<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE YEAR ENDED DECEMBER 31, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 0-22583
ORBIT/FR, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 23-2874370
(STATE OR OTHER JURISDICTION (IRS EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
506 PRUDENTIAL ROAD, HORSHAM, PA 19044
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(215) 674-5100
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, PAR VALUE $.01 PER SHARE
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. Yes X No / /
Indicate by check mark if disclosure of delinquent filers pursuant to
item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrants knowledge, in definite proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [ X]
The aggregate market value of the voting stock held by non-affiliates
of the Registrant is $4,745,946 (1). As of March 24, 1999, 6,072,973 shares of
common stock were outstanding.
(1) The aggregate dollar amount of the voting stock set forth equals the
number of shares of the Company's common stock outstanding, reduced by
the amount of the common stock held by the officers, directors and
shareholders owning in excess of 10% of the Company's common stock,
multiplied by the last reported sale price for the Company's common
stock on March 24, 1999. The information provided shall in no way be
construed as an admission that any officer, director, or 10%
shareholder in the Company may or may not be deemed an affiliate of the
Company or that he/it is the beneficial owner of the shares reported as
being held by him/it, and any such inference is
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hereby disclaimed. The information provided herein is included solely
for record keeping purposes of the Securities and Exchange Commission.
In accordance with instruction G(3) to Form 10K, ORBIT/FR, Inc. (the
"Company" ) is amending its Annual Report on Form 10-K filed with the Securities
and Exchange Commission on March 31, 1999 to provide information required in
Part III.
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TABLE OF CONTENTS
PART III
Page
Item 10. Directors and Executive Officers of the Registrant 4
Item 11. Executive Compensation 6
Item 12. Security Ownership of Certain Beneficial Owners and Management 11
Item 13. Certain Relationships and Related Transactions 12
Signatures 13
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PART III
Item 10. Directors and Executive Officers of the Registrant
The following table sets forth certain information regarding the
Company's directors, executive officers, and certain key employees.
NAME AGE POSITION
Ze'ev Stein 46 Chairman, Acting Chief Executive Officer
Joseph Aviv(1) 61 Director
Shimon Alon 48 Director
Irwin L. Gross 55 Director
William A. Torzolini 38 VP Finance, Chief Financial Officer
Michael J. Hart, Sr. 46 Executive VP EMC Division
Thomas J. Burke 38 VP Sales and Marketing
John Aubin 45 VP Systems
Moshe Pinkasy 48 Chief Executive Officer of Engineering
Marcel Boumans 41 Managing Director of European Operations
Gabriel Sanchez 47 Chief Operating Officer, AEMI
Jeffrey S. Polan 48 VP Chief Technology Officer
Zeev Stein has served as Chairman of the Board and acting Chief
Executive Officer of the Company since October 1998. He has also served as a
Director of the Company and its predecessor since March 1996. 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.
Joseph Aviv served as Chairman of the Board of Directors of the Company
from March 1996 until October 1998. Mr. Aviv also has served as Chairman of the
Board of Directors of Alchut since 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 of the Company 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 Gross was named a director in December 1998. Mr. Gross is the
sole owner of Ocean Castle Investments, LLC, a financial services company
specializing in private investment banking, which he founded in 1998. From 1984
through July 1998, Mr. Gross served as Chairman of the Board of Directors of ICC
Technologies, a previously publicly traded 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.
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 was employed at 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.
(1) Mr. Aviv resigned from the Board of Directors of the Company effective April
8, 1999.
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Michael J. Hart, Sr. has served as the Executive Vice President of the
EMC Division since joining the Company in 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 of 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 Inc. From 1993 through 1996, Mr. Burke served in various
capacities at Kulicke & Soffa Industries, Inc.
John Aubin has served as the Far Field/RCS Strategic Business Unit
Director of the Company since June 1996. From 1991 to 1996, Mr. Aubin was Vice
President in charge of the Antenna Measurement Business Area for Flam & Russell.
Moshe Pinkasy has served as the Chief Executive Officer of Engineering
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.
Marcel Boumans has served as the Managing Director of European
Operations 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.
Gabriel Sanchez has served as President of AEMI since its establishment
in March of 1980. Prior to that period, Mr. Sanchez worked for Plessy Microwave
and Emerson and Cumming.
Jeffrey Polan has served as Vice President and Chief Technology Officer
since March 1999. From May 1998 to November 1998, Mr. Polan served as Vice
President of Engineering at Aydin Telemetry, a commercial avionics and telemetry
products developer and manufacturer. From June 1996 to April 1998, Mr. Polan
served as Vice President of Engineering of InterDigital Communication
Corporation. Mr. Polan also served as President and Chief Executive Officer of
Programmed Digital Systems, Inc. from September 1989 to May 1996.
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 three directors. The Board of Directors is elected by the
stockholders at the annual meeting of the stockholders of the Company.
With the exception of Mr. Aviv and Mr. Stein, no directors received any
compensation for services on the Board of Directors during the year ended
December 31, 1998. During the Year ended December 31, 1998, Mr. Aviv received
fees of $63,000, and Mr. Stein received $19,500 for services rendered to the
Company. Mr. Stein as Chairman and acting CEO will receive a fees totaling
$180,000 annually for services to be rendered to the Company. All other
Directors will receive fees totaling $5,000 annually, beginning in 1999.
Under the Company's 1997 Equity Incentive Plan, and prior to December
15, 1998, Mr. Aviv, Mr. Stein and Mr. Gross have been granted options to
purchase 30,000 shares each of Common Stock at $3 per share. These options will
vest in five equal increments beginning 12 months after issuance.
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BOARD COMMITTEES
The Board of Directors established an Audit Committee in December 1998
to review, act on and report to the Board of Directors with respect to various
auditing and accounting matters, including the internal accounting procedures of
the Company and the services provided by the Company's independent public
accountants. This Committee is composed of Ze'ev Stein, Irwin L. Gross and
Shimon Alon. The Board of Directors also established a Compensation Committee in
December 1998 to set compensation and bonuses for management. This Committee is
composed of Zeev Stein, Irwin L. Gross and Shimon Alon.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers, directors, and persons who beneficially own more
than ten percent of a registered class of the Company's Common Stock to file
with the Securities and Exchange Commission ("SEC") initial reports of ownership
and reports of changes in ownership of Common Stock and other equity securities
of the Company. Executive officers, directors and greater than ten percent
shareholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, all Section 16(a) filing requirements applicable to the
Company's executive officers, directors and greater than ten percent beneficial
shareholders were complied with during the year ended December 31, 1998.
Item 11. Executive Compensation
The following table summarizes the compensation earned by the Company's
Chief Executive Officer and other executive officers (the "Named Executive
Officers") with compensation in excess of $100,000 for the year ended December
31, 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
Securities
Underlying All Other
Name and Principal Position Year Salary Bonus Options Compensation
<S> <C> <C> <C> <C> <C>
Aryeh Trabelsi, Former President & CEO(3) 1998 $212,649 $22,660 ----- $703(1)
1997 154,216 44,422 171,000(2) 418(1)
John Aubin, Vice President,
Far Field/RCS 1998 115,382 3,350 ----- 456(1)
1997 91,998 18,082 20,000 508(1)
David Farina, Former Vice President,
Nearfield 1998 96,068 5,263 ----- 410(1)
1997 86,008 17,134 20,000 475(1)
William Torzolini, Vice President
and Chief Financial Officer 1998 104,630 ----- 40,000 410(1)
Michael Hart, Executive Vice
President, EMC 1998 103,458 ----- 25,000 365(1)
Sean Mallon, Former Vice
President Marketing 1998 84,163 34,017 ----- 365(1)
</TABLE>
(1) Represents life insurance premiums paid.
(2) All options vested on March 17, 1998
(3) Mr. Trabelsi resigned as President and Chief Executive Officer of the
Company on September 3, 1998.
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OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information concerning stock
options granted under the 1997 Incentive Stock Option Plan during fiscal 1998 to
the Named Executive Officers of the Company.
<TABLE>
<CAPTION>
Potential Realized Value
At Assumed Annual
Rates of Stock Price
Appreciation For
Individual Grants Option Term(1)
----------------------------------------------------------
Percent of
Number of Total Options
Securities Granted to
Underlying Employees
Options in Exercise Expiration
Granted Fiscal Year Price Date 5% 10%
------- ----------- ----- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
William Torzolini 40,000 20.0% $3.00 5/14/08 $0 $41,850
Michael Hart 25,000 12.5% $3.00 5/2/08 $0 $26,156
</TABLE>
(1) Shows the difference between the market value of the Common Stock for
which the option may be exercised, assuming that the market value of
the Common Stock appreciates in value from the date of the grant to the
end of the ten-year option term at annualized rates of 5% and 10%
respectively, less the exercise price of the option. The rates of
appreciation used in this table are prescribed by regulations of the
Securities and Exchange Commission and are not intended to forecast
future appreciation of the market value of the Common Stock.
AGGREGATED OPTION EXERCISES IN LAST YEAR AND FISCAL YEAR-END VALUES
The following table sets forth certain information concerning the
number and value of unexercised options held at the end of fiscal 1998 by the
Named Executive Officers of the Company.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money Options at
Acquired on Value Options at Fiscal Year-End Fiscal Year-End(2)
Name Exercise Realized(1) Exercisable/Unexercisable Exercisable/Unexercisable
<S> <C> <C> <C> <C>
Aryeh Trabelsi -- -- 171,000/0 $0/$0
John Aubin -- -- 0/20,000 $0/$0
David Farina -- -- 0/20,000 $0/$0
William Torzolini -- -- 0/40,000 $0/$0
Michael Hart -- -- 0/25,000 $0/$0
</TABLE>
(1) No options were exercised by the Named Executive Officers in fiscal
1998.
(2) The last sale price of the Common Stock on December 31, 1998, the last
trading day in fiscal 1998, as reported on the National Market was
$2.50 per share.
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The following table sets forth certain information concerning
the repricing of options held at December 31, 1998 by the Named
Executive Officers of the Company.
<TABLE>
<CAPTION>
Market Length of
Number of Price of Exercise Original
Securities Un- Stock at Price At New Option Term
derlying Options Time of Time of Exercise Remaining At
Date Repriced Repricing Repricing Price Date of Repricing
<S> <C> <C> <C> <C> <C> <C>
Aryeh Trabelsi 10/23/98 171,000 $1.56 $8.25 $3.00 8.75 years
John Aubin 10/23/98 20,000 $1.56 $8.25 $3.00 8.75 years
David Farina 10/23/98 20,000 $1.56 $8.25 $3.00 8.75 years
Michael Hart 10/23/98 25,000 $1.56 $8.25 $3.00 9.5 years
William Torzolini 10/23/98 40,000 $1.56 $8.25 $3.00 9.5 years
</TABLE>
EMPLOYMENT AGREEMENTS
Aryeh Trabelsi. 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,
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 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 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.
Michael Hart. Effective May 2, 1998, the Company entered into an
employment agreement with Michael Hart, the Executive Vice President of the
Company's EMC Division, for an initial term of one year and thereafter
terminable by either the Company or Mr. Hart on 360 days notice within the first
year, 180 days in the second year and 90 days thereafter. Pursuant to the terms
of Mr. Hart's employment agreement, Mr. Hart is entitled to receive an annual
base salary of $120,000 or such higher amount as the Company's Board of
Directors may determine from time to time.
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Mr. Hart's employment agreement may be terminated by the Company for
cause, which is defined as the material breach of the employment agreement by
Mr. Hart or if Mr. Hart 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. Hart immediately upon notice for
cause which is defined as a reduction in salary or a material breach of the
agreement which employer has failed to cure after ten days written notice
thereof. Under the employment agreement, Mr. Hart is subject to certain
non-disclosure, non-solicitation and non-competitive covenants.
1997 EQUITY INCENTIVE PLAN
On March 17, 1997, the Board of Directors adopted and the Company's
stockholder approved the Company's 1997 Equity Incentive Plan (the "Incentive
Plan"). The purposes of the Incentive Plan are to attract and retain key
employees and certain other persons who are in a position to make significant
contributions to the success of the Company, to reward these employees and other
persons for their contributions, to provide additional incentive to these
employees and other persons to continue making similar contributions and to
further align the interests of these employees and other persons with those of
the Company's stockholders. To achieve these purposes, the Incentive Plan
permits grants of incentive stock options ("ISOs"), options not intended to
qualify as incentive stock options ("Non-ISOs"), stock appreciation rights
("SARs"), restricted and unrestricted stock awards, performance awards, loans
and supplemental cash awards and combinations of the foregoing (all referred to
as "Awards").
The Incentive Plan permits Awards to be granted for a total of 800,000
shares of the Company's Common Stock. Shares issuable under Awards that
terminate unexercised, shares issuable under Awards that are payable in stock or
cash but are paid in cash and shares issued but later forfeited will be
available for future Awards under the Incentive Plan.
All current and future employees of the Company, and other persons who,
in the opinion of the Board of Directors, are in a position to make significant
contributions to the success of the Company, such as consultants and non-
employee directors, are eligible to receive Awards under the Incentive Plan.
The Incentive Plan is administered by the Board of Directors, which
determines, among other things and subject to certain conditions, the persons
eligible to receive Awards, the persons who actually receive Awards, the type of
each Award, the number of shares of Common Stock subject to each Award, the date
of grant, exercise schedule, vesting schedule and other terms and conditions of
each Award, whether to accelerate the exercise or vesting schedule or waive any
other terms or conditions of each Award, whether to amend or cancel an Award and
the form of any instrument used under the Incentive Plan. The Board of Directors
has the right to adopt rules for the administration of the Incentive Plan,
settle all controversies regarding the Incentive Plan or any Award, and construe
and correct defects and omissions in the Incentive Plan or any Award. The
Incentive Plan may be amended, suspended or terminated by the Board of
Directors, subject to certain conditions, provided that stockholder approval
will be required whenever necessary for the Incentive Plan to continue to
satisfy the requirements of certain securities and tax laws, rules and
regulations.
Recipients of stock options under the Incentive Plan will have the
right to purchase shares of Common Stock at an exercise price, during a period
of time and on such other terms and conditions as are determined by the Board of
Directors. For ISOs, the recipient must be an employee, the exercise price must
be at least 100% (110% if issued to a 10% or greater stockholder of the Company)
of the fair market value of the Company's Common Stock on the date of grant and
the term cannot exceed ten years (five years if issued to a 10% or greater
stockholder of the Company) from date of grant. If permitted by the Board of
Directors and subject to certain conditions, an option exercise price may be
paid by delivery of shares of the Company's Common Stock that have been
outstanding, a promissory note, a broker's undertaking to promptly deliver the
necessary funds or by a combination of those methods. If permitted by the Board
of Directors, options (other than those granted in tandem with SARs) may be
settled by the Company, paying to the recipient, in cash or shares of Common
Stock (valued at the then fair market value of the Company's Common Stock), an
amount equal to such fair market value minus the exercise price of the option
shares.
SARs may be granted under the Incentive Plan either alone or in tandem
with stock options. Generally, recipients of SARs are entitled to receive, upon
exercise, cash or shares of Common Stock (valued at the then fair
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market value of the Company's Common Stock) equal to such fair market value on
the date of exercise minus such fair market value on the date of grant of the
shares subject to the SAR, although certain other measurements also may be used.
A SAR granted in tandem with a stock option is exercisable only if and to the
extent that the option is exercised.
The Incentive Plan provides for restricted and unrestricted stock
awards. Stock awards allow the recipient to acquire shares of the Company's
Common Stock for their par value or any higher price determined by the Board of
Directors. In the case of restricted stock awards, the shares acquired are
subject to a vesting schedule and other possible conditions determined by the
Board of Directors.
The Incentive Plan provides for performance awards entitling the
recipient to receive stock options, stock awards or other types of Awards
conditional upon achieving performance goals determined by the Board of
Directors. Performance goals may involve overall corporate performance,
operating group or business unit performance, personal performance or any other
category of performance determined by the Board of Directors. Financial
performance may be measured by revenue, operating income, net income, earnings
per share, Common Stock price, price-earnings multiple or other financial
factors determined by the Board of Directors.
Under the Incentive Plan, loans or supplemental cash awards may be
granted to recipients of Awards to help defray taxes due as a result of the
Awards. The terms and conditions of loans and supplemental cash awards,
including the interest rate, which may be zero, and whether any loan will be
forgiven, are determined by the Board of Directors.
Generally, upon termination of a recipient's employment or other
relationship with the Company, stock options and SARs remain exercisable for a
period of three months (one year if termination is due to death or disability)
to the extent that they were exercisable at the time of termination, except as
otherwise agreed between the employee and the Company, unvested shares under
outstanding restricted stock awards vest immediately except in the case of a
voluntary resignation or termination for cause (as defined in the Incentive
Plan). Stock options, SARs and other Awards that are not exercisable at the time
of termination automatically terminate, and payments or benefits under deferred
stock awards, performance awards and supplemental cash awards that are not
irrevocably due at the time of termination are forfeited.
In response to a sharp decline in the Company's share price and as a
long-term incentive to its employees, the Company repriced all options
outstanding on October 23, 1998 to $3 per share. The new option price of $3
exceeded the current market price of the underlying shares at the time of
repricing.
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Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of April 30, 1999 regarding the
beneficial ownership (as defined in regulations issued by the Security and
Exchange Commission) (i) each stockholder known by the Company to be the
beneficial owner of five percent or more of the outstanding Common Stock, (ii)
each director and Named Executive Officer and all other executive officers of
the Company individually and (iii) all directors and executive officers as a
group.
<TABLE>
<CAPTION>
Beneficial Ownership(1)
Names and address of Beneficial Owner Number of shares Percentage
<S> <C> <C>
Orbit-Alchut Technologies, Ltd.(2) 3,700,000 60.9%
P.O. Box 3171
Industrial Zone
Netanya 42131
Israel
Joseph Aviv(3) 3,700,000 60.9%
P.O. Box 3171
Industrial Zone
Netanya 42131
Israel
Aryeh Trabelsi(4) 182,500 2.7%
c/o Orbit FR, Inc.
506 Prudential Road
Horsham, PA 19044
Zeev Stein(5) 3,700,000 60.9%
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 Gross(7) -- --
c/o Orbit FR, Inc.
506 Prudential Road
Horsham, PA 19044
William Torzolini(8) 2,000 --
c/o Orbit FR, Inc.
506 Prudential Road
Horsham, PA 19044
Michael Hart(9) -- --
c/o Orbit FR, Inc.
506 Prudential Road
Horsham, PA 19044
Thomas Burke(10) -- --
c/o Orbit FR, Inc.
506 Prudential Road
Horsham, PA 19044
John Aubin(11) -- --
c/o Orbit FR, Inc.
506 Prudential Road
Horsham, PA 19044
</TABLE>
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<TABLE>
<S> <C> <C>
Jeffrey Polan(12) -- --
c/o Orbit FR, Inc.
506 Prudential Road
Horsham, PA 19044
Directors and executive officers
as a group (10 persons) 3,890,500 64.1%
</TABLE>
(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. 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 table. Beneficial ownership may be disclaimed as
to certain of the securities.
(2) Represents shares beneficially owned after the Company's initial public
offering effective June 17, 1997.
(3) Represents 3,700,000 shares held by Orbit-Alchut Technologies, LTD
("Alchut"). Mr. Aviv is a director and 42.27% beneficial stockholder of
Alchut.
(4) Includes 171,000 shares of Common Stock issuable upon the exercise of
an option granted to Mr. Trabelsi, which option became exercisable on
March 17, 1998.
(5) Represents 3,700,000 shares held by Alchut. Mr. Stein is a director and
42.33% beneficial stockholder of Alchut.
(6) Does not include 30,000 share of Common Stock issuable upon the
exercise of an option granted to Mr. Alon upon his appointment to the
Board of Directors of the Company, which option becomes exercisable in
five cumulative annual installments commencing 12 months after the date
of the grant.
(7) Does not include 30,000 share of Common Stock issuable upon the
exercise of an option granted to Mr. Gross upon his appointment to the
Board of Directors of the Company, which option becomes exercisable in
five cumulative annual installments commencing 12 months after the date
of the grant.
(8) Does not include 40,000 share of Common Stock issuable upon the
exercise of an option granted to Mr. Torzolini upon his joining the
Company, which option becomes exercisable in four cumulative annual
installments commencing 24 months after the date of the grant.
(9) Does not include 25,000 share of Common Stock issuable upon the
exercise of an option granted to Mr. Hart upon his joining the Company,
which option becomes exercisable in four cumulative annual installments
commencing 24 months after the date of the grant.
(10) Does not include 25,000 share of Common Stock issuable upon the
exercise of an option granted to Mr. Burke upon his joining the
Company, which option becomes exercisable in four cumulative annual
installments commencing 24 months after the date of the grant.
(11) Does not include 20,000 share of Common Stock issuable upon the
exercise of an option granted to Mr. Aubin upon his joining the
Company, which option becomes exercisable in four cumulative annual
installments commencing 24 months after the date of the grant.
(12) Does not include 20,000 share of Common Stock issuable upon the
exercise of an option granted to Mr. Polan upon his joining the
Company, which option becomes exercisable in four cumulative annual
installments commencing 24 months after the date of the grant.
Item 13. Certain Relationships and Related Transactions
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 $1,249,000 for the year ended December 31, 1998. 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 $320,000 in 1998. Engineering is
leasing office space from Alchut on an annual basis, for a rental of $51,000 per
year. These agreements are evaluated on an annual basis.
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<PAGE> 13
ORBIT/FR, INC.
SIGNATURES
Pursuant to the requirements of section 13 or 15(d) 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.
ORBIT/FR, INC
Registrant
Date: April 30, 1999
By: /s/ ZE'EV STEIN
Chairman of the Board
And Acting Chief Executive Officer
(Principal Executive Officer)
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