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<SEC-DOCUMENT>0000916641-03-000583.txt : 20030317
<SEC-HEADER>0000916641-03-000583.hdr.sgml : 20030317
<ACCEPTANCE-DATETIME>20030317172354
ACCESSION NUMBER:		0000916641-03-000583
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20030131
FILED AS OF DATE:		20030317

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			OPTICAL CABLE CORP
		CENTRAL INDEX KEY:			0001000230
		STANDARD INDUSTRIAL CLASSIFICATION:	DRAWING AND INSULATING NONFERROUS WIRE [3357]
		IRS NUMBER:				541237042
		STATE OF INCORPORATION:			VA
		FISCAL YEAR END:			1031

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-27022
		FILM NUMBER:		03606624

	BUSINESS ADDRESS:	
		STREET 1:		5290 CONCOURSE DR
		CITY:			ROANOKE
		STATE:			VA
		ZIP:			24019
		BUSINESS PHONE:		5402650690

	MAIL ADDRESS:	
		STREET 1:		5290 CONCOURSE DRIVE
		CITY:			ROANOKE
		STATE:			VA
		ZIP:			24019
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>d10q.htm
<DESCRIPTION>FORM 10-Q DATED JANUARY 31, 2003
<TEXT>
<HTML><HEAD>
<TITLE>Form 10-Q dated January 31, 2003</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="4" COLOR="#000000"><B>UNITED
STATES </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="4" COLOR="#000000"><B>SECURITIES AND EXCHANGE COMMISSION </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Washington, D.C. 20549 </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="4" COLOR="#000000"><B>FORM 10-Q </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>[ X ]&nbsp;&nbsp;&nbsp;&nbsp;QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>OF THE SECURITIES EXCHANGE ACT OF 1934 </B></FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">For the quarterly period ended January 31, 2003 </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>OR </B></FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>[&nbsp;&nbsp;&nbsp;&nbsp;]&nbsp;&nbsp;&nbsp;&nbsp;TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>OF THE SECURITIES EXCHANGE ACT OF 1934 </B></FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">For the transition period from
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> to <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Commission file number 0-27022 </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="4" COLOR="#000000"><B>OPTICAL CABLE CORPORATION </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2" COLOR="#000000">(Exact name of registrant as specified in its charter) </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD VALIGN="bottom" WIDTH="59%" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Virginia</B></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="40%" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>54-1237042</B></FONT></P></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center" WIDTH="59%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">(State&nbsp;or&nbsp;other&nbsp;jurisdiction&nbsp;of&nbsp;incorporation or organization)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" WIDTH="40%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(I.R.S. Employer Identification&nbsp;No.)</FONT></P></TD></TR>
</TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>5290
Concourse Drive </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Roanoke, Virginia 24019 </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(Address of principal executive offices, including zip code) </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>(540) 265-0690 </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">(Registrant&#146;s telephone number, including area code) </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2" COLOR="#000000">Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(1)&nbsp;&nbsp;Yes
<U>&nbsp;X&nbsp;</U>&nbsp;&nbsp;No <U>&nbsp;&nbsp;&nbsp;&nbsp;</U>&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;Yes <U>&nbsp;X&nbsp;</U>&nbsp;&nbsp;No <U>&nbsp;&nbsp;&nbsp;&nbsp;</U> </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the
Exchange Act). </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Yes&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;</U>&nbsp;&nbsp;&nbsp;&nbsp;No <U>&nbsp;X&nbsp;</U> </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">As of March 12, 2003, 5,452,785 shares of the
registrant&#146;s Common Stock, no par value, were outstanding. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>



<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>
<A NAME="toc"></A>OPTICAL CABLE CORPORATION </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Form 10-Q Index </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Three Months Ended January 31, 2003 </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT
SIZE="1">&nbsp;</FONT></P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Page</B></FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="7%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>PART&nbsp;I.</B></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3" WIDTH="81%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>FINANCIAL INFORMATION</B></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="6%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Item&nbsp;1.</B></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="81%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Financial Statements</B></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="81%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">
<A HREF="#tx546_1">Condensed Balance Sheets &#150; January 31, 2003 and October 31, 2002 </A></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="81%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">
<A HREF="#tx546_2">Condensed Statements of Operations &#150; Three Months Ended January 31, 2003 and 2002</A></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="81%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">
<A HREF="#tx546_3">Condensed Statement of Changes in Shareholders&#146; Equity &#150; Three Months Ended January 31, 2003</A></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="81%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">
<A HREF="#tx546_4">Condensed Statements of Cash Flows &#150; Three Months Ended January 31, 2003 and 2002</A></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="81%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">
<A HREF="#tx546_5">Condensed Notes to Condensed Financial Statements</A></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="6%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Item&nbsp;2.</B></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="81%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>
<A HREF="#tx546_6">Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations </A></B></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="6%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Item&nbsp;3.</B></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="81%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>
<A HREF="#tx546_7">Quantitative and Qualitative Disclosures About Market Risk </A></B></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="6%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Item&nbsp;4.</B></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="81%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>
<A HREF="#tx546_8">Controls and Procedures</A></B></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="7%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>PART&nbsp;II.</B></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3" WIDTH="81%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>OTHER INFORMATION</B></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="6%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Item&nbsp;1.</B></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="81%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>
<A HREF="#tx546_9">Legal Proceedings</A></B></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="6%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Item&nbsp;2.</B></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="81%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>
<A HREF="#tx546_10">Changes in Securities and Use of Proceeds</A></B></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="6%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Item&nbsp;6.</B></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="81%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>
<A HREF="#tx546_11">Exhibits and Reports on Form 8-K</A></B></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="5" WIDTH="81%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>
<A HREF="#tx546_12">SIGNATURES</A></B></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="5" WIDTH="81%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>
<A HREF="#tx546_13">CERTIFICATION</A></B></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
</TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>



<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>PART I.
FINANCIAL INFORMATION </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Item 1.
&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>
<A NAME="tx546_1"></A>OPTICAL CABLE CORPORATION </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Condensed Balance Sheets </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">

<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>(Unaudited)</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD COLSPAN="2"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="bottom" WIDTH="77%" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Assets</B></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>January 31,</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>2003</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>October 31, 2002</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Current assets:</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Cash</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"> &#151;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">746,771</FONT></P></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Trade accounts receivable, net of allowance for doubtful accounts of $590,355 at January
31, 2003 and $476,124 at October 31, 2002</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">8,015,553</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">7,795,058</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Income taxes refundable</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">908,728</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">840,013</FONT></P></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Other receivables</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">305,639</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">285,639</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Due from employees, net of allowance for uncollectible advances of
$59,078</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">29,892</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">31,467</FONT></P></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Inventories</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">8,924,913</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">9,412,130</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Prepaid expenses</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">414,222</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">492,201</FONT></P></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Deferred income taxes</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">177,684</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">180,144</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:15%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Total current assets</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">18,776,631</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">19,783,423</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Other assets, net</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">276,151</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">261,344</FONT></P></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Property and equipment, net</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">11,601,559</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">11,907,567</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Deferred income taxes</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">723,590</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">721,755</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:15%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Total assets</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">31,377,931</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">32,674,089</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:19%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Liabilities and Shareholders&#146; Equity</B></FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Current liabilities:</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Accounts payable and accrued expenses</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">3,160,054</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">2,912,177</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Accrued compensation and payroll taxes</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">505,250</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">859,899</FONT></P></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Accrued shareholder litigation settlement expense</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">610,427</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">531,643</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:15%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Total current liabilities</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">4,275,731</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">4,303,719</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Note payable to bank</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">2,076,831</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Other liabilities</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">166,383</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:15%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Total liabilities</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">6,352,562</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">4,470,102</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Shareholders&#146; equity:</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Preferred stock, no par value, authorized 1,000,000 shares; none issued and
outstanding</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Common stock, no par value, authorized 50,000,000 shares; issued and outstanding
5,452,785 shares at January 31, 2003 and 6,928,652 at October 31, 2002</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">55,313</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Retained earnings</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">25,025,369</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">28,148,674</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:15%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Total shareholders&#146; equity</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">25,025,369</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">28,203,987</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Commitments and contingencies</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:15%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Total liabilities and shareholders&#146; equity</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">31,377,931</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">32,674,089</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD></TR>
</TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">See accompanying
condensed notes to condensed financial statements. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">2 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>
<A NAME="tx546_2"></A>OPTICAL CABLE CORPORATION </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Condensed Statements of Operations </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(Unaudited) </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">

<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Three Months Ended January&nbsp;31,</B></FONT></P><HR SIZE="1" NOSHADE
COLOR="#000000"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>2003</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>2002</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Net sales</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">9,746,015</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">11,391,421</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Cost of goods sold</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">6,248,180</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">6,895,184</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:15%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Gross profit</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">3,497,835</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">4,496,237</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Selling, general and administrative expenses</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">3,293,106</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">3,506,417</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Shareholder litigation settlement expense</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">291,400</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Loss on impairment of machinery and equipment</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">117,337</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:15%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Income (loss) from operations</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(204,008</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">989,820</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Other income (expense):</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Interest income</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">4,710</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">7,152</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Interest expense</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(34,850</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(64,704</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Other, net</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">13,827</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">184</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:15%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Other expense, net</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(16,313</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(57,368</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:15%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Income (loss) before income tax expense</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(220,321</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">932,452</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Income tax expense (benefit)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(68,299</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">328,000</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:15%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Net income (loss)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(152,022</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">604,452</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="3" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="3" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Net income (loss) per share:</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Basic and diluted</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(0.02</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">0.09</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="3" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="3" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
</TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">See accompanying
condensed notes to condensed financial statements. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">3 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>
<A NAME="tx546_3"></A>OPTICAL CABLE CORPORATION </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Condensed Statement of Changes in Shareholders&#146; Equity </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(Unaudited) </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">

<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="13" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Three Months Ended January 31, 2003</B></FONT></P><HR SIZE="1" NOSHADE
COLOR="#000000"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Common Stock</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ROWSPAN="2" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Retained Earnings</B></FONT></P><HR SIZE="1" NOSHADE
COLOR="#000000"></TD>
<TD VALIGN="bottom" ROWSPAN="2"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ROWSPAN="2" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Total Shareholders&#146; Equity</B></FONT></P><HR SIZE="1" NOSHADE
COLOR="#000000"></TD>
<TD VALIGN="bottom" ROWSPAN="2"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Shares</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Amount</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="59%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Balances at October 31, 2002</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">6,928,652</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">55,313</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">28,148,674</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">28,203,987</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="59%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Stock-based compensation</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">6,311</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">6,311</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="59%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Repurchase of common stock (at cost)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(1,475,867</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(61,624</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(2,971,283</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(3,032,907</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="59%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Net loss</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(152,022</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(152,022</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="59%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Balances at January 31, 2003</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">5,452,785</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">25,025,369</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">25,025,369</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="3" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="3" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="3" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="3" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
</TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">See accompanying
condensed notes to condensed financial statements. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">4 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>
<A NAME="tx546_4"></A>OPTICAL CABLE CORPORATION </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Condensed Statements of Cash Flows </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(Unaudited) </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">

<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Three Months Ended<BR>January 31,</B></FONT></P><HR SIZE="1" NOSHADE
COLOR="#000000"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>2003</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>2002</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Cash flows from operating activities:</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Net income (loss)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(152,022</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">604,452</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Adjustments to reconcile net income (loss) to net cash provided by operating
activities:</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:10%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Depreciation, amortization and accretion</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">288,833</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">293,718</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:10%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Bad debt expense</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">113,437</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">270,659</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:10%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Deferred income tax expense</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">625</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">21,507</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:10%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Stock-based compensation expense</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">6,311</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:10%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Shareholder litigation settlement expense</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">290,083</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:10%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Loss on impairment of machinery and equipment</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">117,337</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:10%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(Increase) decrease in:</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:15%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Trade accounts receivable</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(333,932</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">999,621</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:15%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Income taxes refundable</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(68,715</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">301,303</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:15%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Other receivables</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(20,000</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(125,400</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:15%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Due from employees</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">1,575</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">225</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:15%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Inventories</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">487,217</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">223,559</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:15%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Prepaid expenses</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">77,979</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(75,093</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:15%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Other assets</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(6,844</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:10%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Increase (decrease) in:</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:15%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Accounts payable and accrued expenses and other liabilities</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(139,437</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(346,585</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:15%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Accrued compensation and payroll taxes</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(354,649</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(250,488</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:19%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Net cash provided by operating activities</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">307,798</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">1,917,478</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Cash flows from investing activities:</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Purchase of property and equipment</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(63,339</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(124,986</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Receipt of cash surrender value of life insurance</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">367,469</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:19%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Net cash provided by (used in) investing activities</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(63,339</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">242,483</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Cash flows from financing activities:</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Proceeds from (repayment of) notes payable to bank, net</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">2,076,831</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(1,708,000</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Payments for financing costs</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(35,154</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Repurchase of common stock</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(3,032,907</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:19%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Net cash used in financing activities</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(991,230</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(1,708,000</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Net increase (decrease) in cash</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(746,771</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">451,961</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Cash at beginning of period</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">746,771</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">2,087,608</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Cash at end of period</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"> &#151;</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">2,539,569</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="3" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="3" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
</TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">See accompanying
condensed notes to condensed financial statements. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">5 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>
<A NAME="tx546_5"></A>OPTICAL CABLE CORPORATION </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Condensed Notes to Condensed Financial Statements </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Three Months Ended January 31, 2003 </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman"
SIZE="2" COLOR="#000000">(Unaudited) </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>(1)</B></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>General </B></FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">The accompanying unaudited condensed financial statements of Optical Cable Corporation (the &#147;Company&#148;) have been prepared in accordance with accounting
principles generally accepted in the United States of America for interim financial reporting information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required
by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all material adjustments (consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three months ended January 31, 2003 are not necessarily indicative of the results that may be expected for the fiscal year ending October 31, 2003. The unaudited condensed financial
statements and condensed notes are presented as permitted by Form 10-Q and do not contain certain information included in the Company&#146;s annual financial statements and notes. For further information, refer to the financial statements and notes
thereto included in the Company&#146;s annual report on Form 10-K for the fiscal year ended October 31, 2002. </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>(2)</B></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Allowance for Doubtful Accounts for Trade Accounts Receivable </B></FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Trade accounts receivable are recorded at the invoiced amount and do not typically bear interest. The allowance for doubtful accounts is the Company&#146;s best
estimate of the amount of probable credit losses in the Company&#146;s existing accounts receivable. The Company reviews outstanding trade accounts receivable at the end of each quarter and records allowances for doubtful accounts as deemed
appropriate for (i) certain individual customers and (ii) for all other trade accounts receivable in total not specifically reviewed. In determining the amount of allowance for doubtful accounts to be recorded for individual customers, the Company
considers the age of the receivable, the financial stability of the customer, discussions that may have occurred with the customer and management&#146;s judgment as to the overall collectibility of the receivable from that customer. In addition, the
Company establishes an allowance for all receivables that have not been individually reviewed. This general allowance for doubtful accounts is based on a percentage of total trade accounts receivable with different percentages used based on the
different age of the receivables. The percentages used are based on the Company&#146;s historical experience and management&#146;s current judgment regarding the state of the economy. Account balances are charged off against the allowance after all
means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. Also see note 10. </FONT></TD></TR></TABLE><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">A summary of changes in the allowance for doubtful accounts for trade accounts receivable for the three months ended January 31, 2003 and 2002 follows:
</FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><DIV STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="96%" BORDER="0">

<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Three Months Ended January 31,</B></FONT></P><HR SIZE="1" NOSHADE
COLOR="#000000"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>2003</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>2002</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Balance at beginning of period</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">476,124</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">572,853</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Bad debt expense</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">113,437</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">270,659</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Losses charged to allowance</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(4,030</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Recoveries added to allowance</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">794</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="78%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Balance at end of period</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">590,355</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">839,482</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="3" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
</TABLE></DIV><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">(Continued) </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">6 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>OPTICAL CABLE CORPORATION </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Condensed Notes to Condensed Financial Statements </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Three
Months Ended January 31, 2003 </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(Unaudited) </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>(3)</B></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Inventories </B></FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Inventories as of January 31, 2003 and October 31, 2002 consist of the following: </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><DIV STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="96%" BORDER="0">

<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>January 31, 2003</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>October 31, 2002</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="75%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Finished goods</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">4,397,481</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">4,329,080</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="75%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Work in process</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">1,182,471</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">1,399,575</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="75%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Raw materials</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">3,291,101</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">3,616,306</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="75%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Production supplies</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">53,860</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">67,169</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">8,924,913</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">9,412,130</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD></TR>
</TABLE></DIV><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>(4)</B></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Product Warranties </B></FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">The Company generally warrants its products against certain manufacturing and other defects in material and workmanship. These product warranties are provided for
specific periods of time and are applicable assuming the product has not been subjected to misuse, improper installation, negligence, or shipping damage. As of January 31, 2003 and October 31, 2002, the Company has accrued $125,000 and $100,000,
respectively, for estimated product warranty claims in the accompanying condensed balance sheets included in accounts payable and accrued expenses. The accrued product warranty costs are based primarily on historical experience of actual warranty
claims as well as current information on repair costs. Warranty claims expense for the three months ended January 31, 2003 totaled $25,000. </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">The following table summarizes the changes in the Company&#146;s accrual for product warranties during the three months ended January 31, 2003:
</FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><DIV STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="96%" BORDER="0">

<TR>
<TD VALIGN="top" WIDTH="87%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Balance at beginning of period</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">100,000</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="87%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Liabilities accrued for warranties issued during the period</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">57,169</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="87%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Warranty claims paid during the period</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(41,169</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="87%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Changes in liability for pre-existing warranties during the period</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">9,000</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="87%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Balance at end of period</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">125,000</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="3" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
</TABLE></DIV><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>(5)</B></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Warrants </B></FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Warrants to purchase shares of the Company&#146;s common stock at an exercise price of $4.88 per share are in the process of being issued. The warrants are being
issued to class members defined in a consolidated class action law suit in accordance with the settlement agreement approved by the United States District Court for the Western District of Virginia on September 23, 2002. Each warrant entitles the
holder to purchase one share of the Company&#146;s common stock. The total number of warrants to be issued in accordance with the settlement agreement is 250,000. During the three months ended January 31, 2003, 75,000 warrants had been issued. The
warrants expire October 24, 2007. </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">The fair value of the 250,000 warrants, totaling $610,427, is recorded as accrued shareholder litigation settlement expense as of January 31, 2003. Generally
accepted accounting principles require the fair value to be adjusted at each reporting period until such time that the warrants are issued and the underlying shares of common stock to be issued on exercise are registered. At such time, the fair
value of the warrants will be reclassified to permanent equity. </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%" ALIGN="right"><FONT
FACE="Times New Roman" SIZE="2" COLOR="#000000">(Continued) </FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">7 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>OPTICAL CABLE CORPORATION </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Condensed Notes to Condensed Financial Statements </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Three
Months Ended January 31, 2003 </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(Unaudited) </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">During the three months ended January 31, 2003, the Company recorded an additional $290,000 of expense resulting from the variable accounting treatment of the
warrants. Additionally, we will recognize related income or expense in future periods&#146; statements of operations until the previously noted requirements are met. Such recognized income or expense will be a non-cash item and have no impact on our
net cash flow. The warrant expense portion of the accrued shareholder litigation settlement expense is calculated using the Black-Scholes pricing model and, as of January 31, 2003, the closing price of our common stock of $3.22 per share on that day
was used in that calculation. </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>(6)</B></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Note Payable to Bank </B></FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">The Company has a revolving credit facility with Wachovia Bank, National Association. The three-year credit facility provides up to a maximum of $25 million and is
collateralized by all of the Company&#146;s tangible and intangible assets. Borrowings under the credit facility are subject to certain coverage ratios, advance limits and qualifications that are applied to the Company&#146;s accounts receivable,
inventory and fixed assets. The Company&#146;s ability to access the full amount of the credit facility depends on the future growth of the Company&#146;s borrowing base. As of January 31, 2003, the Company had outstanding borrowings under the
credit facility in the amount of $2,076,831, with $6,884,077 unused and available. The outstanding balance on the credit facility has been reflected as noncurrent in the accompanying condensed balance sheet as of January 31, 2003 based on the
scheduled maturity of the credit facility in April 2005. As of October 31, 2002, the Company had no outstanding borrowings under the credit facility. </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">The credit facility bears interest at one-half of one percent (0.50%) per annum above the prime rate (4.75% as of January 31, 2003). During the three months ended
January 31, 2003, the Company met certain fixed charge coverage ratio requirements and the interest rate on the credit facility was reduced from three-quarters of 1% (0.75%) per annum above the prime rate (5.50% as of October 31, 2002) in accordance
with the loan and security agreement. The facility also provides a LIBOR based rate at the Company&#146;s option. </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>(7)</B></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Stock Option Plan and Other Stock Options </B></FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">The Company applies the provisions of Accounting Principles Board (APB) Opinion No. 25, <I>Accounting for Stock Issued to Employees</I>, and related interpretations
for employee stock option grants and SFAS No. 123, <I>Accounting for Stock-Based Compensation </I>and EITF Issue No. 96-18<I>, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling,
Goods or Services</I>, for nonemployee stock option grants. Stock option activity during the three months ended January 31, 2003 is as follows: </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><DIV
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="96%" BORDER="0">

<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Number&nbsp;of Shares</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Weighted-Average Exercise Price</B></FONT></P><HR SIZE="1" NOSHADE
COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="73%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Balance at October 31, 2002</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">415,308</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">20.13</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="73%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Granted</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="73%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Exercised</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="73%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Forfeited</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(8,587</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">29.21</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="73%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Balance at January 31, 2003</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">406,721</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">19.93</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="3" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
</TABLE></DIV><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">(Continued) </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">8 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>OPTICAL CABLE CORPORATION </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Condensed Notes to Condensed Financial Statements </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Three
Months Ended January 31, 2003 </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(Unaudited) </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">The Company adopted on March 1, 1996 a stock incentive plan which is called the Optical Cable Corporation 1996 Stock Incentive Plan (the Plan). The Plan is intended
to provide a means through the use of stock incentives that the Company can increase the personal financial interest employees have in the success of the Company, thereby stimulating the efforts of these employees and strengthening their desire to
remain with the Company. The Company has reserved 750,000 shares of common stock for issuance pursuant to incentive awards under the Plan. As of January 31, 2003, there were approximately 265,000 additional shares available for grant under the Plan.
</FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>(8)</B></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Net Income (Loss) Per Share </B></FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Basic net income (loss) per share excludes dilution and is computed by dividing income (loss) available to common shareholders by the weighted-average number of
common shares outstanding for the period. Diluted net income (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the
issuance of common stock that then shared in the net income (loss) of the Company. </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">The following is a reconciliation of the numerators and denominators of the net income (loss) per share computations for the periods presented:
</FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><DIV STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="96%" BORDER="0">

<TR>
<TD VALIGN="bottom" WIDTH="67%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Three Months Ended January 31, 2003</B></FONT></P><HR WIDTH="217" SIZE="1" NOSHADE ALIGN="left"
COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Net Loss (Numerator)</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Shares (Denominator)</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Per&nbsp;Share Amount</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="67%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Basic net loss per share</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(152,022</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="11%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">6,575,727</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(0.02</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="3" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="67%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Effect of dilutive stock options</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="11%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="67%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Diluted net loss per share</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(152,022</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="11%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">6,575,727</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(0.02</FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="3" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="3" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
</TABLE></DIV><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><DIV STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="96%" BORDER="0">

<TR>
<TD VALIGN="bottom" WIDTH="67%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Three Months Ended January 31, 2002</B></FONT></P><HR WIDTH="217" SIZE="1" NOSHADE ALIGN="left"
COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Net Income (Numerator)</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Shares (Denominator)</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Per&nbsp;Share Amount</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="67%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Basic net income per share</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">604,452</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="11%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">6,928,910</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">0.09</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="67%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Effect of dilutive stock options</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="11%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">3,037</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="67%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Diluted net income per share</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">604,452</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="11%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">6,931,947</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">0.09</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD></TR>
</TABLE></DIV><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Stock options that could potentially dilute net income (loss) per share in the future that were not included in the computation of diluted net income (loss) per
share (because to do so would have been antidilutive for the periods presented) totaled 406,721 and 95,445 for the three months ended January 31, 2003 and 2002, respectively. Likewise, 75,000 warrants that could potentially dilute net income (loss)
per share in the future were not included in the computation of diluted net income (loss) per share because to do so would have been antidilutive for the three months ended January 31, 2003. </FONT></TD></TR></TABLE><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>(9)</B></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Shareholders&#146; Equity </B></FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">On January 10, 2003, the Company repurchased 1,475,867 shares, or 21.3% of its outstanding common stock, no par value, in a privately negotiated transaction. The
cost of the transaction, including brokerage fees, totaled $3,032,907. After the repurchase, the Company had 5,452,785 shares of common stock issued and outstanding. </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(Continued) </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">9 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>OPTICAL CABLE CORPORATION </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Condensed Notes to Condensed Financial Statements </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Three
Months Ended January 31, 2003 </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(Unaudited) </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">At a Special Meeting of Shareholders held on July 30, 2002, the Company&#146;s shareholders approved a 1-for-8 reverse stock split of all outstanding shares of
common stock and a change in the number of authorized shares of the Company&#146;s common stock from 100 million (pre-reverse split) to 50 million. The reverse split was effective at 12:01 a.m. (eastern daylight time) on July 31, 2002, at which time
each eight shares of issued and outstanding common stock was converted into one issued and outstanding share of common stock. Fractional shares of stock were not issued as a result of the reverse stock split. Shareholders who would otherwise have
received a fractional share of common stock received an equivalent amount of cash in lieu of fractional shares, based on the average closing price of the common stock for the ten trading days prior to, but not including, the effective date of the
reverse stock split. All references to prior period share and per share data contained elsewhere in this quarterly report have been retroactively adjusted to reflect the impact of the approved reverse stock split. </FONT></TD></TR></TABLE><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>(10)</B></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Segment Information and Business and Credit Concentrations </B></FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">The Company has a single reportable segment for purposes of segment reporting pursuant to SFAS No. 131, as the Company&#146;s fiber optic cable products are similar
in nature. </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">The Company provides credit, in the normal course of business, to various commercial enterprises, governmental entities and not-for-profit organizations.
Concentration of credit risk with respect to trade receivables is limited due to the Company&#146;s large number of customers. The Company also manages exposure to credit risk through credit approvals, credit limits and monitoring procedures.
Management believes that credit risks as of January 31, 2003 and October 31, 2002 have been adequately provided for in the condensed financial statements. </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">For the three months ended January 31, 2003, 14.1% of net sales were attributable to one major domestic distributor. No single customer accounted for more than 10%
of net sales during the three months ended January 31, 2002. For the three months ended January 31, 2003 and 2002, approximately 82% and 66%, respectively, of net sales were from customers located in the United States, while approximately 18% and
34%, respectively, were from international customers. </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>(11)</B></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Loss on Impairment of Machinery and Equipment </B></FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">During the three months ended January 31, 2003, the Company recorded loss on impairment of machinery and equipment totaling $117,337 due to an automation upgrade
initiative. The impairment loss relates to certain machinery and equipment not yet placed into service that the Company anticipates will be replaced in conjunction with the automation project. The loss represents the write-off of the carrying value
of the machinery and equipment anticipated to be replaced. </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>(12)</B></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Contingencies </B></FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">On January 3, 2003, Anicom, Inc. a former customer that is in bankruptcy, filed a complaint against the Company in the United States Bankruptcy Court for the
Northern District of Illinois, Eastern Division (the Complaint). The Complaint seeks to avoid and recover certain alleged preferential payments in the </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(Continued) </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">10 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>OPTICAL CABLE CORPORATION </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Condensed Notes to Condensed Financial Statements </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Three
Months Ended January 31, 2003 </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(Unaudited) </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">approximate amount of $1,100,000. The Company has reviewed the claim with legal counsel and believes it is without merit. The Company intends to defend this claim
vigorously. Furthermore, at this time the Company believes it is unlikely that this claim will have a material adverse impact on its financial position, results of operations or cash flows. </FONT></TD></TR></TABLE><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">From time to time, the Company is involved in various other claims, legal actions and regulatory reviews arising in the ordinary course of business. In the opinion
of management, the ultimate disposition of these matters will not have a material adverse effect on the Company&#146;s financial position, results of operations or liquidity. </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">11 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>
<A NAME="tx546_6"></A>Item 2.&nbsp;&nbsp;&nbsp;&nbsp;Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Forward Looking Information </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">This Form 10-Q may contain certain &#147;forward-looking&#148; information within the meaning of the federal securities laws. The forward-looking
information may include, among other information, (i) statements concerning our 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 our expectations. 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; corporate spending on information technology; actions by competitors;
fluctuations in the price of raw materials (including optical fiber); our dependence on a single manufacturing facility; our ability to protect our proprietary manufacturing technology; market conditions influencing prices or pricing; our dependence
on a limited number of suppliers; an adverse outcome in litigation, claims and other actions, and potential litigation, claims and other actions against us; an adverse outcome in regulatory reviews and audits and potential regulatory reviews and
audits; technological changes and introductions of new competing products; 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 and subsequent military responses by the United States, and any potential future military conflicts; ability to retain key personnel; the impact of changes in accounting policies, including those by the
Securities and Exchange Commission; changes in market demand, exchange rates, productivity, weather or market and economic conditions in the areas of the world in which we operate and market our products, and our success in managing the risks
involved in the foregoing. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">We caution readers that the foregoing
list of important factors is not exclusive and we incorporate by reference those factors included in current reports on Form 8-K. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Amounts presented in the following discussion have been rounded to the nearest hundred thousand, unless the amounts are less than one million, in which
case the amounts have been rounded to the nearest thousand. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000"><B>Overview </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">We are a leading manufacturer
of a broad range of tight-buffer fiber optic cables primarily for the local area network and premise markets, often referred to as the enterprise market. Our fiber optic cables are well-suited for use in short to moderate distance applications such
as the connection of metropolitan, access and enterprise networks. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">We pioneered the design and production of special tight-buffer fiber optic cables for the most demanding military field applications in the early 1980&#146;s&#150;applications requiring rugged, flexible and compact fiber optic
cables. At our ISO 9001 registered facility in Roanoke, Virginia, we manufacture a broad range of fiber optic cables for &#147;high bandwidth&#148; transmission of data, video, and audio communications over short to moderate distances. Our cables
can be used both indoors and outdoors and utilize a unique tight-buffer coating process and cable construction that provide excellent mechanical and environmental protection for each optical fiber. Our current portfolio of products is built on the
evolution and refinement of the original fundamental technology into a comprehensive and versatile product line designed to provide end-users with significant value and performance. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Our fiber optic cables are easy and economical to install, provide a high degree of reliability and offer outstanding
performance characteristics. We have designed and implemented an efficient and highly automated manufacturing process based on proprietary technologies. This enables us to produce high quality indoor/outdoor tight-buffer fiber optic cable rapidly
and cost efficiently. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">12 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">We sell our products
internationally and domestically through our sales force to our customers, which include original equipment manufacturers, major distributors, regional distributors and various smaller distributors. International net sales were 18.2% and 34.1% for
the quarters ending January 31, 2003 and 2002, respectively. Substantially all of our international sales are denominated in U.S. dollars. The lower percentage of international net sales in the first quarter of 2003 compared to the first quarter of
2002 resulted primarily from a large order of one international customer in 2002 that did not recur in 2003. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2" COLOR="#000000">Net sales consist of gross sales of products less discounts, refunds and returns. Revenue is recognized at the time of product shipment or delivery to the customer (including distributors) provided
that the customer takes ownership and assumes risk of loss, based on shipping terms. During the first quarter of 2003, 14.1% of our net sales were attributable to one major domestic distributor. No single customer accounted for more than 10% of our
net sales during the first quarter of 2002. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">A significant
percentage of the selling price of our fiber optic cable is based on the cost of raw materials used. Single-mode fiber is less expensive than multimode fiber, and consequently single-mode fiber optic cables have a lower per unit selling price than
comparable multimode fiber optic cables. We believe that the metropolitan and access markets are predominantly the users of single-mode fiber optic cable, and that increasingly, single-mode fiber optic cable is also being used for other short to
moderate distance installations where higher bandwidth is required. To the extent that our sales mix shifts toward single-mode cables, we will have to increase the volume of our sales to maintain our current level of net sales. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Cost of goods sold consists of the cost of materials, compensation costs,
product warranty costs and overhead related to our manufacturing operations. The largest percentage of costs included in cost of goods sold is attributable to costs of materials which are variable costs as opposed to fixed costs. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Selling, general and administrative expenses consist of the compensation costs
for sales and marketing personnel, shipping costs, travel expenses, customer support expenses, trade show expenses, advertising, bad debt expense, the compensation cost for administration, finance and general management personnel, as well as legal
and accounting fees and costs incurred to settle litigation or claims and other actions against us, excluding legal and accounting fees and other costs reflected as shareholder litigation settlement expense. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Results of Operations </B></FONT></P><P
STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">The following table sets forth selected line items from our statements of
operations as a percentage of net sales for the periods indicated: </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">

<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="4" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Three&nbsp;Months&nbsp;Ended January&nbsp;31,</B></FONT></P><HR SIZE="1" NOSHADE
COLOR="#000000"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>2003</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>2002</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="75%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Net sales</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">100.0</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">%</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">100.0</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">%</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="75%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Cost of goods sold</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">64.1</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">60.5</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="75%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Gross profit</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">35.9</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">39.5</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="75%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Selling, general and administrative expenses</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">33.8</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">30.8</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="75%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Shareholder litigation settlement expense</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">3.0</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="75%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Loss on impairment of machinery and equipment</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">1.2</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="75%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Income (loss) from operations</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(2.1</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">8.7</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="75%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Other expense, net</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(0.2</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(0.5</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="75%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Income (loss) before income tax expense (benefit)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(2.3</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">8.2</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="75%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Income tax expense (benefit)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(0.7</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">2.9</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="1" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="75%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Net income (loss)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(1.6</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">)%</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="right" COLSPAN="1" VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">5.3</FONT></P></TD>
<TD COLSPAN="1" NOWRAP VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">%</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="3" NOSHADE ALIGN="left" COLOR="#ffffff"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD><HR WIDTH="0" SIZE="3" NOSHADE ALIGN="left" COLOR="#ffffff"></TD></TR>
</TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">13 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><I>Net Sales </I></FONT></P><P
STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Net sales decreased 14.4% to $9.7 million for the first quarter of fiscal
year 2003 from $11.4 million for the same period in 2002. Net sales for the first quarter of fiscal year 2003 were lower than net sales of $10.6 million for the fourth quarter of fiscal year 2002 and equal to net sales of $9.7 million for the third
quarter of fiscal year 2002. The decrease in net sales during first quarter 2003, when compared to the same period last year, was a result of economic weakness that particularly affected the technology and fiber optic cable sectors, and that
significantly affected our net sales since the second half of fiscal year 2001. While we believe net sales have begun to stabilize during the second half of fiscal year 2002, we expect to return to the historical patterns of seasonality before the
technology sector bubble and subsequent bust, namely relatively lower net sales during the first two quarters of each fiscal year when compared to average quarterly net sales for the fiscal year, and relatively higher net sales during the last two
quarters of each fiscal year when compared to average quarterly net sales for the fiscal year. Total fiber meters shipped decreased 11.2% to 33.4 million fiber meters shipped in the first quarter of fiscal year 2003 from 37.7 million fiber meters
shipped for the same period in 2002. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">During the first quarter of
2003, we experienced an increase in product mix for cable containing multimode fiber (which typically has a higher relative sales price), compared to cable containing single-mode fiber (which typically has a lower relative sales price), when
compared to the first quarter of 2002. The percentage of multimode fiber meters shipped to total fiber meters shipped during the first quarter 2003 was 75.2% compared to 63.4% during the first quarter of 2002; however, the impact of the decreased
market demand due to overall economic conditions of the industry outweighed the impact on sales resulting from the change in product mix. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Cable containing multimode fiber is generally used for communications over shorter distances where the higher bandwidth capacity and the higher
transmission equipment cost of single-mode fiber is not required. Multimode fiber optic cable is often used in datacom applications. Cable containing single-mode fiber is generally used for communications over longer distances and where higher
bandwidth capacity is required. Single-mode fiber optic cable is often used in telecom, CATV and various Internet applications. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><I>Gross Profit </I></FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Gross profit decreased 22.2% to $3.5 million for the first quarter of 2003 from $4.5 million for the same period in 2002. Gross profit margin, or gross
profit as a percentage of net sales, decreased to 35.9% in first quarter 2003 from 39.5% in first quarter 2002, as overall production costs did not decrease at the same relative rate as the decrease in net sales. Although raw material cost per fiber
meter shipped decreased during the first quarter of 2003 compared to the first quarter of 2002, manufacturing overhead costs and labor costs per fiber meter shipped remained relatively stable in the first quarter of 2003 compared to the first
quarter of 2002. By comparison, the gross profit margin for the fourth of quarter 2002 was 34.8%. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2" COLOR="#000000"><I>Selling, General and Administrative Expenses </I></FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2" COLOR="#000000">Selling, general and administrative expenses as a percentage of net sales were 33.8% in the first quarter of 2003 compared to 30.8% in the first quarter of 2002. The higher percentage in first quarter
2003 reflects the fact that net sales for the quarter decreased 14.4% compared to the same period last year, while selling, general and administrative expenses only decreased 6.1% compared to the first quarter of 2002. The decrease in selling,
general and administrative expenses during first quarter 2003 compared to the same period last year is explained by a number of factors including (i) decreases in sales commissions and shipping costs due to decreased net sales, (ii) decreases in
advertising and trade shows expense as a result of attempts to streamline our marketing and advertising efforts, and (iii) decreases in bad debt expense and legal fees (excluding those fees related to the shareholder litigation). These decreases
were partially offset by increases </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">in salaries and related human resources expenses resulting from successful efforts to fill newly created
positions in sales and marketing. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><I>Shareholder Litigation
Settlement Expense </I></FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">We recorded a charge during fiscal year
2002 in the amount of $997,000 representing the estimated cost of the settlement of a consolidated shareholder class action lawsuit and related professional fees incurred during fiscal year 2002, net of insurance proceeds; however, there was no
charge related to the shareholder litigation in the first quarter of 2002. Of the total amount expensed during fiscal year 2002, approximately $320,000 represented the fair value of the warrants to purchase 250,000 shares of our common stock at an
exercise price of $4.88 per share to be issued in connection with the settlement of the shareholder litigation. Generally accepted accounting principles require the fair value to be adjusted at each reporting period until such time that the warrants
are issued and the underlying shares of common stock to be issued on exercise are registered. During the first quarter of fiscal year 2003, we recognized an additional $290,000 of expense resulting from the variable accounting treatment of the
warrants. Additionally, we will recognize related income or expense in future periods&#146; statements of operations until the previously noted requirements are met. Such recognized income or expense will be a non-cash item and have no impact on our
net cash flow. The warrant expense portion of the accrued shareholder litigation settlement expense is calculated using the Black-Scholes pricing model and, as of January 31, 2003, the closing price of our common stock of $3.22 per share on that day
was used in that calculation. The shareholder lawsuit is described in more detail in &#147;Liquidity and Capital Resources&#148; below. Also see &#147;Item 3 - Quantitative and Qualitative Disclosures About Market Risk&#148; in Part 1 of this Form
10-Q for a discussion of the potential non-cash impact on future financial results. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2" COLOR="#000000"><I>Loss on Impairment of Machinery and Equipment </I></FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">During the first quarter of fiscal year 2003, we recorded loss on impairment of machinery and equipment totaling $117,000 due to an automation upgrade initiative. The impairment loss relates to certain machinery and equipment not yet
placed into service that the Company anticipates will be replaced in conjunction with the automation project. The loss is a non-cash item that represents the write-off of the carrying value of the machinery and equipment anticipated to be replaced.
There was no such impairment loss during the first quarter of fiscal year 2002. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000"><I>Other Income (Expense) </I></FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Other expense,
net decreased to $16,000 in the first quarter of 2003 from $58,000 in the first quarter of 2002. The decrease was primarily due to reduced interest expense when comparing the first quarter of 2003 to the first quarter of 2002. The lower interest
expense results from lower amounts payable under our new credit facility during the first quarter of 2003 compared to amounts payable under our former credit facilities during the first quarter of 2002. See also &#147;Liquidity and Capital
Resources&#148; for further discussion of our revolving credit facility. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000"><I>Income (Loss) Before Income Tax Expense (Benefit) </I></FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">We incurred a $220,000 loss before tax benefit for the first quarter of fiscal year 2003 whereas we reported income before tax expense of $932,000 for the first quarter of fiscal year 2002. This change was primarily due to a decrease
in gross profit of $998,000 and the two non-cash charges recorded during the first quarter of fiscal year 2003 described above under &#147;Shareholder Litigation Settlement Expense&#148; and &#147;Loss on Impairment of Machinery and Equipment,&#148;
partially offset by the decrease in selling, general and administrative expenses of $213,000. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><I>Income Tax Expense
(Benefit) </I></FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Income tax benefit totaled $68,000 for the first
quarter of fiscal year 2003 compared to income tax expense of $328,000 for the first quarter of fiscal year 2002. This change was due primarily to the fact that we incurred a loss before tax benefit for the first quarter of fiscal year 2003 compared
to income before tax expense for the first quarter of fiscal year 2002. Additionally, the amounts reflect a change in our expected effective tax rate for 2003 compared to 2002. Our effective tax rate was 31.0% in the first quarter of 2003 compared
to 35.2% in the first quarter of 2002. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Fluctuations in our
effective tax rates are due primarily to the amount and timing of the tax benefits related to our Extraterritorial Income Exclusion which exempts from federal income taxation a portion of the net profit realized from sales outside of the United
States of products manufactured in the United States. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><I>Net
Income (Loss) </I></FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Net loss for the first quarter of 2003 was
$152,000 compared to net income of $604,000 for the first quarter of 2002. This change was due primarily to the fact that we incurred a loss before tax benefit for the first quarter of fiscal year 2003 compared to income before tax expense for the
first quarter of fiscal year 2002, partially offset by the recognition of income tax benefit in the first quarter of 2003 compared to income tax expense during the first quarter of 2002. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Financial Condition </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Total assets decreased $1.3 million, or 4.0%, to $31.4 million at January 31, 2003, from $32.7 million at October 31, 2002. This decrease was primarily
due to a $747,000 decrease in cash resulting from the use of cash on hand to repurchase 21.3% of our outstanding common stock during the first quarter of 2003, a $487,000 decrease in inventories resulting from continuing efforts to appropriately
manage inventory levels, and a $306,000 decrease in property and equipment, net, of which $117,000 relates to the loss on impairment of machinery and equipment, partially offset by a $220,000 increase in trade accounts receivable, net. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Total liabilities increased $1.9 million, or 42.1%, to $6.4 million at January
31, 2003, from $4.5 million at October 31, 2002. This increase was primarily due to a $2.1 million increase in note payable to our bank under our line of credit. The increase in note payable was due to the use of proceeds from borrowings against the
line of credit to repurchase 21.3% of our outstanding common stock during the first quarter of 2003. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2" COLOR="#000000">Total shareholders&#146; equity at January 31, 2003 decreased $3.2 million, or 11.3% in the first quarter of 2003. The decrease resulted primarily from the repurchase of 21.3% of our outstanding common
stock during the first quarter of 2003. The repurchased common stock was retired. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2" COLOR="#000000"><B>Liquidity and Capital Resources </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">In addition to the repurchase of 21.3% of our outstanding common stock during the first quarter of 2003, our primary capital needs have been to fund working capital requirements and capital expenditures. Our primary source of capital
for these purposes has been cash provided from operations and borrowings under our bank line of credit described below. The outstanding balance under our line of credit totaled $2.1 million at January 31, 2003, an increase of $2.1 million from
October 31, 2002. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">We had no cash on hand at January 31, 2003, a
decrease of $747,000 compared to October 31, 2002. The decrease in cash in the first quarter of 2003 was primarily due to net cash used in financing activities of $991,000 and the purchase of property and equipment totaling $63,000, partially offset
by net cash provided by operating activities of $308,000. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">We have entered into an
amended and restated supply agreement to purchase raw optical fiber from one supplier. Additionally, we have amended a supply agreement to purchase raw optical fiber with a second supplier. While this amended agreement sets forth certain quantities
to be purchased for calendar years 2003, 2004 and 2005, it allows carryover of the purchase commitment to future years without penalty in the event the target quantities in any year are not met; provided that the aggregate amount of the purchase
commitment under the amended supply agreement must be satisfied by December 31, 2005. Alternative suppliers exist that could provide this material at a similar cost in the event these suppliers are unable or unwilling to perform under the contracts.
See &#147;Contractual Obligations and Commitments&#148; below. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">On January 31, 2003, we had working capital of $14.5 million, compared to $15.5 million as of October 31, 2002, an decrease of $1.0 million. The ratio of current assets to current liabilities as of January 31, 2003, was 4.4 to 1,
compared to 4.6 to 1 as of October 31, 2002. The decrease in working capital during the first quarter of 2003 was primarily caused by a $747,000 decrease in cash and a $487,000 decrease in inventories partially offset by a $220,000 decrease in trade
accounts receivable, net and a $107,000 decrease in accounts payable, accrued expenses and accrued compensation and payroll taxes. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Net cash provided by operating activities was $308,000 in the first quarter of 2003, compared to $1.9 million in the first quarter of 2002. Net cash
provided by operating activities during the first quarter of 2003 primarily resulted from certain adjustments to reconcile net loss to net cash provided by operating activities, including depreciation, amortization and accretion of $289,000, bad
debt expense of $113,000 shareholder litigation settlement expense of $291,000 and loss on impairment of machinery and equipment of $117,000. Additionally, a $487,000 decrease in inventories, partially offset by an increase of $334,000 in trade
accounts receivable contributed to net cash provided by operating activities. Net cash provided by operating activities during the first quarter of 2002 primarily resulted from cash provided by operating income, a $1.0 million decrease in trade
accounts receivable, a $224,000 decrease in inventories, and a $301,000 decrease in income taxes refundable, partially offset by a total decrease of $597,000 in accounts payable, accrued expenses (including accrued compensation and payroll taxes)
and other liabilities, and a total increase of $200,000 in other receivables and prepaid expenses. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2" COLOR="#000000">Net cash used in investing activities totaled $63,000 in the first quarter of 2003, compared to net cash provided by investing activities of $242,000 in the first quarter of 2002. Net cash used in
investing activities during the first quarter 2003 resulted entirely from purchases of property and equipment. Net cash provided by investing activities during the first quarter of 2002 primarily resulted from $367,000 provided by the receipt of the
cash surrender value of a life insurance policy on a former officer, partially offset by $125,000 in purchases of property and equipment. There are no material commitments for capital expenditures as of January 31, 2003. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Net cash used in financing activities was $991,000 in the first quarter of
2003, compared to $1.7 million in the first quarter of 2002. Net cash used in financing activities in first quarter 2003 was primarily the result of the repurchase of common stock with a total cost, including brokerage fees, of $3.0 million,
partially offset by proceeds from notes payable to our bank under our line of credit. Net cash used in financing activities in the first quarter of 2002 was the result of repayments on notes payable to our bank under our lines of credit.
</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">On April 18, 2002, we entered into a new revolving credit
facility with Wachovia Bank, National Association (formerly First Union National Bank). The new three-year credit facility provides up to a maximum of $25 million and replaced our previous $9.5 million credit facility. The facility is collateralized
by all of our tangible and intangible assets. Borrowings under the credit facility are subject to certain coverage ratios, advance limits and qualifications that are applied to our accounts receivable, inventory and fixed assets. Our ability to
access the full amount of the credit facility will depend on the future growth of our borrowing base. As of January 31, 2003, we had $2.1 million outstanding under the new credit facility, with approximately $6.9 million unused and available.
</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">The credit facility bears
interest at one-half of one percent (0.50%) per annum above the prime rate (4.75% as of January 31, 2003). During the first quarter of 2003, we met certain fixed charge coverage ratio requirements and the interest rate on the credit facility was
reduced from three-quarters of 1% (0.75%) per annum above the prime rate (5.50% as of October 31, 2003) in accordance with the loan and security agreement. The facility also provides a LIBOR based rate at our option. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">We believe that our cash flow from operations and our credit facility will be
adequate to fund our operations for at least the next twelve months. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">On September 27, 2000, the Equal Employment Opportunity Commission (&#147;EEOC&#148;) filed a lawsuit under Title VII of the Civil Rights Act against us in the United States District Court for the Western District of Virginia. The
lawsuit alleged a pattern or practice of discrimination on the bases of gender and race. The lawsuit sought injunctive and other relief and damages in an unspecified amount. On December 13, 2001, the parties reached an agreement as to the amount of
a settlement (subject to final documentation and judicial review and approval). On February 20, 2002, we reached a final settlement of the case and the court issued a Consent Decree setting forth the terms of the settlement. Pursuant to the
settlement and Consent Decree: (i) we paid $500,000 on February 22, 2002; and $175,000 on January 7, 2003; (ii) we are required to pay $175,000 in January 2004, to satisfy the gender and race class claims; (iii) we paid an additional $75,000 on
February 20, 2002 to one individual specifically named in the complaint; and (iv) we are required to spend at least $75,000 for our planned diversity, recruitment and human resource management programs over the term of the Consent Decree. We
recorded a charge in the fourth quarter of fiscal year 2001 in the amount of $902,000 representing $575,000 payable upon entry of the Consent Decree, as well as $327,000 representing the present value at that date of the two equal payments in the
amount of $175,000 payable in January 2003 and 2004. During the first quarter of 2003, we recorded accretion of the associated discount as interest expense in the amount of $3,000. The $75,000 used for our planned diversity, recruitment and human
resource management programs is being expensed as incurred. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">The
Company, our former Chairman, President and Chief Executive Officer Robert Kopstein, and two other officers and directors, Luke J. Huybrechts and Kenneth W. Harber, were named as defendants in a consolidated class action lawsuit pending in the
United States District Court for the Western District of Virginia (the &#147;Consolidated Suit&#148;). The first class action lawsuit was filed on November 26, 2001, by Charles S. Farrell, Jr., on behalf of himself and others similarly situated. The
second class action lawsuit was filed on December 14, 2001, by Lerner Group, on behalf of itself and others similarly situated. The third class action lawsuit was filed on December 27, 2001, by Richard Simone, on behalf of himself and others
similarly situated. The fourth class action lawsuit was filed on January 31, 2002 by Charles H. Yeatts, on behalf of himself and others similarly situated. In each of the four suits, the defendants in the actions were the Company, Kopstein and
various John Does (unidentified officers and/or directors of the Company during the class period described below). The United States District Court for the Western District of Virginia appointed a group of shareholders as the lead plaintiffs for the
Consolidated Suit. In the Consolidated Suit, the plaintiffs purported to represent purchasers of our common stock during the period ranging from June 14, 2000, through September 26, 2001 (the class period), and alleged that the defendants violated
Sections 10(b) and 20 of the federal Securities Exchange Act of 1934 in making certain alleged misrepresentations and/or omitting to disclose material facts. The plaintiffs in the Consolidated Suit sought compensatory damages in an unspecified
amount, as well as reasonable costs and expenses incurred in the cause of action, including attorneys&#146; fees and expert fees. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">On June 26, 2002, we issued a press release announcing that we reached a tentative agreement to resolve the Consolidated Suit. The settlement provided for
a cash payment of $700,000 and the issuance of warrants to purchase 250,000 shares (adjusted for the 1-for-8 reverse stock split approved on July 30, 2002) of our common stock at an exercise price per share of $4.88 (adjusted for the 1-for-8 reverse
stock split). </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">On July 22, 2002, the Court
entered an Order of Preliminary Approval of the proposed settlement, and on September 23, 2002, the Court entered an Order and Final Judgment, approving the settlement and dismissing the Consolidated Suit 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 became final and binding. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">We paid $500,000 of the cash portion of the settlement upon preliminary court approval. The second and final installment, totaling $200,000, of the cash
portion of the settlement was paid on November 1, 2002. The warrants will be exercisable for five years. We are in the process of registering the shares issuable upon the exercise of the warrants under the Securities Act of 1933, as amended.
</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">We recorded a charge during fiscal year 2002 in the amount of
$997,000 representing the estimated cost of the settlement and related professional fees incurred, net of insurance proceeds. Of the total amount expensed, approximately $320,000 represented the fair value of the warrants to purchase 250,000 shares
of our common stock at an exercise price of $4.88 per share issued and to be issued in connection with the settlement of the shareholder litigation. Generally accepted accounting principles require the fair value to be adjusted at each reporting
period until such time that the warrants are issued and the underlying shares of common stock to be issued on exercise are registered. Accordingly, we recognized additional related expense during the three months ended January 31, 2003 totaling
$290,000 and we will continue to recognize related income or expense in future periods&#146; statements of operations until the previously noted requirements are met. Such recognized income or expense will be a non-cash item and have no impact on
our net cash flow. The warrant expense portion of the accrued shareholder litigation settlement expense is calculated using the Black-Scholes pricing model and, as of January 31, 2003, the closing price of our common stock of $3.22 per share on that
day was used in that calculation. See &#147;Item 3&#151;Quantitative and Qualitative Disclosures About Market Risk&#148; in Part 1 of this Form 10-Q for a discussion of the potential non-cash impact on future financial results. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">On January 2, 2003, Anicom, Inc., a former customer of the Company that is in
bankruptcy, filed a complaint against us in the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division (the &#147;Complaint&#148;). The Complaint seeks to avoid and recover certain alleged preferential payments in the
approximate amount of $1,100,000. We have reviewed the claim with legal counsel and believe it is without merit. We intend to defend this claim vigorously. Furthermore, at this time we believe it is unlikely that this claim will have a material
adverse impact on our financial position, results of operations or cash flows. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">From time to time, we are involved in various other claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect
on our financial position, results of operations or liquidity. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000"><B>Seasonality </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Historically, net sales are
relatively lower in the first half of each fiscal year and relatively higher in the second half of each fiscal year, which we believe may be partially due to construction cycles and budgetary cycles of our customers. For example, an average of
approximately 45% of our net sales occurred during the first half of the fiscal year and an average of approximately 55% of our net sales occurred during the second half of the fiscal year for fiscal years 1996 through 2000. However, our sales did
not follow this pattern in fiscal year 2002 or 2001. In fiscal years 2002 and 2001, approximately 52% and 57% of our net sales occurred during the second half of the fiscal year, respectively. This shift in the pattern of our net sales appears to be
related to overall economic conditions in the industry. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">19 </FONT></P>


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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Contractual Obligations and
Commitments </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">The table below sets forth a summary of our
contractual obligations and commitments that will impact our future liquidity: </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">

<TR>
<TD VALIGN="bottom" ROWSPAN="2" WIDTH="53%" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Contractual Obligations and Commitments </B></FONT></P><HR WIDTH="244"
SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="10" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Fiscal Years Ending October 31, </B></FONT></P><HR SIZE="1" NOSHADE
COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>2003</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>2004</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>2005</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>2006</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Totals</B></FONT></P><HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="53%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Bank line of credit</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"> &#151;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="9%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="9%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">2,077,000</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="7%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="10%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">2,077,000</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="53%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Long-term optical fiber supply agreements</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">3,557,000</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="9%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">4,928,000</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="9%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">5,324,000</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="7%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">899,000</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="10%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">14,708,000</FONT></P></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="53%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">EEOC settlement</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="9%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">175,000</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="9%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="7%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&#151;</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="10%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">175,000</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" WIDTH="53%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Total</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">$</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">3,557,000</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="9%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">5,103,000</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="9%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">7,401,000</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="7%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">899,000</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right" WIDTH="10%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">16,960,000</FONT></P></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE ALIGN="right" COLOR="#000000"></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD><HR SIZE="3" NOSHADE COLOR="#000000"></TD></TR>
</TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><I>Bank Lines of Credit
</I></FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Under the terms of our loan agreement, as amended, our
credit facility has a term of three years and will expire in April 2005. See further discussion under &#147;Liquidity and Capital Resources.&#148; </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><I>Long-Term Optical Fiber Supply Agreements </I></FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">During fiscal year 2001, we entered into separate long-term supply agreements with two raw optical fiber suppliers. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">The agreement with the first optical fiber supplier has been amended and
replaced with a new agreement which expires on December&nbsp;31, 2005. The aggregate purchases required under the terms of this amended and restated agreement (subject to certain future market price adjustments) are included in the table above.
Additionally, this amended and restated agreement requires that one-half of the Company&#146;s aggregate multimode fiber purchases and one-half of the Company&#146;s aggregate single-mode fiber purchases through December 31, 2005 be purchased from
that supplier at market prices. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">The agreement with a second
optical fiber supplier has also been amended. This amended supply agreement sets forth certain quantities to be purchased for calendar years 2003, 2004 and 2005. However, the amended supply agreement allows us to carry over the purchase commitment
of any year to future years without penalty in the event the target quantities in any year are not met; provided that the aggregate amount of the purchase commitment under the amended supply agreement must be satisfied by December 31, 2005. The
aggregate purchases under this second amended supply agreement (subject to certain future market price adjustments) are included in the table above assuming the purchase target quantities are met each year as set forth in the agreement.
</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><I>Equal Employment Opportunity Commission Settlement
</I></FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">On September 27, 2000, the Equal Employment Opportunity
Commission (&#147;EEOC&#148;) filed a lawsuit under Title VII of the Civil Rights Act against us in the United States District Court for the Western District of Virginia. The lawsuit alleged a pattern or practice of discrimination on the bases of
gender and race. The lawsuit sought injunctive and other relief and damages in an unspecified amount. On December 13, 2001, the parties reached an agreement as to the amount of a settlement (subject to final documentation and judicial review and
approval). On February 20, 2002, we reached a final settlement of the case and the court issued a Consent Decree setting forth the terms of the settlement. Pursuant to the settlement and Consent Decree: (i) we paid $500,000 on February 22, 2002; and
$175,000 on January 7, 2003; (ii) we are required to pay $175,000 in January 2004, to satisfy the gender and race class claims; (iii) we paid an additional $75,000 on February 20, 2002 to one individual specifically named in the complaint; and (iv)
we are required to spend at least $75,000 for our planned diversity, recruitment and human resource management programs over the term </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">20 </FONT></P>


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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

<P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">of the Consent Decree. We recorded a charge in the fourth quarter of fiscal year 2001 in the amount of
$902,000 representing $575,000 payable upon entry of the Consent Decree, as well as $327,000 representing the present value at that date of the two equal payments in the amount of $175,000 payable in January 2003 and 2004. During the first quarter
of 2003, we recorded accretion of the associated discount as interest expense in the amount of $3,000. The $75,000 used for our planned diversity, recruitment and human resource management programs is being expensed as incurred, and is not reflected
in the Contractual Obligations and Commitments table above. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000"><B>Critical Accounting Policies </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><I>Revenue
Recognition </I></FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Revenue is recognized at the time of product
shipment or delivery to the customer (including distributors), provided that the customer takes ownership and assumes risk of loss based on shipping terms. Net sales consists of gross sales of products, less discounts, refunds and returns. We
estimate sales returns based on our analysis and judgment of historical trends, identified returns and the potential for additional returns. We also provide certain volume incentives, discounts and rebates to certain of our distributors. Payments of
any such volume incentives, discounts and rebates are reflected in net sales. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000"><I>Trade Accounts Receivable and Allowance for Doubtful Accounts </I></FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2" COLOR="#000000">In connection with the sale of our products, we have trade accounts receivable outstanding from our customers at any given time. We review outstanding trade accounts receivable at the end of each quarter and record
allowances for doubtful accounts as deemed appropriate for (i) certain individual customers and (ii) for all other trade accounts receivable in total not specifically reviewed. In determining the amount of allowance for doubtful accounts to be
recorded for individual customers, we consider the age of the receivable, the financial stability of the customer, discussions that may have occurred with the customer and our judgment as to the overall collectibility of the receivable from that
customer. In addition, we establish an allowance for all receivables that have not been individually reviewed. This general allowance for doubtful accounts is based on a percentage of total trade accounts receivable with different percentages used
based on the different age of the receivables. The percentages used are based on our historical experience and our current judgment regarding the state of the economy. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><I>Inventories </I></FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Inventories of raw materials and production supplies are stated at the lower of cost (specific identification for optical fibers and first-in, first-out
for other raw materials and production supplies) or market. Inventories of work in process and finished goods are stated at average cost, which includes raw materials, direct labor and manufacturing overhead. At the end of each quarter, we review
our inventories to ensure they are carried at no more than net realizable value. Individual inventory items are viewed and adjustments are made based on the age of the inventory and our judgment as to the salability of that inventory. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><I>Long-Lived Assets </I></FONT></P><P
STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Our property and equipment are stated at cost. Depreciation and amortization
are provided for using either the straight-line method or the declining balance method over the estimated useful lives of the assets. We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. We have no significant intangible assets recorded on our condensed balance sheets. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><I>Commitments and
Contingencies </I></FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Liabilities for loss contingencies arising
from product warranties and defects, claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. Actual
results could differ from these estimates. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Future Accounting
Considerations </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">In December 2002, the FASB issued SFAS No.
148, <I>Accounting for Stock-Based Compensation &#150; Transition and Disclosure, an amendment of FASB Statement No. 123</I>, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for
stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported results. The application of the transition provisions of SFAS No. 148 is effective for fiscal years ending after December 15, 2002. The application of the disclosure requirements is
effective for financial reports for interim periods beginning after December 15, 2002. We are currently evaluating the impact of SFAS No. 148. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">As of January 31, 2003, there are no other new accounting standards issued, but not yet adopted by us, which are expected to be applicable to our
financial position, operating results or financial statement disclosures. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">22 </FONT></P>


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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Item 3.
<A NAME="tx546_7"></A>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Quantitative and Qualitative Disclosures About Market Risk </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">We do not engage in transactions in derivative financial instruments or derivative commodity instruments. As of January 31, 2003, our
financial instruments were not exposed to significant market risk due to interest rate risk, foreign currency exchange risk, commodity price risk or equity price risk, with the exception of the portion of accrued shareholder litigation settlement
expense that represents the fair market value of the warrants issued and to be issued in connection with the settlement. As of January 31, 2003, the portion of accrued shareholder litigation settlement expense that represents the fair market value
is calculated using the Black-Scholes pricing model. Assuming a 20% increase in the market price of our common shares, we estimate the portion of accrued shareholder litigation settlement expense that represents the fair market value of the warrants
issued and to be issued in connection with the settlement would increase approximately $164,000, or 27%. Assuming a 20% decrease in the market price of our common shares, we estimate the portion of accrued shareholder litigation settlement expense
that represents the fair market value of the warrants issued and to be issued in connection with the settlement would decrease approximately $142,000, or 23%. </FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Item
4.&nbsp;&nbsp;&nbsp;
<A NAME="tx546_8"></A>&nbsp;&nbsp;Controls and Procedures </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">The Company&#146;s principal executive officer and principal financial officer are the same person. He has evaluated the effectiveness of the Company&#146;s &#147;disclosure controls and procedures,&#148; as such term is defined in
Rule 13a-14(c) of the Securities Exchange Act of 1934, as amended, within 90 days of the filing date of this Quarterly Report on Form 10-Q. Based upon his evaluation, the principal executive officer and principal financial officer concluded that the
Company&#146;s disclosure controls and procedures are effective. There were no significant changes in the Company&#146;s internal controls or in other factors that could significantly affect these controls, since the date the controls were
evaluated. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">23 </FONT></P>


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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>PART II.
OTHER INFORMATION </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>
<A NAME="tx546_9"></A>Item 1.&nbsp;&nbsp;&nbsp;&nbsp;Legal Proceedings. </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT
FACE="Times New Roman" SIZE="2" COLOR="#000000">On September 27, 2000, the Equal Employment Opportunity Commission (&#147;EEOC&#148;) filed a lawsuit under Title VII of the Civil Rights Act against us in the United States District Court for the
Western District of Virginia. The lawsuit alleged a pattern or practice of discrimination on the bases of gender and race. The lawsuit sought injunctive and other relief and damages in an unspecified amount. On December 13, 2001, the parties reached
an agreement as to the amount of a settlement (subject to final documentation and judicial review and approval). On February 20, 2002, we reached a final settlement of the case and the court issued a Consent Decree setting forth the terms of the
settlement. Pursuant to the settlement and Consent Decree: (i) we paid $500,000 on February 22, 2002; and $175,000 on January 7, 2003; (ii) we are required to pay $175,000 in January 2004, to satisfy the gender and race class claims; (iii) we paid
an additional $75,000 on February 20, 2002 to one individual specifically named in the complaint; and (iv) we are required to spend at least $75,000 for our planned diversity, recruitment and human resource management programs over the term of the
Consent Decree. We recorded a charge in the fourth quarter of fiscal year 2001 in the amount of $902,000 representing $575,000 payable upon entry of the Consent Decree, as well as $327,000 representing the present value at that date of the two equal
payments in the amount of $175,000 payable in January 2003 and 2004. During the first quarter of 2003, we recorded accretion of the associated discount as interest expense in the amount of $3,000. The $75,000 used for our planned diversity,
recruitment and human resource management programs is being expensed as incurred. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT
FACE="Times New Roman" SIZE="2" COLOR="#000000">The Company, our former Chairman, President and Chief Executive Officer Robert Kopstein, and two other officers and directors, Luke J. Huybrechts and Kenneth W. Harber, were named as defendants in a
consolidated class action lawsuit pending in the United States District Court for the Western District of Virginia (the &#147;Consolidated Suit&#148;). The first class action lawsuit was filed on November 26, 2001, by Charles S. Farrell, Jr., on
behalf of himself and others similarly situated. The second class action lawsuit was filed on December 14, 2001, by Lerner Group, on behalf of itself and others similarly situated. The third class action lawsuit was filed on December 27, 2001, by
Richard Simone, on behalf of himself and others similarly situated. The fourth class action lawsuit was filed on January 31, 2002 by Charles H. Yeatts, on behalf of himself and others similarly situated. In each of the four suits, the defendants in
the actions were the Company, Kopstein and various John Does (unidentified officers and/or directors of the Company during the class period described below). The United States District Court for the Western District of Virginia appointed a group of
shareholders as the lead plaintiffs for the Consolidated Suit. In the Consolidated Suit, the plaintiffs purported to represent purchasers of our common stock during the period ranging from June 14, 2000, through September 26, 2001 (the class
period), and alleged that the defendants violated Sections 10(b) and 20 of the federal Securities Exchange Act of 1934 in making certain alleged misrepresentations and/or omitting to disclose material facts. The plaintiffs in the Consolidated Suit
sought compensatory damages in an unspecified amount, as well as reasonable costs and expenses incurred in the cause of action, including attorneys&#146; fees and expert fees. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">On June 26, 2002, we issued a press release announcing that we reached a tentative agreement to resolve the
Consolidated Suit. The settlement provided for a cash payment of $700,000 and the issuance of warrants to purchase 250,000 shares (adjusted for the 1-for-8 reverse stock split approved on July 30, 2002) of our common stock at an exercise price per
share of $4.88 (adjusted for the 1-for-8 reverse stock split). </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">24 </FONT></P>


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<P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">On July 22,
2002, the Court entered an Order of Preliminary Approval of the proposed settlement, and on September 23, 2002, the Court entered an Order and Final Judgment, approving the settlement and dismissing the Consolidated Suit 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 became final and binding. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">We paid $500,000 of the cash portion of the settlement upon preliminary court approval. The second and final
installment, totaling $200,000, of the cash portion of the settlement was paid on November 1, 2002. The warrants will be exercisable for five years. We are in the process of registering the shares issuable upon the exercise of the warrants under the
Securities Act of 1933, as amended. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">We recorded
a charge during fiscal year 2002 in the amount of $997,000 representing the estimated cost of the settlement and related professional fees incurred, net of insurance proceeds. Of the total amount expensed, approximately $320,000 represented the fair
value of the warrants to purchase 250,000 shares of our common stock at an exercise price of $4.88 per share issued and to be issued in connection with the settlement of the shareholder litigation. Generally accepted accounting principles require
the fair value to be adjusted at each reporting period until such time that the warrants are issued and the underlying shares of common stock to be issued on exercise are registered. Accordingly, we recognized additional related expense during the
three months ended January 31, 2003 totaling $290,000 and we will continue to recognize related income or expense in future periods&#146; statements of operations until the previously noted requirements are met. Such recognized income or expense
will be a non-cash item and have no impact on our net cash flow. The warrant expense portion of the accrued shareholder litigation settlement expense is calculated using the Black-Scholes pricing model and, as of January 31, 2003, the closing price
of our common stock of $3.22 per share on that day was used in that calculation. See &#147;Item 3&#151;Quantitative and Qualitative Disclosures About Market Risk&#148; in Part 1 of this Form 10-Q for a discussion of the potential non-cash impact on
future financial results. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">On January 2, 2003,
Anicom, Inc., a former customer of the Company that is in bankruptcy, filed a complaint against us in the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division (the &#147;Complaint&#148;). The Complaint seeks to
avoid and recover certain alleged preferential payments in the approximate amount of $1,100,000. We have reviewed the claim with legal counsel and believe it is without merit. We intend to defend this claim vigorously. Furthermore, at this time we
believe it is unlikely that this claim will have a material adverse impact on our financial position, results of operations or cash flows. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>
<A NAME="tx546_10"></A>Item 2.&nbsp;&nbsp;&nbsp;&nbsp;Changes in Securities and Use of Proceeds. </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">On February 11, 2002, we filed a Registration Statement on Form S-3. The shares offered by the prospectus are issuable upon exercise of
common share purchase warrants to be issued to class members pursuant to a settlement agreement among Optical Cable Corporation, some of our current and former officers and directors and plaintiffs&#146; counsel that was approved by the United
States District Court for the Western District of Virginia on September 23, 2002, relating to a consolidated class action law suit filed against Optical Cable and some of our current and former officers and directors. Optical Cable will sell the
common shares to class members upon exercise of the warrants as at an exercise price of $4.88 per common share. If all of the warrants are exercised, Optical Cable would receive aggregate cash proceeds of $1,220,000. However, holders of warrants may
not exercise some or all of the warrants. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">25 </FONT></P>


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<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>
<A NAME="tx546_11"></A>Item 6.&nbsp;&nbsp;&nbsp;&nbsp;Exhibits and Reports on Form 8-K. </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><DIV STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="92%" BORDER="0">

<TR>
<TD VALIGN="top" WIDTH="4%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(a)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Exhibits required by Item 601 of Regulation S-K for the three months ended January 31,
2003:</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="11%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Exhibit&nbsp;3.1</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 1 to the Company&#146;s Form 8-A
filed with the Commission on November 5, 2001).</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="11%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Exhibit 3.2</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Bylaws of Optical Cable Corporation, as amended (filed as Exhibit 3.2 to the Registrant&#146;s Annual Report on Form 10-K
for the fiscal year ended October 31, 1997 (file number 0-37022), and incorporated herein by reference)).</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="11%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Exhibit 4.1</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Rights Agreement dated as of November 2, 2001 (filed as Exhibit 4 to the Company&#146;s Form 8-A filed with the
Commission on November 5, 2001 and incorporated by reference herein).</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="11%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Exhibit 4.2</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Form of certificate representing preferred share purchase right (filed as Exhibit 5 to the Company&#146;s Form 8-A filed
with the Commission on November 5, 2001 and incorporated by reference herein).</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="11%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Exhibit 4.3</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Warrant Agreement dated as of October 24, 2002 (filed as Exhibit 4.1 to the Company&#146;s Form S-3 filing with the
Commission on February 11, 2003 and incorporated by reference herein).</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="11%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Exhibit 4.4</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Form of warrant certificate (filed as Exhibit 4.2 to the Company&#146;s Form S-3 filing with the Commission on February
11, 2003 and incorporated by reference herein).</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="11%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Exhibit 10.1</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Employment Agreement dated November 1, 2002 by and between Optical Cable Corporation and Neil D. Wilkin, Jr. (filed
herewith).</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="11%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Exhibit 10.2</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Employment Agreement dated November 1, 2002 by and between Optical Cable Corporation and Luke J. Huybrechts (filed
herewith).</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="11%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Exhibit 10.3</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Employment Agreement dated November 1, 2002 by and between Optical Cable Corporation and Charles W. Carson (filed
herewith).</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="11%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Exhibit 99.1</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Certification under Section 906 of the Sarbanes-Oxley Act of 2002.</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD VALIGN="top" WIDTH="4%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">(b)</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Reports on Form 8-K filed during the three months ended January 31, 2003:</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3" WIDTH="77%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Form 8-K dated January 10, 2003, filed January 22, 2003, reporting under Item 5.</FONT></P></TD></TR>
</TABLE></DIV><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">26 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>
<A NAME="tx546_12"></A>SIGNATURES </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0">

<TR>
<TD COLSPAN="3"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3" WIDTH="44%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>OPTICAL CABLE
CORPORATION<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>(Registrant)<B></B></FONT></P></TD></TR>
<TR>
<TD HEIGHT="16"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3" WIDTH="44%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Date: March 17, 2003</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="44%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">/s/&nbsp;&nbsp;&nbsp;&nbsp;N<SMALL>EIL</SMALL> D. W<SMALL>ILKIN</SMALL>, J<SMALL>R</SMALL>.</FONT></P><HR SIZE="1"
NOSHADE ALIGN="left" COLOR="#000000"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="44%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Neil D. Wilkin, Jr.<BR>President and Chief Financial Officer<BR>(principal executive officer
and<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;principal financial officer)</FONT></P></TD></TR>
<TR>
<TD HEIGHT="32"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3" WIDTH="44%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Date: March 17, 2003</FONT></P></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" WIDTH="44%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">/s/&nbsp;&nbsp;&nbsp;&nbsp;T<SMALL>RACY</SMALL> G. S<SMALL>MITH</SMALL></FONT></P><HR SIZE="1" NOSHADE ALIGN="left"
COLOR="#000000"></TD></TR>
<TR>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="44%"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Tracy G. Smith<BR>Controller (principal accounting officer)</FONT></P></TD></TR>
</TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">27 </FONT></P>


<p Style='page-break-before:always'>
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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>
<A NAME="tx546_13"></A>CERTIFICATION </B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">I, Neil D. Wilkin, Jr.,
certify that: </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">1.</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">I have reviewed this quarterly report on Form 10-Q of Optical Cable Corporation; </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">2.</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">3.</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">4.</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and I
have: </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">a)</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made
known to me by others within those entities, particularly during the period in which this quarterly report is being prepared; </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">b)</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report
(the &#147;Evaluation Date&#148;); and </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">c)</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">presented in this quarterly report my conclusions about the effectiveness of the disclosure controls and procedures based on my evaluation as of the Evaluation Date;
</FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">5.</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">I have disclosed, based on my most recent evaluation, to the registrant&#146;s auditors and the audit committee of registrant&#146;s board of directors (or persons
performing the equivalent function): </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">a)</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant&#146;s ability to record, process, summarize
and report financial data and have identified for the registrant&#146;s auditors any material weaknesses in internal controls; and </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">b)</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal controls; and
</FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">6.</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal
controls subsequent to the date of my most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Date: March 17, 2003 </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; margin-left:54%; text-indent:-2%"><FONT
FACE="Times New Roman" SIZE="2" COLOR="#000000"><U>/s/N<SMALL>EIL</SMALL> D. W<SMALL>ILKIN</SMALL>,
J<SMALL>R</SMALL>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; margin-left:54%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Neil D. Wilkin, Jr. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; margin-left:54%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">President (principal executive officer) and &nbsp;<BR>Chief Financial Officer </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">28 </FONT></P>

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<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>dex101.htm
<DESCRIPTION>EMPLOYMENT AGREEMENT WITH NEIL D. WILKIN, JR.
<TEXT>
<HTML><HEAD>
<TITLE>Employment Agreement with Neil D. Wilkin, Jr.</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
  <p align=right><font size="3"><b>Exhibit 10.1</b></font></p> <p align=center><font size=2 face="Times New Roman"><b>OPTICAL CABLE CORPORATION<br> EMPLOYMENT AGREEMENT</b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS EMPLOYMENT AGREEMENT (this &#147;Agreement&#148;) is made and entered into as of the 1st day of November, 2002 by and between
OPTICAL CABLE CORPORATION, a Virginia corporation, hereinafter called the &#147;Corporation&#148;, and Neil D. Wilkin, Jr. called &#147;Executive&#148;, and provides as follows:</font></p> <p align=center> <font size=2
face="Times New Roman"><b><u>RECITALS</u></b></font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Corporation is a manufacturer and seller of fiber
optic cable, with its capital stock traded on the Nasdaq National Market;</font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, Executive has been
involved in the executive management of the business and affairs of the Corporation and possesses managerial experience, knowledge, skills and expertise required by the Corporation; </font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the employment of Executive by the Corporation is in the best interests of the Corporation and Executive; and</font></p> <p>
<font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the parties have mutually agreed upon the terms and conditions of Executive&#146;s continued employment by the
Corporation as hereinafter set forth;</font></p> <p align=center><font size=2 face="Times New Roman"><b><u>TERMS OF AGREEMENT</u></b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, for and in consideration of the premises and of the mutual promises and undertakings of the parties as hereinafter set
forth, and other good and valuable consideration, receipt of which is hereby acknowledged, the parties covenant and agree as follows:</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 1.&#160; <u>Employment</u>. </b></font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall be employed as President of the
Corporation and shall discharge such duties and responsibilities of an executive nature as may be assigned him by the Board of Directors, including general responsibility for the business of the Corporation.&#160; Additionally, the Corporation has
requested that Executive, and Executive has agreed to, continue to hold the position of Chief Financial Officer, until otherwise mutually agreed by the Board of Directors of the Corporation and Executive.</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall be nominated by the Board of Directors
for election to the Corporation&#146;s Board of Directors as long as he is the President of the Corporation.</font></p> </td> </tr> </table> <p><font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 2.&#160; <u>Term of Employment</u>.&#160; </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The initial term of this Agreement shall end on October 31, 2005.&#160; However, on November 1, 2003 and each November 1 thereafter the
term of this Agreement shall be renewed and extended by one year unless Executive or the Corporation notifies the other in writing thirty (30) days prior to such date(s) that the term shall not be renewed and extended.&#160; </font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 3.&#160; <u>Exclusive Service</u>.&#160; </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall devote his best efforts and full time to rendering services on behalf of the Corporation in furtherance of its best
interests. Executive shall comply with all policies, standards and regulations of the Corporation now or hereafter promulgated, and shall perform his duties under this Agreement to the best of his abilities and in accordance with standards of
conduct applicable to an executive officer.</font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 4.&#160; <u>Salary</u>.&#160; </b></font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As compensation while employed hereunder, Executive,
during his faithful performance of this Agreement shall receive an initial annual base salary of $250,000, payable on such terms and in such installments as the parties may from time to time mutually agree upon.&#160; The Board of Directors or an
appropriate committee thereof, in its discretion, may increase Executive&#146;s base salary during the term of this Agreement.</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation shall withhold state and federal income
taxes, social security taxes and such other payroll deductions as may from time to time be required by law or agreed upon in writing by Executive and the Corporation.&#160; The Corporation shall also withhold and remit to the proper party any
amounts agreed to in writing by the Corporation and Executive for participation in any corporate sponsored benefit plans for which a contribution is required.</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as otherwise expressly set forth herein, no
compensation shall be paid pursuant to this Agreement in respect of any calendar month subsequent to any termination of Executive&#146;s employment by the Corporation.</font></p> </td> </tr> </table> <p> <font size=2
face="Times New Roman"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.&#160; <u>Corporate Benefit Plans</u>.&#160; </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall be entitled to participate in or become a participant in any employee health, welfare and benefit plans maintained by
the Corporation for which he is or will become eligible.</font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 6.&#160; <u>Bonuses</u>.&#160;
</b></font></p> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall participate in executive bonus programs, as established from time to time by the Board
of Directors, or an appropriate committee thereof.&#160; This includes participation in the Optical Cable Corporation 2003 Management Incentive Plan, pursuant to which Executive is being provided with a 40% annual target bonus opportunity (as a
percentage of annual base salary) for the Corporation&#146;s fiscal year 2003 which, unless otherwise provided herein, is contingent on achievement of quantified corporate goals.</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 7.&#160; <u>Equity Compensation</u>.&#160; </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall participate in grants of long-term equity compensation awarded from time to time to senior executives pursuant to equity
participation plans, including grants under the</font></p> <p align=center> <font size=2 face="Times New Roman">2</font></p>

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  <p> <font size=2 face="Times New Roman">Optical Cable Corporation 1996 Stock Incentive Plan and any successor plans.&#160; Grants under such plans are subject to approval by the Board of Directors or an appropriate
committee thereof. </font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 8.&#160; <u>Expense Account</u>.&#160; </b>The Corporation shall reimburse
Executive for reasonable and customary business expenses incurred in the conduct of the Corporation&#146;s business.&#160; Such expenses will include business meals, out-of-town lodging, travel expenses, reasonable professional fees and dues.
Executive agrees to timely submit records and receipts of reimbursable items and agrees that the Corporation can adopt reasonable rules and policies regarding such reimbursement.&#160; The Corporation agrees to make prompt payment to Executive
following receipt and verification of such reports.&#160; Notwithstanding any contrary provision contained herein, and in addition to all other compensation, reimbursements and benefits provided herein, the Corporation shall reimburse Executive for
certain relocation and related expenses as agreed separately in writing. </font></p> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 9.&#160; <u>Paid Time
Off (PTO)</u>.&#160; </b></font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall be entitled to receive under the Corporation&#146;s Paid Time Off
(&#147;PTO&#148;) program (or under any alternative program adopted in the future for vacation and sick time) the greater of (i) 26 days of time away from work with continued compensation (PTO days) or (ii) the number of days other similarly
positioned employees would be eligible to receive based on years of service.&#160; The Corporation&#146;s PTO program provides for both vacation and sick time off with pay.&#160; The PTO days for any calendar year will be earned on January 1 of such
calendar year. At the end of each calendar year, Executive shall be entitled to carry-over up to 10 unused PTO days to the next calendar year. </font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 10. <u>Termination</u>. </b></font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Resignation by Executive without Good
Reason</u></i>.</font></p> </td> </tr> </table> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive may resign and terminate this Agreement upon written notice
to the Corporation as provided herein.&#160; In the event Executive&#146;s employment under this Agreement is terminated by the resignation of the Executive without Good Reason (as hereinafter defined), Executive shall thereafter have no right to
receive compensation or other benefits under this Agreement.</font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Termination by Corporation for
Cause.</u></i></font></p> </td> </tr> </table> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation shall have the right to terminate Executive&#146;s
employment under this Agreement at any time for Cause, which termination shall be effective immediately.&#160; Termination for &#147;Cause&#148; shall include termination for (i) material breach of this Agreement by Executive which breach is not
cured within 30 days of receipt by Executive of written notice from the Corporation specifying the breach; (ii) Executive&#146;s gross negligence in the performance of his material duties hereunder; (iii) intentional nonperformance or misperformance
of such duties, or refusal to abide by or comply with the reasonable directives of the Board of Directors, his superior officers, or the Corporation&#146;s policies and procedures, which actions continue for a period of at least 30 days after
receipt by Executive of written notice of the need to cure or cease; (iv) Executive&#146;s willful dishonesty, fraud or misconduct with respect to the business or affairs of</font></p> <p align=center> <font size=2
face="Times New Roman">3</font></p>

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<td width="100%" colspan="2" valign="top"> <p> <font size=2 face="Times New Roman">the Corporation, that in the reasonable judgment of the Board of Directors materially and adversely affects the Corporation; or (v) Executive&#146;s conviction of, or
a plea of nolo contendere to, a felony or other crime involving moral turpitude.&#160; In the event Executive&#146;s employment under this Agreement is terminated for Cause, Executive shall thereafter have no right to receive compensation or other
benefits under this Agreement.</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Termination by Corporation without
Cause or by Executive for Good Reason</u></i>.</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation may terminate
Executive&#146;s employment other than for Cause (as defined above) at any time upon written notice to Executive, which termination shall be effective immediately.&#160; Executive may resign thirty (30) days after notice to the Corporation for
&#147;Good Reason&#148;, as hereafter defined.</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as otherwise provided in Section
10(c)(3) of this Agreement, in the event the Executive&#146;s employment is terminated either: by the Corporation other than for Cause; or by Executive for Good Reason, then:</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall receive a monthly amount equal to one-twelfth (1/12) the rate of
his annual base salary in effect immediately preceding such termination for sixteen (16) months after the date of such termination at the times such payments would have been made in accordance with Section 4(a).</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall receive a payment in cash on the date his employment terminates
equal to sixteen twelfths (16/12) times the greater of: (y) the amount of the average annual cash bonus paid or payable to him in respect of each of the three (3) fiscal years of the Corporation prior to the fiscal year in which his employment
terminates (or such average over the shorter period of Executive&#146;s employment, if applicable), or (z) the amount of the target bonus opportunity contemplated in Section 6 of this Agreement, in each case as in effect prior to the termination of
Executive&#146;s employment.</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event a Change of Control occurs,
and Executive&#146;s employment is terminated either: by Corporation other than for Cause or by Employee for Good Reason, in each case within thirteen (13) months after the occurrence of such Change of Control, then, the Corporation&#146;s
obligations under Section 10(c)(2) shall not apply, and in lieu thereof, the Corporation&#146;s obligations, in addition to any other obligations set forth under this Agreement, are as follows:</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On or before the Executive&#146;s last day of employment with the Corporation (unless
another period is mutually agreed upon by the parties), the Corporation shall pay to Executive as compensation for services rendered to the Corporation a cash amount (subject to any applicable payroll or other taxes required to be withheld) equal to
the aggregate total of a twenty-four (24) month continuation of his annual base salary, as in effect immediately preceding such termination.</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On or before the Executive&#146;s last day of employment with the
Corporation</font></p> </td> </tr> </table> <p align=center> <font size=2 face="Times New Roman">4</font></p>

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<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">(unless another period is mutually agreed upon by the parties), the Corporation shall pay to Executive as compensation for services rendered to the Corporation a cash amount
(subject to applicable payroll or other taxes required to be withheld) equal to twenty-four twelfths (24/12) times the greater of: (y) the amount of the average annual cash bonus paid or payable to him in respect of each of the three (3) fiscal
years of the Corporation prior to the fiscal year in which his employment terminates (or such average over the shorter period of Executive&#146;s employment, if applicable), or (z) the amount of his target bonus opportunity contemplated in Section 6
of this Agreement, in each case as in effect prior to the termination of Executive&#146;s employment.</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation shall maintain in full force and effect for the continued benefit of
the Executive for the remainder of the then current term of this Agreement all employee health, welfare benefit plans and programs or arrangements in which the Executive was entitled to participate immediately prior to such termination, provided
that continued participation is possible under the general terms and provisions of such plans and programs.&#160; In the event that Executive&#146;s participation in any such plan or program is barred, the Corporation shall arrange to provide the
Executive with benefits substantially similar to those which the Executive was entitled to receive under such plans and programs.</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive will be entitled to receive reasonable out-placement services, including job
search services, paid by the Corporation.&#160; The services will be provided by a recognized out-placement organization selected by the Executive with the approval of the Corporation (which approval will not be unreasonably withheld).&#160; The
services will be provided for up to two years after the date Executive&#146;s employment by the Corporation terminates.</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any benefits paid by the Corporation pursuant to Section 10(c)(3), or otherwise
triggered by the occurrence of a Change of Control, will be grossed up by the Corporation as necessary to protect the Executive from paying any excise taxes that may result from such benefits.</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the provisions of Section
10(c)(2) and Section 10(c)(3) of this Agreement to the contrary:</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If Executive breaches Section 11, 12 or 13, Executive will not thereafter be entitled
to receive any further compensation or benefits pursuant to Section 10(c)(2) or Section 10(c)(3), as applicable; provided that the Corporation shall have provided Executive with a reasonable time to cease and desist and cure any such violation, if
curable;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If, while he is receiving payments under Section 10(c)(2) or Section 10(c)(3), as
applicable, Executive violates the provisions of Section 12, provided that the Corporation shall have provided Executive with a reasonable time to cease and desist and cure any such violation, if curable, such payments will cease and he will not
thereafter be</font></p> </td> </tr> </table> <p align=center> <font size=2 face="Times New Roman">5</font></p>

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<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">entitled to receive any compensation or benefits pursuant to Section 10(c)(2) or Section 10(c)(3), as applicable; and</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The obligations of the Corporation to Executive under Section 10(c)(2) and Section
10(c)(3) are conditioned upon the Executive&#146;s signing a release of claims in a form satisfactory to the Corporation within twenty-one (21) days of the date he receives or gives notice of termination of his employment or the date he receives
said release of claims, whichever is later, and upon his not revoking the release of claims thereafter.</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Termination Upon Executive&#146;s
Death.</u></i></font></p> </td> </tr> </table> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall terminate upon death of Executive; provided,
however, that in such event the Corporation shall pay to the estate of Executive his compensation including salary and accrued target bonus, if any, which otherwise would be payable to Executive through the end of the month in which his death
occurs.</font></p>
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<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Termination Upon Disability.</u></i></font></p>
</td> </tr> </table> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation may terminate Executive&#146;s employment under this Agreement, after having
established the Executive&#146;s disability, by giving to Executive written notice of its intention to terminate his employment for disability and his employment with the Corporation shall terminate effective on the 120th day after receipt of such
notice if within 120 days after such receipt Executive shall fail to return to the full-time performance of the essential functions of his position (and if Executive&#146;s disability has been established pursuant to the definition of
&#147;disability&#148; set forth below).&#160; For purposes of this Agreement, &#147;disability&#148; means either (i) disability which after the expiration of more than 13 consecutive weeks after its commencement is determined to be total and
permanent by a physician selected and paid for by the Corporation or its insurers, and acceptable to Executive or his legal representative, which consent shall not be unreasonably withheld or (ii) disability as defined in the policy of disability
insurance maintained by the Corporation for the benefit of Executive, whichever shall be more favorable to Executive.</font></p>
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<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Obligations Survive Termination or
Expiration</u>.</i></font></p> </td> </tr> </table> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the termination of Executive&#146;s employment
pursuant to any provision of this Agreement (including any expiration of this Agreement), the parties shall be required to carry out any provisions of this Agreement which contemplate performance by them subsequent to such termination.&#160; In
addition, no termination shall affect any liability or other obligation of either party which shall have accrued prior to such termination, including, but not limited to, any liability, loss or damage on account of breach. No termination of
employment shall terminate the obligation of the Corporation to make payments of any vested benefits provided hereunder or the obligations of Executive under Sections 11, 12 and 13.</font></p>
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<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Notice by Executive.</u></i></font></p> </td>
</tr> </table> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive&#146;s employment hereunder may be terminated by Executive upon thirty (30) days</font></p> <p
align=center> <font size=2 face="Times New Roman">6</font></p>

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  <p> <font size=2 face="Times New Roman">written notice to the Corporation or at any time by mutual agreement in writing.</font></p>
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<td width="100%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Obligations Unconditional.</u></i></font></p>
</td> </tr> </table> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as set forth in Section 10(c)(4), the Corporation&#146;s obligation to pay the Executive
the compensation provided in Section 10 shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Corporation may have
against him or anyone else.&#160; All amounts payable by the Corporation hereunder shall be paid without notice or demand.&#160;&#160; Each and every payment made hereunder by the Corporation shall be final and the Corporation will not seek to
recover all or any part of such payment from the Executive or from whosoever may be entitled thereto, for any reason whatsoever.&#160; The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by
seeking other employment or otherwise.</font></p>
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<td width="100%" colspan="2" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Good Reason
Defined.</u></i></font></p> </td> </tr>
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<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this Agreement, &#147;Good Reason&#148; shall
mean:</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The assignment of duties to the Executive by the Corporation which result in the
Executive having significantly less authority or responsibility than he has on the date hereof, without his express written consent;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The removal of the Executive from or any failure to re-elect him to the position of
President of the Corporation without his express written consent;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) Executive is not elected to serve on the Board of Directors, or (z) the Board of
Directors fails to, or in the event of a Change of Control, the principal shareholders fail to, cause Executive to be nominated and put forth their best efforts to elect the Executive to the Board of Directors;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Requiring the Executive to maintain his principal office (y) at a location outside of
a 50 mile radius of the Corporation&#146;s principal executive offices at the time of this Agreement, or (z) at a location other than the principal executive offices of the Corporation;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A reduction by the Corporation of the Executive&#146;s base salary, as the same may
have been increased from time to time;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The failure of the Corporation to provide the Executive with substantially the same
material fringe benefits that are provided to him at the inception of this Agreement (including, but not limited to, participation in bonus programs or equity incentive programs);</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation&#146;s failure to comply with any material term of this</font></p>
</td> </tr> </table> <p align=center> <font size=2 face="Times New Roman">7</font></p>

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<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">Agreement; or</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The failure of the Corporation to obtain the assumption of, and agreement to
perform, this Agreement by any successor.</font></p> </td> </tr> </table> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Change
of Control.</u></i></font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this Agreement, a Change of Control occurs if, after the date of this
Agreement, (i) any person, including a &#147;group&#148; as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, becomes the owner or beneficial owner of Corporation securities having 50% or more of the combined voting power of the
then outstanding Corporation securities that may be cast for the election of the Corporation&#146;s directors; or (ii) as the direct or indirect result of, or in connection with, a tender or exchange offer, a merger or other business combination, a
sale of assets, a contested election of directors, or any combination of these events, the persons who were directors of the Corporation before such events cease to constitute a majority of the Corporation&#146;s Board, or any successor&#146;s
board, within three years of the last of such transactions.&#160; For purposes of this Agreement, a Change of Control occurs on the date on which an event described in (i) or (ii) occurs.&#160; If a Change of Control occurs on account of a series of
transactions or events, the Change of Control occurs on the date of the last of such transactions or events.</font></p> <p><font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event a Change of Control occurs, all unvested equity participation grants by the Corporation to the Executive will immediately
vest and shall be exercisable over the period of time set forth in the granting documents. </font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section
11.&#160; <u>Confidentiality/Nondisclosure</u>.&#160; </b></font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive hereby acknowledges that Executive&#146;s
employment with the Corporation places Executive in a position of confidence and trust with respect to the business, operations, customers, prospects, and personnel of the Corporation, and that Executive will be given access to trade secrets and
confidential and proprietary business information of the Corporation. Executive acknowledges that the Corporation&#146;s trade secrets and confidential and proprietary business information&#160; include, but is not limited to, such matters as
Corporation patents, trade secrets, systems, products and methodologies (whether or not patentable), formulas, processes, manufacturing procedures, manuals, reports, software and source code used in the Corporation&#146;s production and business
processes, customers, identity of vendors, materials used in the manufacturing process, pricing received from vendors, machine settings, business opportunities and prospective business opportunities, costing and pricing procedures, marketing and
business strategies, equipment and methods used and preferred by the Corporation and/or its customers, and the amounts paid by such customers for the Corporation&#146;s products (all of the foregoing will be hereinafter referred to as
&#147;confidential information&#148;). Additionally, and not by way of limitation,&#160; as used above, the term &#147;trade secrets&#148; shall be afforded the broadest construction allowed by the common law, the Virginia Trade Secrets Act, and/or
the federal law.</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive agrees that the Corporation&#146;s
confidential information derives</font></p> </td> </tr> </table> <p align=center> <font size=2 face="Times New Roman">8</font></p>

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<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">independent economic value because it is not generally known or readily ascertainable by other persons who could obtain economic value from the disclosure or use of such
information.</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive acknowledges that the Corporation has
invested considerable time and expense in developing and safeguarding its confidential information, and in developing and maintaining personal contacts and relationships with its customers and potential customers.&#160; Executive agrees that, in so
doing, the Corporation has developed favorable goodwill with customers and with the business community. The Corporation wishes to safeguard its goodwill and confidential information.</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive pledges his best efforts and utmost diligence
to protect the Corporation&#146;s confidential information. Unless required by the Corporation in connection with Executive&#146;s employment or with the Corporation&#146;s express written consent, Executive agrees that he will not, either during
his employment with the Corporation or afterwards, directly or indirectly, use or disclose for Executive&#146;s own benefit or for the benefit of another person or entity of any kind, or group of persons and/or entities, any of the
Corporation&#146;s confidential information, whether or not the information is acquired, learned, attained, or developed by Executive alone or in conjunction with others. Executive makes the same pledge with regard to the confidential information of
the Corporation&#146;s customers, contractors, or others with whom the Corporation has a business relationship.</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive also agrees that all notes, lists, records,
drawings, memoranda, or other documents that are made or compiled by Executive or which were available to Executive concerning any of the Corporation&#146;s business and/or confidential information shall be the exclusive property of the Corporation.
Executive agrees to deliver such materials and information to the Corporation upon the termination of the employment relationship or at any other time at the Corporation&#146;s request. Executive understands that the unauthorized taking or
disclosure of any of such information or materials could also result in civil and/or criminal liability.</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation expects Executive to respect any trade
secrets or confidential information of any of Executive&#146;s former employers, business associates, or any others. Executive agrees to respect the Corporation&#146;s express direction to Executive not to disclose to the Corporation, its officers,
or any employees any such information as long as it remains confidential.</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding any contrary provision contained
herein, Executive will be permitted to retain any documentation reasonably necessary to enforce the terms of this Agreement.</font></p> </td> </tr> </table> <p><font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 12.&#160; <u>Covenant Not to Compete and Non-solicitation</u>.&#160; </b></font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive understands and agrees that the Corporation
has disclosed or will disclose confidential information to Executive during his employment with the Corporation, the disclosure or use of which outside the Corporation&#146;s business would be detrimental to the Corporation. Executive further agrees
that the Corporation would suffer great loss and damage if</font></p> </td> </tr> </table> <p align=center> <font size=2 face="Times New Roman">9</font></p>

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<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">Executive should, on his own behalf or on behalf of any other person or entity of any kind, or group of persons and/or entities, use or disclose any of the Corporation&#146;s
confidential information.</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive acknowledges that Executive&#146;s engaging
in any business that is competitive with the Corporation would cause the Corporation great and irreparable harm. While employed by the Corporation, Executive shall faithfully devote his best efforts to advance the business and interests of the
Corporation and shall not, on his own behalf or another&#146;s behalf, engage in any manner in any other business competing with that of the Corporation.</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the Restricted Period (defined below), Executive
shall not, on his own behalf or on behalf of another person or entity of any kind, or group of persons and/or entities, (i) participate in the management or control of any competing business engaged in the manufacture or sale of fiber optic cable
similar to the type manufactured, sold or designed by the Corporation at the time of termination of Executive&#146;s employment or (ii) be employed by any such business in a position in which Executive would perform duties that are substantially
similar to or the same as those performed by Executive on behalf of the Corporation or in a position that would utilize knowledge or skill developed by Executive during such employment with the Corporation.&#160; It is expressly provided, however,
that this covenant does not preclude Executive from working in the fiber optic industry in a role that would not compete with the business of the Corporation.&#160; Because the Corporation engages in its business on a worldwide basis, the geographic
scope of the covenants in this paragraph shall extend to those worldwide markets in which the Corporation does business or has active plans to do business at the termination of Executive&#146;s employment. Executive further acknowledges that the
covenants in this paragraph are reasonable and necessary to protect the Corporation&#146;s legitimate business interests.</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive acknowledges that, while employed by the
Corporation, Executive will have contact with and/or become aware of the Corporation&#146;s customers and the representatives of those customers, their names and addresses, specific customer needs and requirements, and leads and references to
prospective customers. Executive further acknowledges that loss of such customers would cause the Corporation great and irreparable harm. During the Restricted Period, Executive shall not solicit, contact, call upon, or attempt to communicate with
any customer, former customer or prospective customer of the Corporation on behalf of any business competing with that of the Corporation for the purpose of securing business that is the same as or similar to that of the Corporation. This
restriction will apply only to any customer, former customer or prospective customer of the Corporation with whom the Corporation has had contact during the last twelve (12) months of Executive&#146;s employment with the Corporation. For the
purposes of the preceding sentence, &#147;contact&#148; means (i) interaction between the Corporation and the customer, former customer or prospective customer that takes place to further the business of either the Corporation or the customer, or
(ii) making sales or marketing efforts to or performing services for the customer, former customer or prospective customer on behalf of the Corporation.</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the greater of (i) twelve (12) months after the
termination of Executive&#146;s employment with the Corporation for any reason or (ii) the Restricted Period, Executive may not recruit, hire or attempt to recruit or hire, directly or by assisting others, any other employee of the </font></p> </td>
</tr> </table> <p align=center> <font size=2 face="Times New Roman">10</font></p>

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<td width="100%" colspan="2" valign="top"> <p> <font size=2 face="Times New Roman">Corporation.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As used in this Section 12,
&#147;Restricted Period&#148; shall mean the period of time from the date of Executive&#146;s termination for any reason until the passage of the greater of:</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; twelve (12) months; or</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) in the event Section 10(c)(2) of this Agreement is applicable, the
number of months during which Executive receives payments pursuant to Section 10(c)(2)(i) of this Agreement ; or</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) in the event Section 10(c)(3) of this
Agreement is applicable, the number of months that form the basis for any cash amount paid to Executive pursuant to Section 10(c)(3)(i) of this Agreement.</font></p> </td> </tr> </table> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the foregoing, except as set forth in Section 10(c)(4) above, the imposition of the restrictions during the Restricted
Period under this Section 12 are conditioned upon the payment by the Corporation to Executive of all amounts provided for under Section 10(c)(2) or Section 10(c)(3) to the extent such Sections are applicable.</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 13.&#160; <u>Ownership of Intellectual Property.</u></b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any and all inventions, discoveries, improvements, or creations (collectively &#147;intellectual property&#148;) that Executive has
conceived or made or may conceive or make during his employment with the Corporation that in any way, directly or indirectly, are connected with or related to the Corporation and/or its business, shall be the sole and exclusive property of the
Corporation. All works created by Executive under the Corporation&#146;s direction or in connection with the Corporation&#146;s business for which copyrights, trademarks or patents may be sought are &#147;works made for hire&#148; and will be the
sole and exclusive property of the Corporation. Any and all copyrights, trademarks or patents to such works, whether actually sought and/or applied for or not, will belong to the Corporation, and the Executive shall execute all documents that may be
necessary to convey or assign any such rights that the Executive may have in such intellectual property to the Corporation or that otherwise may be necessary to enable the Corporation to seek such protection for such intellectual property. To the
extent any such works are not deemed to be &#147;works made for hire,&#148; the Executive hereby assigns all proprietary rights, including copyrights, trademarks and patents, in such works to the Corporation.</font></p> <p><font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 14.&#160; <u>Injunctive Relief, Damages, Etc</u>.&#160; </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive agrees that given the nature of the positions held by Executive with the Corporation, that each and every one of the covenants
and restrictions set forth in Sections 11 and 12 above are reasonable in scope, length of time and geographic area and are necessary for the protection of the significant investment of the Corporation in developing, maintaining and expanding its
business. Accordingly, the parties hereto agree that in the event of any breach by Executive of any of the provisions of Sections 11 or 12 that monetary damages alone will not</font></p> <p align=center> <font size=2
face="Times New Roman">11</font></p>

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  <p> <font size=2 face="Times New Roman">adequately compensate the Corporation for its losses and, therefore, that it may seek any and all legal or equitable relief available to it, specifically including, but not
limited to, injunctive relief. The covenants contained in Sections 11, 12 and 13 shall be construed and interpreted in any judicial proceeding to permit their enforcement to the maximum extent permitted by law. Should a court of competent
jurisdiction determine that any provision of the covenants and restrictions set forth in Section 12 above is unenforceable as being overbroad as to time, area or scope, the court may strike the offending provision or reform such provision to
substitute such other terms as are reasonable to protect the Corporation&#146;s legitimate business interests.</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event either party must proceed with litigation to force the other party to satisfy its obligations under the terms of this
Agreement, the court shall award to the prevailing party his or its reasonable litigation and counsel costs incurred to enforce his or its rights under this Agreement.</font></p> <p><font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 15.&#160; <u>Binding Effect/Assignability</u>.&#160; </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall be binding upon and inure to the benefit of the Corporation and Executive and their respective heirs, legal
representatives, executors, administrators, successors and assigns, but neither this Agreement, nor any of the rights hereunder, shall be assignable by Executive or any beneficiary or beneficiaries designated by Executive.&#160;&#160; The
Corporation will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business, stock or assets of the Corporation, by agreement in form and substance reasonably
satisfactory to the Executive, to expressly assume and agree to perform this Agreement in its entirety. Failure of the Corporation to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement.&#160;
Any successor of the Corporation shall be bound by the terms of this Agreement.</font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 16.&#160;
<u>Governing Law and Venue</u>.&#160; </b></font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall be subject to and construed in accordance
with the laws of the Commonwealth of Virginia, without respect to its conflict of laws provisions.&#160; The parties agree that exclusive venue for any action to enforce this Agreement shall be the Circuit Court for Roanoke County, Virginia, or the
United States District Court for the Western District of Virginia, Roanoke Division.</font></p> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 17.&#160;
<u>Notices</u>.&#160; </b></font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any and all notices, designations, consents, offers, acceptance or any other
communications provided for herein shall be given in writing and shall be deemed properly delivered if delivered in person or by registered or certified mail, return receipt requested, addressed in the case of the Corporation to its registered
office or in the case of Executive to his last known address. </font></p> <p align=center> <font size=2 face="Times New Roman">12</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 18.&#160; <u>Entire Agreement.</u></b></font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except with respect to reimbursement of relocation and
related expenses as referenced in Section 8, this Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes any and all other agreements, either oral or in writing, among the parties hereto
with respect to the subject matter hereof.</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be executed in one or more
counterparts, each of which shall be considered an original copy of this Agreement, but all of which together shall evidence only one agreement.</font></p> </td> </tr> </table> <p><font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 19.&#160; <u>Amendment and Waiver</u>.&#160; </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may not be amended except by an instrument in writing signed by or on behalf of each of the parties hereto.&#160; No
waiver of any provision of this Agreement shall be valid unless in writing and signed by the person or party to be charged.</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 20.&#160; <u>Severability.</u></b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In case any one or more of the provisions of this Agreement is held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision hereof and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein.</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 21.&#160; <u>Case and Gender</u>.&#160; </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wherever required by the context of this Agreement, the singular or plural case and the masculine, feminine and neuter genders shall be
interchangeable. </font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 22.&#160; <u>Captions</u>.&#160; </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The captions used in this Agreement are intended for descriptive and reference purposes only and are not intended to affect the meaning
of any Section hereunder. </font></p> <p align=center><font size=2 face="Times New Roman"><b>[END OF PAGE]</b></font></p> <p align=center> <font size=2 face="Times New Roman"><b>[SIGNATURE PAGE FOLLOWS]</b></font></p> <p align=center> <font size=2
face="Times New Roman">13</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>IN WITNESS WHEREOF,</b> the Corporation has caused this Agreement to be signed by
its duly authorized representatives and Executive has hereunto set his hand and seal on the day and year first above written. </font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="24%" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> &nbsp;</font></p> </td>
<td width="75%" colspan="4" valign="bottom"> <p> <font size=2 face="Times New Roman"><b>O</b></font><font size=1 face="Times New Roman"><b><font size="2">PTICAL</font></b></font> <font size=2 face="Times New Roman"><b> C</b></font><font size=1
face="Times New Roman"><b><font size="2">ABLE</font></b></font> <font size=2 face="Times New Roman"><b> C</b></font><font size=1 face="Times New Roman"><b><font size="2">ORPORATION</font></b></font></p> </td> </tr>
<tr>
<td width="100%" colspan="5" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="24%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="bottom"> <p> <font size=2 face="Times New Roman">By:</font></p> </td>
<td width="47%" colspan="2" valign="bottom"> <p align="center"><font size=2 face="Times New Roman">&nbsp;/s/ R<font size="1">ANDALL</font> H. F<font size="1">RAZIER</font></font></p> </td>
<td width="23%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="24%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="47%" colspan="2" valign="bottom"> <hr size=1 width="100%" noshade color=black> </td>
<td width="23%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="24%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="47%" colspan="2" valign="bottom"> <p align=center> <font size=1 face="Times New Roman"><b>Randall H. Frazier</b></font></p> </td>
<td width="23%" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="24%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="47%" colspan="2" valign="bottom"> <p align=center><font size=1 face="Times New Roman"><b>Member of the Compensation Committee of the Board of Directors</b></font></p> </td>
<td width="23%" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="50%" colspan="3" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="50%" colspan="2" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="24%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="bottom"> <p> <font size=2 face="Times New Roman">By:</font></p> </td>
<td width="47%" colspan="2" valign="bottom"> <p align="center"><font size=2 face="Times New Roman">&nbsp;/s/ J<font size="1">OHN </font>M. H<font size="1">OLLAND</font></font></p> </td>
<td width="23%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="24%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="47%" colspan="2" valign="bottom"> <hr size=1 width="100%" noshade color=black> </td>
<td width="23%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="24%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="47%" colspan="2" valign="bottom"> <p align=center> <font size=1 face="Times New Roman"><b>John M. Holland</b></font></p> </td>
<td width="23%" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="24%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="47%" colspan="2" valign="bottom"> <p align=center> <font size=1 face="Times New Roman"><b>Member of the Compensation Committee of the Board of Directors</b></font></p> </td>
<td width="23%" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="50%" colspan="3" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="50%" colspan="2" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="24%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="bottom"> <p><font size=2 face="Times New Roman">By:</font></p> </td>
<td width="47%" colspan="2" valign="bottom"> <p align="center"><font size=2 face="Times New Roman">&nbsp;/s/ C<font size="1">RAIG</font> H. W<font size="1">EBER</font></font></p> </td>
<td width="23%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="24%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="47%" colspan="2" valign="bottom"> <hr size=1 width="100%" noshade color=black> </td>
<td width="23%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="24%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="47%" colspan="2" valign="bottom"> <p align=center> <font size=1 face="Times New Roman"><b>Craig H. Weber</b></font></p> </td>
<td width="23%" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="24%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="47%" colspan="2" valign="bottom"> <p align=center> <font size=1 face="Times New Roman"><b>Member of the Compensation Committee of the Board of Directors</b></font></p> </td>
<td width="23%" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="24%" valign="bottom">&nbsp;</td>
<td width="4%" valign="bottom">&nbsp;</td>
<td width="47%" colspan="2" valign="bottom">&nbsp;</td>
<td width="23%" valign="bottom">&nbsp;</td> </tr>
<tr>
<td width="24%" valign="bottom">&nbsp;</td>
<td colspan="3" valign="bottom"><font size=1 face="Times New Roman"><b><font size="2">EXECUTIVE</font></b></font></td>
<td width="23%" valign="bottom">&nbsp;</td> </tr>
<tr>
<td width="24%" valign="bottom">&nbsp;</td>
<td colspan="3" valign="bottom"><font size=1 face="Times New Roman"><b></b></font></td>
<td width="23%" valign="bottom">&nbsp;</td> </tr>
<tr>
<td width="24%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="47%" colspan="2" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> /s/ N<font size="1">EIL</font> D. W<font size="1">ILKIN</font>, J<font size="1">R</font>. &nbsp;</font></p> </td>
<td width="23%" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="24%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="4%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="47%" colspan="2" valign="bottom"> <hr size=1 width="100%" noshade color=black> </td>
<td width="23%" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="24%" valign="bottom">&nbsp;</td>
<td width="4%" valign="bottom">&nbsp;</td>
<td width="47%" colspan="2" valign="bottom"> <center> <b><font size="1">Neil D. Wilkin, Jr.</font></b> </center> </td>
<td width="23%" valign="bottom">&nbsp;</td> </tr>
<tr >
<td width=179 height="2"></td>
<td width=31 height="2"></td>
<td width=151 height="2"></td>
<td width=190 height="2"></td>
<td width=170 height="2"></td> </tr> </table> <p align=center><font size=2 face="Times New Roman">14</font></p>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>4
<FILENAME>dex102.htm
<DESCRIPTION>EMPLOYMENT AGREEMENT WITH LUKE J. HUYBRECHTS
<TEXT>
<HTML><HEAD>
<TITLE>Employment Agreement with Luke J. Huybrechts</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
  <p align=right><font size="3"><b>Exhibit 10.2</b></font></p> <p align=center><font size=2 face="Times New Roman"><b>OPTICAL CABLE CORPORATION<br> EMPLOYMENT AGREEMENT</b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS EMPLOYMENT AGREEMENT (this &#147;Agreement&#148;) is made and entered into as of the 1st day of November, 2002 by and between OPTICAL CABLE CORPORATION, a
Virginia corporation, hereinafter called the &#147;Corporation&#148;, and Luke J. Huybrechts called &#147;Executive&#148;, and provides as follows:</font></p> <p align=center> <font size=2 face="Times New Roman"><b><u>RECITALS</u></b></font></p> <p>
<font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Corporation is a manufacturer and seller of fiber optic cable, with its capital stock traded on the Nasdaq National Market;</font></p> <p>
<font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, Executive has been involved in the executive management of the business and affairs of the Corporation and possesses managerial experience,
knowledge, skills and expertise required by the Corporation; </font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the employment of Executive by the Corporation is in the best
interests of the Corporation and Executive; and</font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the parties have mutually agreed upon the terms and conditions of
Executive&#146;s continued employment by the Corporation as hereinafter set forth;</font></p> <p align=center> <font size=2 face="Times New Roman"><b><u>TERMS OF AGREEMENT</u></b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, for and in consideration of the premises and of the mutual promises and undertakings of the parties as hereinafter set forth, and other good and
valuable consideration, receipt of which is hereby acknowledged, the parties covenant and agree as follows:</font></p> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 1.&#160;
<u>Employment</u>. </b></font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall be employed as Senior Vice
President of Sales of the Corporation, shall report directly to the President of the Corporation (the &#147;President&#148;), and shall discharge such duties and responsibilities of an executive nature as may be assigned him by the President.
</font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall be nominated by the Board of Directors for election to the
Corporation&#146;s Board of Directors as long as he is a Senior Vice President of the Corporation or a more senior officer.</font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section
2.&#160; <u>Term of Employment</u>.&#160; </b></font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The initial term of this Agreement shall end on October 31, 2005.&#160; However, on
November 1, 2003 and each November 1 thereafter the term of this Agreement shall be renewed and extended by one year unless Executive or the Corporation notifies the other in writing thirty (30) days prior to such date(s) that the term shall not be
renewed and extended.&#160; </font></p> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 3.&#160; <u>Exclusive Service</u>.&#160; </b></font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall devote his best efforts and full time to rendering services on behalf of the Corporation in
furtherance of its best interests. Executive shall comply with all policies, standards and regulations of the Corporation now or hereafter promulgated, and shall perform his duties under this Agreement to the best of his abilities and in accordance
with standards of conduct applicable to an executive officer.</font></p> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 4.&#160; <u>Salary</u>.&#160; </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As compensation while employed hereunder, Executive, during his faithful performance of this Agreement
shall receive an initial annual base salary of $175,000, payable on such terms and in such installments as the parties may from time to time mutually agree upon.&#160; The President, subject to review by the Board of Directors or an appropriate
committee thereof, in his discretion, may increase Executive&#146;s base salary during the term of this Agreement.</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation shall withhold state and federal income taxes, social security taxes and such other
payroll deductions as may from time to time be required by law or agreed upon in writing by Executive and the Corporation.&#160; The Corporation shall also withhold and remit to the proper party any amounts agreed to in writing by the Corporation
and Executive for participation in any corporate sponsored benefit plans for which a contribution is required.</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as otherwise expressly set forth herein, no compensation shall be paid pursuant to this
Agreement in respect of any calendar month subsequent to any termination of Executive&#146;s employment by the Corporation.</font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section
5.&#160; <u>Corporate Benefit Plans</u>.&#160; </b></font></p> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall be entitled to participate in or become a participant in any employee
health, welfare and benefit plans maintained by the Corporation for which he is or will become eligible.</font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 6.&#160;
<u>Bonuses</u>.&#160; </b></font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall participate in executive bonus programs, as established from time to time by the President,
subject to review by the Board of Directors, or an appropriate committee thereof.&#160; This includes participation in the Optical Cable Corporation 2003 Management Incentive Plan, pursuant to which Executive is being provided with a 35% annual
target bonus opportunity (as a percentage of annual base salary) for the Corporation&#146;s fiscal year 2003 which, unless otherwise provided herein, is contingent on achievement of quantified corporate and divisional goals and specifically
identified divisional objectives.</font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 7.&#160; <u>Equity Compensation</u>.&#160; </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall participate in grants of long-term equity compensation awarded from time to time to senior executives pursuant to equity participation plans,
including grants under the Optical Cable Corporation 1996 Stock Incentive Plan and any successor plans.&#160; Grants under such</font></p> <p align=center> <font size=2 face="Times New Roman">2</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p> <font size=2 face="Times New Roman">plans are based on the recommendations of the President and subject to approval by the Board of Directors or an appropriate committee thereof. </font></p> <p><font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 8.&#160; <u>Expense Account</u>.</b>&#160; The Corporation shall reimburse Executive for reasonable and customary business expenses incurred in the conduct
of the Corporation&#146;s business.&#160; Such expenses will include business meals, out-of-town lodging, travel expenses, reasonable professional fees and dues. Executive agrees to timely submit records and receipts of reimbursable items and agrees
that the Corporation can adopt reasonable rules and policies regarding such reimbursement.&#160; The Corporation agrees to make prompt payment to Executive following receipt and verification of such reports.&#160; </font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 9.&#160; <u>Paid Time Off (PTO)</u>.&#160; </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall be entitled to receive under the Corporation&#146;s Paid Time Off (&#147;PTO&#148;) program (or under any alternative program adopted in the future
for vacation and sick time) the greater of (i) 26 days of time away from work with continued compensation (PTO days) or (ii) the number of days other similarly positioned employees would be eligible to receive based on years of service.&#160; The
Corporation&#146;s PTO program provides for both vacation and sick time off with pay.&#160; The PTO days for any calendar year will be earned on January 1 of such calendar year. At the end of each calendar year, Executive shall be entitled to
carry-over up to 10 unused PTO days to the next calendar year. </font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 10. <u>Termination</u>. </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Resignation by Executive without Good Reason</u></i>.</font></p> <p><font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive may resign and terminate this Agreement upon written notice to the Corporation as provided herein.&#160; In the event Executive&#146;s employment under this
Agreement is terminated by the resignation of the Executive without Good Reason (as hereinafter defined), Executive shall thereafter have no right to receive compensation or other benefits under this Agreement.</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Termination by Corporation for Cause.</u></i></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation shall have the right to terminate Executive&#146;s employment under this Agreement at any time for Cause, which termination shall be effective
immediately.&#160; Termination for &#147;Cause&#148; shall include termination for (i) material breach of this Agreement by Executive which breach is not cured within 30 days of receipt by Executive of written notice from the Corporation specifying
the breach; (ii) Executive&#146;s gross negligence in the performance of his material duties hereunder; (iii) intentional nonperformance or misperformance of such duties, or refusal to abide by or comply with the reasonable directives of his
superior officers, or the Corporation&#146;s policies and procedures, which actions continue for a period of at least 30 days after receipt by Executive of written notice of the need to cure or cease; (iv) Executive&#146;s willful dishonesty, fraud
or misconduct with respect to the business or affairs of the Corporation, that in the reasonable judgment of the President and/or the Board of Directors materially and adversely affects the Corporation; or (v) Executive&#146;s conviction of, or a
plea of nolo contendere to, a felony</font></p> <p align=center><font size=2 face="Times New Roman">3</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p> <font size=2 face="Times New Roman">or other crime involving moral turpitude.&#160; In the event Executive&#146;s employment under this Agreement is terminated for Cause, Executive shall thereafter have no right
to receive compensation or other benefits under this Agreement.</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Termination by Corporation without Cause or by Executive for Good Reason</u></i>.&#160;
</font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation may terminate Executive&#146;s employment other than for
Cause (as defined above) at any time upon written notice to Executive, which termination shall be effective immediately.&#160; Executive may resign thirty (30) days after notice to the Corporation for &#147;Good Reason&#148;, as hereafter
defined.&#160; </font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as otherwise provided in Section 10(c)(3) of this
Agreement, in the event the Executive&#146;s employment is terminated either: by the Corporation other than for Cause; or by Executive for Good Reason, then:</font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall receive a monthly amount equal to
one-twelfth (1/12) the rate of his annual base salary in effect immediately preceding such termination for fourteen (14) months after the date of such termination at the times such payments would have been made in accordance with Section
4(a).</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall receive a payment in cash on the
date his employment terminates equal to fourteen twelfths (14/12) times the greater of: (y) the amount of the average annual cash bonus paid or payable to him in respect of each of the three (3) fiscal years of the Corporation prior to the fiscal
year in which his employment terminates (or such average over the shorter period of Executive&#146;s employment, if applicable), or (z) the amount of the target bonus opportunity contemplated in Section 6 of this Agreement, in each case as in effect
prior to the termination of Executive&#146;s employment.</font></p> </td> </tr> </table> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event a Change of Control occurs, and Executive&#146;s employment is terminated either: by
Corporation other than for Cause or by Employee for Good Reason, in each case within thirteen (13) months after the occurrence of such Change of Control, then, the Corporation&#146;s obligations under Section 10(c)(2) shall not apply, and in lieu
thereof, the Corporation&#146;s obligations, in addition to any other obligations set forth under this Agreement, are as follows:</font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On or before the Executive&#146;s last day of
employment with the Corporation (unless another period is mutually agreed upon by the parties), the Corporation shall pay to Executive as compensation for services rendered to the Corporation a cash amount (subject to any applicable payroll or other
taxes required to be withheld) equal to the aggregate total of a twenty (20) month continuation of his annual base salary, as in effect immediately preceding such termination.</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On or before the Executive&#146;s last day of
employment with the Corporation (unless another period is mutually agreed upon by the parties), the Corporation shall pay to Executive as compensation for services rendered to the Corporation a cash amount</font></p> </td> </tr> </table> <p
align=center> <font size=2 face="Times New Roman">4</font></p>

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<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p> <font size=2 face="Times New Roman">(subject to applicable payroll or other taxes required to be withheld) equal to twenty twelfths (20/12) times the greater of: (y) the amount of the average annual cash bonus paid
or payable to him in respect of each of the three (3) fiscal years of the Corporation prior to the fiscal year in which his employment terminates (or such average over the shorter period of Executive&#146;s employment, if applicable), or (z) the
amount of his target bonus opportunity contemplated in Section 6 of this Agreement, in each case as in effect prior to the termination of Executive&#146;s employment.</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation shall maintain in full force and
effect for the continued benefit of the Executive for the remainder of the then current term of this Agreement all employee health, welfare benefit plans and programs or arrangements in which the Executive was entitled to participate immediately
prior to such termination, provided that continued participation is possible under the general terms and provisions of such plans and programs.&#160; In the event that Executive&#146;s participation in any such plan or program is barred, the
Corporation shall arrange to provide the Executive with benefits substantially similar to those which the Executive was entitled to receive under such plans and programs.&#160; </font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive will be entitled to receive reasonable
out-placement services, including job search services, paid by the Corporation.&#160; The services will be provided by a recognized out-placement organization selected by the Executive with the approval of the Corporation (which approval will not be
unreasonably withheld).&#160; The services will be provided for up to two years after the date Executive&#146;s employment by the Corporation terminates.</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any benefits paid by the Corporation pursuant to
Section 10(c)(3), or otherwise triggered by the occurrence of a Change of Control, will be grossed up by the Corporation as necessary to protect the Executive from paying any excise taxes that may result from such benefits.</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr> </table> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the provisions of Section 10(c)(2) and Section 10(c)(3) of this Agreement to the
contrary: </font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If Executive breaches Section 11, 12 or 13,
Executive will not thereafter be entitled to receive any further compensation or benefits pursuant to Section 10(c)(2) or Section 10(c)(3), as applicable; provided that the Corporation shall have provided Executive with a reasonable time to cease
and desist and cure any such violation, if curable;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If, while he is receiving payments under Section
10(c)(2) or Section 10(c)(3), as applicable, Executive violates the provisions of Section 12, provided that the Corporation shall have provided Executive with a reasonable time to cease and desist and cure any such violation, if curable, such
payments will cease and he will not thereafter be entitled to receive any compensation or benefits pursuant to Section 10(c)(2) or Section 10(c)(3), as applicable; and</font></p> </td> </tr> </table> <p align=center> <font size=2
face="Times New Roman">5</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The obligations of the Corporation to Executive
under Section 10(c)(2) and Section 10(c)(3) are conditioned upon the Executive&#146;s signing a release of claims in a form satisfactory to the Corporation within twenty-one (21) days of the date he receives or gives notice of termination of his
employment or the date he receives said release of claims, whichever is later, and upon his not revoking the release of claims thereafter.</font></p> </td> </tr> </table> <p><font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Termination Upon Executive&#146;s Death.</u></i>&#160; </font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall terminate upon death of Executive; provided, however, that in such event the Corporation shall pay to the estate of Executive his compensation
including salary and accrued target bonus, if any, which otherwise would be payable to Executive through the end of the month in which his death occurs.</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Termination Upon Disability.</u></i></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation may terminate Executive&#146;s employment under this Agreement, after having established the Executive&#146;s disability, by giving to Executive
written notice of its intention to terminate his employment for disability and his employment with the Corporation shall terminate effective on the 120th day after receipt of such notice if within 120 days after such receipt Executive shall fail to
return to the full-time performance of the essential functions of his position (and if Executive&#146;s disability has been established pursuant to the definition of &#147;disability&#148; set forth below).&#160; For purposes of this Agreement,
&#147;disability&#148; means either (i) disability which after the expiration of more than 13 consecutive weeks after its commencement is determined to be total and permanent by a physician selected and paid for by the Corporation or its insurers,
and acceptable to Executive or his legal representative, which consent shall not be unreasonably withheld or (ii) disability as defined in the policy of disability insurance maintained by the Corporation for the benefit of Executive, whichever shall
be more favorable to Executive.</font></p> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Obligations Survive Termination or
Expiration</u>.&#160; </i></font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the termination of Executive&#146;s employment pursuant to any provision of this Agreement
(including any expiration of this Agreement), the parties shall be required to carry out any provisions of this Agreement which contemplate performance by them subsequent to such termination.&#160; In addition, no termination shall affect any
liability or other obligation of either party which shall have accrued prior to such termination, including, but not limited to, any liability, loss or damage on account of breach. No termination of employment shall terminate the obligation of the
Corporation to make payments of any vested benefits provided hereunder or the obligations of Executive under Sections 11, 12 and 13.</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Notice by Executive.</u></i>&#160;&#160; </font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive&#146;s employment hereunder may be terminated by Executive upon thirty (30) days written notice to the Corporation or at any time by mutual agreement in
writing.</font></p> <p align=center> <font size=2 face="Times New Roman">6</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Obligations Unconditional.</u></i></font></p>
<p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as set forth in Section 10(c)(4), the Corporation&#146;s obligation to pay the Executive the compensation provided in Section 10 shall be
absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Corporation may have against him or anyone else.&#160; All amounts
payable by the Corporation hereunder shall be paid without notice or demand.&#160;&#160; Each and every payment made hereunder by the Corporation shall be final and the Corporation will not seek to recover all or any part of such payment from the
Executive or from whosoever may be entitled thereto, for any reason whatsoever.&#160; The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise.</font></p>
<p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Good Reason Defined.</u></i></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this Agreement, &#147;Good Reason&#148; shall mean:</font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The assignment of duties to the Executive by the
Corporation which result in the Executive having significantly less authority or responsibility than he has on the date hereof, without his express written consent;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The removal of the Executive from or any failure to appoint
or re-appoint him to a position of Senior Vice President of the Corporation, or a more senior position, without his express written consent;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;(y) Executive is not elected to serve on the Board of Directors,
or (z) the Board of Directors fails to, or in the event of a Change of Control, the principal shareholders fail to, cause Executive to be nominated and put forth their best efforts to elect the Executive to the Board of Directors;</font></p> </td>
</tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;Requiring the Executive to maintain his principal office (y) at a
location outside of a 50 mile radius of the Corporation&#146;s principal executive offices at the time of this Agreement, or (z) at a location other than the principal executive offices of the Corporation;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A reduction by the Corporation of the Executive&#146;s base
salary, as the same may have been increased from time to time;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;&nbsp;&nbsp;The failure of the Corporation to provide the Executive with
substantially the same material fringe benefits that are provided to him at the inception of this Agreement (including, but not limited to, participation in bonus programs or equity incentive programs);</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;&nbsp;&nbsp;The Corporation&#146;s failure to comply with any material term of this
Agreement; or</font></p> </td> </tr> </table> <p align=center> <font size=2 face="Times New Roman">7</font></p>

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<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)&nbsp;&nbsp;The failure of the Corporation to obtain the assumption of, and agreement to
perform, this Agreement by any successor.</font></p> </td> </tr> </table> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Change
of Control.</u></i></font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this Agreement, a Change of Control occurs if, after the date of this Agreement, (i) any person,
including a &#147;group&#148; as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, becomes the owner or beneficial owner of Corporation securities having 50% or more of the combined voting power of the then outstanding Corporation
securities that may be cast for the election of the Corporation&#146;s directors; or (ii) as the direct or indirect result of, or in connection with, a tender or exchange offer, a merger or other business combination, a sale of assets, a contested
election of directors, or any combination of these events, the persons who were directors of the Corporation before such events cease to constitute a majority of the Corporation&#146;s Board, or any successor&#146;s board, within three years of the
last of such transactions.&#160; For purposes of this Agreement, a Change of Control occurs on the date on which an event described in (i) or (ii) occurs.&#160; If a Change of Control occurs on account of a series of transactions or events, the
Change of Control occurs on the date of the last of such transactions or events.</font></p> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event a Change of Control occurs, all unvested
equity participation grants by the Corporation to the Executive will immediately vest and shall be exercisable over the period of time set forth in the granting documents. </font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 11.&#160; <u>Confidentiality/Nondisclosure</u>.&#160; </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive hereby acknowledges that Executive&#146;s employment with the Corporation places Executive in
a position of confidence and trust with respect to the business, operations, customers, prospects, and personnel of the Corporation, and that Executive will be given access to trade secrets and confidential and proprietary business information of
the Corporation. Executive acknowledges that the Corporation&#146;s trade secrets and confidential and proprietary business information&#160; include, but is not limited to, such matters as Corporation patents, trade secrets, systems, products and
methodologies (whether or not patentable), formulas, processes, manufacturing procedures, manuals, reports, software and source code used in the Corporation&#146;s production and business processes, customers, identity of vendors, materials used in
the manufacturing process, pricing received from vendors, machine settings, business opportunities and prospective business opportunities, costing and pricing procedures, marketing and business strategies, equipment and methods used and preferred by
the Corporation and/or its customers, and the amounts paid by such customers for the Corporation&#146;s products (all of the foregoing will be hereinafter referred to as &#147;confidential information&#148;). Additionally, and not by way of
limitation,&#160; as used above, the term &#147;trade secrets&#148; shall be afforded the broadest construction allowed by the common law, the Virginia Trade Secrets Act, and/or the federal law.</font></p> <p><font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive agrees that the Corporation&#146;s confidential information derives independent economic
value because it is not generally known or readily ascertainable by other</font></p> <p align=center> <font size=2 face="Times New Roman">8</font></p>

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  <p> <font size=2 face="Times New Roman">persons who could obtain economic value from the disclosure or use of such information.</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Executive acknowledges that the Corporation has invested considerable time and expense in developing
and safeguarding its confidential information, and in developing and maintaining personal contacts and relationships with its customers and potential customers.&#160; Executive agrees that, in so doing, the Corporation has developed favorable
goodwill with customers and with the business community. The Corporation wishes to safeguard its goodwill and confidential information.</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive pledges his best efforts and utmost diligence to protect the Corporation&#146;s confidential
information. Unless required by the Corporation in connection with Executive&#146;s employment or with the Corporation&#146;s express written consent, Executive agrees that he will not, either during his employment with the Corporation or
afterwards, directly or indirectly, use or disclose for Executive&#146;s own benefit or for the benefit of another person or entity of any kind, or group of persons and/or entities, any of the Corporation&#146;s confidential information, whether or
not the information is acquired, learned, attained, or developed by Executive alone or in conjunction with others. Executive makes the same pledge with regard to the confidential information of the Corporation&#146;s customers, contractors, or
others with whom the Corporation has a business relationship.</font></p> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive also
agrees that all notes, lists, records, drawings, memoranda, or other documents that are made or compiled by Executive or which were available to Executive concerning any of the Corporation&#146;s business and/or confidential information shall be the
exclusive property of the Corporation. Executive agrees to deliver such materials and information to the Corporation upon the termination of the employment relationship or at any other time at the Corporation&#146;s request. Executive understands
that the unauthorized taking or disclosure of any of such information or materials could also result in civil and/or criminal liability.</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Corporation expects Executive to respect any trade secrets or confidential information of any of
Executive&#146;s former employers, business associates, or any others. Executive agrees to respect the Corporation&#146;s express direction to Executive not to disclose to the Corporation, its officers, or any employees any such information as long
as it remains confidential.</font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding any contrary provision
contained herein, Executive will be permitted to retain any documentation reasonably necessary to enforce the terms of this Agreement.</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 12.&#160; <u>Covenant Not to Compete and Non-solicitation</u>.&#160; </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive understands and agrees that the Corporation has disclosed or will disclose confidential
information to Executive during his employment with the Corporation, the disclosure or use of which outside the Corporation&#146;s business would be detrimental to the Corporation. Executive further agrees that the Corporation would suffer great
loss and damage if Executive should, on his own behalf or on behalf of any other person or entity of any kind, or</font></p> <p align=center><font size=2 face="Times New Roman">9</font></p>

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  <p> <font size=2 face="Times New Roman">group of persons and/or entities, use or disclose any of the Corporation&#146;s confidential information.</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive acknowledges that Executive&#146;s engaging in any business that is competitive with the
Corporation would cause the Corporation great and irreparable harm. While employed by the Corporation, Executive shall faithfully devote his best efforts to advance the business and interests of the Corporation and shall not, on his own behalf or
another&#146;s behalf, engage in any manner in any other business competing with that of the Corporation.</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the Restricted Period (defined below), Executive shall not, on his own behalf or on behalf of
another person or entity of any kind, or group of persons and/or entities, (i) participate in the management or control of any competing business engaged in the manufacture or sale of fiber optic cable similar to the type manufactured, sold or
designed by the Corporation at the time of termination of Executive&#146;s employment or (ii) be employed by any such business in a position in which Executive would perform duties that are substantially similar to or the same as those performed by
Executive on behalf of the Corporation or in a position that would utilize knowledge or skill developed by Executive during such employment with the Corporation.&#160; It is expressly provided, however, that this covenant does not preclude Executive
from working in the fiber optic industry in a role that would not compete with the business of the Corporation.&#160; Because the Corporation engages in its business on a worldwide basis, the geographic scope of the covenants in this paragraph shall
extend to those worldwide markets in which the Corporation does business or has active plans to do business at the termination of Executive&#146;s employment. Executive further acknowledges that the covenants in this paragraph are reasonable and
necessary to protect the Corporation&#146;s legitimate business interests. </font></p> <p><font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive acknowledges that, while employed by the Corporation, Executive will have contact with and/or
become aware of the Corporation&#146;s customers and the representatives of those customers, their names and addresses, specific customer needs and requirements, and leads and references to prospective customers. Executive further acknowledges that
loss of such customers would cause the Corporation great and irreparable harm. During the Restricted Period, Executive shall not solicit, contact, call upon, or attempt to communicate with any customer, former customer or prospective customer of the
Corporation on behalf of any business competing with that of the Corporation for the purpose of securing business that is the same as or similar to that of the Corporation. This restriction will apply only to any customer, former customer or
prospective customer of the Corporation with whom the Corporation has had contact during the last twelve (12) months of Executive&#146;s employment with the Corporation. For the purposes of the preceding sentence, &#147;contact&#148; means (i)
interaction between the Corporation and the customer, former customer or prospective customer that takes place to further the business of either the Corporation or the customer, or (ii) making sales or marketing efforts to or performing services for
the customer, former customer or prospective customer on behalf of the Corporation.</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the greater of (i) twelve (12) months after the termination of Executive&#146;s employment with
the Corporation for any reason or (ii) the Restricted Period, Executive may not recruit, hire or attempt to recruit or hire, directly or by assisting others, any other employee of the Corporation.</font></p> <p align=center><font size=2
face="Times New Roman">10</font></p>

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  <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As used in this Section 12, &#147;Restricted
Period&#148; shall mean the period of time from the date of Executive&#146;s termination for any reason until the passage of the greater of:</font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;twelve (12) months; or</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) in the event Section
10(c)(2) of this Agreement is applicable, the number of months during which Executive receives payments pursuant to Section 10(c)(2)(i) of this Agreement; or</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="4%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="95%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)
in the event Section 10(c)(3) of this Agreement is applicable, the number of months that form the basis for any cash amount paid to Executive pursuant to Section 10(c)(3)(i) of this Agreement.</font></p> </td> </tr> </table> <p><font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the foregoing, except as set forth in Section 10(c)(4) above, the imposition of the restrictions during the Restricted Period under this Section 12
are conditioned upon the payment by the Corporation to Executive of all amounts provided for under Section 10(c)(2) or Section 10(c)(3) to the extent such Sections are applicable.</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 13.&#160; <u>Ownership of Intellectual Property</u>.</b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any and all inventions, discoveries, improvements, or creations (collectively &#147;intellectual property&#148;) that Executive has conceived or made or may conceive
or make during his employment with the Corporation that in any way, directly or indirectly, are connected with or related to the Corporation and/or its business, shall be the sole and exclusive property of the Corporation. All works created by
Executive under the Corporation&#146;s direction or in connection with the Corporation&#146;s business for which copyrights, trademarks or patents may be sought are &#147;works made for hire&#148; and will be the sole and exclusive property of the
Corporation. Any and all copyrights, trademarks or patents to such works, whether actually sought and/or applied for or not, will belong to the Corporation, and the Executive shall execute all documents that may be necessary to convey or assign any
such rights that the Executive may have in such intellectual property to the Corporation or that otherwise may be necessary to enable the Corporation to seek such protection for such intellectual property. To the extent any such works are not deemed
to be &#147;works made for hire,&#148; the Executive hereby assigns all proprietary rights, including copyrights, trademarks and patents, in such works to the Corporation.</font></p> <p><font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 14.&#160; <u>Injunctive Relief, Damages, Etc</u>.&#160; </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive agrees that given the nature of the positions held by Executive with the Corporation, that each and every one of the covenants and restrictions set forth in
Sections 11 and 12 above are reasonable in scope, length of time and geographic area and are necessary for the protection of the significant investment of the Corporation in developing, maintaining and expanding its business. Accordingly, the
parties hereto agree that in the event of any breach by Executive of any of the provisions of Sections 11 or 12 that monetary damages alone will not adequately compensate the Corporation for its losses and, therefore, that it may seek any and
all</font></p> <p align=center> <font size=2 face="Times New Roman">11</font></p>

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  <p> <font size=2 face="Times New Roman">legal or equitable relief available to it, specifically including, but not limited to, injunctive relief. The covenants contained in Sections 11, 12 and 13 shall be construed
and interpreted in any judicial proceeding to permit their enforcement to the maximum extent permitted by law. Should a court of competent jurisdiction determine that any provision of the covenants and restrictions set forth in Section 12 above is
unenforceable as being overbroad as to time, area or scope, the court may strike the offending provision or reform such provision to substitute such other terms as are reasonable to protect the Corporation&#146;s legitimate business
interests.</font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event either party must proceed with litigation to force the other party to satisfy its obligations under the terms of
this Agreement, the court shall award to the prevailing party his or its reasonable litigation and counsel costs incurred to enforce his or its rights under this Agreement.</font></p> <p><font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 15.&#160; <u>Binding Effect/Assignability</u>.&#160; </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall be binding upon and inure to the benefit of the Corporation and Executive and their respective heirs, legal representatives, executors,
administrators, successors and assigns, but neither this Agreement, nor any of the rights hereunder, shall be assignable by Executive or any beneficiary or beneficiaries designated by Executive.&#160;&#160; The Corporation will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business, stock or assets of the Corporation, by agreement in form and substance reasonably satisfactory to the Executive, to expressly
assume and agree to perform this Agreement in its entirety. Failure of the Corporation to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement.&#160; Any successor of the Corporation shall be
bound by the terms of this Agreement.</font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 16.&#160; <u>Governing Law and Venue</u>.&#160; </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall be subject to and construed in accordance with the laws of the Commonwealth of Virginia, without respect to its conflict of laws
provisions.&#160; The parties agree that exclusive venue for any action to enforce this Agreement shall be the Circuit Court for Roanoke County, Virginia, or the United States District Court for the Western District of Virginia, Roanoke
Division.</font></p> <p> <font size=2 face="Times New Roman"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 17.&#160; <u>Notices</u>.&#160; </b></font></p> <p><font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any and all notices, designations, consents, offers, acceptance or any other communications provided for herein shall be given in writing and shall be deemed properly
delivered if delivered in person or by registered or certified mail, return receipt requested, addressed in the case of the Corporation to its registered office to the attention of the President, or in the case of Executive to his last known
address. </font></p> <p align=center> <font size=2 face="Times New Roman">12</font></p>

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  <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 18.&#160; <u>Entire Agreement</u>.</b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement constitutes the entire agreement among the parties with
respect to the subject matter hereof and supersedes any and all other agreements, either oral or in writing, among the parties hereto with respect to the subject matter hereof. </font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be executed in one or more counterparts, each of which
shall be considered an original copy of this Agreement, but all of which together shall evidence only one agreement. </font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 19.&#160;
<u>Amendment and Waiver</u>.&#160; </b></font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may not be amended except by an instrument in writing signed by or on behalf of
each of the parties hereto.&#160; No waiver of any provision of this Agreement shall be valid unless in writing and signed by the person or party to be charged.&#160; No officer other than the President shall have the authority to amend this
Agreement or waive any provision of this Agreement on behalf of the Corporation.&#160; Additionally, the President shall be the officer designated to act on behalf of the Corporation with respect to the provisions of this Agreement.</font></p>
<p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 20.&#160; <u>Severability</u>.</b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In case any one or more of the provisions of this Agreement is held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein.</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 21.&#160; <u>Case and Gender</u>.&#160; </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wherever required by the context of this Agreement, the singular or plural case and the masculine, feminine and neuter genders shall be interchangeable. </font></p>
<p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 22.&#160; <u>Captions</u>.&#160; </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The captions used in this Agreement are intended for descriptive and reference purposes only and are not intended to affect the meaning of any Section hereunder.
</font></p> <p align=center> <font size=2 face="Times New Roman"><b>[END OF PAGE]</b></font></p> <p align=center> <font size=2 face="Times New Roman"><b>[SIGNATURE PAGE FOLLOWS]</b></font></p> <p align=center> <font size=2
face="Times New Roman">13</font></p>

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  <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the Corporation has caused this Agreement to be signed by its duly authorized representative and
Executive has hereunto set his hand and seal on the day and year first above written. </font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="29%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="70%" colspan="4" valign="bottom"> <p><font size=2 face="Times New Roman"><b>O</b></font><font size=1 face="Times New Roman"><b><font size="2">PTICAL</font></b></font><font size=2 face="Times New Roman"><b> C</b></font><font size=1
face="Times New Roman"><b><font size="2">ABLE</font></b></font> <font size=2 face="Times New Roman"><b>C</b></font><font size=1 face="Times New Roman"><b><font size="2">ORPORATION</font></b></font></p> </td> </tr>
<tr>
<td width="29%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="70%" colspan="4" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="29%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="3%" colspan="2" valign="bottom"> <p> <font size=2 face="Times New Roman">By:</font></p> </td>
<td width="39%" valign="bottom"> <p align="center"><font size=2 face="Times New Roman">&nbsp;/s/ N<font size="1">EIL</font> D. W<font size="1">ILKIN</font>, J<font size="1">R</font>.</font></p> </td>
<td width="27%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="29%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="3%" colspan="2" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="39%" valign="bottom"> <hr size=1 width="100%" noshade color=black> </td>
<td width="27%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="29%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="3%" colspan="2" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="39%" valign="bottom"> <p align=center> <font size=1 face="Times New Roman"><b>Neil D. Wilkin, Jr.<br> President and Chief Financial Officer</b></font></p> </td>
<td width="27%" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="29%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="3%" colspan="2" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="66%" colspan="2" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="29%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="70%" colspan="4" valign="bottom"> <p> <font size=2 face="Times New Roman"><b>EXECUTIVE</b></font></p> </td> </tr>
<tr>
<td width="29%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="43%" colspan="3" valign="bottom"> <p align="center"><font size=2 face="Times New Roman">&nbsp;/s/ L<font size="1">UKE</font> J. H<font size="1">UYBRECHTS</font></font></p> </td>
<td width="27%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="29%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="3%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="39%" colspan="2" valign="bottom"> <hr size=1 width="100%" noshade color=black> </td>
<td width="27%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="29%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="3%" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="39%" colspan="2" valign="bottom"> <p align=center><font size=1 face="Times New Roman"><b>Luke J. Huybrechts</b></font></p> </td>
<td width="27%" valign="bottom"> <p align=center><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width=215></td>
<td width=24></td>
<td width=1></td>
<td width=285></td>
<td width=195></td> </tr> </table> <p align=center><font size=2 face="Times New Roman">14</font></p>
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<TYPE>EX-10.3
<SEQUENCE>5
<FILENAME>dex103.htm
<DESCRIPTION>EMPLOYMENT AGREEMENT WITH CHARLES W. CARSON
<TEXT>
<HTML><HEAD>
<TITLE>Employment Agreement with Charles W. Carson</TITLE>
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  <p align=right><font size="3"><b>Exhibit 10.3</b></font></p> <p align=center><font size=2 face="Times New Roman"><b>OPTICAL CABLE CORPORATION<br> EMPLOYMENT AGREEMENT</b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS EMPLOYMENT AGREEMENT (this &#147;Agreement&#148;) is made and entered into as of the 2nd day of January, 2003 by and between
OPTICAL CABLE CORPORATION, a Virginia corporation, hereinafter called the &#147;Corporation&#148;, and Charles W. Carson called &#147;Executive&#148;, and provides as follows:</font></p> <p align=center> <font size=2
face="Times New Roman"><b><u>RECITALS</u></b></font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Corporation is a manufacturer and seller of fiber
optic cable, with its capital stock traded on the Nasdaq National Market;</font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, Executive possesses
managerial experience, knowledge, skills and expertise required by the Corporation; </font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the employment
of Executive by the Corporation is in the best interests of the Corporation and Executive; and</font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the
parties have mutually agreed upon the terms and conditions of Executive&#146;s employment by the Corporation as hereinafter set forth;</font></p> <p align=center> <font size=2 face="Times New Roman"><b><u>TERMS OF AGREEMENT</u></b></font></p>
<p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, for and in consideration of the premises and of the mutual promises and undertakings of the parties as
hereinafter set forth, and other good and valuable consideration, receipt of which is hereby acknowledged, the parties covenant and agree as follows:</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 1.&#160; <u>Employment</u>.</b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall be employed as Senior Vice President of Marketing and Strategy of the Corporation, shall report directly to the
President of the Corporation (the &#147;President&#148;), and shall discharge such duties and responsibilities of an executive nature as may be assigned him by the President.&#160; </font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 2.&#160; <u>Term of Employment</u>.</b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The initial term of this Agreement shall end on December 31, 2004.&#160; However, on January 1, 2004 and each January 1 thereafter the
term of this Agreement shall be renewed and extended by one year unless Executive or the Corporation notifies the other in writing thirty (30) days prior to such date(s) that the term shall not be renewed and extended.&#160; </font></p> <p> <font
size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 3. &#160;<u>Exclusive Service</u>.</b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall devote his best efforts and full time to rendering services on behalf of the Corporation in furtherance of its best
interests. Executive shall comply with all policies, standards and regulations of the Corporation now or hereafter promulgated, and shall perform his duties under</font></p>

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  <p><font size=2 face="Times New Roman">this Agreement to the best of his abilities and in accordance with standards of conduct applicable to an executive officer.</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 4.&#160; <u>Salary</u>.</b></font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As compensation while
employed hereunder, Executive, during his faithful performance of this Agreement shall receive an initial annual base salary of $175,000, payable on such terms and in such installments as the parties may from time to time mutually agree upon.&#160;
The President, subject to review by the Board of Directors or an appropriate committee thereof, in his discretion, may increase Executive&#146;s base salary during the term of this Agreement.</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation shall
withhold state and federal income taxes, social security taxes and such other payroll deductions as may from time to time be required by law or agreed upon in writing by Executive and the Corporation.&#160; The Corporation shall also withhold and
remit to the proper party any amounts agreed to in writing by the Corporation and Executive for participation in any corporate sponsored benefit plans for which a contribution is required.</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
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<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as otherwise
expressly set forth herein, no compensation shall be paid pursuant to this Agreement in respect of any calendar month subsequent to any termination of Executive&#146;s employment by the Corporation.</font></p> </td> </tr> </table> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 5.&#160; <u>Corporate Benefit Plans</u>.</b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall be entitled to participate in or become a participant in any employee health, welfare and benefit plans maintained by
the Corporation for which he is or will become eligible.</font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 6.&#160; <u>Bonuses</u>.</b></font></p>
<p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall participate in executive bonus programs, as established from time to time by the President, subject to
review by the Board of Directors or an appropriate committee thereof.&#160; This includes participation in the Optical Cable Corporation 2003 Management Incentive Plan, pursuant to which Executive is being provided with a 35% annual target bonus
opportunity (as a percentage of annual base salary) for the Corporation&#146;s fiscal year 2003 which, unless otherwise provided herein, is contingent on achievement of quantified corporate and divisional goals and specifically identified divisional
objectives.</font></p> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 7.&#160; <u>Equity Compensation</u>.</b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall participate in grants of long-term equity compensation awarded from time to time to senior executives pursuant to equity
participation plans, including grants under the Optical Cable Corporation 1996 Stock Incentive Plan and any successor plans.&#160; Grants under such plans are based on the recommendations of the President and subject to approval by the Board of
Directors or an appropriate committee thereof. </font></p> <p align=center> <font size=2 face="Times New Roman">2</font></p>

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  <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 8.&#160; <u>Expense Account</u>.</b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation shall reimburse Executive for reasonable and customary business expenses incurred in the conduct of the
Corporation&#146;s business.&#160; Such expenses will include business meals, out-of-town lodging, travel expenses, reasonable professional fees and dues. Executive agrees to timely submit records and receipts of reimbursable items and agrees that
the Corporation can adopt reasonable rules and policies regarding such reimbursement.&#160; The Corporation agrees to make prompt payment to Executive following receipt and verification of such reports.&#160; Notwithstanding any contrary provision
contained herein, and in addition to all other compensation, reimbursements and benefits provided herein, the Corporation shall reimburse Executive for certain relocation and related expenses as agreed separately in writing. </font></p> <p><font
size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 9.&#160; <u>Paid Time Off (PTO)</u>.&#160; </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall be entitled to receive under the Corporation&#146;s Paid Time Off (&#147;PTO&#148;) program (or under any alternative
program adopted in the future for vacation and sick time) the greater of (i) 26 days of time away from work with continued compensation (PTO days) or (ii) the number of days other similarly positioned employees would be eligible to receive based on
years of service.&#160; The Corporation&#146;s PTO program provides for both vacation and sick time off with pay.&#160; The PTO days for any calendar year will be earned on January 1 of such calendar year. At the end of each calendar year, Executive
shall be entitled to carry-over up to 10 unused PTO days to the next calendar year. </font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 10.
<u>Termination</u>.</b></font></p>
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<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Resignation by
Executive without Good Reason</u></i>.</font></p> </td> </tr>
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<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
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<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive may resign and terminate this Agreement upon written notice to the Corporation
as provided herein.&#160; In the event Executive&#146;s employment under this Agreement is terminated by the resignation of the Executive without Good Reason (as hereinafter defined), Executive shall thereafter have no right to receive compensation
or other benefits under this Agreement.</font></p> </td> </tr>
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<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
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<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Termination by
Corporation for Cause.</u></i></font></p> </td> </tr>
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<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
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<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation shall have the right to terminate Executive&#146;s employment under this
Agreement at any time for Cause, which termination shall be effective immediately.&#160; Termination for &#147;Cause&#148; shall include termination for (i) material breach of this Agreement by Executive which breach is not cured within 30 days of
receipt by Executive of written notice from the Corporation specifying the breach; (ii) Executive&#146;s gross negligence in the performance of his material duties hereunder; (iii) intentional nonperformance or misperformance of such duties, or
refusal to abide by or comply with the reasonable directives of his superior officers, or the Corporation&#146;s policies and procedures, which actions continue for a period of at least 30 days after receipt by Executive of written notice of the
need to cure or cease; (iv) Executive&#146;s willful dishonesty, fraud or misconduct with respect to the business or affairs of the Corporation, that in the reasonable judgment of the President and/or the Board of Directors materially and
adversely</font></p> </td> </tr> </table> <p align=center> <font size=2 face="Times New Roman">3</font></p>

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  <p> <font size=2 face="Times New Roman">affects the Corporation; or (v) Executive&#146;s conviction of, or a plea of nolo contendere to, a felony or other crime involving moral turpitude.&#160; In the event
Executive&#146;s employment under this Agreement is terminated for Cause, Executive shall thereafter have no right to receive compensation or other benefits under this Agreement.</font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
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<td width="100%" colspan="2" valign="top"> <p><font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Termination by Corporation without Cause or by Executive for Good
Reason</u></i>.</font></p> </td> </tr>
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<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
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<td width="100%" colspan="2" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Corporation may terminate Executive&#146;s employment other than for Cause (as defined above) at any time upon written notice to Executive, which termination shall be effective immediately.&#160; Executive may resign thirty (30) days after notice to
the Corporation for &#147;Good Reason&#148;, as hereafter defined.</font></p> </td> </tr>
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<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
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<td width="100%" colspan="2" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as
otherwise provided in Section 10(c)(3) of this Agreement, in the event the Executive&#146;s employment is terminated either: by the Corporation other than for Cause; or by Executive for Good Reason, then:</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall receive a monthly amount equal to
one-twelfth (1/12) the rate of his annual base salary in effect immediately preceding such termination for six (6) months after the date of such termination at the times such payments would have been made in accordance with Section 4(a); provided,
however, that beginning August 1, 2003 and on the first of each month until and including January 1, 2004, the period of time Executive will receive base salary continuation under this Section 10(c)(2)(i) shall be extended by one month until
reaching a total of twelve (12) months on January 1, 2004, at which time such extensions shall cease.</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive shall receive a payment in cash on the date
his employment terminates equal to one half (1/2) times the greater of: (y) the amount of the average annual cash bonus paid or payable to him in respect of each of the three (3) fiscal years of the Corporation prior to the fiscal year in which his
employment terminates (or such average over the shorter period of Executive&#146;s employment, if applicable), or (z) the amount of the target bonus opportunity contemplated in Section 6 of this Agreement, in each case as in effect prior to the
termination of Executive&#146;s employment; provided, however, that beginning August 1, 2003 and on the first of each month until and including January 1, 2004, the multiplier set forth above (i.e., &#147;one half (1/2)&#148; as of the date hereof)
will be increased by one twelfth (1/12) at the beginning of each such month until such adjustments result in such multiplier being equal to one (1) on January 1, 2004, at which time such increases shall cease.</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
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<td width="100%" colspan="2" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event
a Change of Control occurs, and Executive&#146;s employment is terminated either: by Corporation other than for Cause or by Employee for Good Reason, in each case within thirteen (13) months after the occurrence of such Change of Control, then, the
Corporation&#146;s obligations under Section 10(c)(2) shall not apply, and in lieu thereof, the Corporation&#146;s obligations, in addition to any other obligations set forth under this Agreement, are as follows:</font></p> </td> </tr> </table> <p
align=center><font size=2 face="Times New Roman">4</font></p>

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<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On or before the Executive&#146;s last day of employment
with the Corporation (unless another period is mutually agreed upon by the parties), the Corporation shall pay to Executive as compensation for services rendered to the Corporation a cash amount (subject to any applicable payroll or other taxes
required to be withheld) equal to the aggregate total of a twelve (12) month continuation of his annual base salary, as in effect immediately preceding such termination; provided, however, that beginning August 1, 2003 and on the first of each month
until and including January 1, 2004, the period of time Executive will receive base salary continuation under this Section 10(c)(3)(i) shall be extended by one month until reaching a total of eighteen (18) months on January 1, 2004, at which time
such extensions shall cease.</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On or before the Executive&#146;s last day of
employment with the Corporation (unless another period is mutually agreed upon by the parties), the Corporation shall pay to Executive as compensation for services rendered to the Corporation a cash amount (subject to applicable payroll or other
taxes required to be withheld) equal to one (1) times the greater of: (y) the amount of the average annual cash bonus paid or payable to him in respect of each of the three (3) fiscal years of the Corporation prior to the fiscal year in which his
employment terminates (or such average over the shorter period of Executive&#146;s employment, if applicable), or (z) the amount of his target bonus opportunity contemplated in Section 6 of this Agreement, in each case as in effect prior to the
termination of Executive&#146;s employment; provided, however, that beginning August 1, 2003 and on the first of each month until and including January 1, 2004, the multiplier set forth above (i.e., &#147;one (1)&#148; as of the date hereof) will be
increased by one twelfth (1/12) at the beginning of each such month until such adjustments result in such multiplier being equal to eighteen twelfths (18/12) on January 1, 2004, at which time such increases shall cease.</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation shall maintain in full force and effect
for the continued benefit of the Executive for the remainder of the then current term of this Agreement all employee health, welfare benefit plans and programs or arrangements in which the Executive was entitled to participate immediately prior to
such termination, provided that continued participation is possible under the general terms and provisions of such plans and programs.&#160; In the event that Executive&#146;s participation in any such plan or program is barred, the Corporation
shall arrange to provide the Executive with benefits substantially similar to those which the Executive was entitled to receive under such plans and programs.</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive will be entitled to receive reasonable
out-placement services, including job search services, paid by the Corporation.&#160; The services will be provided by a recognized out-placement organization selected by the Executive with the approval of the Corporation (which approval will not be
unreasonably withheld).&#160; The services will be provided for up to two years after the date Executive&#146;s employment by the Corporation terminates.</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any benefits paid by the Corporation pursuant to Section
10(c)(3), or</font></p> </td> </tr> </table> <p align=center> <font size=2 face="Times New Roman">5</font></p>

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<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">otherwise triggered by the occurrence of a Change of Control, will be grossed up by the Corporation as necessary to protect the Executive from paying any excise taxes that may
result from such benefits.</font></p> </td> </tr>
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<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
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<td width="100%" colspan="2" valign="top"> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the provisions of Section 10(c)(2) and Section 10(c)(3)
of this Agreement to the contrary:</font></p> </td> </tr>
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<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If Executive breaches Section 11, 12 or 13, Executive
will not thereafter be entitled to receive any further compensation or benefits pursuant to Section 10(c)(2) or Section 10(c)(3), as applicable; provided that the Corporation shall have provided Executive with a reasonable time to cease and desist
and cure any such violation, if curable;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If, while he is receiving payments under Section
10(c)(2) or Section 10(c)(3), as applicable, Executive violates the provisions of Section 12, provided that the Corporation shall have provided Executive with a reasonable time to cease and desist and cure any such violation, if curable, such
payments will cease and he will not thereafter be entitled to receive any compensation or benefits pursuant to Section 10(c)(2) or Section 10(c)(3), as applicable; and</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The obligations of the Corporation to Executive under
Section 10(c)(2) and Section 10(c)(3) are conditioned upon the Executive&#146;s signing a release of claims in a form satisfactory to the Corporation within twenty-one (21) days of the date he receives or gives notice of termination of his
employment or the date he receives said release of claims, whichever is later, and upon his not revoking the release of claims thereafter.</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Termination Upon Executive&#146;s Death.</u></i></font></p> </td>
</tr> </table> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall terminate upon death of Executive; provided, however, that in such event the
Corporation shall pay to the estate of Executive his compensation including salary and accrued target bonus, if any, which otherwise would be payable to Executive through the end of the month in which his death occurs.</font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Termination Upon
Disability.</u></i></font></p> </td> </tr> </table> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation may terminate Executive&#146;s employment under
this Agreement, after having established the Executive&#146;s disability, by giving to Executive written notice of its intention to terminate his employment for disability and his employment with the Corporation shall terminate effective on the
120th day after receipt of such notice if within 120 days after such receipt Executive shall fail to return to the full-time performance of the essential functions of his position (and if Executive&#146;s disability has been established pursuant to
the definition of &#147;disability&#148; set forth below).&#160; For purposes of this Agreement, &#147;disability&#148; means either (i) disability which after the expiration of more than 13 consecutive weeks after its commencement is determined to
be total and permanent by a physician selected and paid for by the Corporation or its insurers, and acceptable to Executive or his legal representative, which consent shall not be unreasonably withheld or (ii)</font></p> <p align=center><font size=2
face="Times New Roman">6</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="100%" colspan="2" valign="top"> <p> <font size=2 face="Times New Roman">disability as defined in the policy of disability insurance maintained by the Corporation for the benefit of Executive, whichever shall be more favorable to
Executive.</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Obligations Survive Termination or Expiration</u>.</i></font></p>
</td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the termination of Executive&#146;s employment pursuant to
any provision of this Agreement (including any expiration of this Agreement), the parties shall be required to carry out any provisions of this Agreement which contemplate performance by them subsequent to such termination.&#160; In addition, no
termination shall affect any liability or other obligation of either party which shall have accrued prior to such termination, including, but not limited to, any liability, loss or damage on account of breach. No termination of employment shall
terminate the obligation of the Corporation to make payments of any vested benefits provided hereunder or the obligations of Executive under Sections 11, 12 and 13.</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Notice
by Executive.</u></i></font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive&#146;s employment hereunder may be terminated by Executive upon
thirty (30) days written notice to the Corporation or at any time by mutual agreement in writing.</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Obligations Unconditional.</u></i></font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as set forth in Section 10(c)(4), the Corporation&#146;s obligation
to pay the Executive the compensation provided in Section 10 shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the
Corporation may have against him or anyone else.&#160; All amounts payable by the Corporation hereunder shall be paid without notice or demand. </font><font size=2 face="Times New Roman">Each and every payment made hereunder by the Corporation shall
be final and the Corporation will not seek to recover all or any part of such payment from the Executive or from whosoever may be entitled thereto, for any reason whatsoever.&#160; The Executive shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise.</font> </p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Good
Reason Defined.</u></i></font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this Agreement, &#147;Good Reason&#148; shall
mean:</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The assignment of duties to the
Executive by the Corporation which result in the Executive having significantly less authority or responsibility than he has on the date hereof, without his express written consent;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The removal of the Executive
from or any failure to appoint or re-appoint him to a position of Senior Vice President of the Corporation, or a more senior position, without his express written consent;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Requiring the Executive to
maintain his principal office (y) at a location</font></p> </td> </tr> </table> <p align=center> <font size=2 face="Times New Roman">7</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">outside of a 50 mile radius of the Corporation&#146;s principal executive offices at the time of this Agreement, or (z) at a location other than the principal executive offices of
the Corporation;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A reduction by the Corporation
of the Executive&#146;s base salary, as the same may have been increased from time to time;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The failure of the Corporation
to provide the Executive with substantially the same material fringe benefits that are provided to him at the inception of this Agreement (including, but not limited to, participation in bonus programs or equity incentive programs);</font></p> </td>
</tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation&#146;s failure
to comply with any material term of this Agreement; or</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The failure of the Corporation
to obtain the assumption of, and agreement to perform, this Agreement by any successor.</font></p> </td> </tr> </table> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i><u>Change of Control.</u></i></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this Agreement, a Change of Control occurs if, after the date of this Agreement, (i) any person, including a
&#147;group&#148; as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, becomes the owner or beneficial owner of Corporation securities having 50% or more of the combined voting power of the then outstanding Corporation securities
that may be cast for the election of the Corporation&#146;s directors; or (ii) as the direct or indirect result of, or in connection with, a tender or exchange offer, a merger or other business combination, a sale of assets, a contested election of
directors, or any combination of these events, the persons who were directors of the Corporation before such events cease to constitute a majority of the Corporation&#146;s Board, or any successor&#146;s board, within three years of the last of such
transactions.&#160; For purposes of this Agreement, a Change of Control occurs on the date on which an event described in (i) or (ii) occurs.&#160; If a Change of Control occurs on account of a series of transactions or events, the Change of Control
occurs on the date of the last of such transactions or events.</font></p> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event a Change of Control occurs, all
unvested equity participation grants by the Corporation to the Executive will immediately vest and shall be exercisable over the period of time set forth in the granting documents. </font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 11.&#160; <u>Confidentiality/Nondisclosure</u>.&#160; </b></font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive hereby
acknowledges that Executive&#146;s employment with the Corporation places Executive in a position of confidence and trust with respect to the business, operations, customers, prospects, and personnel of the Corporation, and that Executive will be
given access to trade secrets and confidential and proprietary business information of the Corporation. Executive acknowledges that the Corporation&#146;s trade secrets and confidential and</font></p> </td> </tr> </table> <p align=center> <font
size=2 face="Times New Roman">8</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p> <font size=2 face="Times New Roman">proprietary business information&#160; include, but is not limited to, such matters as Corporation patents, trade secrets, systems, products and methodologies (whether or not
patentable), formulas, processes, manufacturing procedures, manuals, reports, software and source code used in the Corporation&#146;s production and business processes, customers, identity of vendors, materials used in the manufacturing process,
pricing received from vendors, machine settings, business opportunities and prospective business opportunities, costing and pricing procedures, marketing and business strategies, equipment and methods used and preferred by the Corporation and/or its
customers, and the amounts paid by such customers for the Corporation&#146;s products (all of the foregoing will be hereinafter referred to as &#147;confidential information&#148;). Additionally, and not by way of limitation,&#160; as used above,
the term &#147;trade secrets&#148; shall be afforded the broadest construction allowed by the common law, the Virginia Trade Secrets Act, and/or the federal law.</font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive agrees that the
Corporation&#146;s confidential information derives independent economic value because it is not generally known or readily ascertainable by other persons who could obtain economic value from the disclosure or use of such information.</font></p>
</td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive acknowledges
that the Corporation has invested considerable time and expense in developing and safeguarding its confidential information, and in developing and maintaining personal contacts and relationships with its customers and potential customers.&#160;
Executive agrees that, in so doing, the Corporation has developed favorable goodwill with customers and with the business community. The Corporation wishes to safeguard its goodwill and confidential information.</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive pledges his
best efforts and utmost diligence to protect the Corporation&#146;s confidential information. Unless required by the Corporation in connection with Executive&#146;s employment or with the Corporation&#146;s express written consent, Executive agrees
that he will not, either during his employment with the Corporation or afterwards, directly or indirectly, use or disclose for Executive&#146;s own benefit or for the benefit of another person or entity of any kind, or group of persons and/or
entities, any of the Corporation&#146;s confidential information, whether or not the information is acquired, learned, attained, or developed by Executive alone or in conjunction with others. Executive makes the same pledge with regard to the
confidential information of the Corporation&#146;s customers, contractors, or others with whom the Corporation has a business relationship.</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive also agrees that
all notes, lists, records, drawings, memoranda, or other documents that are made or compiled by Executive or which were available to Executive concerning any of the Corporation&#146;s business and/or confidential information shall be the exclusive
property of the Corporation. Executive agrees to deliver such materials and information to the Corporation upon the termination of the employment relationship or at any other time at the Corporation&#146;s request. Executive understands that the
unauthorized taking or disclosure of any of such information or materials could also result in civil and/or criminal liability.</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation expects
Executive to respect any trade secrets or confidential information of any of Executive&#146;s former employers, business associates, or any others. Executive agrees to respect the Corporation&#146;s express direction to Executive not to disclose to
the </font></p> </td> </tr> </table> <p align=center> <font size=2 face="Times New Roman">9</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p><font size=2 face="Times New Roman">Corporation, its officers, or any employees any such information as long as it remains confidential.</font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding any
contrary provision contained herein, Executive will be permitted to retain any documentation reasonably necessary to enforce the terms of this Agreement.</font></p> </td> </tr> </table> <p><font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 12.&#160; <u>Covenant Not to Compete and Non-solicitation</u>.&#160; </b></font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive understands and
agrees that the Corporation has disclosed or will disclose confidential information to Executive during his employment with the Corporation, the disclosure or use of which outside the Corporation&#146;s business would be detrimental to the
Corporation. Executive further agrees that the Corporation would suffer great loss and damage if Executive should, on his own behalf or on behalf of any other person or entity of any kind, or group of persons and/or entities, use or disclose any of
the Corporation&#146;s confidential information.</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive acknowledges
that Executive&#146;s engaging in any business that is competitive with the Corporation would cause the Corporation great and irreparable harm. While employed by the Corporation, Executive shall faithfully devote his best efforts to advance the
business and interests of the Corporation and shall not, on his own behalf or another&#146;s behalf, engage in any manner in any other business competing with that of the Corporation.</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the Restricted
Period (defined below), Executive shall not, on his own behalf or on behalf of another person or entity of any kind, or group of persons and/or entities, (i) participate in the management or control of any competing business engaged in the
manufacture or sale of fiber optic cable similar to the type manufactured, sold or designed by the Corporation at the time of termination of Executive&#146;s employment or (ii) be employed by any such business in a position in which Executive would
perform duties that are substantially similar to or the same as those performed by Executive on behalf of the Corporation or in a position that would utilize knowledge or skill developed by Executive during such employment with the
Corporation.&#160; It is expressly provided, however, that this covenant does not preclude Executive from working in the fiber optic industry in a role that would not compete with the business of the Corporation.&#160; Because the Corporation
engages in its business on a worldwide basis, the geographic scope of the covenants in this paragraph shall extend to those worldwide markets in which the Corporation does business or has active plans to do business at the termination of
Executive&#146;s employment. Executive further acknowledges that the covenants in this paragraph are reasonable and necessary to protect the Corporation&#146;s legitimate business interests.</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive acknowledges
that, while employed by the Corporation, Executive will have contact with and/or become aware of the Corporation&#146;s customers and the representatives of those customers, their names and addresses, specific customer needs and requirements, and
leads and references to prospective customers. Executive further acknowledges that loss of such customers would cause the Corporation great and irreparable harm. During the Restricted Period, Executive shall not solicit, contact, call upon, or
attempt to communicate with any customer,</font></p> </td> </tr> </table> <p align=center><font size=2 face="Times New Roman">10</font></p>

<p Style='page-break-before:always'>
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<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="100%" colspan="2" valign="top"> <p> <font size=2 face="Times New Roman">former customer or prospective customer of the Corporation on behalf of any business competing with that of the Corporation for the purpose of securing business that
is the same as or similar to that of the Corporation. This restriction will apply only to any customer, former customer or prospective customer of the Corporation with whom the Corporation has had contact during the last twelve (12) months of
Executive&#146;s employment with the Corporation. For the purposes of the preceding sentence, &#147;contact&#148; means (i) interaction between the Corporation and the customer, former customer or prospective customer that takes place to further the
business of either the Corporation or the customer, or (ii) making sales or marketing efforts to or performing services for the customer, former customer or prospective customer on behalf of the Corporation.</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the
greater of (i) twelve (12) months after the termination of Executive&#146;s employment with the Corporation for any reason or (ii) the Restricted Period, Executive may not recruit, hire or attempt to recruit or hire, directly or by assisting others,
any other employee of the Corporation.</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As used in
this Section 12, &#147;Restricted Period&#148; shall mean the period of time from the date of Executive&#146;s termination for any reason until the passage of the greater of:</font></p> </td> </tr>
<tr>
<td width="100%" colspan="2" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;twelve (12) months; or</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) in the event Section
10(c)(2) of this Agreement is applicable, the number of months during which Executive receives payments pursuant to Section 10(c)(2)(i) of this Agreement; or</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="6%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="93%" valign="top"> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) in the event Section 10(c)(3) of this
Agreement is applicable, the number of months that form the basis for any cash amount paid to Executive pursuant to Section 10(c)(3)(i) of this Agreement;</font></p> </td> </tr> </table> <p><font size=2 face="Times New Roman">provided, however, that
in the event of termination of Executive by the Corporation other than for Cause or termination by Executive for Good Reason, in no case shall the Restricted Period be longer than the period set forth in clause (ii)(A) or clause (ii)(B) above, as
applicable; and further provided that notwithstanding the foregoing, in the event the Restricted Period is less than twelve (12) months, the Corporation shall have the option to extend the Restricted Period to an aggregate period equal to not more
than twelve (12) months by proportionally increasing the&#160; compensation provided to Executive under either Section 10(c)(2) or Sections 10(c)(3)(i) and (ii), as applicable. </font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the foregoing, except as set forth in Section 10(c)(4) above, the imposition of the restrictions during the Restricted
Period under this Section 12 are conditioned upon the payment by the Corporation to Executive of all amounts provided for under Section 10(c)(2) or Section 10(c)(3) to the extent such Sections are applicable.</font></p> <p align=center> <font size=2
face="Times New Roman">11</font></p>

<p Style='page-break-before:always'>
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  <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Ownership of Intellectual
Property.</u></b></font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any and all inventions, discoveries, improvements, or creations (collectively
&#147;intellectual property&#148;) that Executive has conceived or made or may conceive or make during his employment with the Corporation that in any way, directly or indirectly, are connected with or related to the Corporation and/or its business,
shall be the sole and exclusive property of the Corporation. All works created by Executive under the Corporation&#146;s direction or in connection with the Corporation&#146;s business for which copyrights, trademarks or patents may be sought are
&#147;works made for hire&#148; and will be the sole and exclusive property of the Corporation. Any and all copyrights, trademarks or patents to such works, whether actually sought and/or applied for or not, will belong to the Corporation, and the
Executive shall execute all documents that may be necessary to convey or assign any such rights that the Executive may have in such intellectual property to the Corporation or that otherwise may be necessary to enable the Corporation to seek such
protection for such intellectual property. To the extent any such works are not deemed to be &#147;works made for hire,&#148; the Executive hereby assigns all proprietary rights, including copyrights, trademarks and patents, in such works to the
Corporation.</font></p> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 14.&#160; <u>Injunctive Relief, Damages, Etc</u>.&#160; </b></font></p> <p> <font
size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive agrees that given the nature of the positions held by Executive with the Corporation, that each and every one of the
covenants and restrictions set forth in Sections 11 and 12 above are reasonable in scope, length of time and geographic area and are necessary for the protection of the significant investment of the Corporation in developing, maintaining and
expanding its business. Accordingly, the parties hereto agree that in the event of any breach by Executive of any of the provisions of Sections 11 or 12 that monetary damages alone will not adequately compensate the Corporation for its losses and,
therefore, that it may seek any and all legal or equitable relief available to it, specifically including, but not limited to, injunctive relief. The covenants contained in Sections 11, 12 and 13 shall be construed and interpreted in any judicial
proceeding to permit their enforcement to the maximum extent permitted by law. Should a court of competent jurisdiction determine that any provision of the covenants and restrictions set forth in Section 12 above is unenforceable as being overbroad
as to time, area or scope, the court may strike the offending provision or reform such provision to substitute such other terms as are reasonable to protect the Corporation&#146;s legitimate business interests.</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event either party must proceed with litigation to force the other party to satisfy its obligations under the terms of this
Agreement, the court shall award to the prevailing party his or its reasonable litigation and counsel costs incurred to enforce his or its rights under this Agreement.</font></p> <p><font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 15.&#160; <u>Binding Effect/Assignability</u>.&#160; </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall be binding upon and inure to the benefit of the Corporation and Executive and their respective heirs, legal
representatives, executors, administrators, successors and assigns, but neither this Agreement, nor any of the rights hereunder, shall be assignable by Executive or any beneficiary or beneficiaries designated by Executive.&#160;&#160; The
Corporation will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or</font></p> <p align=center> <font size=2 face="Times New Roman">12</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p> <font size=2 face="Times New Roman">substantially all of the business, stock or assets of the Corporation, by agreement in form and substance reasonably satisfactory to the Executive, to expressly assume and agree
to perform this Agreement in its entirety. Failure of the Corporation to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement.&#160; Any successor of the Corporation shall be bound by the terms
of this Agreement.</font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 16.&#160; <u>Governing Law and Venue</u>.&#160; </b></font></p> <p> <font
size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall be subject to and construed in accordance with the laws of the Commonwealth of Virginia, without respect to
its conflict of laws provisions.&#160; The parties agree that exclusive venue for any action to enforce this Agreement shall be the Circuit Court for Roanoke County, Virginia, or the United States District Court for the Western District of Virginia,
Roanoke Division.</font></p> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 17.&#160; <u>Notices</u>.&#160; </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any and all notices, designations, consents, offers, acceptance or any other communications provided for herein shall be given in
writing and shall be deemed properly delivered if delivered in person or by registered or certified mail, return receipt requested, addressed in the case of the Corporation to its registered office to the attention of the President, or in the case
of Executive to his last known address. </font></p> <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 18.&#160; <u>Entire Agreement.</u></b></font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="100%" valign="top"> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except with
respect to reimbursement of relocation and related expenses as referenced in Section 8, this Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes any and all other agreements, either
oral or in writing, among the parties hereto with respect to the subject matter hereof.</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="100%" valign="top"> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Agreement may be executed in one or more counterparts, each of which shall be considered an original copy of this Agreement, but all of which together shall evidence only one agreement.</font></p> </td> </tr> </table> <p><font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 19.&#160; <u>Amendment and Waiver</u>.&#160; </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may not be amended except by an instrument in writing signed by or on behalf of each of the parties hereto.&#160; No
waiver of any provision of this Agreement shall be valid unless in writing and signed by the person or party to be charged. No officer other than the President shall have the authority to amend this Agreement or waive any provision of this Agreement
on behalf of the Corporation.&#160; Additionally, the President shall be the officer designated to act on behalf of the Corporation with respect to the provisions of this Agreement. </font></p> <p align=center> <font size=2
face="Times New Roman">13</font></p>

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  <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 20.&#160; <u>Severability.</u></b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In case any one or more of the provisions of this Agreement is held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision hereof and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein.</font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 21.&#160; <u>Case and Gender</u>.</b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wherever required by the context of this Agreement, the singular or plural case and the masculine, feminine and neuter genders shall be
interchangeable. </font></p> <p><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Section 22.&#160; <u>Captions</u>.&#160; </b></font></p> <p> <font size=2
face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The captions used in this Agreement are intended for descriptive and reference purposes only and are not intended to affect the meaning
of any Section hereunder. </font></p> <p align=center> <font size=2 face="Times New Roman"><b>[END OF PAGE]</b></font></p> <p align=center> <font size=2 face="Times New Roman"><b>[SIGNATURE PAGE FOLLOWS]</b></font></p> <p align=center> <font size=2
face="Times New Roman">14</font></p>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">
  <p> <font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>IN WITNESS WHEREOF,</b> the Corporation has caused this Agreement to be signed by
its duly authorized representative and Executive has hereunto set his hand and seal on the day and year first above written. </font></p>
<table align=center border=0 cellspacing=0 cellpadding=0 width="100%">
<tr>
<td width="414" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> &nbsp;</font></p> </td>
<td colspan="4" valign="bottom"> <p> <font size=2 face="Times New Roman"><b>O</b></font><font size=1 face="Times New Roman"><b><font size="2">PTICAL</font></b></font> <font size=2 face="Times New Roman"><b>C</b></font><font size=1
face="Times New Roman"><b><font size="2">ABLE</font></b></font> <font size=2 face="Times New Roman"><b>C</b></font><font size=1 face="Times New Roman"><b><font size="2">ORPORATION</font></b></font></p> </td> </tr>
<tr>
<td colspan="5" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td colspan="5" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="414" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> &nbsp;</font></p> </td>
<td colspan="2" valign="bottom"> <p align="left"> <font size=2 face="Times New Roman">By:</font></p> </td>
<td width="411" valign="bottom"> <center> <font size=2 face="Times New Roman">/s/ N<font size="1">EIL</font> D. W<font size="1">ILKIN,</font> J<font size="1">R</font>.</font> </center> </td>
<td width="378" valign="bottom">&nbsp;</td> </tr>
<tr>
<td width="414" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="51" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td colspan="2" valign="bottom"> <hr size=1 width="100%" noshade color=black> </td>
<td width="378" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td colspan="2" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> &nbsp;</font></p> </td>
<td colspan="2" valign="bottom"> <p align=center><font size=1 face="Times New Roman"><b>Neil D. Wilkin, Jr.</b></font></p> </td>
<td width="378" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td colspan="2" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> &nbsp;</font></p> </td>
<td colspan="2" valign="bottom"> <p align=center> <font size=1 face="Times New Roman"><b>President and Chief Financial Officer</b></font></p> </td>
<td width="378" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td colspan="2" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> &nbsp;</font></p> </td>
<td colspan="2" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> &nbsp;</font></p> </td>
<td width="378" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td width="414" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> &nbsp;</font></p> </td>
<td colspan="4" valign="bottom"> <p> <font size=2 face="Times New Roman"><b>EXECUTIVE</b></font></p> </td> </tr>
<tr>
<td colspan="5" valign="bottom"> <p align="center"><font size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/ C<font size="1">HARLES</font> W.
C<font size="1">ARSON</font></font></p> </td> </tr>
<tr>
<td width="414" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td colspan="2" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td width="411" valign="bottom"> <hr size=1 width="100%" noshade color=black> </td>
<td width="378" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr>
<td width="414" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td>
<td colspan="2" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> &nbsp;</font></p> </td>
<td width="411" valign="bottom"> <p align=center> <font size=1 face="Times New Roman"><b>Charles W. Carson</b></font></p> </td>
<td width="378" valign="bottom"> <p align=center><font size=2 face="Times New Roman"> &nbsp;</font></p> </td> </tr>
<tr>
<td colspan="5" valign="bottom"> <p><font size=2 face="Times New Roman">&nbsp;</font></p> </td> </tr>
<tr >
<td width=414></td>
<td width=51></td>
<td width=5></td>
<td width=411></td>
<td width=378></td> </tr> </table> <p align=center><font size=2 face="Times New Roman">15</font></p>
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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>6
<FILENAME>dex991.htm
<DESCRIPTION>CERTIFICATION
<TEXT>
<HTML><HEAD>
<TITLE>Certification</TITLE>
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 <BODY BGCOLOR="WHITE">

<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>EXHIBIT 99.1
</B></FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">CERTIFICATION UNDER SECTION 906 OF
&nbsp;<BR>THE SARBANES-OXLEY ACT OF 2002 </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">I, Neil D. Wilkin, Jr.,
President and Chief Financial Officer of Optical Cable Corporation (the Company), certify that: </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">1.</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">The Quarterly Report on Form 10-Q of the Company to which this certification is an exhibit for the quarter ended January 31, 2003 (the Report) fully complies with
the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">2.</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of January 31,
2003 and for the period then ended. </FONT></TD></TR></TABLE><P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Date: March
17, 2003 </FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; margin-left:54%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><U>/s/N<SMALL>EIL</SMALL> D. W<SMALL>ILKIN</SMALL>,
J<SMALL>R</SMALL>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</FONT></P><P STYLE="margin-top:0px;margin-bottom:0px; margin-left:54%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Neil D. Wilkin, Jr. </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px; margin-left:54%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">President (principal executive officer) and &nbsp;<BR>Chief Financial Officer </FONT></P><P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>


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