SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): OCTOBER 2, 2001
OPTICAL CABLE CORPORATION
Virginia 0-27022 54-1237042
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
5290 CONCOURSE DR.
ROANOKE, VIRGINIA 24019 (540) 265-0690
(Address of principal (Telephone Number)
executive offices)
ITEM 1. CHANGES OF CONTROL OF REGISTRANT
Optical Cable Corporation (the "Company") announced on October 2, 2001,
that Mr. Robert Kopstein, its Chairman & Chief Executive Officer, had informed
the Company that substantially all of his personally-held unregistered shares of
the Company had been pledged to secure substantial personal margin loans from
several brokerage firms. Mr. Kopstein has advised the Company that he had
originally pledged a total of 52,830,000 shares of his personal holdings of
unregistered common stock of Optical Cable Corporation representing
approximately 94% of the Company's outstanding common stock. Based on the
information provided by Mr. Kopstein, the brokerage firms (collectively, the
"Brokers") that accepted such pledges of Mr. Kopstein's unregistered common
stock of the Company, and the number of shares originally pledged to each Broker
are as follows: A.G. Edwards and Sons, Inc. (15,000,000 shares pledged), The
Bear Stearns Companies, Inc. (15,000,000 shares pledged), Goldman Sachs & Co.
(1,130,000 shares pledged), Merrill Lynch & Co., Inc. (5,000,000 shares
pledged), Salomon Smith Barney, Inc. (3,000,000 shares pledged), Scott and
Stringfellow, Inc. (1,700,000 shares pledged), and UBS Warburg Paine Webber,
Inc. (12,000,000 shares pledged). In addition, according to information provided
by Mr. Kopstein, Merrill Lynch & Co., Inc. holds 1,000,000 shares of Mr.
Kopstein's unregistered Optical Cable Corporation common stock, the pledged
status of which is currently in dispute. Based on information provided by Mr.
Kopstein, the Company estimates that the original margin loans totaled
approximately $91 million.
The Brokers have sold or are taking actions to sell the unregistered shares
of common stock of Optical Cable Corporation they hold as collateral pursuant to
the various pledge arrangements with Mr. Kopstein and pursuant to Rule 144(k)
under the Securities Act of 1933, as amended (the "1933 Act"). Based on sales
information filed with the Securities and Exchange Commission by Mr. Kopstein,
the Company estimates that 50,470,500 of such shares continued to be pledged to
secure Mr. Kopstein's margin loans as of September 30, 2001 (excluding the
additional 1,000,000 disputed shares also held by Merrill Lynch & Co., Inc.). At
this time, the Company is aware that sales by the Brokers are continuing, but is
not aware of the total number of pledged shares sold by the Brokers in October.
The Company is not aware of Mr. Kopstein's current margin loan balances.
The Company believes that at least the three Brokers holding the largest
numbers of Mr. Kopstein's unregistered shares may be considered "affiliates" for
purposes of Rule 144(k) under the 1933 Act. However, each of these three Brokers
has expressed to the Company its view that it is not an "affiliate" as that term
is used in Rule 144(k), and all but one of these Brokers have provided opinions
of counsel to that effect. If the Company determines to accept the opinions of
counsel for these Brokers, the Brokers would be able to sell all of the
unregistered shares of the Company that have been pledged to them without any
volume restrictions. The Company is attempting to expeditiously review and,
where appropriate, clear the sale by the Brokers of Mr. Kopstein's unregistered
shares of the Company's common stock in compliance with its legal duties.
On October 9, 2001, UBS Warburg Paine Webber, Inc. notified Mr. Kopstein
that it had sold 486,315 shares of pledged common stock of the Company to date
and repossessed the remaining 11,513,685 shares originally pledged by Mr.
Kopstein.
2
Attached as exhibits hereto are copies of the Company's various press
releases as this situation has developed.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(c) Exhibits.
99.1 Press release of Optical Cable Corporation, dated September
26, 2001.
99.2 Press release of Optical Cable Corporation, dated October 2,
2001.
99.3 Press release of Optical Cable Corporation, dated October 8,
2001.
3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused the report to be signed on its behalf by the
undersigned, thereunto duly authorized, on October 17, 2001.
OPTICAL CABLE CORPORATION
By: /s/ Neil D. Wilkin, Jr.
------------------------------
Neil D. Wilkin, Jr.
Senior Vice President &
Chief Financial Officer
4
Exhibit 99.1
DRAFT
NEWS BULLETIN RE:
FROM: OPTICAL CABLE CORPORATION
5290 Concourse Drive
THE FINANCIAL RELATIONS BOARD Roanoke, VA 24019
BSMG WORLDWIDE (Nasdaq: OCCF)
www.occfiber.com
-------------------------------------------------------------------------------
AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:
--------------- ---------------------------------
Robert Kopstein Neil Wilkin Alison Ziegler - General Info.
Chairman & CEO Senior VP & CFO Peter Seltzberg - Analyst Info.
(540) 265-0690 (540) 265-0690 Judith Sylk-Siegel - Media Info.
kopstein@occfiber.com nwilkin@occfiber.com (212) 661-8030
FOR IMMEDIATE RELEASE:
---------------------
September 26, 2001
OPTICAL CABLE CORPORATION COMMENTS ON RECENT MARKET ACTIVITY
ROANOKE, VA, SEPTEMBER 26, 2001 -- Optical Cable Corporation (Nasdaq: OCCF)
commented today on the recent substantial increase in trading volume and lower
trading price of its stock.
The Chairman & CEO of the Company has pledged a significant amount of his
personally-held Optical Cable Corporation stock to various stock brokerage firms
as security for substantial margin loans. As the price of the securities
personally held by the Chairman & CEO has declined, several of the brokerage
firms commenced sales of the pledged securities, including Optical Cable
Corporation common stock, under the margin agreements. As previously reported on
Form 4 filed with the Securities and Exchange Commission, sales of 358,100
shares were made in August 2001 by or for the benefit of the Company's Chairman
& CEO. A total of 288,100 of such shares were sold to satisfy margin calls. The
sales continued in September and increased substantially after September 11,
2001, in view of further significant declines in the trading prices of
securities in the accounts after the markets reopened on September 17, 2001. The
number of shares of Company stock sold during September by the Chairman & CEO
have not yet been compiled by the Company.
Optical Cable Corporation's Board of Directors first authorized the repurchase
of the Company's common stock in the open market or in privately negotiated
transactions in October 1997. The amount of shares authorized to be repurchased
was increased from time to time, with the latest increase in the authorization
occurring in August 2001. Optical Cable Corporation repurchased 818,500 shares
of its common stock for $6,750,368 from August 1 to September 20, 2001. Since
September 20, 2001, Optical Cable Corporation has not purchased shares of its
stock in the market, but may revisit that decision in the future as appropriate.
-- MORE --
Optical Cable Corporation
Page 2 of 2
NOTE: 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, 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, THE COMPANY'S DEPENDENCE ON A LIMITED NUMBER OF
SUPPLIERS, AN ADVERSE PRICE CHANGE IN TRADING SECURITIES HELD BY THE COMPANY, AN
ADVERSE OUTCOME IN LITIGATION, CLAIMS AND OTHER ACTIONS AGAINST THE COMPANY,
TECHNOLOGICAL CHANGES AND INTRODUCTIONS OF NEW COMPETING PRODUCTS, 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.
###
Exhibit 99.2
DRAFT
NEWS BULLETIN RE:
FROM: OPTICAL CABLE CORPORATION
5290 Concourse Drive
THE FINANCIAL RELATIONS BOARD Roanoke, VA 24019
BSMG WORLDWIDE (Nasdaq: OCCF)
www.occfiber.com
-------------------------------------------------------------------------------
AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:
--------------- ---------------------------------
Neil Wilkin Alison Ziegler - General Info.
Senior VP & CFO Peter Seltzberg - Analyst Info.
(540) 265-0690 Judith Sylk-Siegel - Media Info.
nwilkin@occfiber.com (212) 661-8030
FOR IMMEDIATE RELEASE:
October 2, 2001
OPTICAL CABLE CORPORATION REPORTS TEMPORARY HALT OF SALES
BY CERTAIN BROKERAGE FIRMS
ROANOKE, VA, OCTOBER 2, 2001 -- Optical Cable Corporation (Nasdaq: OCCF)
reported today that its Chairman & Chief Executive Officer, Robert Kopstein, has
personally obtained a Temporary Restraining Order (TRO) against various
brokerage firms temporarily preventing the firms from selling Mr. Kopstein's
personally- held shares of Optical Cable Corporation in an attempt to satisfy
substantial margin loans made by these brokerage firms to Mr. Kopstein
personally. Mr. Kopstein reported to the Company that the move was in response
to the recent substantial increase in trading volume and lower trading price of
the Company's stock caused by selling of shares by some of the brokers. The TRO
granted by the U.S. District Court, Western District of Virginia, temporarily
prevents Salomon Smith Barney, Inc., Merrill Lynch & Co., Inc., UBS Warburg
Paine Webber, Inc., The Bear Stearns Companies, Inc., A.G. Edwards and Sons,
Inc., and Scott and Stringfellow, Inc. from selling Mr. Kopstein's
personally-held shares of Optical Cable Corporation.
The Company has been informed by Mr. Kopstein that, at this point, substantially
all of his personally-held shares of Optical Cable Corporation have been pledged
to secure substantial margin loans from the brokers named in the TRO.
The Board of Directors of the Company has formed an independent special
committee of the Board to explore and address issues on behalf of Optical Cable
Corporation and all of its shareholders related to Mr. Kopstein's margin loans.
The Special Committee will be assisted by Neil Wilkin, the Company's Senior Vice
President & Chief Financial Officer, who joined the Company in early September
2001.
NOTE: 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
-- MORE --
Optical Cable Corporation
Page 2 of 2
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, 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 PRICE CHANGE IN TRADING SECURITIES HELD BY THE
COMPANY, AN ADVERSE OUTCOME IN LITIGATION, CLAIMS AND OTHER ACTIONS AGAINST THE
COMPANY, TECHNOLOGICAL CHANGES AND INTRODUCTIONS OF NEW COMPETING PRODUCTS,
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.
###
Exhibit 99.3
DRAFT
NEWS BULLETIN RE:
FROM: OPTICAL CABLE CORPORATION
5290 Concourse Drive
THE FINANCIAL RELATIONS BOARD Roanoke, VA 24019
BSMG WORLDWIDE (Nasdaq: OCCF)
www.occfiber.com
-------------------------------------------------------------------------------
AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:
--------------- ---------------------------------
Neil Wilkin Alison Ziegler - General Info.
Senior VP & CFO Peter Seltzberg - Analyst Info.
(540) 265-0690 Judith Sylk-Siegel - Media Info.
nwilkin@occfiber.com (212) 661-8030
FOR IMMEDIATE RELEASE:
October 8, 2001
OPTICAL CABLE CORPORATION REPORTS LIFTING OF
TEMPORARY RESTRAINING ORDER AND OTHER RECENT DEVELOPMENTS
ROANOKE, VA, October 8, 2001 - Optical Cable Corporation (Nasdaq: OCCF) reported
this morning that the Temporary Restraining Order (TRO) personally obtained by
its Chairman & Chief Executive Officer, Robert Kopstein, against various
brokerage firms on October 1, 2001 was lifted as of midnight on October 5, 2001.
The TRO, granted by the U.S. District Court, Western District of Virginia, had
temporarily prevented Salomon Smith Barney, Inc., Merrill Lynch & Co., Inc., UBS
Warburg Paine Webber, Inc., The Bear Stearns Companies, Inc., A.G. Edwards and
Sons, Inc., and Scott and Stringfellow, Inc. from selling Mr. Kopstein's
personally-held shares of Optical Cable Corporation to satisfy Mr. Kopstein's
personal margin loans with the brokerage firms. Granting a motion by Mr.
Kopstein's attorneys, the Honorable James C. Turk lifted the TRO, and ordered
Mr. Kopstein and the brokerage firms to mediation scheduled for October 10,
2001. However, the order does not prevent the brokerage firms from selling Mr.
Kopstein's shares of Optical Cable Corporation.
Substantially all of Mr. Kopstein's personally-held shares of Optical Cable
Corporation have been pledged to secure substantial margin loans to Mr. Kopstein
from the brokers named in the TRO. The individual brokerage firms hold various
numbers of shares ranging from approximately 1.5 million shares to 15 million
shares. The Company has been advised by its legal counsel that, based upon
information currently available to it, certain of the brokerage firms will be
permitted to immediately sell all of the shares of Optical Cable Corporation
they hold pursuant to Rule 144(k) under the Securities Act of 1933, as amended,
while others may be deemed affiliates of the Company in which event they would
be subject to the volume limitations set forth in Rule 144. The Company
estimates that approximately 8.5 million shares of its common stock could be
legally entitled to come to market as early as today.
Mr. Kopstein has informed the Company that he is taking appropriate steps that
he believes could assist in the controlled disposition of a sufficient number of
his shares to begin to pay down his personal margin loans. At this point, it is
unclear the extent to which the brokerage firms will cooperate in this process,
or whether the firms will attempt to dispose of Mr. Kopstein's shares in the
open market.
-- MORE --
Optical Cable Corporation
Page 2 of 2
In other news, Optical Cable Corporation reported that it has liquidated its
investment in Nasdaq 100 Index Tracking Stock (QQQ) securities, netting proceeds
to the Company of approximately $1.6 million. Mr. Kopstein stated "The Company
will continue to focus on what it does best, making the highest quality fiber
optic cable in the industry for short to moderate distance runs." The Company's
new Senior Vice President & Chief Financial Officer, Neil Wilkin, said, "The
liquidation is part of a policy not to invest excess funds in any instrument
other than money market funds or other similar non-volatile securities."
The Company also reported that on October 4, 2001, Thomas R. Brock, who recently
joined the Board of Directors, resigned. Mr. Brock cited the substantial time
commitment required to perform his duties given recent developments.
NOTE: 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, 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 AGAINST THE COMPANY, TECHNOLOGICAL CHANGES
AND INTRODUCTIONS OF NEW COMPETING PRODUCTS, 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.
###