OPTICAL CABLE CORPORATION
5290 CONCOURSE DRIVE
ROANOKE, VIRGINIA 24019
February 11, 1997
Dear Shareholder:
You are cordially invited to attend Optical Cable Corporation's (the
"Company") Annual Meeting of Shareholders to be held on March 11, 1997, at 10:00
a.m. local time at the Hotel Roanoke at 110 Shenandoah Avenue, Roanoke, Virginia
24016.
You are being asked to elect the Company's Board of Directors and to ratify
the appointment of KPMG Peat Marwick LLP as accountants. We also will be pleased
to report on the affairs of the Company and a discussion period will be provided
for questions and comments of general interest to shareholders.
Whether or not you are able to attend, it is important that your shares be
represented and voted at this meeting. Accordingly, please complete, sign and
date the enclosed proxy and mail it in the envelope provided at your earliest
convenience. Your prompt response would be greatly appreciated.
Sincerely,
Robert Kopstein
Chairman and
Chief Executive Officer
YOUR VOTE IS IMPORTANT
EVEN IF YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, AND RETURN
PROMPTLY THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED TO ENSURE THAT YOUR VOTE
WILL BE COUNTED. YOU MAY VOTE IN PERSON IF YOU SO DESIRE EVEN IF YOU HAVE
PREVIOUSLY SENT IN YOUR PROXY.
IF YOUR SHARES ARE HELD IN THE NAME OF A BANK, BROKERAGE FIRM OR OTHER
NOMINEE, PLEASE CONTACT THE PARTY RESPONSIBLE FOR YOUR ACCOUNT AND DIRECT HIM OR
HER TO VOTE YOUR SHARES ON THE ENCLOSED CARD.
OPTICAL CABLE CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MARCH 11, 1997
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Optical
Cable Corporation, a Virginia corporation (the "Company"), is scheduled to be
held on March 11, 1997 at 10:00 a.m., local time, at the Hotel Roanoke located
at 110 Shenandoah Avenue, Roanoke, Virginia 24016 for the following purposes:
1. To elect five directors to serve for the terms of office specified in the
accompanying proxy statement and until their successors are duly elected and
qualified;
2. To ratify the appointment of KPMG Peat Marwick LLP as independent
accountants for the Company for fiscal year 1997; and
3. To transact such other business as may properly come before the meeting
and any adjournment thereof.
Only shareholders of record at the close of business on December 31, 1996 are
entitled to notice of and to vote at the Annual Meeting and any adjournment
thereof. All shareholders are cordially invited to attend the Annual Meeting in
person. However, to assure your representation at the meeting, you are urged to
complete, sign and date the enclosed form of proxy and return it promptly in the
envelope provided. Shareholders attending the meeting may revoke their proxy and
vote in person.
FOR THE BOARD OF DIRECTORS
Kenneth W. Harber
Secretary
Roanoke, Virginia
February 11, 1997
OPTICAL CABLE CORPORATION
PROXY STATEMENT
GENERAL INFORMATION
PROXY SOLICITATION
This Proxy Statement is furnished to the holders of common stock, no par
value (the "Common Stock"), of Optical Cable Corporation, a Virginia corporation
(the "Company") in connection with the solicitation by the Board of Directors of
the Company of proxies for use at the Annual Meeting of Shareholders to be held
on Tuesday, March 11, 1997, or at any adjournment thereof, pursuant to the
accompanying Notice of Annual Meeting of Shareholders. The purposes of the
meeting and the matters to be acted upon are set forth in the accompanying
Notice of Annual Meeting of Shareholders. The Board of Directors is not
currently aware of any other matters that will come before the Annual Meeting.
Proxies for use at the Annual Meeting are being solicited by the Board of
Directors of the Company. These proxy solicitation materials are first being
mailed on or about February 11, 1997 to all shareholders entitled to vote at the
Annual Meeting. Proxies will be solicited chiefly by mail. The Company will make
arrangements with brokerage houses and other custodians, nominees and
fiduciaries to send proxies and proxy material to the beneficial owners of the
shares and will reimburse them for their expenses in so doing. Should it appear
desirable to do so in order to ensure adequate representation of shares at the
Annual Meeting, officers, agents and employees of the Company may communicate
with shareholders, banks, brokerage houses and others by telephone, facsimile or
in person to request that proxies be furnished. All expenses incurred in
connection with this solicitation will be borne by the Company.
REVOCABILITY AND VOTING OF PROXY
A form of proxy for use at the Annual Meeting and a return envelope for the
proxy are enclosed. Shareholders may revoke the authority granted by their
execution of proxies at any time before their effective exercise by filing with
the Secretary of the Company a written notice of revocation or a duly executed
proxy bearing a later date, or by voting in person at the Annual Meeting. Shares
of the Company's Common Stock represented by executed and unrevoked proxies will
be voted in accordance with the choice or instructions specified thereon. If no
specifications are given, the proxies intend to vote the shares represented
thereby in favor of the matters as set forth in the accompanying Notice of
Annual Meeting of Shareholders and in accordance with their best judgment on any
other matters which may properly come before the Annual Meeting.
RECORD DATE AND VOTING RIGHTS
Only shareholders of record at the close of business on December 31, 1996 are
entitled to notice of and to vote at the Annual Meeting. As of the record date,
38,675,416 shares of Common Stock were issued and outstanding. Each share of
Common Stock is entitled to one vote on all matters that may properly come
before the Annual Meeting. The holders of a majority of the outstanding shares
of Common Stock, present in person or by proxy, will constitute a quorum at the
Annual Meeting. Abstentions and broker non-votes will be counted for purposes of
determining the presence or absence of a quorum. "Broker non-votes" are shares
held by brokers or nominees which are present in person or represented by proxy,
but which are not voted on a particular matter because instructions have not
been received from the beneficial owner.
Directors will be elected by a plurality of the votes cast at the Annual
Meeting. Accordingly, abstentions or non-votes will not affect the election of
candidates receiving the plurality of votes.
All other matters to come before the Annual Meeting require the approval of
the holders of a majority of the votes cast at the Annual Meeting. For this
purpose, abstentions and non-votes will be deemed shares not voted on such
matters, will not count as votes for or against the proposals, and will not be
included in calculating the number of votes necessary for the approval of such
matters.
Votes at the Annual Meeting will be tabulated by Inspectors of Election
appointed by the Company.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Five directors, constituting the entire Board of Directors, are to be elected
at the Annual Meeting. Unless otherwise specified, the enclosed proxy will be
voted in favor of the persons named below to serve until the next Annual Meeting
and until their successors are elected and qualified. Each person named below is
now a director of the Company. In the event any of these nominees shall be
unable to serve as a director, the shares represented by the proxy will be voted
for the person, if any, who is designated by the Board of Directors to replace
the nominee. All nominees have consented to be named and have indicated their
intent to serve if elected. The Board of Directors has no reason to believe that
any of the nominees will be unable to serve or that any vacancy on the Board of
Directors will occur.
The names of the nominees and certain other information about them are set
forth below:
Nominee Age Director Since Office Held with Company
Robert Kopstein . 47 1983 Chairman of the Board,
President, Chief Executive
Officer and Director
Luke J. Huybrechts. 52 1995 Senior Vice President of
Sales and Director
Kenneth W. Harber.. 46 1995 Vice President of Finance,
Treasurer, Secretary and
Director
Randall H. Frazier 46 1996 Director
John M. Holland .. 51 1996 Director
- ----------
MR. KOPSTEIN has been President and a Director of the Company since 1983 and
Chairman of the Board and Chief Executive Officer since 1989. From 1981 to 1983,
Mr. Kopstein worked at Phalo Corporation as the Plant Manager for its Fiber
Optic Cable Division, from 1979 to 1981 at ITT's Electro-Optical Products
Division as a Project Engineer on cable development projects for the United
States military, and from 1977 to 1979 at Rochester Corporation as a Product
Engineer on the development of cables for military-oriented applications.
MR. HUYBRECHTS was elected a Director of the Company in August 1995 and has
been Senior Vice President of Sales since joining the Company in 1986. Prior
thereto, Mr. Huybrechts worked at ITT's Electro-Optical Products Division for 10
years in marketing, sales and research and development.
MR. HARBER was elected a Director of the Company in August 1995 and has been
Vice President of Finance, Treasurer and Secretary of the Company since 1989.
Prior to joining the Company as an accounting manager in 1986, Mr. Harber was an
accounting supervisor at an architecture and engineering firm.
MR. FRAZIER was elected a Director of the Company in April of 1996. Mr.
Frazier is President of R. Frazier, Inc., a company founded in 1988. Mr. Frazier
was self-employed in various chemical and engineering concerns prior to the
founding of R. Frazier, Inc.
2
MR. HOLLAND was elected a Director of the company in April of 1996. Mr.
Holland is currently President of Cybermotion, a company he co-founded in 1984.
Mr. Holland also currently serves as the chairman of the International Service
Robot Association. Mr. Holland's previous employment experience includes the
Electro-Optics Product Division of ITT where he was responsible for the design
of the earliest fiber optic systems and the development of automated
manufacturing systems for optical fiber.
EXECUTIVE OFFICERS
The Executive Officers of the Company are: Robert Kopstein -- President and
Chief Executive Officer; Luke J. Huybrechts -- Senior Vice President of Sales;
and Kenneth W. Harber -- Vice President of Finance, Treasurer, and Secretary.
See the information concerning nominees for directors above for certain
information concerning each of these officers.
OTHER SIGNIFICANT EMPLOYEES
The following table contains information as of December 31, 1996 as to
certain other significant employees of the Company.
Office Held
Name Age With Company
---- --- ------------
Vice President of Sales,
Ted Leonard ................... 44 Western Region
Vice President of Sales,
James Enochs .................. 36 Southeastern Region
Vice President of Sales,
Paul Oh ........................ 54 Far East
Vice President of
Susan Adams ................... 36 Marketing
MR. LEONARD has been Vice President of Sales, Western Region since 1992.
Before joining the Company, Mr. Leonard worked in engineering management at
Alcatel Telecommunications Cable. Prior to that he worked at ITT's
Electro-Optical Products Division.
MR. ENOCHS has been Vice President of Sales, Southeastern Region since 1992.
Before that he was Distribution Sales Manager from 1990 to 1992 and Inside Sales
Manager from 1988 to 1990.
DR. OH has been Vice President of Sales, Far East since 1989. Before joining
the Company, Dr. Oh worked at Samsung Electronics Co. as the Technical/Managing
Director of fiber optic products. Prior to that he worked at ITT's
Electro-Optical Products Division.
MS. ADAMS has been Vice President of marketing since 1992. Ms. Adams worked
as Marketing Services Coordinator from 1984 to 1987 and Director of Marketing
from 1987 to 1992.
There are no family relationships among the directors, executive officers, or
other significant employees of the Company.
DIRECTOR COMPENSATION
Each non-employee director will receive compensation in the amount of $500.00
per meeting that is attended including committee meetings. In addition, the
Company will reimburse the independent directors for their out-of-pocket
expenses related to attending meetings of the Board of Directors or the
committees thereof. Officers of the Company who serve as directors do not
receive compensation for their services as Directors other than the compensation
they receive as officers of the company.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors held a total of four meetings during the Company's
fiscal year ended October 31, 1996. Each Director attended in person or
telephonically at least 75% of the meetings held by the Board of Directors and
all committees thereof on which he served.
3
The Board of Directors has established two standing committees: the Audit and
Compensation Committees. The Board of Directors does not have a Nominating
Committee. The Audit Committee is comprised of Messrs. Frazier and Holland,
while the Compensation Committee is comprised of Messrs. Kopstein, Frazier and
Holland.
The Audit Committee recommends annually to the Board of Directors the
appointment of the independent public accountants of the Company, discusses and
reviews the scope and the fees of the prospective annual audit, reviews the
results of the annual audit with the Company's independent public accountants,
reviews compliance with existing major accounting and financial policies of the
Company, reviews the adequacy of the financial organization of the Company,
reviews management's procedures and policies relative to the adequacy of the
Company's internal accounting controls and compliance with federal and state
laws relating to accounting practices, and reviews and approves transactions, if
any, with affiliated parties.
The Compensation Committee reviews and approves annual salaries and bonuses
for all officers, administers the Company's existing stock option plan, and
carries out the responsibilities required by the rules of the U.S.
Securities and Exchange Commission.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE DIRECTORS
NAMED ON THE ENCLOSED PROXY.
4
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF ACCOUNTANTS
The Board of Directors has appointed the firm of KPMG Peat Marwick LLP as the
Company's independent accountants for fiscal year 1997. Although action by the
shareholders in this matter is not required, the Board of Directors believes
that it is appropriate to seek shareholder ratification of this appointment.
A representative of KPMG Peat Marwick LLP is expected to attend the Annual
Meeting. The representative will have the opportunity to make a statement, if he
or she so desires, and will be available to respond to appropriate questions
from shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF KPMG PEAT
MARWICK LLP AS INDEPENDENT ACCOUNTANTS FOR FISCAL YEAR 1997.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth information as of December 31, 1996 regarding
the beneficial ownership of the Company's Common Stock of (i) each person known
to the Company to be the beneficial owner, within the meaning of Section 13(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), of more
than 5% of the outstanding shares of Common Stock, (ii) each director of the
Company, (iii) each executive officer or former executive officer of the Company
named in the Summary Compensation Table (see "Executive Compensation") and (iv)
all executive officers and directors of the Company as a group. Unless otherwise
indicated, the address of each named beneficial owner is c/o Optical Cable
Corporation, 5290 Concourse Drive, Roanoke, Virginia 24019. Except to the extent
indicated in the footnotes, each of the beneficial owners named below has sole
voting and investment power with respect to the shares listed.
Number of Percent
Name and Address Shares of Class
---------------- ------ --------
Robert Kopstein ......................................... 36,000,000 93.1 %
Luke J. Huybrechts ...................................... 0 0
Kenneth W. Harber ....................................... 4,000 *
Randall H. Frazier ...................................... 0 0
John M. Holland ......................................... 0 0
All directors and executive officers as a group (5
persons)................................................. 36,004,000 93.1 %
- ----------
* Less than 1%
5
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning compensation paid by
the Company to the Chief Executive Officer and to all other executive officers
of the Company whose total salary and bonus exceeded $100,000 for the year ended
October 31, 1996.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation Awards
-------------------- ------------
Name and Fiscal Other Annual Options All Other
Principal Position Years Salary($) Bonus($) Compensation Granted Compensation
- ------------------ ----- --------- -------- ------------ ------- ------------
Robert Kopstein 1996 363,600 87,923 6,150,000(1) -- 13,310
President and Chief 1995 594,150 78,221 1,080,000(1) -- 16,860
Executive Officer 1994 1,321,399 -- 2,679,000(1) -- 9,600
Luke J. Huybrechts 1996 94,200 57,338 -- 40,000 9,834
Senior Vice-President of 1995 88,580 43,714 -- -- 9,189
Sales 1994 85,082 30,089 -- -- 6,951
Kenneth W. Harber 1996 89,550 57,503 -- 40,000 9,488
Vice President of 1995 85,400 43,946 -- -- 8,935
Finance 1994 81,800 30,278 -- -- 6,735
- ----------
(1) Represent distributions to Mr. Kopstein primarily to pay his income tax
liability resulting from the Company's status as an S Corporation, which
status terminated March 31, 1996.
STOCK OPTION GRANTS
The following table sets forth certain information concerning stock options
granted to the officers named in the Summary Compensation Table above during the
year ended October 31, 1996.
OPTION GRANTS IN FISCAL YEAR 1996
Potential
Realizable Value at
Assumed Annual
Number of Rates of Stock
Shares % of Total Options Price Appreciation
Underlying Granted to for Option Term(1)
Options Employees Exercise Expiration ---------------------
Name Granted(#) in Fiscal Year Price Date 5% 10%
---- ---------- -------------- ----- ---- -- ---
Luke J. Huybrechts. 40,000(2) 8.7 % $ 2.50 4/30/06 $62,889 $159,374
Kenneth W. Harber.. 40,000(2) 8.7 % $ 2.50 4/30/06 $62,889 $159,374
(1) Amounts represent hypothetical gains that could be achieved if exercised
at end of the option term. The dollar amounts under these columns assume 5% and
10% compounded annual appreciation in the Common Stock from the date the
respective options were granted. These calculations and assumed realizable
values are required to be disclosed under Securities and Exchange Commission
rules and, therefore, are not intended to forecast possible future appreciation
of Common Stock or amounts that may be ultimately realized upon exercise.
(2) Options vest one-fourth on each of the second, third, fourth and fifth
anniversaries of the date of grant, and expire 10 years after the grant date.
6
YEAR-END OPTION VALUES
The following table sets forth certain information as of October 31, 1996
concerning the value of unexercised options held by the officers named in the
Summary Compensation Table above.
FISCAL YEAR-END OPTION VALUES
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at October 31, 1996 at October 31, 1996 (1)
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
Luke J. Huybrechts. -- 40,000 -- $ 400,000
Kenneth W. Harber.. -- 40,000 -- $ 400,000
- ----------
(1) Represents the difference between the exercise price of the outstanding
options and the closing bid price of the Common Stock on October 31, 1996,
which was $12.50 per share.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Robert Kopstein, the Chairman, Chief Executive Officer and President of the
Company, serves on the Compensation Committee of the Board of Directors.
EMPLOYMENT AGREEMENTS
As of February 1, 1995, the Company and Mr. Kopstein entered into an
employment agreement pursuant to which Mr. Kopstein agreed to be employed
through October 31, 1997, at an annual salary equal to one percent of the
previous fiscal year's net sales and one percent of any increase between the
current fiscal year's net sales and the prior fiscal year's net sales.
Compensation under this agreement amounted to $274,871 during the period from
February 1, 1995 to October 31, 1995.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") is
comprised of a majority of independent, non-management directors. The Committee
has responsibility for developing and implementing the Company's compensation
policy for senior management, and for determining the compensation for the
executive officers of the Company. The goal of the Committee is to achieve fair
compensation for the individuals and to enhance shareholder value by continuing
to closely align the financial rewards of management with those of the Company's
shareholders.
The Company's compensation program is structured to support the human
resource requirements of its business. The Company seeks to attract and retain
qualified executives who are creative, motivated and dedicated. With respect to
its executive officers, the Company competes with other manufacturers and fiber
optic related industries in North America. The Committee is very much aware of
the unique circumstances which relate to the attraction and retention of highly
qualified executives that is required in such a highly specialized field such as
fiber optics. The Committee attempts to create and administer a compensation
program to achieve that result with consistency throughout the Company.
Executive officer total compensation is generally comprised of three
components: base salary, monthly and annual incentive bonus compensation and
long-term incentive stock options. The mix of an officer's total compensation is
generally based upon the seniority of the officer's position within the company.
Senior officers receive a greater percentage of their total compensation in the
form of incentive compensation.
Salary and incentive compensation awards are reviewed semiannually for
competitiveness and fairness. Each executive's contribution to the advancement
of corporate goals is also considered. Factors taken into account include, among
others, the executive's impact on financial results, business production,
development of the management team and strategic steps such as development of
new customers and products, geographical spread of business and product
development.
7
BASE SALARY:
In determining the salary of each senior executive other than the Chief
Executive Officer, the Committee is guided by the recommendations of the Chief
Executive Officer. The Base Salary of the Chief Executive Officer is based on
the terms of his employment contract which expires on October 31, 1997.
Effective November l, 1994, the Company entered into two separate one-year
employment agreements with the Chief Executive Officer. Total compensation under
the agreements consisted of salary payments equal to 6% of the fiscal year's net
sales. Effective February 1, 1995, these agreements were replaced by an
employment agreement that expires October 31, 1997 and reduces the base salary
payment percentage from 6 percent to 1 percent. The base salary under these
agreements amounted to $363,600 and $594,150 for the years ended October 31,
1996 and 1995, respectively.
ANNUAL INCENTIVE COMPENSATION:
The revised employment agreement with the Chief Executive Officer which
became effective February 1, 1995 provides for an incentive bonus equal to 1% of
the positive difference between the current fiscal year's net sales and the
prior fiscal year's net sales. The bonus under these agreements amounted to
$87,923 and $78,221 for the years ended October 31, 1996 and 1995, respectively.
The other senior executives are included in a monthly and lump-sum bonus plan
which is based on a percentage of the previous months sales.
LONG-TERM INCENTIVE COMPENSATION:
The Company adopted on March 1, 1996 a stock incentive plan. All of the
senior executives are included in the plan with the exception of the Chief
Executive Officer. The plan is intended to provide a means for key management
employees to increase their personal financial interest in the Company, thereby
stimulating the efforts of those employees and strengthening their desire to
remain with the Company through the use of stock incentives. The Company has
reserved 4,000,000 shares of common stock for issuance pursuant to incentive
awards under the Plan. Under the Plan, stock options may be granted at not less
than fair market value on the date of grant. The options vest 25 percent after
two years, 50 percent after three years, 75 percent after four years and 100
percent after five years. Each executive officer, other than the Chief Executive
Officer, was granted options on 40,000 shares of common stock during the fiscal
year ended October 31, 1996. The exercise price is $2.50 per share and the
options expire on April 30, 2006. All of the options were unexercisable as of
October 31, 1996. The Plan is administered by the two outside directors of the
Company. With respect to guidelines for administering the long-term incentive
plan, the Committee will receive recommendations from the Chief Executive
Officer which will be based on the individual and company performance of each
senior executive. The Committee anticipates that over the next few years, awards
generally will be in the form of stock options. The Committee believes that
awards of stock options, which reward Company stock price appreciation over the
long-term, are particularly appropriate in light of the nature of the Company's
business and long-term business plans.
CHIEF EXECUTIVE OFFICER'S FISCAL 1996 COMPENSATION:
As set forth in the Summary Compensation above, Mr. Kopstein's total annual
compensation for the year ended October 31, 1996 was $6,614,833. Such annual
compensation consisted of a base salary of $363,600 and a bonus of $87,923,
pursuant to Mr. Kopstein's employment agreement. The Company distributed
$6,150,000 to Mr. Kopstein during fiscal 1996, primarily to pay his income tax
liability resulting from the Company's status as an S Corporation, which status
terminated March 31, 1996. The Company made matching contributions to the
Company 401(K) retirement savings plan of $13,310.
Randall H. Frazier
John M. Holland
Robert Kopstein
8
PERFORMANCE GRAPH
The following graph compares the cumulative total return (based on share
price) on the Company's Common Stock with the cumulative total return since
April 2, 1996, the date on which the Company's common stock began trading on the
NASDAQ National Market, of the Nasdaq Market Index and a peer group index
comprised of the following companies: AFC Cable Systems, Andrew Corp.; Belden,
Inc.; Cable Design Technologies, Inc., and Encore Wire Corp.
COMPARISON OF CUMULATIVE TOTAL
RETURNS SINCE APRIL 2, 1996*
[GRAPH]
Optical Cable NASDAQ
Corporation Market Index Peer Group Index
April 2, 1996 $100 $100 $100
October 31, 1996 $417 $110 $127
- ----------
* $100 invested on 4/2/96 in stock or index including reinvestment of
dividends.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's officers, directors
and persons who own more than 10% of a registered class of the Company's equity
securities to file reports of ownership and changes in ownership with the
Securities and Exchange Commission. Officers, directors and greater than 10%
shareholders are required by the regulation to furnish the Company with copies
of the Section 16(a) forms which they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company, and written representations that no other
reports were required during the fiscal year ended October 31, 1996, all Section
16(a) filing requirements applicable to the Company's officers, directors and
greater than ten percent beneficial owners were complied with.
9
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
DISTRIBUTIONS TO SHAREHOLDERS AND PROMISSORY NOTE
During the year ended October 31, 1996, the Company distributed $6,150,000 to
its sole shareholder, Mr. Kopstein, primarily to pay his income tax liability
resulting from the Company's status as an S Corporation, which status terminated
March 31, 1996.
TAX INDEMNIFICATION AGREEMENT
Mr. Kopstein has entered into a Tax Indemnification Agreement with the
Company, pursuant to which he will indemnify the Company for any income tax
liability of the Company arising from its S Corporation status being denied for
any periods prior to its termination, but only to the extent such denial results
in a refund to Mr. Kopstein of personal income taxes paid with respect to such
periods.
SHAREHOLDER PROPOSALS
Proposals of Shareholders of the Company that are intended to be presented at
the Company's 1998 Annual Meeting of Shareholders must be received by the
Company no later than October 14, 1997 in order that they may be included in the
proxy statement and form of proxy relating to that meeting.
ANNUAL REPORT
A copy of the Company's Annual Report on Form 10-K for the fiscal year ended
October 31, 1996 including the financial statements and notes thereto is being
mailed to the shareholders of record along with this Proxy Statement. The Annual
Report on Form 10-K is not incorporated by reference in this Proxy Statement and
is not considered to be part of the proxy material.
The Company will furnish any exhibit described in the list accompanying the
1996 Form 10-K upon the payment, in advance, of the specified reasonable fees
related to the Company's furnishing of such exhibit(s). Requests for copies of
such report and/or exhibit(s) should be directed to the Company at its principal
executive offices, 5290 Concourse Drive, Roanoke, Virginia 24019, attention
Corporate Secretary.
OTHER MATTERS
The Board of Directors knows of no other business to be acted upon at the
Annual Meeting matters other than those referred to in this Proxy Statement. If
any other matters properly come before the Annual Meeting, it is the intention
of the persons named in the enclosed proxy to vote the shares they represent as
the Board of Directors may recommend.
By Order of the Board of Directors
Kenneth W. Harber
Secretary
Date: February 11, 1997
10
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF OPTICAL CABLE
CORPORATION FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MARCH 11, 1997
The undersigned appoints Luke J. Huybrechts or Kenneth W. Harber, or either
of them, with full power of substitution, to attend the Annual Meeting of
Stockholders of Optical Cable Corporation on March 11, 1997, and at any
adjournments thereof, and to vote all shares which the undersigned would be
entitled to vote if personally present upon the following matters set forth in
the Notice of Annual Meeting and Proxy Statement.
1. ELECTION OF DIRECTORS
[ ] FOR the FIVE nominees listed below [ ] WITHHOLD AUTHORITY to vote for
(except as marked to the contrary the FIVE nominees listed below
below)
Robert Kopstein, Luke J. Huybrechts, Kenneth W. Harber, Randall H.Frazier,
and John M. Holland
INSTRUCTION: To withhold authority for any individual nominee, write that
nominee's name in the space provided below:
- --------------------------------------------------------------------------------
2. To ratify the appointment of KPMG Peat Marwick LLP as independent
accountants for the Company for fiscal year 1997;
[ ] FOR this proposal [ ] AGAINST this proposal [ ] ABSTAIN
and
3. In their discretion, upon such other business as may properly come before the
meeting and any adjournments thereof.
PLEASE DATE, SIGN, AND RETURN PROXY
PROMPTLY. Receipt of Notice of Annual
Meeting and Proxy Statement is hereby
acknowledged
Date:_____________________________________
__________________________________________
Shareholder's signature
__________________________________________
Joint Holder's Signature
(If applicable)
When properly executed, this proxy will be voted in the manner directed
herein. If no direction is made, this proxy will be voted FOR proposal 2. and
FOR the election of the nominees of the Board of Directors in the election of
directors and in accordance with the judgment of the person(s) voting the proxy
upon such other matters properly coming before the meeting and any adjournments
thereof. Please sign exactly as name(s) appear above.
