In determining the fair market value under
this clause (i), the provisions of Section 8 hereof
shall apply.
(ii) The ISO by its terms shall not be exercisable after
the expiration of five years from the date such ISO
is granted.
7. Option Agreement.
Each Option shall be evidenced by an option agreement (an "Agreement")
duly executed on behalf of the Company and by the optionee to whom such Option
is granted, which Agreement shall comply with and be subject to the terms and
conditions of the Plan. The Agreement may contain such other terms, provisions
and conditions which are not inconsistent with the Plan as may be determined by
the Board; provided that ISOs shall meet all of the conditions for incentive
stock options as defined in Section 422 of the Code. No Option shall be
granted within the meaning of the Plan and no purported grant of any Option
shall be effective until the Agreement shall have been duly executed on behalf
of the Company and the optionee.
8. Option Price.
(a) Subject to the conditions set forth in Section 6(b) hereof,
the option price or prices of shares of the Company's Common Stock subject to
ISOs shall be at least the fair market value of such Common Stock on the date
the ISO is granted as determined by the Board in accordance with the
Regulations promulgated under Section 422 of the Code.
(b) If such shares are then listed on any national securities
exchange, the fair market value shall be the mean between the high and low
sales prices, if any, on the largest such exchange on the date of the grant of
the ISO or, if there are no such sales on such date, shall be determined by
taking a weighted average of the means between the highest and lowest sales
prices on the nearest date before and the nearest date after the date of grant
in accordance with Section 25.2512-2 of the Regulations. If the shares are not
then listed on any such exchange, the fair market value of such shares shall be
the mean between the closing "Bid" and the closing "Ask" prices, if any, as
reported in the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") for the date of the grant of the ISO, or, if there are no
such prices on such date, shall be determined by taking a weighted average of
the means between the highest and lowest sales prices on the nearest date
before and the nearest date after the date of grant in accordance with Section
25.2512-2 of the Regulations. If the shares are not then either listed on any
such exchange or quoted in NASDAQ, the fair market value shall be the mean
between the average of the "Bid" and "Ask" prices, if any, as reported in the
National Association of Securities Dealers National Daily Quotation Service for
the date of the grant of the ISO, or, if there are no such prices on such date,
shall be determined by taking a weighted average of the means between the
highest and lowest sales prices on the nearest date before and the nearest date
after the date of grant in accordance with Section 25.2512-2 of the
Regulations. If the fair market value cannot be determined under the preceding
three sentences, it shall be determined in good faith by the Board in
accordance with Section 422 of the Code.
-3-
<PAGE> 7
(c) The option price of NSOs shall be as determined by the Board
of Directors.
9. Manner of Payment; Manner of Exercise.
(a) Options granted under the Plan may provide for the payment of
the exercise price by delivery of (i) cash or a check payable to the order of
the Company in an amount equal to the exercise price of such Options, (ii)
shares of Common Stock owned by the optionee having a fair market value (at the
date of exercise) equal in amount to the exercise price of the Options being
exercised, or (iii) any combination of (i) and (ii). The fair market value of
any shares of Common Stock which may be delivered upon exercise of an Option
shall be determined by the Board in accordance with Section 8 hereof.
(b) To the extent that an Option is exercisable, Options may be
exercised in full at one time or in part from time to time, by giving written
notice, signed by the person or persons exercising the Option, to the Company,
stating the number of shares with respect to which the Option is being
exercised, accompanied by payment in full for such shares as provided in
Section 9(a) hereof. No exercise of an Option may be made for fewer than 100
full shares of Common Stock unless such exercise is made for the entire number
of shares remaining to be purchased pursuant to such Option. Upon such
exercise, delivery of a certificate for paid-up non-assessable shares shall be
made by the Company to the person or persons exercising the Option within 10
business days after receipt of such notice by the Company.
10. Exercise of Options.
Each Option granted under the Plan shall, subject to Sections 11(b),
13 and 16 hereof, be exercisable at such time or times and during such period
as shall be set forth in the Agreement; provided, however, that except as
otherwise provided pursuant to the provisions of Section 6(b) hereof, no Option
granted under the Plan shall have a term in excess of ten years from the date
of grant.
11. Term of Options; Exercisability.
(a) Term.
(i) Each Option shall expire on a date determined by the
Board which is not more than ten years from the date
of the granting thereof, except (a) as otherwise
provided pursuant to the provisions of Section 6(b)
hereof, and (b) for earlier termination as herein
provided.
(ii) Except as otherwise provided in this Section 11, an
Option granted to any optionee whose employment by
the Company and its subsidiaries is terminated for
any reason, shall terminate on the earlier of (i)
three months after the date such optionee's
employment by the Company and its subsidiaries is
terminated, or (ii) the date on which the Option
expires by its terms.
-4-
<PAGE> 8
(iii) If the employment of an optionee is terminated by the
Company and its subsidiaries for cause or because the
optionee is in breach of any employment agreement or
his or her terms of employment, such Option will
terminate on the date the optionee's employment is
terminated by the Company and its subsidiaries.
(iv) If the employment of an optionee is terminated by the
Company and its subsidiaries because the optionee has
become disabled (within the meaning of Section
22(e)(3) of the Code), such Option shall terminate on
the earlier of (i) one year after the date such
optionee's employment by the Company and its
subsidiaries is terminated, or (ii) the date on which
the Option expires by its terms.
(v) In the event of the death of any optionee, such
Option shall terminate on the earlier of (i) one year
after the date of death, or (ii) the date on which
the Option expires by its terms.
(b) Exercisability.
(i) Except as otherwise provided in this Section 11 (b),
an Option granted to an optionee whose employment by
the Company and its subsidiaries is terminated shall
be exercisable only to the extent that the right to
purchase shares under such Option is exercisable on
the date such optionee's employment by the Company
and its subsidiaries is terminated.
(ii) An Option granted to an optionee whose employment is
terminated by the Company and its subsidiaries
because he or she has become disabled, as determined
by the Board or, if applicable, as determined
pursuant to the terms of any employment agreement
between the Company or any of its subsidiaries and
the optionee, shall be immediately exercisable as to
the full number of shares covered by such Option,
whether or not under the provisions of the Plan or
Agreement such Option was otherwise exercisable as of
the date of disability.
(iii) In the event of the death of an optionee, the Option
granted to such optionee may be exercised as to the
full number of shares covered thereby, whether or not
under the provisions of the Plan or Agreement the
optionee was entitled to do so at the date of his or
her death, by the executor, administrator or personal
representative of such optionee, or by any person or
persons who acquired the right to exercise such
Option by bequest or inheritance or by reason of the
death of such optionee.
12. Options Not Transferable.
The right of any optionee to exercise any Option granted to him or her
shall not be assignable or transferable by such optionee other than by will or
the laws of descent and distribution, and any
-5-
<PAGE> 9
such Option shall be exercisable during the lifetime of such optionee only by
him or her. Any Option granted under the Plan shall be null and void and
without effect upon the bankruptcy of the optionee to whom the Option is
granted, or upon any attempted assignment or transfer, except as herein
provided, including, without limitation, any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition, or
levy of execution, attachment, trustee process or similar process, whether legal
or equitable, upon such Option.
13. Recapitalization, Reorganizations and the Like.
(a) In the event that the outstanding shares of the Common Stock
are changed into or exchanged for a different number or kind of shares or other
securities of the Company by reason of, or are otherwise subjected to, any
reorganization, recapitalization, reclassification, stock split, reverse stock
split, or stock dividends, appropriate and equitable adjustment shall be made
by the Board, in its sole discretion, in the number and kind of shares as to
which Options may be granted under the Plan and as to which outstanding Options
or portions thereof then unexercised shall be exercisable. Such adjustment in
outstanding Options shall be made without change in the total price applicable
to the unexercised portion of such Options and with a corresponding adjustment
in the Option price per share.
(b) (i) In addition, unless otherwise determined by the Board
in its sole discretion, in the case of any (I) merger or consolidation pursuant
to which the Company's stockholders shall receive cash or securities of another
corporation and less than 50% of the outstanding capital stock of the surviving
corporation pursuant to such merger or consolidation shall be owned by the
stockholders of the Company, (II) sale or conveyance to another entity of all
or substantially all of the property and assets of the Company or (III) Change
in Control of the Company, the Company shall, or shall cause such surviving
corporation or the purchaser(s) of the Company's assets to, deliver to the
optionee the same kind of consideration that is delivered to the shareholders
of the Company as a result of such merger, consolidation, sale, conveyance or
Change in Control, or the Board may cancel all outstanding Options in exchange
for consideration in cash or marketable securities, which consideration in both
cases shall be equal in value to the value of those shares of stock or other
securities the optionee would have received had the Option been exercised (but
only to the extent then exercisable) and had no disposition of the shares
acquired upon such exercise been made prior to such merger, consolidation,
sale, conveyance or Change in Control, less the Option price therefor or, lieu
thereof, the Board shall give the optionee at least twenty days prior written
notice of any such transaction in order to enable the optionee to exercise the
exercisable portion, if any, of the Option. Upon receipt of such consideration
or effective on the date specified in such notice, all Options (whether or not
then exercisable) shall immediately terminate and be of no further force or
effect. The value of the stock or other securities the optionee would have
received if the Option had been exercised shall be determined in good faith by
the Board, and in the case of shares of Common Stock, in accordance with the
provisions of Section 8 hereof.
(ii) The Board shall also have the power and right to
accelerate the exercisability of any Options,
notwithstanding any limitations in this Plan or in
the Agreement upon such merger, consolidation, sale,
conveyance or Change in Control.
-6-
<PAGE> 10
(c) A "Change in Control" shall be deemed to have occurred if any
person, or any two or more persons acting as a group, and all affiliates of
such person or persons, who prior to such time Beneficially Owned (as defined
in Rule 13d-3 under the Exchange Act) less than 25% of the then outstanding
Common Stock, shall acquire such additional shares of Common Stock in one or
more transactions, or series of transactions, such that following such
transaction or transactions, such person or group and affiliates Beneficially
Own 50% or more of the Common Stock outstanding.
(d) If by reason of a corporate merger, consolidation, acquisition
of property or stock, separation, reorganization, or liquidation, the Board
shall authorize the issuance or assumption of a stock option or stock options
in a transaction to which Section 424(a) of the Code applies, then,
notwithstanding any other provision of the Plan, the Board may grant an option
or options upon such terms and conditions as it may deem appropriate for the
purpose of assumption of the old Option, or substitution of a new option for
the old Option, in conformity with the provisions of such Section 424(a) of the
Code and the Regulations thereunder, and any such option shall not reduce the
number of shares otherwise available for issuance under the Plan. In the event
of such assurance or assumption, the provisions of Section 13(b) hereof shall
not be applicable.
(e) No fraction of a share shall be purchasable or deliverable
upon the exercise of any Option, but in the event any adjustment hereunder in
the number of shares covered by the Option shall cause such number to include a
fraction of a share, such fraction shall be adjusted to the nearest smaller
whole number of shares.
14. No Special Employment Rights.
Nothing contained in the Plan or in any Option granted under the Plan
shall confer upon any optionee any right with respect to the continuation of
his or her employment by the Company or any subsidiary or interfere in any way
with the right of the Company or any subsidiary, subject to the terms of any
separate employment agreement to the contrary, at any time to terminate such
employment or to increase or decrease the compensation of the Option holder
from the rate in existence at the time of the grant of an Option. Whether an
authorized leave of absence, or absence in military or government service,
shall constitute termination of employment for purposes of any Option shall be
determined by the Board at the time of such occurrence.
15. Withholding.
The Company's obligation to deliver shares upon the exercise of any
Option granted under the Plan at a time which would cause the Option to fail to
be a qualified incentive stock option under Section 422 of the Code shall be
subject to the Option holder's satisfaction of all applicable Federal, state
and local income and employment tax withholding requirements. The Company and
optionee may agree to withhold shares of Common Stock purchased upon exercise
of an Option to satisfy the above-mentioned withholding requirements; provided,
however, no such agreement may be made by an optionee who is an "officer" or
"director" within the meaning of Section 16 of the Exchange Act, except
pursuant to a standing election to so withhold shares of Common Stock purchased
upon exercise of an Option, such election to be made not less than six months
prior to such exercise and which election may be revoked only upon six months
prior written notice to the Company.
-7-
<PAGE> 11
16. Restrictions on Exercise of Options and Issuance of Shares.
(a) Notwithstanding the provisions of Section 9 hereof, an Option
cannot be exercised and the Company may delay the issuance of shares covered by
the exercise of an Option and the delivery of a certificate for such shares,
until one of the following conditions shall be satisfied:
(i) The shares with respect to which such Option has been
exercised are at the time of the issue of such shares
effectively registered or qualified under applicable
Federal and state securities acts now in force or as
hereafter amended; or
(ii) Counsel for the Company shall have given an opinion,
which opinion shall not be unreasonably conditioned
or withheld, that the issuance of such shares is
exempt from registration and qualification under
applicable Federal and state securities acts now in
force or as hereafter amended.
(b) The Company shall be under no obligation to qualify shares or
to cause a registration statement or a post-effective amendment to any
registration statement to be prepared for the purpose of covering the issuance
of shares in respect of which any Option may be exercised or to cause the
issuance of such shares to be exempt from registration and qualification under
applicable Federal and state securities acts now in force or as hereinafter
amended, except as otherwise agreed to by the Company in writing in its sole
discretion.
17. Purchase for Investment; Rights of Holder on Subsequent
Registration.
Unless and until the shares to be issued upon exercise of an Option
granted under the Plan have been effectively registered under the Securities
Act of 1933, as amended (the "1933 Act"), as now in force or hereafter amended,
the Company shall be under no obligation to issue any shares covered by any
Option unless the person who exercises such Option, in whole or in part, shall
give a written representation and undertaking to the Company which is
satisfactory in form and scope to counsel for the Company and upon which, in
the opinion of such counsel, the Company may reasonably rely, that he or she is
acquiring the shares issued pursuant to such exercise of the Option for his or
her own account as an investment and not with a view to, or for sale in
connection with, the distribution of any such shares, and that he or she will
make no transfer of the same except in compliance with any rules and
regulations in force at the time of such transfer under the 1933 Act, or any
other applicable law, and that if shares are issued without such registration,
a legend to this effect may be endorsed upon the securities so issued.
In the event that the Company shall, nevertheless, deem it necessary
or desirable to register under the 1933 Act or other applicable statutes any
shares with respect to which an Option shall have been exercised, or to qualify
any such shares for exemption from the 1933 Act or other applicable statutes,
then the Company may take such action and may require from each optionee such
information in writing for use in any registration statement, supplementary
registration statement, prospectus, preliminary prospectus, offering circular
or any other document that is reasonably necessary for such purpose and may
require reasonable indemnity to the Company and its officers and directors from
such holder against all losses, claims, damages and liabilities arising from
such
-8-
<PAGE> 12
use of the information so furnished and caused by any untrue statement of any
material fact therein or caused by the omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made.
18. Loans.
At the discretion of the Board, the Company may loan to the optionee,
or pay to the optionee as a bonus, some or all of the purchase price of the
shares acquired upon exercise of an Option, the terms of such loans or bonus to
be it at the discretion of the Board.
19. Modification of Outstanding Options.
Subject to any applicable limitations contained herein, the Board may
authorize the amendment of any outstanding Option with the consent of the
optionee when and subject to such conditions as are deemed to be in the best
interests of the Company and in accordance with the purposes of the Plan.
20. Approval of Stockholders.
The Plan shall become effective upon adoption by the Board; provided,
however, that the Plan shall be submitted for approval by the stockholders of
the Company no later than 12 months after the date of adoption of the Plan by
the Board. Should the stockholders of the Company fail to approve the Plan
within such 12-month period, all Options granted thereunder shall be and become
null and void.
21. Termination and Amendment of Plan.
Unless sooner terminated as herein provided, the Plan shall terminate
ten years from the date upon which the Plan was duly adopted by the Board of
the Company. The Board may at any time terminate the Plan or make such
modification or amendment thereof as it deems advisable; provided, however, (i)
except as provided in Section 13 hereof, the Board may not, without the
approval of the stockholders of the Company obtained in the manner stated in
Section 20 hereof, increase the maximum number of shares for which Options may
be granted or change the designation of the class of persons eligible to
receive Options under the Plan, and (ii) any such modification or amendment of
the Plan shall be approved by a majority of the stockholders of the Company to
the extent that such stockholder approval is necessary to comply with
applicable provisions of the Code, rules promulgated pursuant to Section 16 of
the Exchange Act, applicable state law, or applicable NASD or exchange listing
requirements. Termination or any modification or amendment of the Plan shall
not, without the consent of an optionee, affect his or her rights under an
Option theretofore granted to him or her.
22. Limitation of Rights in the Option Shares.
An optionee shall not be deemed for any purpose to be a stockholder of
the Company with respect to any of the Options until (x) the Option shall have
been exercised with respect thereto (including payment to the Company of the
exercise price) and (y) the earlier to occur of (i) the
-9-
<PAGE> 13
delivery by the Company to the optionee of a certificate therefor, or (ii) the
date on which the Company is required to deliver a certificate pursuant to
Section 9(b) hereof.
23. Notices.
Any communication or notice required or permitted to be given under
the Plan shall be in writing, and mailed by registered or certified mail or
delivered by hand, if to the Company, to the attention of the President at the
Company's principal place of business; and, if to an optionee, to his or her
address as it appears on the records of the Company.
-10-
<PAGE> 1
EXHIBIT 5.1
December ___, 1997
DSC Communications Corporation
1000 Coit Road
Plano, Texas 75075
Gentlemen:
DSC Communications Corporation, a Delaware corporation (the
"Company"), intends to file with the Securities and Exchange Commission (the
"Commission") a registration statement (the "Registration Statement") on Form
S-8 under the Securities Act of 1933, as amended (the "Act"). The Registration
Statement covers (i) 236,330 shares of the Company's common stock, $.01 par
value per share, including the preferred stock purchase rights attaching to
such stock pursuant to that certain Rights Agreement dated April 25, 1996 by
and between the Company and Harris Trust and Savings Bank, formerly KeyCorp
Shareholder Services, Inc. (the "Common Stock"), which shall be issued pursuant
to the Celcore, Inc. 1995 Stock Option Plan (the "Plan") assumed by the
Company, and (ii) such additional shares of Common Stock as may become issuable
pursuant to the anti-dilution provisions of the Plan (such shares collectively
referred to as the "Securities").
We have acted as counsel to the Company in connection with the
preparation and filing of the Registration Statement. In rendering this
opinion we have examined such corporate records, documents and instruments of
the Company and such certificates of public officials, have received such
representations from officers of the Company, and have reviewed such questions
of law as in our judgment are necessary, relevant or appropriate to enable us
to render the opinion expressed below. In such examination, we have assumed
the genuineness of all signatures, the authenticity of all corporate records,
documents and instruments submitted to us as originals, the conformity to
original documents of all documents submitted to us as conformed, certified or
photostatic copies thereof, and the authenticity of the originals of such
photostatic, certified or conformed copies.
Based upon such examination and review and upon representations made
to us by officers of the Company, we are of the opinion that upon issuance and
delivery of the Securities in accordance with the terms and conditions of the
Plan, and upon receipt by the Company of the full consideration for the
Securities as determined pursuant to the Plan, the Securities will be legally
issued, fully paid and nonassessable shares of Common Stock of the Company.
This firm consents to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we come
within the category of persons whose consent is required by Section 7 of the
Act or the rules and regulations of the Commission thereunder.
Respectfully submitted,
BAKER & MCKENZIE
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to the Celcore, Inc. 1995 Stock Option Plan of our reports
dated January 23, 1997, with respect to the consolidated financial statements
of DSC Communications Corporation incorporated by reference in its Annual
Report (Form 10-K) for the year ended December 31, 1996 and the related
financial statement schedule included therein, filed with the Securities and
Exchange Commission.
/S/ ERNST & YOUNG, LLP
Dallas, Texas,
December 5, 1997
