Since it appears that there is some interest in OCCF, here is an article on the today's development:
From Roanoke Times
Tuesday, December 04, 2001
Bob Kopstein too busy tending to disputes over his portfolio of company stock, board says
Optical Cable fires founder from $500,000-a-year job
He remains a board member with voting rights. In addition, the board immediately offered him work as a consultant.
By JEFF STURGEON
THE ROANOKE TIMES
Optical Cable Corp. fired Bob Kopstein on Monday, saying that the company's founder and highest executive had become too embroiled in his own money problems to handle his work.
Kopstein, one of the Roanoke region's best-known high-tech entrepreneurs, secretly gambled his Optical Cable stock on Wall Street and lost. Stock brokerages have seized his once-dominant portfolio of company stock, and Optical Cable shares have fallen more than 90 percent.
About 10 weeks after the debacle became public, the bombshell that ended Kopstein's 18-year reign was ignited in a closed meeting of the board of directors Monday morning. Gathering at the downtown office of company attorneys, the board voted to strip Kopstein of his $500,000-a-year job as president and chief executive and of his board chairmanship.
"Because of the time and attention necessitated by the ongoing disputes with the brokerage firms and the ensuing litigation, it became apparent ... that Mr. Kopstein could not devote his focus and attention to his duties as president and chief executive officer," read a prepared statement by board member John Holland, head of a Roanoke robotics firm and one of two Roanoke Valley businessmen who provide outside oversight of the company.
Holland said board members felt Kopstein's departure would better enable the 200-employee company to focus on making fiber-optical cable at its plant in Roanoke County.
Kopstein, however, is not out of the picture. He remains a board member with voting rights until the annual shareholder meeting next spring.
In addition, the board immediately offered him work as a consultant.
"We don't want to lose him if we can help it," said board member Randy Frazier, who owns a computer-reclamation and sales firm in Salem.
Kopstein, 51, had not responded to the offer by late Monday afternoon.
He has never commented publicly on his personal financial troubles and could not be reached for comment Monday.
Kopstein for years owned more than 95 percent of the stock of the company he founded in 1983 to manufacture extra-strength fiber-optic communications cable for Internet, television, phone, data and other uses.
Beginning in 1997, he pledged his shares to stock brokerages that lent him money to buy other stocks. His personal stock purchases performed poorly, after which brokerage houses demanded repayment. When they did not receive it, they began selling Kopstein's pledged Optical Cable shares to reduce what he owed them. The selling began in August and continued last week. In one six-day period in September, Optical Cable's share price dropped from more than $7 to less than $2. The shares had traded for nearly $18 apiece a year ago.
The September slump alerted other company executives that something was awry, at which point they confronted Kopstein. Frazier and Holland formed a special committee soon after to investigate Kopstein's activities and have been working on the task ever since, Frazier said. Frazier said Kopstein has not been charged with any criminal or federal securities violations.
The stock price is of concern to the company because Optical Cable would like to issue more stock to raise money to expand. In addition, the stock's troubles, along with Kopstein's, have put the company in an unflattering light.
The company's struggles aren't over, but shareholders and executives agreed Kopstein's departure could help ease them.
"The good news is a lot of the uncertainty around the founder and his shares has now been kind of dealt with," said Rolv Heggenhougen, who directs a technology investment fund from the Cayman Islands. He read about the turmoil surrounding Optical Cable's stock on the Internet and bought a large amount, believing the company to be sound.
William Federman, a lawyer in Oklahoma City, Okla., who filed a shareholder lawsuit charging Kopstein with fraud, said: "If they can keep him as a consultant, it may be the best thing for everybody. He's the one with the knowledge."
"I still believe the company is going to come back," said Tom Tielking, a former engineering faculty member at Texas A&M who retired to Daleville and invested in local companies. He spent about $20,000 on Optical Cable. He said Kopstein's investment decisions smack of greed. "People become millionaires and they're not happy. They want to become billionaires."
Of greatest concern to shareholders Monday was what the depressed stock will do next.
A half hour after the markets opened Monday morning, the Nasdaq halted trading in Optical Cable with the price at $1.17 and released word that major news was due out soon. When trading resumed soon after the Kopstein press release was sent out, the price shot to $1.44, a rise of 23 percent. The shares closed at $1.33, up 15 percent for the day.
Brian Gottstein , a financial adviser at the Roanoke office of Legg Mason, described the market's reaction as "a cautious positive with a let's-wait-and-see-what-happens-next attitude."
Yearly financial results are due out in about two weeks, along with the latest report on stock ownership. In recent weeks, the Optical Cable stock has traded so fast and in such great numbers that no one knows whether Kopstein is still the majority shareholder. Many shareholders suspect he isn't. Any investor or institution that has accumulated 5 percent of the 55 million outstanding shares must file a report at the U.S. Securities and Exchange Commission by Dec. 10.
Kopstein has no obvious successor, Frazier said. Monday, the board named Neil Wilkin as acting president. Wilkin, who was hired two months ago as senior vice president and chief financial officer, will lead the company until Kopstein's successor is named.
"While the company recognizes that Mr. Kopstein's leadership has contributed greatly to the success of the business, the board is confident the current management team and work force are well suited to carry the company forward," Frazier said.
A production employee, who spoke on the condition that her name not be printed, said many workers were told the news in a meeting near their 3 p.m. quitting time.
"Everybody in the company was very, very sad to say the least. I'm sure some people were crying," the employee said. "We're like a family. It's not going to be the same without him." |
