As filed with the Securities and Exchange Commission on July 18, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
--------------------
GLASGAL COMMUNICATIONS, INC.
DELAWARE 94-2914253
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
151 VETERANS DRIVE
NORTHVALE, NEW JERSEY 07647
(Address of principal executive offices) (Zip Code)
----------------------
1990 STOCK OPTION PLAN
(Full Title of the Plan)
----------------------
ISAAC GAON
CHIEF EXECUTIVE OFFICER
GLASGAL COMMUNICATIONS, INC.
151 VETERANS DRIVE
NORTHVALE, NEW JERSEY 07647
(Name and Address of agent for service)
(201) 768-8082
(Telephone number, including area code, of agent for service)
----------------------
WITH A COPY TO:
ROBERT H. FRIEDMAN, ESQ.
OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
505 PARK AVENUE
NEW YORK, NEW YORK 10022
(212) 753-7200
----------------------
Approximate date of proposed sales pursuant to the plan:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================================================================
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price offering registration
registered registered per share price fee
- --------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
Common Stock
par value,
$.001 per 703,501 shares $2.99 $2,103,467.99
share (1)(2)(3) (1)(2)(3) (1)(2)(3) $725.33
- --------------------------------------------------------------------------------------------------------------------------------
Common Stock
par value,
$.001 per 676,499 $7.00 $4,735,493.00
share shares(2)(4) (2)(4) (2)(4) $1,632.93
- --------------------------------------------------------------------------------------------------------------------------------
Total
Registration
Fee ....................................................................................$2,358.26
================================================================================================================================
</TABLE>
(1) The contents of Registration Statement on Form S-8 (No. 33-60916)
relating to 600,000 shares of Sellectek Incorporated, the Company's
predecessor in interest (which equates to 120,000 shares of the
Company's Common Stock after taking into effect a 5 for 1 reverse stock
split) issuable upon the exercise of stock options granted or to be
granted pursuant to the 1990 Stock Option Plan (the "1990 Plan") is
incorporated by reference herein.
(2) Pursuant to Rule 416, there are also registered hereby such
indeterminate number of shares of Common Stock as may become issuable
by reason of the operation of the anti-dilution provisions of the 1990
Plan.
(3) Includes 703,501 shares with respect to which options were granted
under the 1990 Plan at an average exercise price of $2.99 per share.
<PAGE>
(4) Represents an additional 676,499 shares available for grant under the
1990 Plan at prices not presently determined. Pursuant to Rule 457(g)
and (h), the offering price for the 676,499 shares which may be issued
under the 1990 Plan is estimated solely for the purpose of determining
the registration fee and is based on the average of the high and low
sale prices of the Company's Common Stock as reported by The Nasdaq
SmallCap Market on July 16, 1996.
================================================================================
-2-
<PAGE>
PROSPECTUS
1,407,577 SHARES
GLASGAL COMMUNICATIONS, INC.
Common Stock, $.001 par value
This Prospectus relates to the reoffer and resale by certain selling
stockholders (the "Selling Stockholders") of shares (the "Shares") of Common
Stock, $.001 par value (the "Common Stock") of Glasgal Communications, Inc. (the
"Company") (i) that may be issued by the Company to the Selling Stockholders
upon the exercise of outstanding stock options granted pursuant to the Company's
1990 Stock Option Plan (the "1990 Plan") and (ii) previously acquired upon the
exercise of stock options, all of which Shares are "restricted securities" as
defined in Rule 144(a)(3) of the Securities Act. This Prospectus also relates to
the reoffer and resale of Shares to be acquired upon exercise of stock options
that may be granted to individuals who may be deemed to be "affiliates" of the
Company (collectively, the "Future Selling Stockholders") upon the exercise of
outstanding stock options to be granted under the 1990 Plan. If and when such
options are granted to the Future Selling Stockholders, the Company intends to
distribute a Prospectus Supplement as required by Rule 424(b) of the Securities
Act of 1933, as amended (the "Securities Act"). Such Prospectus Supplement will
specify the names of the Future Selling Stockholders and the amount of Shares to
be reoffered and resold by them.
The offer and sale of the Shares to the Selling Stockholders and Future
Selling Stockholders were previously registered under the Securities Act. The
Shares are being reoffered and may be resold for the account of the Selling
Stockholders, the Future Selling Stockholders and the Company will not receive
any of the proceeds from the resale of the Shares.
The Selling Stockholders have advised the Company that the resale of
their Shares may be effected from time to time in one or more transactions on
The Boston Stock Exchange ("BSE"), the Nasdaq SmallCap Market ("Nasdaq"), in
negotiated transactions or otherwise at market prices prevailing at the time of
the sale or at prices otherwise negotiated. See "Plan of Distribution." The
Company will bear all expenses in connection with the preparation of this
Prospectus.
AN INVESTMENT IN THE COMMON STOCK OFFERED HEREBY INVOLVES
A HIGH DEGREE OF RISK. SEE "RISK FACTORS" AT PAGE 7.
The Common Stock of the Company is traded on the Nasdaq SmallCap Market
("Nasdaq") under the symbol "GLAS". On July 16, 1996 the closing bid price for
the Common Stock on Nasdaq, was $6-3/4.
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this Prospectus is July ___, 1996.
<PAGE>
TABLE OF CONTENTS
PAGE
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE..........................3
RISK FACTORS.............................................................4
THE COMPANY..............................................................8
RECENT DEVELOPMENTS.....................................................10
USE OF PROCEEDS.........................................................10
SELLING STOCKHOLDERS....................................................10
PLAN OF DISTRIBUTION....................................................11
LEGAL MATTERS...........................................................12
EXPERTS.................................................................12
CHANGE OF ACCOUNTANTS...................................................13
AVAILABLE INFORMATION...................................................13
-2-
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended
April 30, 1995, as amended, the Company's Quarterly Reports on Form 10-Q for the
quarters ended July 31, 1995, October 31, 1995 and January 31, 1996 and the
Company's Current Report on Form 8-K dated October 30, 1995 are hereby
incorporated by reference in this Prospectus and shall be deemed to be a part
hereof. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of filing of such
documents.
The Company's Application for Registration of its Common Stock under
Section 12(b) of the Exchange Act filed on May 2, 1996, is incorporated by
reference in this Prospectus and shall be deemed to be a part hereof.
The description of the Common Stock in the Company's Registration
Statement on Form 8-A filed on April 24, 1996 is incorporated by reference in
this Prospectus and shall be deemed to be a part hereof.
The Company hereby undertakes to provide without charge to each person
to whom a copy of this Prospectus has been delivered, on the written or oral
request of any such person, a copy of any or all of the documents referred to
above which have been or may be incorporated in this Prospectus by reference,
other than exhibits to such documents. Written requests for such copies should
be directed to Glasgal Communications, Inc., 151 Veterans Drive, Northvale, New
Jersey 07647, Attention: James Caci. Oral requests should be directed to such
officer (telephone number (201) 768-8082).
----------------------------------
No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offer made hereby, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company or any Selling Stockholder. This Prospectus does not constitute
an offer to sell, or a solicitation of an offer to buy, the securities offered
hereby to any person in any state or other jurisdiction in which such offer or
solicitation is unlawful. The delivery of this Prospectus at any time does not
imply that information contained herein is correct as of any time subsequent to
its date.
-3-
<PAGE>
RISK FACTORS
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
EACH PROSPECTIVE INVESTOR SHOULD CAREFULLY CONSIDER THE FOLLOWING
RISK FACTORS INHERENT IN, AND AFFECTING THE BUSINESS OF, THE
COMPANY BEFORE MAKING AN INVESTMENT DECISION.
WORKING CAPITAL DEFICIENCIES; HISTORY OF LOSSES. The Company has a
history of limited working capital and had working capital deficiencies in the
years ended December 31, 1992 and 1993, the four months ended April 30, 1994 and
the fiscal year ended April 30, 1995 of $1,953,000, $1,648,000, $1,967,000 and
$3,756,000, respectively. In addition, although the Company had net income of
$43,000 for the year ended December 31, 1992, it incurred net losses of
$147,000, $2,145,000 and $1,643,000 for the year ended December 31, 1993, the
four months ended April 30, 1994 and the fiscal year ended April 30, 1995. There
can be no assurance that the Company will generate sufficient revenues to meet
expenses or to operate profitably in the future.
REVOLVING CREDIT FACILITY; PAST DEFAULTS UNDER REVOLVING CREDIT
FACILITY. The Company's revolving credit facility expired on May 31, 1996. The
Company has extended this facility through August 31, 1996. There can be no
assurance that the Company will be able to further extend its revolving credit
agreement or refinance the amount outstanding under such agreement. If the
Company is unable to extend its revolving credit agreement or refinance the
amount outstanding under such agreement or if the bank accelerates the amount
due thereunder, the Company's business will be materially adversely affected.
The Company has in the past been in violation of certain of the financial
covenants contained in the revolving credit facility. At May 31, 1996,
$2,495,000 was outstanding under such agreement.
DEPENDENCE ON KEY PERSONNEL. The Company's future success depends in
large part on the continued service of its key personnel. In particular, the
loss of the services of Isaac Gaon, Chief Executive Officer, Robert Gadd, Vice
President Federal and Enterprise Systems, David Tobey, President of
Computer-Aided Software Integration, Inc. ("CASI") of which the Company owns 80%
of the issued and outstanding shares or Maurice Kulik, President of Signatel
Ltd., the Company's wholly-owned Canadian subsidiary, could have a material
adverse effect on the operations of the Company. The Company has key-man life
insurance on the lives of each of Messrs. Gaon and Gadd in the amount of
$1,000,000, respectively, with the Company named as the sole beneficiary. The
Company has an employment agreement with Mr. Gaon which expires on December 31,
1996 and which may be terminated by Mr. Gaon upon six months prior written
notice to the Company. The Company has an employment agreement with Mr. Tobey
which expires on April 30, 2001, which may be terminated by the Company for
cause or by Mr. Tobey for good reason. The
-4-
<PAGE>
Company has an employment agreement with Mr. Gadd which expires on December 31,
1996 and which may be terminated by Mr. Gadd upon six months prior written
notice to the Company. The Company has an employment agreement with Mr. Kulik
which may be terminated by Mr. Kulik upon six months' notice and which may be
terminated by the Company for cause without notice. The Company's future success
and growth also depends on its ability to continue to attract, motivate and
retain highly qualified employees, including those with the technical expertise
necessary to operate the business of the Company. There can be no assurance that
the Company will be able to attract, motivate and retain such persons.
COMPETITION. The Company competes with other companies involved in the
installation and servicing of local and wide area networks, the provision of
software tools to systems integrators and the distribution of data
communications equipment. These competitors include computer manufacturers,
software vendors, telephone companies and distribution companies. These markets
are highly competitive, and some companies with which the Company competes are
substantially larger and have significantly greater resources than the Company.
There can be no assurance that the Company will be able to compete successfully
in the future.
EXPORT SALES; ADVERSE EFFECT OF INABILITY TO COLLECT ALL EXPORT
RECEIVABLES. For the year ended December 31, 1993, the four months ended April
30, 1994, the fiscal year ended April 30, 1995, and the nine months ended
January 31, 1996 the Company had export sales which were approximately 8.9%,
8.7%, 11.7% and 8.8%, respectively, of net sales. While the Company attempts to
obtain payment on export sales prior to shipment or to obtain letters of credit,
it is not always able to do so. The collection of receivables pertaining to
export sales is generally more difficult than the collection of receivables
arising from domestic sales. There can be no assurance that the Company will be
successful in its efforts to collect all of such receivables. The inability of
the Company to collect all of such receivables could have an adverse effect on
the Company's cash flows and revenues. Of net accounts receivable at January 31,
1996, approximately $1,000,000 (18.0%) were attributable to export sales. In
addition, the Company's international business is subject to various risks
common to international activities, including political instability, economic
instability and recessions, the inherent difficulty of administering business
abroad and the need to comply with a wide variety of foreign import and U.S.
export laws, tariffs and other regulatory requirements. The Company's
competitiveness in overseas markets generally may be negatively impacted when
there is a significant increase in the value of the dollar against European
currencies or the currencies of other countries where the Company does business.
The Company also expects to continue to face
-5-
<PAGE>
heightened competition from manufacturers and distributors in the
European market.
CONTROL BY PRINCIPAL SHAREHOLDER. Ralph Glasgal, the Chairman of the
Board and President of the Company, through his beneficial ownership and through
a voting agreement with Direct Connect International Inc. ("DCI") has the power
to vote approximately 35% of the Common Stock. DCI has pledged 2,000,000 of the
shares of Common Stock it owns in the Company as collateral for a loan. If the
pledgee were to become the owner of such shares, Mr. Glasgal would no longer
have the power to vote such shares.
EXTENDED LEAD TIMES FOR REALIZATION OF REVENUE. Due to the nature and
size of orders that the Company is now pursuing there is a longer lead time
between the initiation of prospective business and the consummation of a
transaction, if any. Consequently, significantly more resources are required to
manage this process. As such, there is likely to be substantial fluctuations in
sales volume on a month-to-month and quarter-to- quarter basis. The pursuit of
this type of business increases the Company's risk of failure, especially given
its present level of working capital. As a result, if the Company experiences
lower than expected sales volume for an extended period of time, there will be a
material adverse effect on the Company.
UNCERTAINTY OF REVENUES FROM RECENT CONTRACT. While the Company
recently entered into a contract with Telos Corporation ("Telos") to act as a
subcontractor under Telos' contract with the Immigration and Naturalization
Service (the "INS"), the contract is an "open" contract, which may be cancelled
by the INS at any time without penalty. While the Company has made sales of
approximately $6,437,000 under this contract as of January 31, 1996, there can
be no assurance that any future sales will result or that any such sales will
result in profits for the Company. In addition, due to the United States
government budget impasse, sales to date under this contract have been lower
than expected. No assurance can be given as to when the budget impasse will be
resolved.
SHARES ELIGIBLE FOR FUTURE SALE. The sale, or availability for sale, of
substantial amounts of Common Stock in the public market pursuant to Rule 144 or
otherwise could adversely affect the market price of the Common Stock and could
impair the Company's ability to raise additional capital through the sale of its
equity securities.
The Redeemable Warrants underlying the Units and the shares of Common
Stock underlying such Redeemable Warrants, upon exercise thereof, will be freely
tradeable without restriction under the Securities Act, except for any
Redeemable Warrants or shares of Common Stock purchased by an "affiliate" of the
-6-
<PAGE>
Company, which will be subject to the resale limitations of Rule 144 under the
Securities Act. Also, an additional 950,000 Redeemable Warrants and the shares
of Common Stock underlying such Redeemable Warrants are registered under the
Securities Act. Holders of such Redeemable Warrants have agreed not to transfer
such Redeemable Warrants, or the underlying shares of Common Stock, prior to
March 21, 1997, without the prior written consent of the Joseph Stevens &
Company, L.P., the representative in the Company's Public Offering (the
"Representative"), and the Company.
In addition, without the consent of the Representative, the Company has
agreed not to sell or offer for sale any of its securities prior to March 21,
1997, except pursuant to outstanding options and warrants and pursuant to the
Company's existing option plan and no option shall have an exercise price that
is less than the fair market value per share of Common Stock on the date of
grant.
NO DIVIDENDS. The Company has not paid dividends on its Common Stock
since its inception, other than distributions made by the Predecessor to
shareholders of the Predecessor in amounts sufficient to reimburse the
Predecessor's shareholders for federal (and some state) income tax liabilities
arising from the Predecessor's former status as an "S" corporation. The Company
currently intends to retain earnings, if any, for use in the business and does
not anticipate paying any dividends to its shareholders in the foreseeable
future. Each of the Company's loan agreements with the Company's bank includes a
restriction on the payment of dividends.
POSSIBLE ACQUISITIONS. It is currently anticipated that a portion of
the Company's future growth will result from acquisitions of other similar or
complementary businesses. In October 1994, the Company consummated the
acquisition of Signatel. On April 24, 1996, the Company acquired 80% of the
issued and outstanding capital stock of CASI, a provider of Software tools and
services to systems integrators and independent Software vendors. On June 17,
1996 the Company signed a letter of intent to acquire 100% of the common stock
of HH Communications, Inc. ("HH"), which resells computer networking equipment
and provides value-added services in connection with such equipment. The Company
has no other current plan or agreement to acquire any other business. There can
be no assurance that any other transaction will be consummated or that they will
result in increased levels of profit for the Company. In addition, there can be
no assurance that the Company will be able to integrate or manage successfully
other acquired businesses.
CERTAIN ANTI-TAKEOVER CHARTER PROVISIONS. Shares of preferred stock may
be issued in the future by the Company
-7-
<PAGE>
without further shareholder approval and upon such terms and conditions, and
having such rights, privileges and preferences, as the Board of Directors of the
Company may determine. The rights of the holders of the Company's Common Stock
will be subject to, and may be adversely affected by, the rights of the holders
of any preferred stock that may be issued in the future. The issuance of
preferred stock could have the effect of making it more difficult for a third
party to acquire, or of discouraging a third party from acquiring, a majority of
the outstanding voting stock of the Company. The Company does not have any
present plans to issue any shares of preferred stock.
THE COMPANY
In May 1994, Glasgal Communications, Inc., a New Jersey corporation
incorporated in 1975 (the "Predecessor") merged with and into Sellectek
Incorporated, a California corporation incorporated in 1983 ("Sellectek") (the
"Merger"). The surviving entity, Sellectek, changed its name to Glasgal
Communications, Inc. following the Merger and continued its existence under the
laws of the State of California. The Merger provided the Company with an
immediate infusion of approximately $750,000 in cash contributed by Sellectek
and created a publicly-traded vehicle to finance the future growth of the
Company's operations. Prior to the Merger, Sellectek was a publicly-traded
company whose common stock was listed on Nasdaq under the symbol ("SLTK")
without any on-going business operations. The Company's sole business is the
business of the Predecessor, and while Sellectek was the survivor of the Merger,
for accounting purposes, the Merger is treated as a reverse acquisition with the
Predecessor as the acquiror. On January 29, 1996, the Company reincorporated
into the State of Delaware. Glasgal Communications, Inc., a California
corporation, merged with and into Glasgal Communications, Inc., a Delaware
corporation, which corporation was incorporated in January 1996. As used in this
Prospectus, the term "Company" refers collectively to Glasgal Communications,
Inc., the Predecessor and Signatel Ltd. and Computer-Aided Software Integration,
Inc., its subsidiaries.
The Company is an open systems integrator that designs, installs and
services local and wide area networks which incorporate a broad range of
computer hardware, networking systems and software products and provides
software tools and services which simplify the integration of systems. The
Company also distributes data communications equipment. Networks are used to
distribute information which can be in the form of data, voice, images, video
and facsimile to multiple users. A local area network ("LAN") allows for the
transmission and sharing of data within one location. A wide area network
("WAN") allows for the transmission and sharing of data among many locations.
The Company's strength as an open systems integrator lies in its WAN expertise,
as well as its capabilities in connecting disparate
-8-
<PAGE>
computing systems thereby facilitating virtually seamless communication among
organizations. As an open systems integrator, the Company provides consulting
and design services, hardware, software, premises wiring, phone lines,
installation and after- sales service.
Although the Company was founded in 1975 as a distributor of data
communications equipment and services, beginning in 1991 the Company began
redirecting its efforts to become an open systems integrator providing complete
computer network systems and integration services. The Company believes that the
integration service sales will account for an increasingly larger percentage of
the Company's sales in future periods.
The Company is a single source supplier of equipment and telephone
line services from a variety of providers. The Company is an authorized reseller
of products for over 100 manufacturers and distributors, including Novell Inc.,
SCO Unix (Santa Cruz Operations, Inc.), Intel Corporation, Hewlett-Packard Co.,
Bay Networks, Inc., Sun Microsystems Computer Corporation, Micom Communications,
Inc., Microcom Inc., Cisco Systems Inc., RAD Data Communications, Inc. and
Racal-Datacom Inc. In addition, the Company resells telephone line services from
major companies, including LDDS WorldCom, Inc., Metropolitan Fiber Systems, Inc.
and Qwest Communications, Inc.
The Company has 15 sales and service offices throughout the United
States and four offices in Canada. The Company's export sales amounted to
approximately 11.7% and 8.8% of net sales for the fiscal year ended April 30,
1995 and the nine months ended January 31, 1996, respectively. These sales are
for hardware only, which are sold to over fifty international agents around the
world.
The Company's objective is to become one of the leading open systems
integrators providing complete enterprise networking solutions to national and
international organizations. To achieve its objective, the Company will continue
to supplement its core competency in data communications with its expertise in
all aspects of networking and connectivity.
On October 28, 1994, the Company consummated the acquisition of all of
the voting capital stock of Signatel, a Canadian distributor of data
communications equipment and services for 875,000 shares of Common Stock. The
acquisition was accounted for as a pooling of interests.
The Company's executive offices are located at 151 Veterans Drive,
Northvale, New Jersey 07647. The telephone number of the Company is (201)
768-8082.
-9-
<PAGE>
RECENT DEVELOPMENTS
On March 29, 1996, the Company consummated a financing (the "Private
Placement Offering") pursuant to which it issued 312,500 shares of Common Stock.
The net proceeds of approximately $1,211,562 were used to pay the cash portion
of the purchase price for Computer-Aided Software Integration, Inc. ("CASI")
($500,000) and to fund the working capital needs of CASI after its acquisition
by the Company.
On April 24, 1996, the Company acquired 80% of the issued and
outstanding capital stock of CASI for a purchase price of $500,000 cash and
44,260 shares of the Company's Common Stock. CASI is a provider of software
tools and services to systems integrators independent software vendors, and
corporate information system departments which simplify the design,
installation, integration and support of information systems. These tools
utilize a proprietary Application Definition Language to load information system
configuration and messaging parameters into a common repository. This repository
is used by each tool comprising the Integrator's Workbench Product Series
("IWPS") to automate the administration of and information exchange among
heterogeneous system environments. CASI also provides services which assist
customers in using IWPS, or which use IWPS to distribute fully integrated
systems in support of customer contracts.
On June 17, 1996, the Company signed a letter of intent to acquire 100%
of the Common Stock of HH in exchange for 1,500,000 shares of the Company's
Common Stock. HH resells computer networking equipment and provides value-added
services in connection with such equipment. The Company and HH are currently
negotiating the terms of a stock purchase agreement to commence the acquisition.
USE OF PROCEEDS
The Company will receive the exercise price of the options when
exercised by the holders thereof. Such proceeds will be used for working capital
and other general corporate purposes by the Company. The Company will not
receive any of the proceeds from the reoffer and resale of the Shares by the
Selling Stockholders and the Future Selling Stockholders.
SELLING STOCKHOLDERS
This Prospectus relates to the reoffer and resale of Shares issued or
that may be issued to the Selling Stockholders under the 1990 Plan.
The following table sets forth (i) the number of shares of Common Stock
beneficially owned by each Selling Stockholder at July 15, 1996, (ii) the number
of Shares of Common Stock to be
-10-
<PAGE>
offered for resale by each Selling Stockholder and (iii) the number and
percentage of shares of Common Stock to be beneficially owned by each Selling
Stockholder after completion of the offering.
<TABLE>
<CAPTION>
Number of shares of
Common Stock/
Number of shares of Number of Percentage of Class to
Common Stock Shares to be be Beneficially Owned
Beneficially Owned at Offered for After Completion of
Name July 15, 1996 Resale the Offering
- ---------------------------------------- ------------------------ ----------------- ------------------------
<S> <C> <C> <C>
Isaac Gaon (1)............................. 619,778(2) 108,821(3) 583,504/3.9%
Robert F. Gadd (4)......................... 398,366(5) 103,985(6) 363,704/2.4%
Ingemar Sjunnemark (7)..................... 289,166(8) 24,666(9) 280,944/1.9%
James Caci (10)............................ 82,000(11) 43,528(12) 67,491/.6%
</TABLE>
(1) Mr. Gaon is a has been the Chief Executive Officer of the Company since
May 1992 and previously served as the Chief Financial Officer of the
Company from April 1992 until October 1994. Mr. Gaon is also a director
of the Company.
(2) Represents options exercisable within sixty (60) days from July 15,
1996 to purchase (i) 495,245 shares of Common Stock at an exercise
price of $.005 per share, (ii) 60,000 shares of Common Stock at an
exercise price of $1.25 per share, and (iii) 64,533 shares of Common
Stock at an exercise price of $2.775 per share.
(3) Represents options to purchase 108,821 shares of Common Stock at an
exercise price of $2.775 per share pursuant to the 1990 Plan,
exercisable 1/3 on July 17, 1996 and 1/3 on July 17, 1997 and 1/3 on
July 17, 1998.
(4) Mr. Gadd has been the Vice President of Federal and Enterprise Systems
of the Company since September 1992.
(5) Represents options exercisable within sixty (60) days from July 15,
1996 to purchase (i) 297,166 shares of Common Stock at an exercise
price of $.005 per share, (ii) 40,000 shares of Common Stock at an
exercise price of $1.25 per share, and (iii) 61,200 shares of Common
Stock at an exercise price of $2.775 per shares.
(6) Represents options to purchase 103,985 shares of Common Stock at an
exercise price of $2.775 per share pursuant to the 1990 Plan,
exercisable 1/3 on July 17, 1996, 1/3 on July 17, 1997 and 1/3 on July
17, 1998.
(7) Mr. Sjunnemark has been the Vice President-Export Sales of the Company
since October 1988.
(8) Includes options exercisable within sixty (60) days from July 15, 1996
to purchase (i) 202,166 shares of Common Stock at an exercise price of
$.005, (ii) 10,000 shares of Common Stock at an exercise price of
$1.25, and (iii) 17,000 shares at an exercise price of $2.775.
(9) Represents options to purchase 24,666 shares of Common Stock at an
exercise price of $2.775 per share pursuant to the 1990 Plan,
exercisable 1/3 on July 17, 1996, 1/3 on July 17, 1997 and 1/3 on July
17, 1998.
(10) Mr. Caci has been Chief Financial Officer of the Company since October
1994 and Secretary and Treasurer of the Company since June 1995.
(11) Represents options exercisable within sixty (60) days from July 15,
1996 to purchase (i) 52,000 shares of Common Stock at an exercise price
of $1.25 and (ii) 30,000 shares of Common Stock at an exercise price of
$2.775.
(12) Represents options to purchase 43,528 shares of Common Stock at an
exercise price of $2.775 per share pursuant to the 1990 Plan,
exercisable 1/3 on July 17, 1996, 1/3 on July 17, 1997 and 1/3 on July
17, 1998.
PLAN OF DISTRIBUTION
It is anticipated that all of the Shares will be offered by the Selling
Stockholders and the Future Selling Stockholders from time to time in one or
more transactions on the BSE or Nasdaq,
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either directly or through brokers or agents, or in privately negotiated
transactions. The Selling Stockholders have advised the Company that they are
not parties to any agreement, arrangement or understanding as to such sales.
LEGAL MATTERS
The legality of the Shares offered hereby will be passed upon for the
Company, the Selling Stockholders and the Future Selling Stockholders by Olshan
Grundman Frome & Rosenzweig LLP, New York, New York. A member of Olshan Grundman
Frome & Rosenzweig LLP holds options to purchase 38,293 shares of Common Stock.
Robert H. Friedman, a member of Olshan Grundman Frome & Rosenzweig LLP, is a
director of the Company and holds options to purchase 87,146 shares of Common
Stock.
EXPERTS
The consolidated financial statements of the Company as of April 30,
1994 and 1995, and for the years ended December 31, 1992 and 1993, the four
months ended April 30, 1994 and the year ended April 30, 1995, included in the
Company's Form 10-K for the fiscal year ended April 30, 1995, as amended (the
"1995 10-K"), which is incorporated herein by reference, have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
The financial statements of the Company's wholly-owned subsidiary,
Signatel Ltd., for the year ended November 30, 1992 included in the Company's
Form 10-K for the fiscal year ended April 30, 1995, which is incorporated herein
by reference, have been audited by Mintz & Partners, 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 said
reports. Signatel Ltd.'s financial statements for the year ended November 30,
1993 included in the Company's Form 10-K for the fiscal year ended April 30,
1995, which is incorporated herein by reference, have been audited by Deloitte &
Touche, 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 said reports.
To the extent that a firm of independent public accountants audits and
reports on the financial statements of the Company issued at future dates, and
consents to the use of their report thereon, such financial statements also will
be incorporated by reference herein in reliance upon their report and said
authority.
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CHANGE OF ACCOUNTANTS
In June 1994, the Company determined to change accountants to Arthur
Andersen LLP. The Company's prior auditors, KPMG Peat Marwick resigned. On the
same date, the Company engaged Arthur Andersen LLP to audit its financial
statements. The decision to change accountants was made with the approval of the
Company's Board of Directors.
The Company believes, and has been advised by KPMG Peat Marwick that it
concurs in such belief, that, during the fiscal year ended December 31, 1993 and
subsequent thereto, the Company and KPMG Peat Marwick did not have any
disagreement on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure, which disagreement, if not
resolved to the satisfaction of KPMG Peat Marwick, would have caused it to make
reference in connection with its report on the Company's financial statements to
the subject matter of the disagreement.
No report of KPMG Peat Marwick on the Company's financial statements
for either of the past two fiscal years contained an adverse opinion, a
disclaimer or opinion or a qualification or was modified as to uncertainty,
audit scope or accounting principles. During such fiscal periods, there were no
"reportable events" within the meaning of Item 304(a)(1) of Regulation S-K
promulgated under the Securities Act.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549; or at certain of the regional offices of
the Commission located at 500 West Madison Street, Suite 1400, Chicago, Illinois
60661; and Seven World Trade Center, Suite 1300, New York, New York 10048.
Copies of such material can be obtained from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates. In addition, reports, Proxy Statements and other
information concerning the Company (Symbol: Glas) can be inspected at the
offices of the Nasdaq Stock Market, 1735 K Street, N.W., Washington D.C. 20006,
on which the Common Stock of the Company is listed.
The Company has also filed with the Securities and Exchange Commission
a Registration Statement on Form S-8 under the Securities Act with respect to
the Shares offered hereby. For further information with respect to the Company
and the securities offered hereby, reference is made to the Registration
Statement.
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<PAGE>
Statements contained in this Prospectus as to the contents of any contract or
other document are not necessarily complete, and in each instance, reference is
made to the copy of such contract or document filed as an exhibit to the
Registration Statement, such statement being qualified in all respects by such
reference.
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference and made a
part hereof:
(a) The Company's Annual Report on Form 10-K for the fiscal
year ended April 30, 1995, as amended;
(b) The Company's Quarterly Reports on Form 10-Q for the
quarters ended July 31, 1995, October 31, 1995 and January 31, 1996;
(c) The Company's Current Report on Form 8-K dated October
30, 1995;
(d) The description of the Company's Common Stock contained
in the Company's Registration Statement on Form 8-A filed May 2, 1996.
All reports and other documents subsequently filed by the Company
pursuant to Sections 13, 14 and 15(d) of the Securities Exchange Act of 1934, as
amended, after the effective date of this registration statement and prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of the filing of such reports and documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL
Certain legal matters in connection with the issuance of the Shares
offered hereby have been passed upon for the Company, the Selling Stockholders
and the Future Selling Stockholders by Olshan Grundman Frome & Rosenzweig LLP,
New York, New York. A member of Olshan Grundman Frome & Rosenzweig LLP holds
options to purchase 38,293 shares of Common Stock. Robert H. Friedman, a member
of Olshan Grundman Frome & Rosenzweig LLP, is a director of the Company and
holds options to purchase 63,146 shares of Common Stock.
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<PAGE>
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Article 6 of the Company's By-laws authorize indemnification of
directors and officers as follows:
The corporation shall, to the fullest extent permitted by Section 145
of the General Corporation Law of Delaware, as that Section may be amended and
supplemented from time to time, indemnify any director, officer or trustee which
it shall have power to indemnify under the Section against any expenses,
liabilities or other matters referred to in or covered by that Section. The
indemnification provided for in this Article (i) shall not be deemed exclusive
of any other rights to which those indemnified may be entitled under any by-law,
agreement or vote on stockholders or disinterested directors or otherwise, both
as to action in their official capacities and as to action in another capacity
while holding such office, (ii) shall continue as to a person who has ceased to
be a director, officer or trustee and (iii) shall inure to the benefit of the
heirs, executors and administrators of such a person. The corporation's
obligation to provide indemnification under this Article shall be offset to the
extent of any other source of indemnification or any otherwise applicable
insurance coverage under a policy maintained by the corporation or any other
person.
Expenses incurred by a director of the Corporation in defending a civil
or criminal action, suit or proceeding by reason of the fact that he is or was a
director of the Corporation (or was serving at the Corporation's request as a
director or officer of another corporation) shall be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such director to repay such amount if it
shall ultimately be determined that he is not entitled to be indemnified by the
Corporation as authorized by relevant sections of the General Corporation Law of
Delaware.
To assure indemnification under this Article of all such persons who
are determined by the corporation or otherwise to be or to have been
"fiduciaries" of any employee benefit plan of the corporation which may exist
from time to time, such Section 145 shall, for the purposes of this Article, be
interpreted as follows: an "other enterprise" shall be deemed to include such an
employee benefit plan, including, without limitation, any plan of the
corporation which is governed by the Act of Congress entitled "Employee
Retirement Income Security Act of 1974," as amended from time to time; the
corporation shall be deemed to have requested a person to serve an employee
benefit plan where the performance by such person of his duties to the
corporation also imposes duties on, or otherwise involves services by, such
person to the plan or participants or beneficiaries of the plan; excise taxes
assessed on a person with respect to an employee benefit plan pursuant to such
Act of Congress shall be deemed "fines"; and action taken or
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<PAGE>
omitted by a person with respect to an employee benefit plan in the performance
of such person's duties for a purpose reasonably believed by such person to be
in the interest of the participants and beneficiaries of the plan shall be
deemed to be for a purpose which is not opposed to the best interests of the
corporation.
See Item 9(c) below for information regarding the position of the
Commission with respect to the effect of any indemnification for liabilities
arising under the Securities Act of 1933, as amended.
Section 145 of the Delaware General Corporation Law provides as
follows:
(a) A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of NOLO CONTENDERE or its
equivalent, shall not, of itself, create a presumption that the person
did not act in good faith and in a manner which he reasonably believed
to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had reasonable cause
to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or was
a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense
or settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or
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<PAGE>
not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of
all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or
such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent
of a corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsections
(a) and (b) of this section, or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
(d) Any indemnification under subsections (a) and (b) of this
section (unless ordered by a court) shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper
in the circumstances because he has met the applicable standard of
conduct set forth in subsections (a) and (b) of this section. Such
determination shall be made (1) by a majority vote of the directors who
are not parties to such action, suit or proceeding, even though less
than a quorum, or (2) if there are no such directors, or if such
directors so direct, by independent legal counsel in a written opinion,
or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an
officer or director in defending any civil, criminal administrative or
investigative action, suit or proceeding may be paid by the corporation
in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that
he is not entitled to be indemnified by the corporation as authorized
in this section. Such expenses (including attorneys' fees) incurred by
other employees and agents may be so paid upon such terms and
conditions, if any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other subsections of this section shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of
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<PAGE>
stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while
holding such office.
(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him and incurred by
him in any such capacity, or arising out of his status as such, whether
or not the corporation would have the power to indemnify him against
such liability under this section.
(h) For purposes of this section, references to "the
corporation" shall include, in addition to the resulting corporation,
any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so that any
person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under this section with
respect to the resulting or surviving corporation as he would have with
respect to such constituent corporation if its separate existence had
continued.
(i) For purposes of this section, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with
respect to any employee benefit plan; and references to "serving at the
request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on,
or involves services by, such director, officer, employee, or agent
with respect to any employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted
in a manner "not opposed to the best interests of the corporation" as
referred to in this section.
(j) The indemnification and advancement of expenses provided
by, or granted pursuant to, this section shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a director,
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<PAGE>
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive
jurisdiction to hear and determine all actions for advancement of
expenses or indemnification brought under this section or under any
bylaw, agreement, vote of stockholders or disinterested directors, or
otherwise. The Court of Chancery may summarily determine a
corporation's obligation to advance expenses (including attorneys'
fees).
The Company maintains a directors and officers insurance and company
reimbursement policy. The policy insures directors and officers against
unindemnified loss arising from certain wrongful acts in their capacities and
reimburses the Company for such loss for which the Company has lawfully
indemnified the directors and officers. The policy contains various exclusions,
none of which relate to the offering hereunder.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
4 - The Company's 1990 Stock Option Plan, as amended to
date.
5 - Opinion of Olshan Grundman Frome & Rosenzweig LLP.
23(a) - Consent of Arthur Andersen LLP, independent public
accountants.
23(b) - Consent of Deloitte & Touche, independent public
accountants.
23(c) - Consent of Mintz & Partners, independent public
accountants.
23(d) - Consent of Olshan Grundman Frome & Rosenzweig LLP,
included in Exhibit 5.
24 - Power of Attorney (included on signature page to
this Registration Statement).
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:
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<PAGE>
(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;
(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 (i) and (ii) above
do not apply if the information required to be
included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by
the registrant pursuant to Section 13 or 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; and
(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
of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934 (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by
reference in this 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.
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<PAGE>
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 Securities Act of 1933 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 a
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 of
1933 and will be governed by the final adjudication of such
issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Northvale, State of New Jersey, on this 18th day of
July, 1996.
GLASGAL COMMUNICATIONS, INC.
(Registrant)
/S/ ISAAC GAON
------------------------------------
ISAAC GAON, CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEYS AND SIGNATORIES
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated. Each of the undersigned officers and
directors of Glasgal Communications, Inc. hereby constitutes and appoints Ralph
Glasgal and Isaac Gaon and each of them singly, as true and lawful
attorneys-in-fact and agents with full power of substitution and resubstitution,
for him in his name in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission and to prepare any and
all exhibits thereto, and other documents in connection therewith, and to make
any applicable state securities law or blue sky filings, granting unto said
attorneys-in-fact and agents, full power and authority to do and perform each
and every act and thing requisite or necessary to be done to enable Glasgal
Communications, Inc. to comply with the provisions of the Securities Act of
1933, as amended, and all requirements of the Securities and Exchange
Commission, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
SIGNATURE TITLE DATE
/S/ RALPH GLASGAL Chairman of the Board and July 18, 1996
- ----------------------- President
RALPH GLASGAL
/S/ ISAAC GAON Chief Executive Officer and July 18, 1996
- ----------------------- Director (principal executive
ISAAC GAON officer)
/S/ JOSEPH M. SALVANI Director July 18, 1996
- -----------------------
JOSEPH M. SALVANI
/S/ ROBERT H. FRIEDMAN Director July 18, 1996
- -----------------------
ROBERT H. FRIEDMAN
/S/ MAURICE KULIK Director July 18, 1996
- -----------------------
MAURICE KULIK
/S/ THOMAS BERRY Director July 18, 1996
- -----------------------
THOMAS BERRY
/S/ JAMES CACI Chief Financial Officer July 18, 1996
- ------------------------ (Principal Financial Officer
JAMES CACI and Principal Accounting
Officer)
GLASGAL COMMUNICATIONS, INC.
1990 STOCK OPTION PLAN
As First Adopted May 4, 1990
And Amended through January 23, 1996
1. PURPOSE. This 1990 Stock Option Plan ("Plan") is
established as a compensatory plan to attract, retain and provide equity
incentives to selected persons to promote the financial success of Glasgal
Communications, Inc. (the "Company"). Capitalized terms not previously defined
herein are defined in Section 17 of this Plan.
2. TYPES OF OPTIONS AND SHARES. Options granted under this
Plan (the "Options") may be either (a) incentive stock options ("ISOs") within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), or (b) nonqualified stock options ("NQSOs"), as designated at the time
of grant. The shares of stock that may be purchased upon exercise of Options
granted under this Plan (the "Shares") are shares of the Common Stock of the
Company.
3. NUMBER OF SHARES. The maximum number of Shares that may
be issued pursuant to Options granted under this Plan shall not exceed 1,500,000
in total (post 1-for- 10.6685, 1-for-0.4669 and 1-for-5 reverse stock splits)
subject to adjustment as provided in this Plan. If any Option is terminated for
any reason without being exercised in whole or in part, the Shares thereby
released from such Option shall be available for purchase under other Options
subsequently granted under this Plan. At all times during the term of this Plan,
the Company shall reserve and keep available such number of Shares as shall be
required to satisfy the requirements of outstanding Options under this Plan.
4. ELIGIBILITY. Options may be granted to employees,
officers, directors, consultants, independent contractors and advisors (provided
such consultants, contractors and advisors render bona fide services in
connection with the offer and sale of securities in a capital- raising
transaction) of the Company or any Parent, Subsidiary or Affiliate of the
Company. ISOs may be granted only to employees (including officers and directors
who are also employees) of the Company or a Parent or Subsidiary of the Company.
The Committee (as defined in Section 14) in its sole discretion shall select the
recipients of Options ("Optionees"). An Optionee may be granted more than one
Option under this Plan.
5. TERMS AND CONDITIONS OF OPTIONS. The Committee shall
determine whether each Option is to be an ISO or an NQSO, the number of Shares
subject to the Option, the exercise price of the Option, the period during which
the Option may be exercised, and all other terms and conditions of the Option,
subject to the following:
<PAGE>
5.1 FORM OF OPTION GRANT. Each Option granted under
this Plan shall be evidenced by a written Stock Option Grant (the "Grant") in
such form (which need not be the same for each Optionee) as the Committee shall
from time to time approve.
5.2 DATE OF GRANT. The date of grant of an Option shall
be the date on which the Committee makes the determination to grant such Option
unless otherwise specified by the Committee. The Grant representing the Option
will be delivered to the Optionee with a copy of this Plan within a reasonable
time after the date of grant.
5.3 EXERCISE PRICE. The exercise price of an Option
shall be not less than 100% of the Fair Market Value of the Shares on the date
the Option is granted. The exercise price of any Option granted to a person
owning more than 10% of the total combined voting power of all classes of stock
of the Company or any Parent or Subsidiary of the Company ("Ten Percent
Shareholder") shall not be less than 110% of the Fair Market Value of the Shares
on the date the Option is granted.
5.4 EXERCISE PERIOD. Options shall be exercisable
within the times or upon the events determined by the Committee as set forth in
the Grant; provided, however, that no Option shall be exercisable after the
expiration of ten (10) years from the date the Option is granted, and provided
further that no Option granted to a Ten Percent Shareholder shall be exercisable
after the expiration of five (5) years from the date of the Option is granted.
5.5 LIMITATIONS ON ISOS. The aggregate Fair Market
Value (determined as of the time of Option is granted) of stock with respect to
which ISOs are exercisable for the first time by an Optionee during any calendar
year (under this Plan or under any other incentive stock option plan of the
Company or any Parent or Subsidiary of the Company) shall not exceed $100,000.
If the Fair Market Value of stock with respect to which ISOs are exercisable for
the first time by an Optionee during any calendar year exceeds $100,000, the
Options for the first $100,000 worth of stock to become exercisable in such year
shall be ISOs and the Options for the amount in excess of $100,000 that becomes
exercisable in that year shall be NQSOs. In the event that the IRC or the
regulations promulgated thereunder are amended after the effective date of this
Plan to provide for a different limit on the Fair Market Value of Shares
permitted to be subject to ISOs, such different limit shall be incorporated
herein and shall apply to any Options granted after the effective date of such
amendment.
5.6 OPTIONS NON-TRANSFERABLE. Options granted under
this Plan, and any interest therein, shall not be transferable or assignable by
the Optionee, and may not be made subject to execution, attachment or similar
process, otherwise than by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or Title
I of the Employee Retirement Income Security Act, or the rules thereunder, and
shall be exercisable during the lifetime of the Optionee only by the Optionee;
provided that NQSOs held by an Optionee who is not an officer or director of the
Company or other person (in each case, an "Insider") whose transactions in the
Company's Common Stock are subject to Section 16(b) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), may be transferred
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<PAGE>
to such family members, trusts and charitable institutions as the Committee, in
its sole discretion, shall approve at the time of the grant of such Option.
6. EXERCISE OF OPTIONS.
6.1 NOTICE. Options may be exercised only by delivery
to the Company of a written exercise agreement in a form approved by the
Committee (which need not be the same for each Optionee), stating the number of
Shares being purchased, the restrictions imposed on the Shares, if any, and such
representations and agreements regarding the Optionee's investment intent and
access to information, if any, as may be required by the Company to comply with
applicable securities laws, together with payment in full of the exercise price
for the number of Shares being purchased.
6.2 PAYMENT. Payment for the Shares may be made in cash
(by check) or, where approved by the Committee in its sole discretion at the
time of grant and where permitted by law: (a) by cancellation of indebtedness of
the Company to the Optionee; (b) by surrender of shares of Common Stock of the
Company that have been owned by the Optionee for more than six (6) months (and
which have been paid for within the meaning of SEC Rule 144 and, if such Shares
were purchased from the Company by use of a promissory note, such note has been
fully paid with respect to such shares) or were obtained by the Optionee in the
open public market having a Fair Market Value equal to the exercise price of the
Option; (c) by instructing the Company to withhold Shares otherwise issuable
pursuant to an exercise of the Option having a Fair Market Value equal to the
exercise price of the Option (including the withheld Shares); (d) by waiver of
compensation due or accrued to Optionee for services rendered; (e) provided that
a public market for the Company's stock exists, through a "same day sale"
commitment from the Optionee and a broker-dealer that is a member of the
National Association of Securities Dealers (an "NASD Dealer") whereby the
Optionee irrevocably elects to exercise the Option and to sell a portion of the
Shares so purchased to pay for the exercise price and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the exercise price
directly to the Company; (f) provided that a public market for the Company's
stock exists, through a "margin" commitment from the Optionee and an NASD Dealer
whereby the Optionee irrevocably elects to exercise the Option and to pledge the
Shares so purchased to the NASD Dealer in a margin account as security for a
loan from the NASD Dealer in the amount of the exercise price, and whereby the
NASD Dealer irrevocably commits upon receipt of such Shares to forward the
exercise price directly to the Company; or (g) by any combination of the
foregoing.
6.3 WITHHOLDING TAXES. Prior to issuance of the Shares
upon exercise of an Option, the Optionee shall pay or make adequate provision
for any federal or state withholding obligations of the Company, if applicable.
Where approved by the Committee in its sole discretion, the Optionee may provide
for payment of withholding taxes upon exercise of the Option by requesting that
the Company retain Shares with a Fair Market Value equal to the minimum amount
of taxes required to be withheld. In such case, the Company shall issue the net
number of Shares to the Optionee by deducting the Shares retained from the
Shares exercised.
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<PAGE>
The Fair Market Value of the Shares to be withheld shall be determined on the
date that the amount of tax to be withheld is to be determined in accordance
with Section 83 of the Code (the "Tax Date"). All elections by Optionees to have
shares withheld for this purpose shall be made in writing in a form acceptable
to the Committee and shall be subject to the following restrictions:
(a) the election must be made on or prior to the applicable
Tax Date;
(b) once made, the election shall be irrevocable as to the
particular Shares as to which the election is made;
(c) all elections shall be subject to the consent or
disapproval of the Committee;
(d) if the Optionee is an Insider, and if the Company is
subject to Section 16(b) of the Exchange Act, the election may not be made
within six (6) months of the date of grant of the Option; provided, however,
that this limitation shall not apply in the event that death or disability of
the Optionee occurs prior to the expiration of the six (6) month period; and
(e) if the Optionee is an Insider, and if the Company is
subject to Section 16(b) of the Exchange Act, the election must be made either
six (6) months prior to the Tax Date or in the 10-day period beginning on the
third day following the public release of the Company's quarterly or annual
summary statement of operations.
In the event the election to have Shares withheld is made by an Optionee who is
an Insider, the Company is subject to Section 16(b) of the Exchange Act, and the
Tax Date is deferred until six months after exercise of the Option because no
election is filed under Section 83(b) of the Code, the Optionee shall receive
the full number of Shares with respect to which the Option is exercised, but
such Optionee shall be unconditionally obligated to tender back to the Company
the proper number of Shares on the Tax Date.
6.4 LIMITATIONS ON EXERCISE. Notwithstanding the exercise
periods set forth in the Grant, exercise of an Option shall always be subject to
the following limitations:
(a) If an Optionee ceases to be employed by the Company
or any Parent, Subsidiary or Affiliate of the Company for any reason except
death or disability, the Optionee may exercise such Optionee's ISOs to the
extent (and only to the extent) that it would have been exercisable upon the
date of termination, within three (3) months after the date of termination (or
such shorter time period as may be specified in the Grant), provided that, if
Optionee is an Insider and the Company is subject to Section 16(b) of the
Exchange Act, the Optionee's Option will be exercisable for a period of time
sufficient to allow such Optionee from having a matching purchase and sale under
Section 16(b), with any extension beyond three (3)
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<PAGE>
months from termination of employment deemed to be as an NQSO, and provided
further that in no event may an Option be exercisable later than the expiration
date of the Option.
(b) If an Optionee's employment with the Company or any
Parent, Subsidiary or Affiliate of the Company is terminated because of the
death of the Optionee or disability of Optionee within the meaning of Section
22(e)(3) of the Code, such Optionee's ISOs may be exercised to the extent (and
only to the extent) that it would have been exercisable by the Optionee on the
date of termination, by the Optionee (or the Optionees legal representative)
within twelve (12) months after the date of termination (or such shorter time
period as may be specified in the Grant), but in any event no later than the
expiration date of the ISOs.
(c) The Committee shall have discretion to determine
whether the Optionee has ceased to be employed by the Company or any Parent,
Subsidiary or Affiliate of the Company and the effective date on which such
employment terminated.
(d) In the case of an Optionee who is a director,
independent consultant, contractor or advisor, the Committee will have the
discretion to determine whether the Optionee is "employed by the Company or any
Parent, Subsidiary or Affiliate of the Company" pursuant to the foregoing
Sections.
(e) The Committee may specify a reasonable minimum number
of Shares that may be purchased on any exercise of an Option, provided that such
minimum number will not prevent the Optionee from exercising the full number of
Shares as to which the Option is then exercisable.
(f) An Option shall not be exercisable unless such
exercise is in compliance with the Securities Act of 1933, as amended (the "1933
Act"), all applicable state securities laws and the requirements of any stock
exchange or national market system upon which the Shares may then be listed, as
they are in effect on the date of exercise. The Company shall be under no
obligation to register the Shares with the Securities and Exchange Commission
("SEC") or to effect compliance with the registration, qualification or listing
requirements of any state securities laws or stock exchange, and the Company
shall have no liability for any inability or failure to do so.
6.5 INFORMATION TO OPTIONEES. The Company shall provide to
each Optionee a copy of the annual financial statements of the Company prior to
such Optionee's exercise of the Option, and to each Optionee annually during the
period such Optionee has Options outstanding, at such time after the close of
each fiscal year of the Company as such statements are released by the Company
to its shareholders; PROVIDED, HOWEVER, the Company shall not be required to
provide such financial statements to Optionees whose services in connection with
the Company assure them access to equivalent information.
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<PAGE>
7. RESTRICTIONS ON SHARES. At the discretion of the
Committee, the Company may reserve to itself and/or its assignee(s) in the Grant
(a) a right of first refusal to purchase all Shares that an Optionee (or a
subsequent transferee) may propose to transfer to a third party and/or (b) a
right to repurchase a portion of or all Shares held by an Optionee upon the
Optionee's termination of employment or service with the Company or its Parent,
Subsidiary or Affiliate of the Company for any reason within a specified time as
determined by the Committee at the time of grant at (a) the Optionee's original
purchase price, (b) the Fair Market Value of such Shares or (c) a price
determined by a formula or other provision set forth in the Grant.
8. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. The
Committee shall have the power to modify, extend or renew outstanding Options
and to authorize the grant of new Options in substitution therefor, provided
that any such action may not, without the written consent of the Optionee,
impair any rights under any Option previously granted. Any outstanding ISO that
is modified, extended, renewed or otherwise altered shall bc treated in
accordance with Section 424(h) of the Code. The Committee shall have the power
to reduce the exercise price of outstanding options; provided, however, that the
exercise price per share may not be reduced below the minimum exercise price
that would be permitted under Section 5.3 of this Plan for options granted on
the date the action is taken to reduce the exercise price.
9. PRIVILEGES OF STOCK OWNERSHIP. No Optionee shall have any
of the rights of a shareholder with respect to any Shares subject to an Option
until such Option is properly exercised. No adjustment shall be made for
dividends or distributions or other rights for which the record date is prior to
such date, except as provided in this Plan.
10. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any
Option granted under this Plan shall confer on any Optionee any right to
continue in the employ of, or other relationship with, the Company or any
Parent, Subsidiary or Affiliate of the Company or limit in any way the right of
the Company or any Parent, Subsidiary or Affiliate of the Company to terminate
the Optionee's employment or other relationship at any time, with or without
cause.
11. ADJUSTMENT OF OPTION SHARES. In the event that the number
of outstanding shares of Common Stock of the Company is changed by a stock
dividend, stock split, reverse stock split, recapitalization, combination,
reclassification or similar change in the capital structure of the Company
without consideration, or if a substantial portion of the assets of the Company
are distributed, without consideration in a spin-off or similar transaction, to
the shareholders of the Company, the number of Shares available under this Plan
and the number of Shares subject to outstanding Options and the exercise price
per share of such Options shall be proportionately adjusted, subject to any
required action by the Board of Directors (the "Board") or shareholders of the
Company and compliance with applicable securities laws; provided, however, that
a fractional share shall not be issued upon exercise of any Option and any
fractions of a Share that would have resulted shall either be cashed out at Fair
Market Value or the number of shares issuable under the Option shall be rounded
up to the nearest whole number, as
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<PAGE>
determined by the Committee; and provided further that the exercise price may
not be decreased to below the par value, if any, for the Shares.
12. ASSUMPTION OF OPTIONS BY SUCCESSORS.
12.1 ASSUMPTION OR REPLACEMENT OF OPTIONS BY SUCCESSOR.
In the event of (a) a merger or consolidation in which the Company is not the
surviving corporation (other than a merger or consolidation with a wholly-owned
subsidiary, a reincorporation of the Company in a different jurisdiction, or
other transaction in which there is no substantial change in the shareholders of
the Company and the Options granted under the Plan are assumed or replaced by
the successor corporation, which assumption shall be binding on all Optionees),
(b) a dissolution or liquidation of the Company, (c) the sale of substantially
all of the assets of the Company, or (d) any other transaction which qualifies
as a "corporate transaction" under Section 424(a) of the Code wherein the
shareholders of the Company give up all of their equity interest in the Company
(EXCEPT for the acquisition, sale or transfer of all or substantially all of the
outstanding shares of the Company), any or all outstanding Options may be
assumed by the successor corporation, which assumption shall be binding on all
Optionees. In the alternative, the successor corporation may substitute
equivalent Options or provide substantially similar consideration to Optionees
as was provided to shareholders (after taking into account the existing
provisions of the Options). The successor corporation may also issue, in place
of outstanding Shares of the Company held by the Optionee, substantially similar
shares or other property subject to repurchase restrictions no less favorable to
the Optionee.
12.2 EXPIRATION OF OPTIONS. In the event such successor
corporation, if any, refuses to assume or substitute the Options, as provided
above, pursuant to a transaction described in Subsection 12.1(a) above, such
Options shall expire on (and, if the Company has reserved to itself a right to
repurchase Shares issued pursuant to an Option, such right shall terminate on
the consummation of such transaction at such time and on such conditions as the
Board shall determine. In the event such successor corporation, if any, refuses
to assume or substitute the Options as provided above, pursuant to a transaction
described in Subsections 12.1(a), (b) or (c) above, or there is no successor
corporation, and if the Company ceases to exist as a separate corporate entity,
then, notwithstanding any contrary terms in the Option Grant, the Options shall
expire on a date at least twenty (20) days after the Board gives written notice
to Optionees specifying the terms and conditions of such termination.
12.3 OTHER TREATMENT OF OPTIONS. Subject to any greater
rights granted to Optionees under the foregoing provisions of this Section 12,
in the event of the occurrence of any transaction described in Section 12.1, any
outstanding Options shall be treated as provided in the applicable agreement or
plan of merger, consolidation, dissolution, liquidation, sale of assets or other
"corporate transaction."
12.4 ASSUMPTION OF OPTIONS BY THE COMPANY. The Company,
from time to time, also may substitute or assume outstanding options granted by
another company, whether in connection with an acquisition of such other company
or otherwise, by either (a) granting an
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<PAGE>
Option under the Plan in substitution of such other company's option, or (b)
assuming such option as if it had been granted under the Plan if the terms of
such assumed option could be applied to an Option granted under the Plan. Such
substitution or assumption shall be permissible if the holder of the substituted
or assumed option would have been eligible to be granted an Option under the
Plan if the other company had applied the rules of the Plan to such grant. In
the event the Company assumes an option by another company, the terms and
conditions of such option shall remain unchanged (except that the exercise price
and the number and nature of Shares issuable upon exercise of any such option
will be adjusted appropriately pursuant to Section 424(a) of the Code). In the
event the Company elects to grant a new Option rather than assuming an existing
option, such new Option may be granted with a similarly adjusted Exercise Price.
13. ADOPTION AND SHAREHOLDER APPROVAL. This Plan shall become
effective on the date that it is adopted by the Board of the Company (the
"Effective Date"). This Plan shall be approved by the shareholders of the
Company, in any manner permitted by applicable corporate law, within twelve
months before or after the Effective Date. Upon the Effective Date, the Board
may grant Options pursuant to the Plan; PROVIDED, HOWEVER, that: (a) no Option
may be exercised prior to initial shareholder approval of the Plan; (b) no
Option shall be exercised prior to the time an increase in the number of shares
has been approved by the shareholders of the Company; and (c) in the event that
shareholder approval is not obtained within the time period provided herein all
Options granted hereunder and any Shares issued pursuant to any Option shall be
rescinded. After the Company becomes subject to Section 16(b) of the Exchange
Act, the Company will comply with the requirements of Rule 16b-3 (or its
successor), as amended with respect to shareholder approval.
14. ADMINISTRATION. This Plan may be administered by the
Board or a Committee appointed by the Board (the "Committee"). If, at the time
the Company registers under the Exchange Act, a majority of the Board is not
comprised or Disinterested Persons, the Board shall appoint a Committee
consisting of not less than two directors, each of whom is a Disinterested
Person. As used in this Plan, references to the "Committee" shall mean either
such Committee or the Board if no committee has been established. After
registration of the Company under the Exchange Act, Board members who are not
Disinterested Persons may not vote on any matters affecting the administration
of this Plan or on the grant of any Options pursuant to this Plan to Insiders,
but any such member may be counted for determining the existence of a quorum at
any meeting of the Board during which action is taken with respect to Options or
administration of this Plan and may vote on the grant of any Options pursuant to
this Plan otherwise than to Insiders. The interpretation by the Committee of any
of the provisions of this Plan or any Option granted under this Plan shall be
final and binding upon the Company and all persons having an interest in any
Option or any Shares purchased pursuant to an Option. The Committee may delegate
the authority to grant Options under this Plan to Optionees who are not Insiders
of the Company to officers of the Company.
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<PAGE>
15. TERM OF PLAN. Options may be granted pursuant to this
Plan from time to time within a period of ten (10) years after the earlier of
the date on which this Plan is adopted by the Board or the date this Plan is
approved by the shareholders of the Company.
16. AMENDMENT OR TERMINATION OF PLAN. The Committee may at
any time terminate or amend this Plan in any respect including (but not limited
to) amendment of any form of Grant, exercise agreement or instrument to be
executed pursuant to this Plan; provided, however, that the Committee shall not,
without the approval of the holders of a majority of the outstanding voting
shares of the Company, amend this Plan in any manner that requires such
shareholder approval pursuant to the IRC or the regulations promulgated
thereunder as such provisions apply to ISO plans or pursuant to the Exchange Act
or Rule 16b-3 (or its successor) promulgated thereunder.
17. CERTAIN DEFINITIONS. As used in this Plan, the following
terms shall have the following meanings:
17.1 "PARENT" means any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company if, at the
time of the granting of the Option, each of such corporations other than the
Company owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.
17.2 "SUBSIDIARY" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company if, at
the time of granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
17.3 "AFFILIATE" means any corporation that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, another corporation, where "control" (including
the terms "controlled by" and "under common control with") means the possession,
direct or indirect, of the power to cause the direction of the management and
policies of the corporation, whether through the ownership of voting securities,
by contract or otherwise.
17.4 "DISINTERESTED PERSON" shall have the meaning set
forth in Rule 16b- 3(c)(2)(i) as promulgated by the SEC under Section 16(b) of
the Exchange Act, as such rule is amended from time to time and as interpreted
by the SEC.
17.5 "FAIR MARKET VALUE" shall mean the fair market
value of the Shares as determined by the Committee from time to time in good
faith. If a public market exists for the Shares, the Fair Market Value shall be
the average of the price of the last trade on each of the six business days
immediately prior to the date of determiniation or, in the event the Common
Stock of the Company is listed on a stock exchange or on the NASDAQ National
Market System,
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<PAGE>
the Fair Market Value shall be the closing price on such exchange or quotation
system on the last trading day prior to the date of determination.
-10-
OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
505 PARK AVENUE
NEW YORK, NEW YORK 10022
TELEPHONE (212) 753-7200
July 18, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: Glasgal Communications, Inc.-
REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
Reference is made to the Registration Statement on Form S-8
dated the date hereof (the "Registration Statement"), filed with the Securities
and Exchange Commission by Glasgal Communications, Inc., a Delaware corporation
(the "Company"). The Registration Statement relates to an aggregate of 1,380,000
(the "Shares") of common stock, par value $.001 per share (the "Common Stock").
The Shares will be issued and sold by the Company in accordance with the
Company's 1990 Employee Stock Option Plan, as amended (the "Plan").
We advise you that we have examined originals or copies
certified or otherwise identified to our satisfaction of the Certificate of
Incorporation and By-laws of the Company, minutes of meetings of the Board of
Directors and stockholders of the Company, the Plan and such other documents,
instruments and certificates of officers and representatives of the Company and
public officials, and we have made such examination of the law, as we have
deemed appropriate as the basis for the opinion hereinafter expressed. In making
such examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, and the conformity
to original documents of documents submitted to us as certified or photostatic
copies.
Based upon the foregoing, we are of the opinion that the
Shares, when issued and paid for in accordance with the terms and
<PAGE>
Securities and Exchange Commission
July 18, 1996
Page -2-
conditions set forth in the Plan, will be duly and validly issued, fully paid
and non-assessable.
We advise you that Robert Frome is a member of this firm and
holds options to purchase 38,293 shares of Common Stock of the Company. In
addition, Robert Friedman, a member of this firm, is a director of the Company
and holds options to purchase 87,146 shares of Common Stock of the Company.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the reference to this firm under the
caption "Legal Matters" in the prospectus constituting a part of the
Registration Statement.
Very truly yours,
/S/ OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
--------------------------------------
OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTS
To Glasgal Communications, Inc.:
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated July 27, 1995 in
Glasgal Communications, Inc. Form 10-K for the year ended April 30, 1995 and to
all references to our Firm included in this registration statement.
Roseland, New Jersey /S/ARTHUR ANDERSON LLP
July 10, 1996 ----------------------
ARTHUR ANDERSON LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTS
As independent public accountants, we consent to the use, in this Form S-8
Registration Statement dated July 18, 1996 of Glasgal Communications, Inc., of
our report dated January 14, 1994 on the November 30, 1993 financial statements
of Signatel Ltd. It should be noted that we have not audited any financial
statements of the company subsequent to November 30, 1993 nor performed any
audit procedures subsequent to the date of our report.
Toronto, Canada /S/DELOITTE & TOUCHE
July 8, 1996 --------------------
Chartered Accountants
MINTZ & PARTNERS
Chartered Accounts
------------------
NEXIA
INTERNATIONAL
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our Auditors' Report on the
statement of operations and statement of changes in financial position of
Signatel Ltd. for the year ended November 30, 1992 dated January 14, 1993
included in Glasgal Communications, Inc. Form S-8 Registration Statement for the
year ended April 30, 1995 and to all references to our Firm included in the
Registration Statement.
/S/MINTZ & PARTNERS
-------------------
North York, Canada Chartered Accountants
July 9, 1996
