Optical Cable Corporation Settles Shareholder Class Action Litigation
ROANOKE, Va., June 26 /PRNewswire-FirstCall/ -- Optical Cable Corporation (Nasdaq: OCCF) today announced that it has reached an agreement to resolve the consolidated class action securities lawsuit filed against Optical Cable, its former Chairman, CEO & President Robert Kopstein, and other officers and directors of the Company, that is pending in the United States District Court for the Western District of Virginia. The consolidated suit sought damages based on alleged misrepresentations or omissions concerning the personal margin accounts of Mr. Kopstein, among other claims.
The settlement, which is subject to final documentation, court approval and class certification, provides for a cash payment of $700,000 and the issuance of warrants to purchase two million shares of common stock of Optical Cable at an exercise price per share calculated in a manner intended to approximate recent market prices. The number of shares issuable upon the exercise of the warrants will be reduced proportionately and the exercise price of the warrants will be adjusted if the previously announced 1-for-8 reverse stock split is effected.
"Optical Cable is pleased that it has been able to quickly dispose of this lawsuit, which focused principally on the personal trading activities of the Company's former Chairman, CEO & President. Management can now focus its full attention on selling product and improving financial performance," said Neil Wilkin, President & Chief Financial Officer.
The cash portion of the settlement will be paid in two installments: $500,000 upon court approval of the settlement agreement and certification of the class, and $200,000 on November 1, 2002 (or upon court approval of the settlement and certification of the class, if later). The warrants will be exercisable for five years, and the number of shares issued upon exercise of the warrants and exercise price of the warrants will be adjusted in the event of certain changes in the Company's capital structure, including any reverse stock split. Optical Cable intends that the shares issuable upon the exercise of the warrants will be registered under the Securities Act of 1933, as amended.
Optical Cable Corporation will record a one-time charge in fiscal third quarter 2002, which ends July 31, to reflect the settlement, including the cost of the settlement, related professional fees, and the estimated costs associated with registering the shares issuable upon exercise of the warrants.
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, (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 or 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, including, but not limited to, the shareholder litigation that has been filed; the effect of sales of the Company's common stock by the various brokerage firms alleging that the Company's former President and Chief Executive Officer 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; the current recession; 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; and market and economic conditions in the areas of the world in which the Company operates and markets its products.
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SOURCE Optical Cable Corporation
/CONTACT: Neil Wilkin, President & CFO of Optical Cable Corporation,
+1-540-265-0690, nwilkin@occfiber.com , or General, Marilynn Meek,
+1-212-445-8451, Analysts, Peter Seltzberg, +1-212-445-8457, or Media, Judith
Sylk-Siegel, +1-212-445-8431, all of FRB Weber Shandwick/
/Web site: occfiber.com / |
