-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VE0mI43LNM1JLiJq3zp5L5BSJlOJKiIMANtc5IiK61xyIDm9ehrgHAnk1fwD+Hqu yzyG80zhEjg6Kwsws9DsVQ== 0000950134-97-009235.txt : 19971211 0000950134-97-009235.hdr.sgml : 19971211 ACCESSION NUMBER: 0000950134-97-009235 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19971210 EFFECTIVENESS DATE: 19971210 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DSC COMMUNICATIONS CORP CENTRAL INDEX KEY: 0000316004 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 541025763 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-41951 FILM NUMBER: 97735932 BUSINESS ADDRESS: STREET 1: 1000 COIT RD CITY: PLANO STATE: TX ZIP: 75075 BUSINESS PHONE: 2145193000 MAIL ADDRESS: STREET 1: 1000 COIT ROAD CITY: PLANO STATE: TX ZIP: 75075-5813 FORMER COMPANY: FORMER CONFORMED NAME: DIGITAL SWITCH CORP DATE OF NAME CHANGE: 19850425 S-8 1 FORM S-8 1 As filed with the Securities and Exchange Commission on December 10, 1997 Registration No. 333- ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------------------- DSC COMMUNICATIONS CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 54-1025763 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 1000 COIT ROAD 75075 PLANO, TEXAS (Zip Code) (Address of principal executive offices) CELCORE, INC. 1995 STOCK OPTION PLAN (Full title of the plan) GEORGE B. BRUNT DSC COMMUNICATIONS CORPORATION 1000 COIT ROAD PLANO, TEXAS 75075 (972) 519-3000 (Name and address of agent for service) with a copy to: DANIEL W. RABUN BAKER & MCKENZIE 2001 ROSS AVENUE, SUITE 4500 DALLAS, TEXAS 75201 (214) 978-3000 ---------------------------- CALCULATION OF REGISTRATION FEE
Title of Each Class of Proposed Maximum Proposed Maximum Amount of Securities to be Amount to be Offering Price Per Aggregate Offering Registration Registered (1) Registered (2) Security (3) Price (3) Fee (4) - --------------------------------- -------------- ------------------ ------------------ -------------- Common Stock, $.01 par value 236,330 Shares $23.375 $5,524,214 $1,630 Preferred Stock Purchase Rights 236,330 Rights Not Applicable Not Applicable Not Applicable
(1) Shares of common stock of DSC Communications Corporation (the "Company"), $.01 par value per share (the "Common Stock"), being registered hereby relate to the Celcore, Inc. 1995 Stock Option Plan (the "Plan") assumed by the Company. Pursuant to Rule 416 promulgated under the Securities Act of 1933, as amended (the "Securities Act"), there are also being registered such additional shares of Common Stock as may become issuable pursuant to the anti-dilution provisions of the Plan. (2) The shares covered by this Registration Statement were previously registered under the Company's Registration Statement, Registration No. 333-39903 (which covers 4,936,663 shares of Common Stock). A registration fee in the amount of $37,540.00 was paid with respect to such Registration Statement. (3) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) and (h) promulgated under the Securities Act on the basis of the average of the high and low sale prices of the Common Stock on December 9, 1997, as reported on the Nasdaq Stock Market. (4) In accordance with rule 457(g), no additional registration fee is required in respect of Preferred Stock Purchase Rights. ================================================================================ 2 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE The documents listed in (a) through (h) below are hereby incorporated by reference into this Registration Statement. All documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), prior to the filing of a post-effective amendment to the Registration Statement which indicates that all shares of Common Stock, including the preferred stock purchase rights attaching to such stock pursuant to that certain Rights Agreement dated April 25, 1996 by and between the Company and Harris Trust and Savings Bank, formerly KeyCorp Shareholder Services, Inc. (the "Preferred Stock Purchase Rights"), offered hereunder have been sold or which deregisters all shares then remaining unsold, shall be deemed to be incorporated herein by reference and to be a part hereof from the date of filing of such documents. (a) The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1996; (b) The Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1997; (c) The Company's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1997; (d) The Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1997; (e) The Company's Current Report on Form 8-K filed August 26, 1997; (f) The Company's Current Report on Form 8-K filed November 3, 1997; (g) The Company's Current Report on Form 8-K filed November 13, 1997; and (h) The description of the Company's Common Stock as contained in the Company's Registration Statement on Form 8-A dated October 27, 1981, including all amendments and reports filed for the purpose of updating such descriptions; and the description of the Company's Preferred Stock Purchase Rights as contained in the Company's Registration Statement on Form 8-A dated May 13, 1996, including all amendments and reports filed for the purpose of updating such descriptions. ITEM 4. DESCRIPTION OF SECURITIES Not Applicable. ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL None. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Company's bylaws require that directors and officers be indemnified to the maximum extent permitted by law. The Company's Restated Certificate of Incorporation includes a provision eliminating, to the fullest extent permitted by the General Corporation Law of the State of Delaware (the "DGCL"), director liability for monetary damages for breaches of fiduciary duty. Section 145 of the DGCL provides that a director or officer of a corporation (i) shall be indemnified by the corporation for all expenses of litigation or other legal proceedings brought against such person by reason of the fact that such person is or was a director or an officer of the corporation when he is successful on the merits, (ii) may be indemnified by the corporation for the expenses, judgments, fines, and amounts paid in settlement of such litigation (other than a derivative suit) even if he is not successful on the merits if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation (and, in the case of a criminal proceeding, had no reason to believe his conduct was unlawful), and (iii) may be indemnified by the corporation for -2- 3 expenses of a derivative suit (a suit by a stockholder alleging a breach by a director or officer of a duty owed to the corporation), even if he is not successful on the merits, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, provided that no such indemnification may be made in accordance with this clause (iii) if the director or officer is adjudged liable to the corporation, unless a court determines that, despite such adjudication but in view of all circumstances, he is fairly and reasonably entitled to indemnification of such expenses. The indemnification described in clauses (ii) and (iii) above shall be made only upon order by a court or a determination by (a) a majority of directors who are not parties to such action, (b) a majority vote of a committee consisting of such disinterested directors, (c) independent legal counsel in a written opinion if no such disinterested directors exist, or if such disinterested directors so direct, or (d) the stockholders, that indemnification is proper because the applicable standard of conduct is met. Expenses incurred by a director or officer in defending an action may be advanced by the corporation prior to the final disposition of such action upon receipt of an undertaking by such director or officer to repay such expenses if it is ultimately determined that he is not entitled to be indemnified in connection with the proceeding to which the expenses relate. The Company has purchased and currently has in force directors' and officers' liability insurance policies which cover certain liabilities of directors and officers arising out of claims based on certain acts or omissions by them in their capacity as directors or officers. The Company has entered into indemnification agreements with certain of its directors and executive officers. Each of these agreements, among other things, contractually obligates the Company to, under certain circumstances, indemnify the officer or director against certain expenses and liabilities arising out of legal proceedings which may be brought against such officer or director by reason of his status or service as a director or officer. In addition, in a related trust agreement (the "Trust Agreement"), the Company has provided $1 million to be held in trust by a third-party trustee to be used to satisfy the Company's obligations pursuant to the indemnification agreements which have been executed and any similar agreements which may be executed in the future. The Trust Agreement further provides that the Company's Board of Directors may, in its discretion, provide up to an additional $1 million to the trustee. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. None. ITEM 8. EXHIBITS.
EXHIBIT NUMBER DESCRIPTION ------- ----------- 4 .1 Indenture, dated August 12, 1997, between the Company and The Bank of New York, as Trustee (incorporated by reference to Exhibit No. 4.1 to the Company's Current Report on Form 8-K, Commission File No. 0-10018, dated August 26, 1997) 4 .2 Registration Rights Agreement, dated as of August 12, 1997, among the Company, Goldman, Sachs & Co. and NationsBanc Capital Markets, Inc. (incorporated by reference to Exhibit No. 4.2 to the Company's Current Report on Form 8-K, Commission File No. 0-10018, dated August 26, 1997) 4 .3 Restated Certificate of Incorporation of the Company, dated November 3, 1997 (incorporated by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-8, Registration No. 333-41929, dated December 10, 1997) 4 .4 Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit No. 3.4 to the Company's Annual Report on Form 10-K for the year ended December 31, 1996, Commission File No. 0-10018, dated March 31, 1997) 4 .5 Rights Agreement, dated April 25, 1996 between the Company and Harris Trust and Savings Bank, formerly KeyCorp Shareholder Services, Inc., as rights agent (incorporated by reference to Exhibit No. 4 to the Company's Current Report on Form 8-K, Commission File No. 0-010018, dated May 9, 1996)
-3- 4 4.6 Form of Notes (included in Exhibit 4.1) *4.7 Celcore, Inc. 1995 Stock Option Plan *5.1 Opinion of Baker & McKenzie *23.1 Consent of Baker & McKenzie (included in Exhibit 5.1) *23.2 Consent of Ernst & Young LLP *24 Power of Attorney (see signature pages of Registration Statement)
- ------------------------ *Filed herewith. ITEM 9. UNDERTAKINGS. (a) The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement; (iii) To include any material information with respect to the Plan of Distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the Registration Statement is on Form S-3, or Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. -4- 5 (c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. -5- 6 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Plano, State of Texas, on December 10, 1997. DSC COMMUNICATIONS CORPORATION By: /s/ James L. Donald -------------------------------- Name: JAMES L. DONALD Title: Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Each person whose signature appears below hereby authorizes and appoints James L. Donald and Gerald F. Montry, and each of them, either one of whom may act without joinder of the other, as his attorney-in-fact to sign on his behalf individually and in the capacity stated below all amendments and post-effective amendments to this Registration Statement as that attorney-in-fact may deem necessary or appropriate.
SIGNATURE TITLE DATE --------- ----- ---- /s/ James L. Donald Chairman of the Board, President and Chief December 10, 1997 -------------------------------------- Executive Officer (Principal Executive JAMES L. DONALD Officer) /s/ Gerald F. Montry Senior Vice President, Chief Financial December 10, 1997 -------------------------------------- Officer, and Director (Principal Financial GERALD F. MONTRY Officer) /s/ Kenneth R. Vines Vice President, Finance (Principal December 10, 1997 -------------------------------------- Accounting Officer) KENNETH R. VINES /s/ Raymond J. Dempsey Director December 10, 1997 -------------------------------------- RAYMOND J. DEMPSEY /s/ Sir John Fairclough Director December 10, 1997 -------------------------------------- SIR JOHN FAIRCLOUGH /s/ James L. Fischer Director December 10, 1997 -------------------------------------- JAMES L. FISCHER
-6- 7
SIGNATURE Title Date --------- ----- ---- /s/ Robert S. Folsom Director December 10, 1997 -------------------------------------- ROBERT S. FOLSOM /s/ William O. Hunt Director December 10, 1997 -------------------------------------- WILLIAM O. HUNT /s/ Morton L. Topfer Director December 10, 1997 -------------------------------------- MORTON L. TOPFER
-7- 8 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - ------ ----------- 4.1 Indenture, dated August 12, 1997, between the Company and The Bank of New York, as Trustee (incorporated by reference to Exhibit No. 4.1 to the Company's Current Report on Form 8-K, Commission File No. 0-10018, dated August 26, 1997) 4.2 Registration Rights Agreement, dated as of August 12, 1997, among the Company, Goldman, Sachs & Co. and NationsBanc Capital Markets, Inc. (incorporated by reference to Exhibit No. 4.2 to the Company's Current Report on Form 8-K, Commission File No. 0-10018, dated August 26, 1997) 4.3 Restated Certificate of Incorporation of the Company, dated November 3, 1997 (incorporated by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-8, Registration No. 333-41929, dated December 10, 1997) 4.4 Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit No. 3.4 to the Company's Annual Report on Form 10-K for the year ended December 31, 1996, Commission File No. 0-10018, dated March 31, 1997) 4.5 Rights Agreement, dated April 25, 1996 between the Company and Harris Trust and Savings Bank, formerly KeyCorp Shareholder Services, Inc., as rights agent (incorporated by reference to Exhibit No. 4 to the Company's Current Report on Form 8-K, Commission File No. 0-010018, dated May 9, 1996) 4.6 Form of Notes (included in Exhibit 4.1) *4.7 Celcore, Inc. 1995 Stock Option Plan *5.1 Opinion of Baker & McKenzie *23.1 Consent of Baker & McKenzie (included in Exhibit 5.1) *23.2 Consent of Ernst & Young LLP *24 Power of Attorney (see signature pages of Registration Statement)
- ------------------------ * Filed herewith. EX-4.7 2 CELCORE, INC. 1995 STOCK OPTION PLAN 1 EXHIBIT 4.7 CELCORE, INC. 1995 STOCK OPTION PLAN 2 CELCORE, INC. 1995 STOCK OPTION PLAN Table of Contents ----------------- 1. Purpose of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2. Stock Subject to the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 3. Administration of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 4. Type of Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 5. Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 6. Restrictions on ISOs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 7. Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 8. Option Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 9. Manner of Payment; Manner of Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 10. Exercise of Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 11. Term of Options; Exercisability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 12. Options Not Transferable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 13. Recapitalization, Reorganizations and the Like . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 14. No Special Employment Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 15. Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 16. Restrictions on Exercise of Options and Issuance of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 8 17. Purchase for Investment; Rights of Holder on Subsequent Registration . . . . . . . . . . . . . . . . . . . . . 8 18. Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 19. Modification of Outstanding Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 20. Approval of Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
-i- 3 21. Termination and Amendment of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 22. Limitation of Rights in the Option Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 23. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
-ii- 4 CELCORE, INC. 1995 STOCK OPTION PLAN 1. Purpose of the Plan. The purpose of the Celcore, Inc. 1995 Stock Option Plan (the "Plan") is to advance the interests of Celcore, Inc., a Delaware corporation (the "Company"), by providing an opportunity for ownership of the stock of the Company by employees of, or other persons providing services to, the Company or any subsidiary corporation (herein called "subsidiary" or "subsidiaries"), as defined in Section 424(f) of the Code and the Treasury regulations promulgated thereunder (the "Regulations"). By providing an opportunity for such stock ownership, the Company seeks to attract and retain qualified personnel, and otherwise to provide additional incentive for optionees to promote the success of its business. 2. Stock Subject to the Plan. (a) The total number of shares of the authorized but unissued or treasury shares of the common stock, $.10 par value per share, of the Company (the "Common Stock") for which options may be granted under the Plan (the "Options") shall be 1,000,000, subject to adjustment as provided in Section 13 hereof. (b) If an Option granted or assumed hereunder shall expire or terminate for any reason without having been exercised in full, the unpurchased shares subject thereto shall again be available for subsequent Option grants under the Plan. (c) Common Stock issuable upon exercise of an Option may be subject to such restrictions on transfer, repurchase rights or other conditions or restrictions as shall be determined by the Board of Directors of the Company (the "Board"). 3. Administration of the Plan. The Plan shall be administered by the Board. No member of the Board shall act upon any matter affecting any Option granted or to be granted to himself or herself under the Plan; provided, however, that nothing contained herein shall be deemed to prohibit a member of the Board from acting upon any matter generally affecting the Plan or any Options granted thereunder. A majority of the members of the Board shall constitute a quorum, and any action may be taken by a majority of those present and voting at any meeting. The decision of the Board as to all questions of interpretation and application of the Plan shall be final, binding and conclusive on all persons. The Board, in its sole discretion, may grant Options to purchase shares of the Common Stock only as provided in the Plan, and shares shall be issued upon exercise of such Options as provided in the Plan. The Board shall have authority, subject to the express provisions of the Plan, to amend the Plan, to determine the terms and provisions of the respective option agreements, which may but need not be identical, to construe the respective option agreements and the Plan, and to make all other determinations in the judgment of the Board necessary or desirable for the administration of the Plan. The Board may correct any defect or supply any omission or reconcile any inconsistency in the Plan 5 or in any option agreement in the manner and to the extent it shall deem expedient to implement the Plan and shall be the sole and final judge of such expediency. The Board, in its discretion, may delegate its power, duties and responsibilities to a committee, consisting of two or more members of the Board, all of whom are "disinterested persons" (as hereinafter defined). If a committee is so appointed, all references to the Board herein shall mean and relate to such committee. For the purposes of the Plan, a director or member of such committee shall be deemed to be "disinterested" only if such person qualified as a "disinterested person" within the meaning of paragraph (c)(2) of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as such term is interpreted from time to time. 4. Type of Option. Options granted pursuant to the Plan shall be either (i) incentive stock options ("ISOs") meeting the requirements of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or (ii) non-qualified stock options ("NSOs"). 5. Eligibility. ISOs may be granted only to directors, officers and employees of the Company or of any subsidiary of the Company. Directors who are not otherwise employees of the Company or of any subsidiary of the Company shall not be eligible to be granted ISOs pursuant to the Plan. NSOs may be granted to any person who has rendered services to the Company or any subsidiary of the Company (including managerial, technical, financial, advisory or consulting services). The Board shall take into account such factors as it may deem relevant in determining the number of shares of Common Stock to be included in an Option and the nature of such Option (i.e., ISO or NSO) to be granted to any director, officer or employee of the Company. 6. Restrictions on ISOs. ISOs granted under this Plan shall be subject to the following restrictions: (a) Limitation on Number of Shares. The aggregate fair market value of the shares of Common Stock with respect to which ISOs are granted (determined as of the date the ISOs are granted), exercisable for the first time by an individual during any calendar year, shall not exceed $100,000. In determining the fair market value under this clause (a), the provisions of Section 8 hereof shall apply. In the event that an individual is eligible to participate in any other stock option plan of the Company or any subsidiary of the Company which is also intended to comply with the provisions of Section 422 of the Code, such $100,000 limitation shall apply to the aggregate number of shares for which incentive stock options may be granted under the Plan and all such other plans. (b) Ten Percent Shareholder. If any employee to whom an ISO is granted pursuant to the provisions of the Plan is on the date of grant the owner of stock (as determined under Section 424(d) of the Code) possessing more than 10% of the total combined voting power of all classes of stock of the Company or any subsidiary of the Company, then the following special provisions shall be applicable to the ISOs granted to such individual: -2- 6 (i) The Option price per share subject to such ISOs shall be not less than 110% of the fair market value of the shares of Common Stock with respect to which ISOs are granted (determined as of the date such ISO was granted). In determining the fair market value under this clause (i), the provisions of Section 8 hereof shall apply. (ii) The ISO by its terms shall not be exercisable after the expiration of five years from the date such ISO is granted. 7. Option Agreement. Each Option shall be evidenced by an option agreement (an "Agreement") duly executed on behalf of the Company and by the optionee to whom such Option is granted, which Agreement shall comply with and be subject to the terms and conditions of the Plan. The Agreement may contain such other terms, provisions and conditions which are not inconsistent with the Plan as may be determined by the Board; provided that ISOs shall meet all of the conditions for incentive stock options as defined in Section 422 of the Code. No Option shall be granted within the meaning of the Plan and no purported grant of any Option shall be effective until the Agreement shall have been duly executed on behalf of the Company and the optionee. 8. Option Price. (a) Subject to the conditions set forth in Section 6(b) hereof, the option price or prices of shares of the Company's Common Stock subject to ISOs shall be at least the fair market value of such Common Stock on the date the ISO is granted as determined by the Board in accordance with the Regulations promulgated under Section 422 of the Code. (b) If such shares are then listed on any national securities exchange, the fair market value shall be the mean between the high and low sales prices, if any, on the largest such exchange on the date of the grant of the ISO or, if there are no such sales on such date, shall be determined by taking a weighted average of the means between the highest and lowest sales prices on the nearest date before and the nearest date after the date of grant in accordance with Section 25.2512-2 of the Regulations. If the shares are not then listed on any such exchange, the fair market value of such shares shall be the mean between the closing "Bid" and the closing "Ask" prices, if any, as reported in the National Association of Securities Dealers Automated Quotation System ("NASDAQ") for the date of the grant of the ISO, or, if there are no such prices on such date, shall be determined by taking a weighted average of the means between the highest and lowest sales prices on the nearest date before and the nearest date after the date of grant in accordance with Section 25.2512-2 of the Regulations. If the shares are not then either listed on any such exchange or quoted in NASDAQ, the fair market value shall be the mean between the average of the "Bid" and "Ask" prices, if any, as reported in the National Association of Securities Dealers National Daily Quotation Service for the date of the grant of the ISO, or, if there are no such prices on such date, shall be determined by taking a weighted average of the means between the highest and lowest sales prices on the nearest date before and the nearest date after the date of grant in accordance with Section 25.2512-2 of the Regulations. If the fair market value cannot be determined under the preceding three sentences, it shall be determined in good faith by the Board in accordance with Section 422 of the Code. -3- 7 (c) The option price of NSOs shall be as determined by the Board of Directors. 9. Manner of Payment; Manner of Exercise. (a) Options granted under the Plan may provide for the payment of the exercise price by delivery of (i) cash or a check payable to the order of the Company in an amount equal to the exercise price of such Options, (ii) shares of Common Stock owned by the optionee having a fair market value (at the date of exercise) equal in amount to the exercise price of the Options being exercised, or (iii) any combination of (i) and (ii). The fair market value of any shares of Common Stock which may be delivered upon exercise of an Option shall be determined by the Board in accordance with Section 8 hereof. (b) To the extent that an Option is exercisable, Options may be exercised in full at one time or in part from time to time, by giving written notice, signed by the person or persons exercising the Option, to the Company, stating the number of shares with respect to which the Option is being exercised, accompanied by payment in full for such shares as provided in Section 9(a) hereof. No exercise of an Option may be made for fewer than 100 full shares of Common Stock unless such exercise is made for the entire number of shares remaining to be purchased pursuant to such Option. Upon such exercise, delivery of a certificate for paid-up non-assessable shares shall be made by the Company to the person or persons exercising the Option within 10 business days after receipt of such notice by the Company. 10. Exercise of Options. Each Option granted under the Plan shall, subject to Sections 11(b), 13 and 16 hereof, be exercisable at such time or times and during such period as shall be set forth in the Agreement; provided, however, that except as otherwise provided pursuant to the provisions of Section 6(b) hereof, no Option granted under the Plan shall have a term in excess of ten years from the date of grant. 11. Term of Options; Exercisability. (a) Term. (i) Each Option shall expire on a date determined by the Board which is not more than ten years from the date of the granting thereof, except (a) as otherwise provided pursuant to the provisions of Section 6(b) hereof, and (b) for earlier termination as herein provided. (ii) Except as otherwise provided in this Section 11, an Option granted to any optionee whose employment by the Company and its subsidiaries is terminated for any reason, shall terminate on the earlier of (i) three months after the date such optionee's employment by the Company and its subsidiaries is terminated, or (ii) the date on which the Option expires by its terms. -4- 8 (iii) If the employment of an optionee is terminated by the Company and its subsidiaries for cause or because the optionee is in breach of any employment agreement or his or her terms of employment, such Option will terminate on the date the optionee's employment is terminated by the Company and its subsidiaries. (iv) If the employment of an optionee is terminated by the Company and its subsidiaries because the optionee has become disabled (within the meaning of Section 22(e)(3) of the Code), such Option shall terminate on the earlier of (i) one year after the date such optionee's employment by the Company and its subsidiaries is terminated, or (ii) the date on which the Option expires by its terms. (v) In the event of the death of any optionee, such Option shall terminate on the earlier of (i) one year after the date of death, or (ii) the date on which the Option expires by its terms. (b) Exercisability. (i) Except as otherwise provided in this Section 11 (b), an Option granted to an optionee whose employment by the Company and its subsidiaries is terminated shall be exercisable only to the extent that the right to purchase shares under such Option is exercisable on the date such optionee's employment by the Company and its subsidiaries is terminated. (ii) An Option granted to an optionee whose employment is terminated by the Company and its subsidiaries because he or she has become disabled, as determined by the Board or, if applicable, as determined pursuant to the terms of any employment agreement between the Company or any of its subsidiaries and the optionee, shall be immediately exercisable as to the full number of shares covered by such Option, whether or not under the provisions of the Plan or Agreement such Option was otherwise exercisable as of the date of disability. (iii) In the event of the death of an optionee, the Option granted to such optionee may be exercised as to the full number of shares covered thereby, whether or not under the provisions of the Plan or Agreement the optionee was entitled to do so at the date of his or her death, by the executor, administrator or personal representative of such optionee, or by any person or persons who acquired the right to exercise such Option by bequest or inheritance or by reason of the death of such optionee. 12. Options Not Transferable. The right of any optionee to exercise any Option granted to him or her shall not be assignable or transferable by such optionee other than by will or the laws of descent and distribution, and any -5- 9 such Option shall be exercisable during the lifetime of such optionee only by him or her. Any Option granted under the Plan shall be null and void and without effect upon the bankruptcy of the optionee to whom the Option is granted, or upon any attempted assignment or transfer, except as herein provided, including, without limitation, any purported assignment, whether voluntary or by operation of law, pledge, hypothecation or other disposition, or levy of execution, attachment, trustee process or similar process, whether legal or equitable, upon such Option. 13. Recapitalization, Reorganizations and the Like. (a) In the event that the outstanding shares of the Common Stock are changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of, or are otherwise subjected to, any reorganization, recapitalization, reclassification, stock split, reverse stock split, or stock dividends, appropriate and equitable adjustment shall be made by the Board, in its sole discretion, in the number and kind of shares as to which Options may be granted under the Plan and as to which outstanding Options or portions thereof then unexercised shall be exercisable. Such adjustment in outstanding Options shall be made without change in the total price applicable to the unexercised portion of such Options and with a corresponding adjustment in the Option price per share. (b) (i) In addition, unless otherwise determined by the Board in its sole discretion, in the case of any (I) merger or consolidation pursuant to which the Company's stockholders shall receive cash or securities of another corporation and less than 50% of the outstanding capital stock of the surviving corporation pursuant to such merger or consolidation shall be owned by the stockholders of the Company, (II) sale or conveyance to another entity of all or substantially all of the property and assets of the Company or (III) Change in Control of the Company, the Company shall, or shall cause such surviving corporation or the purchaser(s) of the Company's assets to, deliver to the optionee the same kind of consideration that is delivered to the shareholders of the Company as a result of such merger, consolidation, sale, conveyance or Change in Control, or the Board may cancel all outstanding Options in exchange for consideration in cash or marketable securities, which consideration in both cases shall be equal in value to the value of those shares of stock or other securities the optionee would have received had the Option been exercised (but only to the extent then exercisable) and had no disposition of the shares acquired upon such exercise been made prior to such merger, consolidation, sale, conveyance or Change in Control, less the Option price therefor or, lieu thereof, the Board shall give the optionee at least twenty days prior written notice of any such transaction in order to enable the optionee to exercise the exercisable portion, if any, of the Option. Upon receipt of such consideration or effective on the date specified in such notice, all Options (whether or not then exercisable) shall immediately terminate and be of no further force or effect. The value of the stock or other securities the optionee would have received if the Option had been exercised shall be determined in good faith by the Board, and in the case of shares of Common Stock, in accordance with the provisions of Section 8 hereof. (ii) The Board shall also have the power and right to accelerate the exercisability of any Options, notwithstanding any limitations in this Plan or in the Agreement upon such merger, consolidation, sale, conveyance or Change in Control. -6- 10 (c) A "Change in Control" shall be deemed to have occurred if any person, or any two or more persons acting as a group, and all affiliates of such person or persons, who prior to such time Beneficially Owned (as defined in Rule 13d-3 under the Exchange Act) less than 25% of the then outstanding Common Stock, shall acquire such additional shares of Common Stock in one or more transactions, or series of transactions, such that following such transaction or transactions, such person or group and affiliates Beneficially Own 50% or more of the Common Stock outstanding. (d) If by reason of a corporate merger, consolidation, acquisition of property or stock, separation, reorganization, or liquidation, the Board shall authorize the issuance or assumption of a stock option or stock options in a transaction to which Section 424(a) of the Code applies, then, notwithstanding any other provision of the Plan, the Board may grant an option or options upon such terms and conditions as it may deem appropriate for the purpose of assumption of the old Option, or substitution of a new option for the old Option, in conformity with the provisions of such Section 424(a) of the Code and the Regulations thereunder, and any such option shall not reduce the number of shares otherwise available for issuance under the Plan. In the event of such assurance or assumption, the provisions of Section 13(b) hereof shall not be applicable. (e) No fraction of a share shall be purchasable or deliverable upon the exercise of any Option, but in the event any adjustment hereunder in the number of shares covered by the Option shall cause such number to include a fraction of a share, such fraction shall be adjusted to the nearest smaller whole number of shares. 14. No Special Employment Rights. Nothing contained in the Plan or in any Option granted under the Plan shall confer upon any optionee any right with respect to the continuation of his or her employment by the Company or any subsidiary or interfere in any way with the right of the Company or any subsidiary, subject to the terms of any separate employment agreement to the contrary, at any time to terminate such employment or to increase or decrease the compensation of the Option holder from the rate in existence at the time of the grant of an Option. Whether an authorized leave of absence, or absence in military or government service, shall constitute termination of employment for purposes of any Option shall be determined by the Board at the time of such occurrence. 15. Withholding. The Company's obligation to deliver shares upon the exercise of any Option granted under the Plan at a time which would cause the Option to fail to be a qualified incentive stock option under Section 422 of the Code shall be subject to the Option holder's satisfaction of all applicable Federal, state and local income and employment tax withholding requirements. The Company and optionee may agree to withhold shares of Common Stock purchased upon exercise of an Option to satisfy the above-mentioned withholding requirements; provided, however, no such agreement may be made by an optionee who is an "officer" or "director" within the meaning of Section 16 of the Exchange Act, except pursuant to a standing election to so withhold shares of Common Stock purchased upon exercise of an Option, such election to be made not less than six months prior to such exercise and which election may be revoked only upon six months prior written notice to the Company. -7- 11 16. Restrictions on Exercise of Options and Issuance of Shares. (a) Notwithstanding the provisions of Section 9 hereof, an Option cannot be exercised and the Company may delay the issuance of shares covered by the exercise of an Option and the delivery of a certificate for such shares, until one of the following conditions shall be satisfied: (i) The shares with respect to which such Option has been exercised are at the time of the issue of such shares effectively registered or qualified under applicable Federal and state securities acts now in force or as hereafter amended; or (ii) Counsel for the Company shall have given an opinion, which opinion shall not be unreasonably conditioned or withheld, that the issuance of such shares is exempt from registration and qualification under applicable Federal and state securities acts now in force or as hereafter amended. (b) The Company shall be under no obligation to qualify shares or to cause a registration statement or a post-effective amendment to any registration statement to be prepared for the purpose of covering the issuance of shares in respect of which any Option may be exercised or to cause the issuance of such shares to be exempt from registration and qualification under applicable Federal and state securities acts now in force or as hereinafter amended, except as otherwise agreed to by the Company in writing in its sole discretion. 17. Purchase for Investment; Rights of Holder on Subsequent Registration. Unless and until the shares to be issued upon exercise of an Option granted under the Plan have been effectively registered under the Securities Act of 1933, as amended (the "1933 Act"), as now in force or hereafter amended, the Company shall be under no obligation to issue any shares covered by any Option unless the person who exercises such Option, in whole or in part, shall give a written representation and undertaking to the Company which is satisfactory in form and scope to counsel for the Company and upon which, in the opinion of such counsel, the Company may reasonably rely, that he or she is acquiring the shares issued pursuant to such exercise of the Option for his or her own account as an investment and not with a view to, or for sale in connection with, the distribution of any such shares, and that he or she will make no transfer of the same except in compliance with any rules and regulations in force at the time of such transfer under the 1933 Act, or any other applicable law, and that if shares are issued without such registration, a legend to this effect may be endorsed upon the securities so issued. In the event that the Company shall, nevertheless, deem it necessary or desirable to register under the 1933 Act or other applicable statutes any shares with respect to which an Option shall have been exercised, or to qualify any such shares for exemption from the 1933 Act or other applicable statutes, then the Company may take such action and may require from each optionee such information in writing for use in any registration statement, supplementary registration statement, prospectus, preliminary prospectus, offering circular or any other document that is reasonably necessary for such purpose and may require reasonable indemnity to the Company and its officers and directors from such holder against all losses, claims, damages and liabilities arising from such -8- 12 use of the information so furnished and caused by any untrue statement of any material fact therein or caused by the omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made. 18. Loans. At the discretion of the Board, the Company may loan to the optionee, or pay to the optionee as a bonus, some or all of the purchase price of the shares acquired upon exercise of an Option, the terms of such loans or bonus to be it at the discretion of the Board. 19. Modification of Outstanding Options. Subject to any applicable limitations contained herein, the Board may authorize the amendment of any outstanding Option with the consent of the optionee when and subject to such conditions as are deemed to be in the best interests of the Company and in accordance with the purposes of the Plan. 20. Approval of Stockholders. The Plan shall become effective upon adoption by the Board; provided, however, that the Plan shall be submitted for approval by the stockholders of the Company no later than 12 months after the date of adoption of the Plan by the Board. Should the stockholders of the Company fail to approve the Plan within such 12-month period, all Options granted thereunder shall be and become null and void. 21. Termination and Amendment of Plan. Unless sooner terminated as herein provided, the Plan shall terminate ten years from the date upon which the Plan was duly adopted by the Board of the Company. The Board may at any time terminate the Plan or make such modification or amendment thereof as it deems advisable; provided, however, (i) except as provided in Section 13 hereof, the Board may not, without the approval of the stockholders of the Company obtained in the manner stated in Section 20 hereof, increase the maximum number of shares for which Options may be granted or change the designation of the class of persons eligible to receive Options under the Plan, and (ii) any such modification or amendment of the Plan shall be approved by a majority of the stockholders of the Company to the extent that such stockholder approval is necessary to comply with applicable provisions of the Code, rules promulgated pursuant to Section 16 of the Exchange Act, applicable state law, or applicable NASD or exchange listing requirements. Termination or any modification or amendment of the Plan shall not, without the consent of an optionee, affect his or her rights under an Option theretofore granted to him or her. 22. Limitation of Rights in the Option Shares. An optionee shall not be deemed for any purpose to be a stockholder of the Company with respect to any of the Options until (x) the Option shall have been exercised with respect thereto (including payment to the Company of the exercise price) and (y) the earlier to occur of (i) the -9- 13 delivery by the Company to the optionee of a certificate therefor, or (ii) the date on which the Company is required to deliver a certificate pursuant to Section 9(b) hereof. 23. Notices. Any communication or notice required or permitted to be given under the Plan shall be in writing, and mailed by registered or certified mail or delivered by hand, if to the Company, to the attention of the President at the Company's principal place of business; and, if to an optionee, to his or her address as it appears on the records of the Company. -10- EX-5.1 3 OPINION OF BAKER & MCKENZIE 1 EXHIBIT 5.1 December ___, 1997 DSC Communications Corporation 1000 Coit Road Plano, Texas 75075 Gentlemen: DSC Communications Corporation, a Delaware corporation (the "Company"), intends to file with the Securities and Exchange Commission (the "Commission") a registration statement (the "Registration Statement") on Form S-8 under the Securities Act of 1933, as amended (the "Act"). The Registration Statement covers (i) 236,330 shares of the Company's common stock, $.01 par value per share, including the preferred stock purchase rights attaching to such stock pursuant to that certain Rights Agreement dated April 25, 1996 by and between the Company and Harris Trust and Savings Bank, formerly KeyCorp Shareholder Services, Inc. (the "Common Stock"), which shall be issued pursuant to the Celcore, Inc. 1995 Stock Option Plan (the "Plan") assumed by the Company, and (ii) such additional shares of Common Stock as may become issuable pursuant to the anti-dilution provisions of the Plan (such shares collectively referred to as the "Securities"). We have acted as counsel to the Company in connection with the preparation and filing of the Registration Statement. In rendering this opinion we have examined such corporate records, documents and instruments of the Company and such certificates of public officials, have received such representations from officers of the Company, and have reviewed such questions of law as in our judgment are necessary, relevant or appropriate to enable us to render the opinion expressed below. In such examination, we have assumed the genuineness of all signatures, the authenticity of all corporate records, documents and instruments submitted to us as originals, the conformity to original documents of all documents submitted to us as conformed, certified or photostatic copies thereof, and the authenticity of the originals of such photostatic, certified or conformed copies. Based upon such examination and review and upon representations made to us by officers of the Company, we are of the opinion that upon issuance and delivery of the Securities in accordance with the terms and conditions of the Plan, and upon receipt by the Company of the full consideration for the Securities as determined pursuant to the Plan, the Securities will be legally issued, fully paid and nonassessable shares of Common Stock of the Company. This firm consents to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not admit that we come within the category of persons whose consent is required by Section 7 of the Act or the rules and regulations of the Commission thereunder. Respectfully submitted, BAKER & MCKENZIE EX-23.2 4 CONSENT OF ERNST & YOUNG LLP 1 EXHIBIT 23.2 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement on Form S-8 pertaining to the Celcore, Inc. 1995 Stock Option Plan of our reports dated January 23, 1997, with respect to the consolidated financial statements of DSC Communications Corporation incorporated by reference in its Annual Report (Form 10-K) for the year ended December 31, 1996 and the related financial statement schedule included therein, filed with the Securities and Exchange Commission. /S/ ERNST & YOUNG, LLP Dallas, Texas, December 5, 1997 -----END PRIVACY-ENHANCED MESSAGE-----