<PAGE> 1
SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
[Amendment No. ]
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
ORBIT/FR, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
______________________________________________________________
2) Aggregate number of securities to which transaction applies:
______________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
______________________________________________________________
4) Proposed maximum aggregate value of transaction:
______________________________________________________________
5) Total fee paid.
______________________________________________________________
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:____________________________________
2) Form Schedule or Registration Statement No.:_______________
3) Filing Party:______________________
4) Date Filed:________________________
<PAGE> 2
ORBIT/FR, INC.
506 Prudential Road
Horsham, Pennsylvania 19044
DEAR STOCKHOLDER:
You are cordially invited to attend the annual meeting of stockholders
("Annual Meeting") of Orbit/FR, Inc. (the "Company") to be held on Tuesday,
December 15, 1998 at 10:00 a.m., local time, at the Corporation Trust Center,
1209 Orange Street, Wilmington, Delaware 19801.
The proposals for the Annual Meeting relate to (i) the election of four
(4) directors and (ii) the ratification of the Board of Directors' appointment
of Ernst & Young LLP, independent auditors for the Company for the fiscal year
ending December 31, 1998. Our Annual Report on Form 10-K for the fiscal year
ended December 31, 1997 accompanies this Proxy Statement.
We look forward to seeing you at the Annual Meeting. Whether or not you
are planning to attend, we urge you to return the enclosed proxy at your
earliest convenience.
Sincerely,
/s/ Zeev Stein
---------------
Zeev Stein
Chairman of the Board of Directors
December 2, 1998
<PAGE> 3
ORBIT/FR, INC.
506 PRUDENTIAL ROAD
HORSHAM, PENNSYLVANIA 19044
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 15, 1998
To the Stockholders of
Orbit/FR, Inc.:
The Annual Meeting of Stockholders (the "Annual Meeting") of Orbit/FR,
Inc. (the "Company") will be held at the Corporation Trust Center, 1209 Orange
Street, Wilmington, Delaware 19801 on Tuesday, December 15, 1998 at 10:00 a.m.,
local time, for the following purposes:
1. To elect four (4) directors for the ensuing year;
2. To ratify the selection of Ernst & Young LLP as the Company's
independent auditors for the year ending December 31, 1998;
and
3. To transact any other business as may properly be brought
before the Annual Meeting.
Any action may be taken on the foregoing matters at the Annual Meeting
on the date specified above, or on any date or dates to which the Annual Meeting
may be adjourned.
The Board of Directors has fixed the close of business on November 15,
1998 as the record date for determining the stockholders entitled to notice of,
and to vote at, the Annual Meeting and at any adjournments or postponements
thereof. Only stockholders of record of the Company's Common Stock (the "Common
Stock") at the close of business on that date will be entitled to notice of, and
to vote at, the Annual Meeting and at any adjournments or postponements thereof.
Your attention is directed to the accompanying Proxy Statement for the
text of the resolutions to be proposed at the Annual Meeting and further
information regarding each proposal to be made. A copy of the Company's Annual
Report on Form 10-K for the year ended December 31, 1997 is enclosed herewith.
All stockholders are cordially invited to attend the Annual Meeting.
Whether or not you plan to attend the Annual Meeting, all holders of shares of
the Company's Common Stock are urged to complete and sign the enclosed proxy,
and return it promptly to the Company. At any time prior to their being voted,
proxies are revocable by delivering written notice to the Company in accordance
with the instructions set forth in the Proxy Statement or by voting at the
Annual Meeting in person.
STOCKHOLDERS UNABLE TO ATTEND THE ANNUAL MEETING IN PERSON ARE ASKED TO VOTE,
SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE ENCLOSED SELF-ADDRESSED
ENVELOPE, WHICH DOES NOT REQUIRE ANY POSTAGE IF MAILED IN THE UNITED STATES.
By order of the Board of Directors
/s/ Irene Honeycutt
--------------------
Irene Honeycutt
Secretary
December 2, 1998
Horsham, Pennsylvania
<PAGE> 4
ORBIT/FR, INC.
506 PRUDENTIAL ROAD
HORSHAM, PENNSYLVANIA 19044
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 15, 1998
PROXY STATEMENT
This Proxy Statement (the "Proxy Statement") has been prepared and is
being distributed in connection with the solicitation by the Board of Directors
of Orbit/FR, Inc. (the "Company") of proxies (each a "Proxy" and collectively,
the "Proxies") in the enclosed form for use at the Annual Meeting of
Stockholders of the Company (the "Annual Meeting") to be held on Tuesday,
December 15, 1998, at 10:00 a.m., local time, at the Corporation Trust Center,
1209 Orange Street, Wilmington, Delaware 19801 and any adjournment(s) or
postponement(s) thereof.
VOTING AND REVOCABILITY OF PROXIES
Stockholders of record as of the close of business on November 15, 1998
(the "Record Date") will be entitled to vote at the Annual Meeting and any
adjournment thereof. As of the Record Date, 6,072,973 shares of common stock,
par value $.01 per share of the Company (the "Common Stock") were outstanding
and entitled to one vote each. Execution of a Proxy will not in any way affect a
stockholder's right to attend the Annual Meeting and vote in person. Any
stockholder submitting a Proxy has the right to revoke it at any time before it
is exercised by another instrument or transmission revoking it or by filing a
properly created proxy bearing a later date with the Secretary of the Company.
Shares represented by properly executed Proxies for which no
instructions are received will be voted for all the nominees identified below
under "Proposal No. 1-Election of Directors," and for the ratification of
accountants identified below under "Proposal No. 2-Appointment of Accountants."
The persons named as proxies are either officers or directors of the Company.
The presence, in person or by Proxy, of stockholders entitled to cast
at least a majority of the votes that all stockholders are entitled to cast on a
particular matter to be acted upon at the Annual Meeting, shall constitute a
quorum for the purposes of consideration and action on such matter. Abstentions
and broker non-votes are each included in the number of shares present at the
Annual Meeting for purposes of establishing a quorum. The affirmative vote of a
plurality of the votes cast is required for the election of directors. For all
other proposals, the affirmative vote of the holders of a majority of shares of
Common Stock voted, in person or by Proxy, at the Annual Meeting is required. If
any other matter should be presented at the Annual Meeting upon which it is
proper to take a vote, shares represented by all Proxies received will be voted
with respect thereto in accordance with the judgment of the persons named as
proxies.
This Proxy Statement and the accompanying materials were first sent to
the stockholders on or about December 2, 1998.
ADDITIONAL INFORMATION
The Company will furnish without charge to any stockholder, upon
written or oral request, a copy of the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1997, including any amendments thereto, and
other documents filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934. Requests for such documents should be addressed
to William A. Torzolini, Vice President, Finance and Chief Financial Officer,
Orbit/FR, Inc., 506 Prudential Road, Horsham, Pennsylvania 19044, telephone
number (215) 674-5100.
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of December 1, 1998 certain
information with regard to beneficial ownership (as determined in accordance
with Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as
amended) of outstanding shares of the Company's Common Stock by (i) each person
known by the Company to beneficially own five percent (5%) or more of the
outstanding shares of the Company's Common Stock, (ii) each director and Named
Executive Officer (as defined below) individually, and (iii) all executive
officers and directors of the Company as a group:
<TABLE>
<CAPTION>
TOTAL NUMBER OF SHARES PERCENTAGE OF CLASS OF
NAME AND ADDRESS OF OF COMMON STOCK COMMON STOCK
BENEFICIAL OWNER BENEFICIALLY OWNED(1) BENEFICIALLY OWNED(1)
- ---------------- --------------------- ---------------------
<S> <C> <C>
Orbit-Alchut Technologies, Ltd. 3,700,000 60.9%
P.O. Box 3171
Industrial Zone
Netanya 42131 Israel
Joseph Aviv(2) 3,700,000 60.9%
c/o Orbit/FR, Inc.
506 Prudential Road
Horsham, PA 19044
Aryeh Trabelsi(3) 182,500 3.0%
c/o Orbit/FR, Inc.
506 Prudential Road
Horsham, PA 19044
Zeev Stein(4) 3,700,000 60.9%
c/o Orbit/FR, Inc.
506 Prudential Road
Horsham, PA 19044
David Ben-Bassat(5) 3,700,000 60.9%
c/o Orbit-Alchut Technologies, Ltd
P.O. Box 3171
Industrial Zone
Netanya 42131 Israel
Shimon Alon(6) 6,000 *
c/o Orbit/FR, Inc.
506 Prudential Road
Horsham, PA 19044
Irwin L. Gross -- *
c/o Orbit/FR, Inc.
506 Prudential Road
Horsham, PA 19044
John Aubin (7) -- *
Orbit/FR, Inc.
506 Prudential Road
Horsham, Pennsylvania 19044
</TABLE>
-2-
<PAGE> 6
<TABLE>
<CAPTION>
TOTAL NUMBER OF SHARES PERCENTAGE OF CLASS OF
NAME AND ADDRESS OF OF COMMON STOCK COMMON STOCK
BENEFICIAL OWNER BENEFICIALLY OWNED(1) BENEFICIALLY OWNED(1)
- ---------------- --------------------- ---------------------
<S> <C> <C>
David Farina (8) -- *
Orbit/FR, Inc.
506 Prudential Road
Horsham, Pennsylvania 19044
All executive officers and directors 3,888,500 64.3%
as a group (11 persons) (9)
</TABLE>
* Less than 1% of the outstanding Common Stock.
(1) The securities "beneficially owned" by an individual are determined in
accordance with the definition of "beneficial ownership" set forth in
the regulations of the Securities and Exchange Commission (the "SEC").
Accordingly, they may include securities owned by or for, among others,
the spouse and/or minor children of the individual and any other
relative who has the same home as such individual, as well as other
securities as to which the individual has or shares voting or
investment power or has the right to acquire under outstanding stock
options within 60 days after the date of this Proxy Statement.
Beneficial ownership may be disclaimed as to certain of the securities.
(2) Represents 3,700,000 shares held by Orbit-Alchut Technologies, Ltd.
("Alchut"). Mr. Aviv is a director and 42.27% beneficial stockholder of
Alchut.
(3) Includes 171,000 shares of Common Stock issuable upon the exercise of
an option granted to Mr. Trabelsi, which option became exercisable on
March 1, 1998.
(4) Represents 3,700,000 shares held by Alchut. Mr. Stein is a director and
42.33% beneficial stockholder of Alchut.
(5) Represents 3,700,000 shares held by Alchut. Mr. Ben-Bassat is a
director of Alchut. Does not include 20,000 shares of Common Stock
issuable upon the exercise of options granted to Mr. Ben-Bassat upon
the completion of the Company's initial public offering on June 17,
1997, which options become exercisable in four cumulative annual
installments commencing on June 17, 1999. Also does not include 10,000
shares of Common Stock issuable upon the exercise of options granted to
Mr. Ben-Bassat on November 25, 1998, which options become exercisable
in four annual cumulative installments commencing on June 17, 1999.
(6) Represents 6,000 shares of Common Stock issuable upon the exercise of
options granted to Mr. Alon, which options became exercisable on July
2, 1998. Does not include 24,000 shares of Common Stock issuable upon
the exercise of options granted to Mr. Alon upon his appointment to the
Board of Directors of the Company, which options are not exercisable
within 60 days of the date of this Proxy Statement.
(7) Does not include 20,000 shares of Common Stock issuable upon the
exercise of options granted to Mr. Aubin on June 17, 1997, which
options become exercisable in four cumulative annual installments
commencing on June 17, 1999.
(8) Does not include 20,000 shares of Common Stock issuable upon the
exercise of options granted to Mr. Farina on June 17, 1997, which
options become exercisable in four cumulative annual installments
commencing on June 17, 1999.
(9) Includes the information contained in the notes above, as applicable.
Does not include 20,000 shares of Common Stock issuable upon the
exercise of options granted to certain other executive officers upon
the completion of the Company's initial public offering on June 17,
1997, which options become exercisable in four cumulative annual
installments commencing on June 17, 1999. Does not include 110,000
shares of Common Stock issuable upon the exercise of options granted to
certain other executive officers on October 23, 1998, which options
become exercisable in five cumulative annual installments commencing on
October 23, 1999.
-3-
<PAGE> 7
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
Four (4) directors are to be elected at the Annual Meeting, each to serve
until the next annual meeting and until his successor shall have been elected
and qualified. Each of the nominees named below, except for Irwin L. Gross, is
presently a member of the Board of Directors. In case any of the nominees should
become unavailable for election, for any reason not presently known or
contemplated, the persons named on the Proxy card will have discretionary
authority to vote pursuant to the Proxy for a substitute.
The following table sets forth the name, age and principal occupation of
each director, including the nominees.
<TABLE>
<CAPTION>
NAME AGE SINCE PRINCIPAL OCCUPATION
- ---- --- ----- --------------------
<S> <C> <C> <C>
Zeev Stein 45 1996 Chairman of the Board of Directors and Acting Chief
Executive Officer of the Company
Joseph Aviv 61 1996 Chairman of the Board of Directors, Alchut
Shimon Alon 48 1997 Chief Executive Officer of Precise Software Ltd.
Irwin L. Gross 55 n/a Private and Investment Banking
</TABLE>
ZEEV STEIN has served as a director of the Company and its predecessor
since March 1996 and began serving as Chairman of the Board of Directors in
October 1998. Since July 1994, Mr. Stein has served as a Director of Alchut and
since September 1996, Mr. Stein has also served as the Vice-President of
Operations of Alchut. From 1991 to 1996, Mr. Stein was the General Manager of
Stein Special Art, Ltd., located in Ra'anana, Israel. Mr. Stein is the
son-in-law of Mr. Aviv.
JOSEPH AVIV served as Chairman of the Board of Directors of the Company
and its predecessor from March 1996 until October 1998 and continues to serve as
a director. Mr. Aviv also has served as Chairman of the Board of Directors of
Alchut since March 1996. Since 1994, Mr. Aviv has been the General Manager of
Aviron Engineers Ltd., a holding company located in Ra'anana, Israel. From April
1992 to July 1994, Mr. Aviv was a member of the Board of Directors of Alchut.
From 1985 to 1994, Mr. Aviv was the Chairman of the Board of Directors of
Paz-Chen, Ltd. a publicly-traded jewelry company located in Tel-Aviv, Israel.
SHIMON ALON was named a director in June 1997, and has served as President
and Chief Executive Officer of Precise Software Ltd., a private company in
Braintree, Massachusetts since October 1997, which provides tools that link the
production support and application development processes. From 1982 to 1997, Mr.
Alon served with Scitex Corporation Ltd. in Herzlia, Israel in various
capacities, with his last position as President of Scitex America Corp. in
Bedford, Massachusetts which sells and supports products used in graphic arts
and digital printing.
IRWIN L. GROSS founded (during 1998) and is the sole owner of Ocean Castle
Investments, LLC, a financial services company specializing in private and
investment banking. From 1984 through July 1998, Mr. Gross served as Chairman of
the Board of Directors of ICC Technologies, a previously publicly traded
technology company that he founded in 1984. From 1994 through 1997, Mr. Gross
served as Chairman of the board of directors of EA Industries, Inc., a publicly
traded company that manufactures electronic products and systems. Mr. Gross
continues to serve as a consultant to EA Industries, Inc.'s board of directors.
The Board of Directors met six times during the last fiscal year. There
was no incumbent who, during the last full fiscal year, attended in person or by
phone fewer than 75% of the meetings of the Board of Directors.
-4-
<PAGE> 8
BOARD OF DIRECTORS
The Company's Amended and Restated Certificate of Incorporation provides
that the Board of Directors shall consist of not less than three nor more than
thirteen members, the exact number to be fixed and determined from time to time
by the Board. The Company's Board of Directors is presently composed of four
directors.
COMMITTEES OF THE BOARD
The Board of Directors established its Compensation Committee and Audit
Committee in April 1997.
The Compensation Committee of the Board of Directors, subject to the
approval of the Board of Directors, determines the compensation of the Company's
executive officers and oversees the administration of executive compensation
programs. During 1997, the Compensation Committee was composed of Mr. Alon, Eric
Haskell, a former director of the Company, and Mr. Stein. Mr. Alon and Mr.
Haskell were independent, nonemployee directors. There was no member of the
Compensation Committee who, during the last fiscal year attended in person or by
phone fewer than 75% of the meetings of the Compensation Committee. The
Compensation Committee presently is composed of Mr. Alon and Mr. Stein.
The Audit Committee recommends outside accountants, reviews the results
and scope of the annual audit, the services provided by the Company's
independent auditors and the recommendations of the auditors with respect to the
Company's accounting systems and controls. During 1997, the Audit Committee was
composed of Mr. Alon, Mr. Haskell and David Ben-Bassat, all of which were
independent, nonemployee directors. Representatives of the Company's independent
auditing firm, Ernst & Young LLP, met with the Audit Committee during the first
quarter of 1998 and reviewed their examination of the Company's financial
statements for the year ended December 31, 1997. With the exception of Mr. Alon,
there was no member of the Audit Committee who, during the last fiscal year,
attended in person or by phone, fewer than 75% of the meetings of the Audit
Committee. The Audit Committee presently is composed of Mr. Alon and Mr.
Ben-Bassat.
COMPENSATION OF DIRECTORS
With the exception of Mr. Aviv, directors of the Company currently do not
receive any monetary compensation for service on the Board of Directors,
although directors are reimbursed for necessary travel expenses incurred in
attending meetings of the Board of Directors. Pursuant to an agreement between
the Company and Mr. Aviv, during the year ended December 31, 1997, Mr. Aviv
received fees of $84,000 for services rendered to the Company. The Board of
Directors has, however, established that, effective upon the date of the Annual
Meeting, each director who does not otherwise receive compensation as an officer
or employee of the Company will receive $5,000 for each year of service on the
Board of Directors.
Under the Company's 1997 Equity Incentive Plan (the "Incentive Plan"), Mr.
Ben-Bassat was granted an option to purchase 20,000 shares of Common Stock
exercisable at $8 1/4, the price of the Company's Common Stock on the date of
its initial public offering (the "Offering Price"). These options will vest
annually in four equal increments beginning on June 17, 1999. Mr. Haskell and
Mr. Alon also were granted options to purchase 30,000 shares of Common Stock at
the Offering Price. These options vest in five equal increments beginning on
June 17, 1998. On November 25, 1998, Mr. Stein and Mr. Aviv were granted options
to purchase 30,000 shares of Common Stock each at an exercise price of $3 per
share and Mr. Ben-Bassat was granted additional options to purchase 10,000
shares of Common Stock at the same exercise price. These options will vest
annually in four increments beginning on June 17, 1999. Effective upon the date
of the Annual Meeting, non-incumbent nominees to the Board of Directors who are
approved by the stockholders of the Company will receive options to purchase
30,000 shares of Common Stock at an exercise price equal to the closing price of
the Common Stock on the date such options are granted. These options will vest
annually in five equal increments beginning 12 months from the date such options
are granted.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ENTIRE SLATE
OF NOMINEES IN PROPOSAL NO. 1
-5-
<PAGE> 9
EXECUTIVE OFFICERS AND KEY EMPLOYEES OF THE COMPANY
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Zeev Stein(1) 45 Chairman of the Board of Directors and Acting Chief
Executive Officer
John Aubin 44 Vice President, Measurement Systems
David Farina, Ph.D. 37 Vice President, Research and Development
William A. Torzolini 38 Vice President, Finance and Chief Financial Officer
Michael J. Hart, Sr. 46 Executive Vice President
Thomas J. Burke 37 Vice President, Sales
Sean Mallon 31 Vice President, Marketing
Marcel Boumans 40 Managing Director of Orbit/FR Europe GmbH
Moshe Pinkasy 47 Chief Executive Officer, Orbit/FR Engineering, Ltd.
Gabriel Sanchez 46 President, Advanced Electromagnetic, Inc.
</TABLE>
(1) In accordance with the Company's bylaws, Mr. Stein, in his capacity as
Chairman of the Board of Directors, has been serving as the Company's
Chief Executive Officer since October 9, 1998 in light of the previous
resignation of Mr. Trabelsi, the Company's former Chief Executive Officer.
JOHN AUBIN has served as Vice President of Measurement Systems since
October 1998 and has held various positions with the Company since 1996. From
1991 to 1996, Mr. Aubin was Vice-President in charge of the Antenna Measurement
Business Area for Flam & Russell.
DAVID FARINA, PH.D. has served as Vice President of Research and
Development since October 1998 and has held various positions with the Company
and its predecessor since August 1995. From 1994 to 1995, Mr. Farina was
employed as a Department Manager for Flam & Russell, managing large engineering
projects. From 1987 to 1994, Mr. Farina was Project Manager for Flam & Russell.
WILLIAM A. TORZOLINI has served as Vice President of Finance and Chief
Financial Officer for the Company since May of 1998. From 1990 to 1998 Mr.
Torzolini served with Novacare, Inc., a national provider of rehabilitation
healthcare services in various senior management roles including Vice President
of Finance and Chief Financial Officer of Novacare's Outpatient Division.
MICHAEL J. HART, SR. has served as the Executive Vice President since
October 1998. Mr. Hart joined the Company in May 1998 as Division Manager of the
EMC Division. From January 1995 through May 1998, Mr. Hart was the President of
Quantum Change/EMC Systems, Inc., a privately held company specializing in
software for the electromagnetic compatibility (EMC) marketplace. The
significant assets of Quantum Change/EMC Systems, Inc. were purchased by the
Company in May 1998. From January 1980 through November 1994, Mr. Hart was the
President of Electro-Mechanics Company, a privately held manufacturer of EMC
components.
THOMAS J. BURKE has served as Vice President - Sales and Customer Service
for the Company since September 1998. From 1996 through 1998, Mr. Burke was
employed as the Director - Worldwide Sales and Customer Service for Robotic
Vision Systems Incorporated. From 1993 through 1996, Mr. Burke served in various
capacities Kulicke & Soffa Industries, Incorporated.
-6-
<PAGE> 10
SEAN MALLON has served as Vice President of Marketing since October 1998
and has held various positions with the Company and its predecessor since
November 1996. From 1993 to 1996, Mr. Mallon was the President and Chief
Executive Officer of RDI International, Inc., a company co-founded by Mr.
Mallon, which designed, manufactured and marketed a line of TV/FM antennas and
accessories.
MARCEL BOUMANS has served as the Managing Director of Orbit/FR Europe
GmbH, a wholly-owned subsidiary of the Company, since March 1997. From June 1995
to March 1997, Mr. Boumans was a Systems Design Engineer for Dornier Satelliten
Systeme GmbH, the satellite systems subsidiary of Daimler-Benz Aerospace. From
1990 to 1995, Mr. Boumans was a Systems Design Engineer for Dornier GmbH, the
communications and defense subsidiary of Daimler-Benz Aerospace.
MOSHE PINKASY has served as the Chief Executive Officer of Orbit/FR
Engineering, Ltd., a wholly-owned subsidiary of the Company, since January 1997.
From February 1996 to December 1996, Mr. Pinkasy was Alchut's Manager of the
Microwave Test and Measurement Business in Israel. From 1992 to 1996, Mr.
Pinkasy served, in various capacities, as the Mechanical Engineering Department
Manager for Alchut.
GABRIEL SANCHEZ has served as President of Advanced Electromagnetic, Inc.
since its establishment in March of 1980. Prior to that period, Mr. Sanchez
worked for Plessy Microwave and Emerson and Cumming.
EXECUTIVE COMPENSATION
The following Summary Compensation Table summarizes the compensation of
the Chief Executive Officer and the other Named Executive Officers of the
Company for 1997 (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------- ----------------------
Awards Payouts
------ -------
Other
Annual Restricted Securities LTIP All other
Name and Principal Compen- Stock Underlying Payouts Compen-
Position Year Salary Bonus sation Award(s) Options(#) ($) sation(1)
- -------- ---- ------ ----- ------ -------- ---------- ----- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aryeh Trabelsi 1997 $154,216 $44,422 - - 171,000(3) - $418
President and Chief 1996 108,876 15,000 - - 440
Executive Officer(2)
John Aubin 1997 $91,998 $18,082 - - 20,000 - 508
Vice President, 1996 44,510(4) - - - - -
Measurement
Systems
David Farina, Ph.D. 1997 $86,008 $17,134 - - 20,000 - 475
Vice President, 1996 84,286 3,347 - - -
Research and
Development
</TABLE>
(1) Represents life insurance premiums paid.
(2) Mr. Trabelsi resigned as President and Chief Executive Officer of the
Company on September 3, 1998.
(3) All options vested on March 1, 1998.
(4) Represents Mr. Aubin's compensation from the commencement of his
employment with the Company on June 28, 1996 through December 31, 1996.
-7-
<PAGE> 11
STOCK OPTION GRANTS
Pursuant to the Incentive Plan, stock options for 211,000 shares of Common
Stock were granted to the Named Executive Officers of the Company. The table
below shows option grants in 1997 to the Named Executive Officers of the
Company.
OPTIONS GRANTED IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
% of Total Options
Number of Securities Granted to Exercise
Underlying Options Employees in Fiscal Price
Name Granted Year ($/share) Expiration Date
- ---- ------- ---- --------- ---------------
<S> <C> <C> <C> <C>
Aryeh Trabelsi 171,000 (1) 34.7% $8 1/4(3) 6/17/07
John Aubin 20,000 (2) 4.1% $8 1/4(3) 6/17/07
David Farina 20,000 (2) 4.1% $8 1/4(3) 6/17/07
</TABLE>
(1) All options vested as of March 1, 1998.
(2) Options vest in equal annual installments over four years commencing on
June 17, 1999.
(3) Effective October 23, 1998, the Company repriced all outstanding options
to an exercise price of $3 per share. The closing price of the Company's
Common Stock on October 23, 1998 was $1 9/16 per share.
AGGREGATED FISCAL YEAR-END OPTION VALUES
The table below shows 1997 year-end amounts and value of shares of Common
Stock underlying outstanding options. The Named Executive Officers did not
exercise any stock options in 1997.
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised In-the-Money
Unexercised Options at Options at
December 31, 1997 December 31, 1997(1)
----------------- --------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Aryeh Trabelsi - 171,000 - $1,346,625
John Aubin - 20,000 - 157,500
David Farina - 20,000 - 157,500
</TABLE>
(1) Based on the closing price on the Nasdaq National Market of $16 1/8 on the
Nasdaq National Market on December 31, 1997.
With the exception of Mr. Trabelsi, all of the options granted to the Named
Executive Officers first become exercisable on June 17, 1999, and, therefore,
are unexercisable at December 31, 1997. All options were granted at an exercise
price equal to the Company's initial offering price of $8 1/4 and were repriced
by the Company effective October 23, 1998 to an exercise price of $3 per share.
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<PAGE> 12
EMPLOYMENT AGREEMENTS
Effective February 15, 1997, the Company entered into an employment
agreement with Aryeh Trabelsi, to hold the positions of President and Chief
Executive Officer of the Company, for an initial term of two years and
thereafter terminable by either the Company or Mr. Trabelsi on 90 days notice.
Pursuant to the terms of Mr. Trabelsi's employment agreement and during its
effective period, Mr. Trabelsi was entitled to receive (i) an annual base salary
of $154,216 or such higher amount as the Company's Board of Directors may
determine from time to time, (ii) an annual cash bonus based on the Company's
net income before taxes, excluding any gains from the sale of securities, and
(iii) an annual cash bonus based on the Company's achievement of specific levels
of net income before taxes excluding capital gains.
Mr. Trabelsi was granted a stock option to purchase up to 171,000 shares of
Common Stock at a per share exercise price equal to the Offering Price to vest
in four equal annual installments beginning on June 17, 1999. On March 17, 1998,
the Company's Board of Directors approved the immediate and full vesting of his
stock option to purchase 171,000 shares of Common Stock.
Mr. Trabelsi's employment agreement may be terminated by the Company for
cause, which is defined as the material breach of the employment agreement by
Mr. Trabelsi or if Mr. Trabelsi commits a material act of dishonesty or a
material breach of trust or a fiduciary obligation with respect to the Company.
The employment agreement may be terminated by Mr. Trabelsi for good reason
("good reason"), which includes, among other things, a material breach of the
employment agreement by the Company, the demotion or removal of Mr. Trabelsi, a
material diminishment of Mr. Trabelsi's responsibilities, a reduction in base
salary, the relocation of Mr. Trabelsi's primary place of employment by more
than 100 miles (other than a relocation to Israel after December 1998) without
his consent or any failure of the Company to obtain the assumption of the
agreement by any successor or assign of the Company.
Under the employment agreement, Mr. Trabelsi is subject to certain
non-disclosure, non-solicitation and non-competitive covenants. The employment
agreement provides that during the period of non-competition and
non-solicitation, Mr. Trabelsi will receive his base salary reduced by up to
one-half of any salary received by Mr. Trabelsi from another employer during the
period of non-competition or non-solicitation.
On September 3, 1998, 90 days prior to the effective date thereof, Mr.
Trabelsi delivered to the Company written notice of the termination of his
employment agreement for good reason. Mr. Trabelsi remained on the Board of
Directors of the Company to assist the Company's management in its search for a
new Chief Executive Officer until his resignation therefrom on November 3, 1998.
Although Mr. Trabelsi stepped down from the positions of Chief Executive Officer
and President, Mr. Trabelsi continued as an employee of the Company until the
effective date of the termination of his employment agreement on December 3,
1998.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
TRANSACTIONS BETWEEN ALCHUT AND ENGINEERING
Orbit/FR Engineering, Ltd. ("Engineering"), the Company's wholly-owned
Israeli subsidiary, and Alchut have an agreement, whereby Engineering purchases
from Alchut electrical and mechanical production services. Engineering pays
Alchut for these services based upon a rate of cost plus 5%, totaling
approximately $1,677,000 for the year ended December 31, 1997. In addition,
Alchut provided other administrative services, including but not limited to,
bookkeeping, computer, legal, accounting, cost management, information systems,
and production support, which amounted to $360,000 in 1997.
These agreements are evaluated on an annual basis.
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<PAGE> 13
AGREEMENT WITH DIRECTOR
Pursuant to an agreement entered into between the Company and Joseph Aviv,
former Chairman of the Board of Directors, during the year ended December 31,
1997, the Company paid $84,000 to Mr. Aviv for consulting services rendered by
him to the Company.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors and persons who own more than ten percent (10%)
of the Company's Common Stock to file initial reports of ownership and reports
of change of ownership with the SEC. Executive officers and directors are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file. Based solely on a review of the copies of such forms
furnished to it, the Company believes that, during the preceding year, the
executive officers and directors and persons who own more than ten percent (10%)
of the Company's Common Stock then subject to Section 16(a) complied with all
Section 16(a) filing requirements.
PROPOSAL NO. 2 - APPOINTMENT OF ACCOUNTANTS
Subject to stockholder ratification, the Board of Directors intends to
appoint the firm of Ernst & Young LLP which served as the Company's independent
auditors for the last fiscal year, as its independent auditors for the year
ending December 31, 1998.
One or more representatives of Ernst & Young LLP are expected to be present
at the Annual Meeting, who will have the opportunity to make a statement if so
desired and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL NO. 2
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
The Company intends to mail next year's proxy statement to its stockholder
on or about May 1, 1999. Any stockholder proposal intended to be presented at
the Company's 1999 annual meeting of stockholders pursuant to Rule 14a-8
promulgated under the Securities Exchange Act of 1934 (the "Exchange Act") must
be received by the Company at its office in Horsham, Pennsylvania on or before
January 31, 1999 in order to be considered for inclusion in the Company's proxy
statement and form of proxy relating to such annual meeting.
On May 21, 1998 the SEC adopted an amendment to Rule 14a-4, as promulgated
under the Exchange Act. The amendment to Rule 14a-4(c)(1) governs the Company's
use of its discretionary proxy voting authority with respect to a stockholder
proposal which the stockholder has not sought to include in the Company's proxy
statement. The new amendment provides that if a proponent of a proposal fails to
notify the Company at least 45 days prior to the month and day of mailing of the
prior year's proxy statement (or any date specified in an advance notice
provision), then the management proxies will be allowed to use their
discretionary voting authority when the proposal is raised at the meeting,
without any discussion of the matter in the proxy statement.
With respect to the Company's 1999 annual meeting of stockholders, if the
Company is not provided notice of a stockholder proposal, which the stockholder
has not previously sought to include in the Company's proxy statement under Rule
14a-8, by March 16, 1999, the management proxies will be allowed to use their
discretionary authority as outlined above.
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<PAGE> 14
OTHER MATTERS
The Board of Directors does not intend to bring any matters before the
Annual Meeting, other than as stated in this Proxy Statement, and is not aware
that any other matters will be presented for action at the Annual Meeting. If
any other matters come before the Annual Meeting, the persons named in the
enclosed Proxy will vote the Proxy with respect thereto, in accordance with
their best judgment, pursuant to the discretionary authority granted by the
Proxy.
EXPENSES OF SOLICITATION
The cost of preparing, assembling, mailing and soliciting the Proxies will
be borne by the Company. In addition to the use of the mails, Proxies may be
solicited by regular employees of the Company, either personally or by
telephone. The Company does not expect to pay any compensation for the
solicitation of Proxies, but may reimburse brokers and other persons holding
shares in their names or in the names of nominees for expenses in sending proxy
materials to beneficial owners and obtaining Proxies from such owners.
All properly executed Proxies delivered pursuant to this solicitation and
not revoked will be voted at the Annual Meeting in accordance with the
directions given. In voting by Proxy in regard to the election of directors to
serve until the next annual meeting of stockholders, stockholders may vote in
favor of all nominees or withhold votes as to all nominees or withhold votes as
to specific nominees. With respect to other items to be voted upon, stockholders
may vote in favor of the item or against the item or may abstain from voting.
Stockholders should specify their choices on the enclosed Proxy. If no specific
instructions are given with respect to the matters to be acted upon, and the
Proxy is returned properly executed, then the shares represented by the Proxy
will be voted FOR the election of all directors, and FOR the proposal to ratify
the appointment of the independent accountants.
PLEASE DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED IF IT IS MAILED IN THE UNITED STATES.
ORBIT/FR, INC.
/s/ Irene Honeycutt
--------------------
Irene Honeycutt
Secretary
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<PAGE> 15
ORBIT/FR, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all previous proxies, hereby appoints Zeev
Stein and Shimon Alon, or any of them acting individually, as the proxy of the
undersigned, with full power of substitution, to vote, as indicated below and in
their discretion upon such other matters as may properly come before the Annual
Meeting, all shares which the undersigned would be entitled to vote at the
Annual Meeting of the Company to be held at 10:00 A.M., eastern standard time,
December 15, 1998 at the Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware 19801, and at any adjournment or postponement thereof.
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS:
[ ]FOR all nominees listed below [ ]WITHHOLD AUTHORITY to vote for all nominees listed below
Nominees: For a term expiring at the next Annual Meeting of Stockholders:
Zeev Stein, Joseph Aviv, Shimon Alon and Irwin L. Gross
(INSTRUCTION: To withhold authority to vote for any nominee(s), write the name(s) of such
nominee(s) on the line below.)
- -----------------------------------------------------------------------------------------------------------
2. RATIFICATION OF APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR THE FISCAL YEAR
ENDING DECEMBER 31, 1998:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Please date and sign your Proxy on the reverse side and return it promptly)
</TABLE>
<PAGE> 16
This Proxy is solicited on behalf of the Board of Directors. Unless
otherwise specified, the shares will be voted "FOR" the election of all nominees
for director listed on the reverse side hereof and "FOR" ratification of
appointment of Ernst & Young LLP as the Company's independent auditors. This
Proxy also delegates discretionary authority with respect to any other business
which may properly come before the Annual Meeting or any adjournment or
postponement thereof.
The undersigned hereby acknowledges receipt of the notice of Annual
Meeting and Proxy Statement.
Date:____________________________________, 1998
-----------------------------------------------
Signature of Stockholder
-----------------------------------------------
Signature of Stockholder
NOTE: PLEASE SIGN THIS PROXY EXACTLY AS NAME(S)
APPEAR ON YOUR STOCK CERTIFICATE. WHEN SIGNING
AS ATTORNEY-IN-FACT, EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE ADD YOUR TITLE AS
SUCH, AND IF SIGNER IS A CORPORATION, PLEASE SIGN
WITH FULL CORPORATE NAME BY A DULY AUTHORIZED
OFFICER OR OFFICERS AND AFFIX THE CORPORATE SEAL.
WHERE STOCK IS ISSUED IN THE NAME OF TWO (2) OR
MORE PERSONS, ALL SUCH PERSONS SHOULD SIGN.
