|WEBER SHANDWICK
FRB|Financial Communications NEWS
| OPTICAL CABLE CORPORATION
5290 Concourse Drive
Roanoke, VA 24019
(Nasdaq NM: OCCF)
www.occfiber.com
AT THE COMPANY: AT FRB | Weber Shandwick:
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Neil Wilkin Marilynn Meek - General Info. (212) 445-8451
President & CFO Peter Seltzberg - Analyst Info. (212) 445-8431
(540) 265-0690
nwilkin@occfiber.com
FOR IMMEDIATE RELEASE:
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October 25, 2002
OPTICAL CABLE CORPORATION REPORTS
SHAREHOLDER CLASS ACTION LITIGATION DISMISSED
AND SETTLEMENT FINAL
ROANOKE, VA, October 25, 2002 - Optical Cable Corporation (Nasdaq NM: OCCF)
today announced that the consolidated class action securities lawsuit filed
against Optical Cable Corporation, its former Chairman, CEO & President Robert
Kopstein, and certain other officers and directors of the Company brought in the
United States District Court for the Western District of Virginia (the "Court")
has been dismissed with prejudice and the previously announced agreed upon
settlement is final and binding.
The settlement with members of the shareholder class, initially announced on
June 26, 2002, provides for Optical Cable to pay $700,000 in cash, a portion of
which was funded by insurance, and issue warrants to purchase 250,000 shares of
common stock at an exercise price of $4.88 per common share (reflecting
adjustments for the reverse split effected July 31, 2002).
"Optical Cable is pleased with the settlement, which we believe was in the best
interests of both the Company and its shareholders," stated Neil Wilkin,
President and Chief Financial Officer. "The fact that the settlement was
finalized quickly permits Optical Cable's management to return its focus to the
fundamentals of the business. We also believe the plaintiffs' desire to accept
warrants to purchase additional shares in the Company indicates an optimism for
Optical Cable's future," added Mr. Wilkin.
On September 23, 2002, U.S. District Judge James C. Turk entered an Order and
Final Judgment approving the settlement and dismissing the shareholder class
action lawsuit with prejudice. The Order and Final Judgment was subject to
appeal for 30 days after being entered. Since no appeal was filed with the Court
within 30 days, the settlement has become final and binding.
No member of the approved class opted out of participation in the settlement.
Therefore, the Order and Final Judgment should preclude any other lawsuits by
shareholders with respect to the allegations set forth in the settled
consolidated class action securities lawsuit. The allegations in the class
action lawsuit substantially arose from the actions of Mr. Kopstein, the
Company's former Chairman, CEO and President.
Optical Cable Corp. - Shareholder Litigation Dismissed
Page 2 of 3
Optical Cable expensed approximately $1.1 million during the nine months ended
July 31, 2002 related to the settlement of the class action lawsuit, net of
insurance proceeds. The expense included $700,000 for the cash portion of the
settlement, approximately $465,000 for the fair market value of the warrants,
and approximately $471,000 for professional and legal fees, partially offset by
insurance proceeds. Optical Cable does not expect to incur significant
additional costs associated with the settlement. However, professional and legal
fees incurred after July 31, 2002 and the costs associated with registering the
common shares to be issued pursuant to the warrants with the U.S. Securities and
Exchange Commission will be expensed as incurred. Additionally, any change in
the valuation of the warrants prior to their issuance that will require an
adjustment to the settlement expense accrual as required by generally accepted
accounting principles will be reflect in our income statement in future periods.
The warrants issued in the settlement will be exercisable for five years, and
Optical Cable anticipates filing a registration statement with the U.S.
Securities and Exchange Commission before the end of 2002 to register the common
shares issuable upon exercise of the warrants.
Counsel for the plaintiff class will receive 30% of the settlement fund,
consisting of cash and warrants, plus approximately $38,500 in reimbursement for
expenses that will also be funded by the settlement fund.
Optical Cable Corporation manufactures and markets a broad range of fiber optic
cables for "high bandwidth" transmission of data, video, and audio
communications over short to moderate distances. Optical Cable Corporation's
cables can be used both indoors and outdoors and utilize a tight-buffer coating
process that protects the optical fiber.
Further information on Optical Cable Corporation is available through our
website on the World Wide Web at www.occfiber.com.
FORWARD-LOOKING INFORMATION
This news release may contain certain "forward-looking" information within the
meaning of the federal securities laws. The forward-looking information may
include, among other information, (i) statements concerning Optical Cable
Corporation's (the "Company") outlook for the future, (ii) statements of belief,
anticipation or expectation, (iii) future plans, strategies or anticipated
events, and (iv) similar information and statements concerning matters that are
not historical facts. Such forward-looking information is subject to risks and
uncertainties that may cause actual events to differ materially from the
expectations of the Company. Factors that could cause or contribute to such
differences include, but are not limited to, the level of sales to key
customers, including distributors; the economic conditions affecting network
service providers; the slowdown in corporate spending on information technology;
actions by competitors; fluctuations in the price of raw materials (including
optical fiber); the Company's dependence on a single manufacturing facility; the
ability of the Company to protect its proprietary manufacturing technology;
market conditions influencing prices or pricing; the Company's dependence on a
limited number of suppliers; an adverse outcome in litigation, claims and other
actions, and potential litigation, claims and other actions against the Company;
an adverse outcome in regulatory reviews and audits and potential regulatory
reviews and audits; the effect of sales of the Company's common stock by the
various brokerage firms to whom the Company's former President and Chief
Executive Officer
Optical Cable Corp. - Shareholder Litigation Dismissed
Page 3 of 3
pledged substantially all of his personally-held unregistered shares of the
Company to cover personal margin loans; technological changes and introductions
of new competing products; adverse economic conditions that affect the
telecommunications sector, certain technology sectors or the economy as a whole;
terrorist attacks or acts of war, particularly given the acts of terrorism
against the United States on September 11, 2001 and subsequent military
responses by the United States; ability to retain key personnel; changes in
market demand, exchange rates, productivity, weather or market and economic
conditions in the areas of the world in which the Company operates and markets
its products.
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