SCHEDULE 14A
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
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Orbit International Corp.
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ORBIT INTERNATIONAL CORP.
80 Cabot Court
Hauppauge, New York 11788
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of Orbit International Corp.:
The Annual Meeting of Stockholders of Orbit International Corp.
(the "Company") will be held at The Penn Club, 30 West 44th Street, New
York, New York 10036, at 10:00 a.m., Eastern Daylight Savings Time, on
July 2, 1997, for the following purposes:
1. To elect the Board of Directors for the ensuing year.
2. To ratify the appointment of Ernst & Young LLP as the
independent auditors and accountants for the Company for
the fiscal year ending December 31, 1997.
3. To transact such other business as may properly come
before the meeting.
All stockholders are invited to attend the meeting. Stockholders
of record at the close of business on May 19, 1997 the record date
fixed by the Board of Directors, are entitled to notice of, and to vote
at, the meeting. A complete list of stockholders entitled to notice
of, and vote at, the meeting will be open to examination by the
stockholders beginning ten days prior to the meeting for any purpose
germane to the meeting during normal business hours at the office of
the Secretary of the Company at 80 Cabot Court, Hauppauge, New York
11788.
Whether or not you intend to be present at the meeting, please
sign and date the enclosed proxy and return it in the enclosed
envelope. Returning a proxy will not deprive you of your right to
attend the annual meeting and vote your shares in person.
By Order of the Board of Directors
HARLAN SYLVAN
Secretary
Hauppauge, New York
May 30, 1997
ORBIT INTERNATIONAL CORP.
80 Cabot Court
Hauppauge, New York 11788
(516) 435-8300
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors of
Orbit International Corporation (the "Company") for use at the Annual
Meeting of Stockholders (the "Annual Meeting") to be held at 9:30 a.m.,
Eastern Daylight Savings Time, on July 2, 1997, at The Penn Club, 30
West 44th Street, New York, New York 10036, and any adjournment
thereof.
VOTING SECURITIES; PROXIES
The Company will bear the cost of solicitation of proxies. In
addition to the solicitation of proxies by mail, certain officers and
employees of the Company, without additional remuneration, may also
solicit proxies personally by telefax and by telephone. In addition to
mailing copies of this material to stockholders, the Company may
request persons, and reimburse them for their expenses in connection
therewith, who hold stock in their names or custody or in the names of
nominees for others to forward such material to those persons for whom
they hold stock of the Company and to request their authority for
execution of the proxies.
One third of the outstanding shares of Common Stock, par value
$.10 per share (the "Common Stock"), present in person or represented
by proxy shall constitute a quorum at the Annual Meeting. The approval
of a plurality of the outstanding shares of Common Stock present in
person or represented by proxy at the Annual Meeting is required for
election of the nominees as directors. In all matters other than the
election of directors, the affirmative vote of the majority of the
outstanding shares of Common Stock present in person or represented by
proxy at the Annual Meeting is required for adoption of such matters.
The form of proxy solicited by the Board of Directors affords
stockholders the ability to specify a choice among approval of,
disapproval of, or abstention with respect to each matter to be acted
upon at the Annual Meeting. Shares of Common Stock represented by the
proxy will be voted, except as to matters with respect to which
authority to vote is specifically withheld. Where the solicited
stockholder indicates a choice on the form of proxy with respect to any
matter to be acted upon, the shares will be voted as specified.
Abstentions and broker non-votes will not effect the outcome of the
election of directors or the ratification of the appointment of the
independent auditors. With respect to all other matters to be voted on
by stockholders at the Annual Meeting, abstentions will have the same
effect as "no" votes, and broker non-votes will have no effect on the
outcome of the vote.
All shares of Common Stock represented by properly executed
proxies which are returned and not revoked will be voted in accordance
with the instructions, if any, given therein. If no instructions are
provided in a proxy, the shares of Common Stock represented by such
proxy will be voted FOR the Board's nominees for director, FOR the
ratification of the appointment of Ernst & Young LLP and in accordance
with the proxy-holder's best judgment as to any other matters raised at
the Annual Meeting.
A stockholder who has given a proxy may revoke it at any time
prior to its exercise by giving written notice of such revocation to
the Secretary of the Company, executing and delivering to the Company a
later dated proxy reflecting contrary instructions or appearing at the
Annual Meeting and taking appropriate steps to vote in person.
At the close of business on April 25, 1997, 6,186,093 shares of
Common Stock were outstanding and eligible for voting at the meeting.
Each stockholder of record is entitled to one vote for each share of
Common Stock held on all matters that come before the meeting. Only
stockholders of record at the close of business on May 19, 1997 are
entitled to notice of, and to vote at, the meeting.
No Dissenter's Rights
Under Delaware law, stockholders are not entitled to
dissenter's rights of appraisal with respect to Proposal 2.
This proxy material is being mailed to stockholders commencing on
or about May 30, 1997.
PROPOSAL 1
ELECTION OF DIRECTORS
The bylaws of the Company provide that each director serves from
the date of election until the next annual meeting of stockholders and
until his successor is elected and qualified. The specific number of
directors is set by a resolution adopted by a majority of the entire
Board of Directors. The number of directors is currently fixed at
seven, and the number of current directors is six. The Company has
nominated Dennis Sunshine, Bruce Reissman, Mitchell Binder, Nathan A.
Greenberg, John Molloy and Stanley Morris, each a current Director, for
reelection to the Board of Directors and has decided not to fill the
vacancy at this time.
The persons named in the accompanying proxy intend to vote for the
election as directors of the nominees listed herein. Each nominee has
consented to serve if elected. The Board of Directors has no reason to
believe that any nominee will not serve if elected, but if any of them
should become unavailable to serve as a director, and if the Board of
Directors designates a substitute nominee or nominees, the persons
named as proxies will vote for the substitute nominee or nominees
designated by the Board of Directors.
The following table sets forth certain information with respect to
the individuals nominated and recommended to be elected by the Board of
Directors of the Company and is based on the records of the Company and
information furnished to it by such persons. Reference is made to
"Security Ownership of Certain Beneficial Owners and Management" for
information pertaining to stock ownership by the nominees.
Name of Nominee Age Position
Dennis Sunshine 50 President, Chief Executive Officer
and Director
Bruce Reissman 47 Executive Vice President, Chief
Operating Officer and Director
Mitchell Binder 41 Vice President - Finance, Chief
Financial Officer and Director
Nathan A. Greenberg 80 Director
John Molloy 67 Director
Stanley Morris 54 Director
Biographical Information
Dennis Sunshine has been President and Chief Executive Officer of
the Company since March 1995. He has held various positions with the
Company since 1976, including Secretary and Vice President of
Operations from April 1988 to March 1995 and Director of Operations
from June 1983 to April 1988. He has been a director of the Company
since 1988.
Bruce Reissman has been Executive Vice President and Chief
Operating Officer of the Company since March 1995. He has held various
positions with the Company since 1975, including Vice President-
Marketing from April 1988 to February 1995 and Director of Sales and
Marketing from 1976 to April 1988. He has been a director of the
Company since 1992.
Mitchell Binder has been Vice President-Finance of the Company
since 1986 and Chief Financial Officer since 1983. He has held various
positions with the Company since 1983, including Treasurer and
Assistant Secretary from 1983 to March 1995. He has been a director of
the Company since 1985.
Nathan A. Greenberg has been a financial and accounting consultant
since retiring in 1982 as a partner in a New York City-based public
accounting firm. He has been a director of the Company since 1991.
John Molloy has been a part-time consultant for Montgomery
Associates, a consulting company for the defense industry since
November 1991. Prior thereto he served as Vice President, Business
Development of Ocean Technologies Inc., a defense electronics company,
from September 1986 to October 1991. He has been a director of the
Company since 1992.
Stanley Morris has been President of Rampart Brokerage Corporation
("Rampart"), an insurance agency since 1989. He has been a director of
the Company since 1995.
Stockholder Vote Required
Election of each director requires a plurality of the votes of the
shares of Common Stock present in person or requested by Proxy at the
meeting and entitled to vote on the election of directors.
The Board of Directors recommends a vote "FOR" the election of
each of the nominees for election to the Board of Directors named
above.
Committees of the Board - Board Meetings
The Board has established an audit, a compensation and a stock
option committee to assist it in the discharge of its responsibilities.
The principal responsibilities of each committee and the members of
each committee are described in the succeeding paragraphs. Actions
taken by any committee of the Board are reported to the Board of
Directors, usually at its next meeting or by written report. The
Company's Board of Directors held 12 meetings during the fiscal year
ended December 31, 1996. All directors attended at least 75% of the
meetings.
The Audit Committee of the Board of Directors currently consists
of Nathan A. Greenberg, John Molloy and Stanley Morris. The Audit
Committee held two meetings during the fiscal year ended December 31,
1996. Each year it recommends the appointment of a firm of independent
public accountants to examine the financial statements of the Company
and its subsidiaries for the coming year. In making this
recommendation, it reviews the nature of audit services rendered, or to
be rendered, to the Company and its subsidiaries. It reviews with
representatives of the independent public accountants the auditing
arrangements and scope of the independent public accountants'
examination of the financial statements, results of those audits, their
fees and any problems identified by the independent public accountants
regarding internal accounting controls, together with their
recommendations. It also meets with the Company's Controller to review
reports on the functioning of the Company's programs for compliance
with its policies and procedures regarding ethics and those regarding
financial controls and internal auditing. This includes an assessment
of internal controls within the Company and its subsidiaries based upon
the activities of the Company's internal auditing staffs as well as an
evaluation of the performance of those staffs. The Audit Committee is
also prepared to meet at any time upon request of the independent
public accountants or the Controller to review any special situation
arising in relation to any of the foregoing subjects.
The Compensation Committee of the Board of Directors currently
consists of John Molloy, Stanley Morris and Dennis Sunshine. The
Compensation Committee held one meeting during the fiscal year ended
December 31, 1996. This Committee makes recommendations to the Board
of Directors as to the salaries of the President, sets the salaries of
the other elected officers and reviews salaries of certain other senior
executives. It grants incentive compensation to elected officers and
other senior executives and reviews guidelines for the administration
of the Company's incentive programs. It also reviews and approves or
makes recommendations to the Board of Directors on any proposed plan or
program which would benefit primarily the senior executive group.
The Stock Option Committee of the Board of Directors currently
consists of Stanley Morris and John Molloy. The Stock Option Committee
was formed on September 1, 1995 and held three meetings during the
fiscal year ended December 31, 1996. This Committee is responsible for
administering the Company's stock option plans. Specifically, the
Committee determines the persons to be granted options as well as the
exercise price and term of such. The members of the Stock Option
Committee are not eligible to participate in the stock option plans
they administer.
The Board of Directors does not have a nominating committee. This
function is performed by the Board of Directors as a whole.
There are no family relationships among any of the directors or
executive officers of the Company except that Bruce Reissman and Dennis
Sunshine are brothers-in-law. The Company's executive officers serve in
such capacity at the pleasure of the Board of Directors.
Executive Officers of the Company
The names and ages of the executive officers of the Company as of
April 30, 1997 and their positions with the Company are as follows:
Name Age Position
Dennis Sunshine 50 President, Chief Executive
Officer and Director
Bruce Reissman 47 Executive Vice President, Chief
Operating Officer and Director
Mitchell Binder 41 Vice President - Finance, Chief
Financial Officer and Director
Harlan Sylvan 46 Treasurer, Secretary and
Controller
Set forth below is a brief biographical description of each
executive officer:
Dennis Sunshine. See "Election of Directors."
Bruce Reissman. See "Election of Directors."
Mitchell Binder. See "Election of Directors."
Harlan Sylvan has been Treasurer and Secretary of the Company
since March 1995 and Controller of the Company since 1987.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth, for the fiscal years ended
December 31, 1996, 1995 and 1994, compensation paid by the Company to
the Chief Executive Officer and to each other executive officer of the
Company that received more than $100,000 in salary and bonus during the
fiscal year ended December 31, 1996 including salary, bonuses, stock
options and certain other compensation (each, a "Named Executive"):
Annual Compensation(1)
Name and All Other
Principal Position Year Salary ($) Bonus ($) Compensation ($)
Max Reissman,(2) 1996 0(2) 0 0
1995 49,000 0 86,250(3)
1994 330,000 0 145,000(3)
Dennis Sunshine,(2) 1996 344,000 162,875 239,710(4)(5)
President and Chief 1995 319,000 0 7,009(6)
Executive Officer 1994 252,000 0 0
Bruce Reissman, 1996 344,000 85,516 6,663(5)
Executive Vice 1995 319,000 0 6,975(6)
President and 1994 252,000 0 0
Chief Operating
Officer
Mitchell Binder, 1996 253,000 68,733 4,709(5)
Vice President- 1995 243,000 0 26,753(6)(7)
Finance and 1994 210,000 0 22,000(7)
Chief Financial
Officer
Harlan Sylvan 1996 106,000 8,000 2,599(5)
Treasurer, 1995 99,000 0 2,352(6)
Secretary and 1994 76,000 0 0
Controller
(1) The Company has no long-term incentive compensation plan other than
its several stock option plans described herein and various
individually granted options. The Company does not award stock
appreciation rights, restricted stock awards or long-term incentive
plan pay-outs.
(2) Max Reissman served as Chief Executive Officer of the Company until
his death on February 24, 1995, after which Dennis Sunshine was
elected to serve as Chief Executive Officer and President.
Pursuant to Mr. Reissman's employment agreement with the Company,
Mr. Reissman's estate is entitled to receive approximately $265,000
per year for three years following his death, which amounts are
funded by the $1.5 million of key man life insurance received by
the Company upon Mr. Reissman's death. During 1996, Mr.
Reissman's estate was paid approximately $248,000. See "Employment
Agreements."
(3) Consists of the value of the right of the Company to repurchase,
for $.10 per share, 460,000 shares of Common Stock which the
Company issued to Mr. Reissman in 1985 for $.10 per share. Such
right terminated upon Mr. Reissman's death at which point the
remaining 46,000 of such shares vested. See "Employment
Agreements."
(4) Consists of the value of the right of the Company to repurchase,
for $.10 per share, 300,000 shares of Common Stock which the
Company issued to Mr. Sunshine in 1996 for $.10 per share. See
"Employment Agreement".
(5) Includes $4,750, $4,750, $3,800 and $2,055 of matching
contributions made by the Company pursuant to the Company's 401(k)
Plan for each of Messrs. Sunshine, Reissman, Binder and Sylvan,
respectively. Also includes the portion of the insurance premium
attributable to the employee and paid by the Company under split
dollar insurance policies maintained by the Company for the benefit
of Messrs. Sunshine, Reissman, Binder and Sylvan in the amounts of
$2,468, $1,913, $909 and $544, respectively.
(6) Includes $4,666, $5,149, $3,760 and $1,832 of matching
contributions made by the Company pursuant to the Company's 401(k)
Plan for each of Messrs. Sunshine, Reissman, Binder and Sylvan.
Also includes the portion of the insurance premium attributable to
the employee and paid by the Company under split dollar insurance
policies maintained by the Company for the benefit of Messrs.
Sunshine, Reissman, Binder and Sylvan in the amounts of $2,343,
$1,826, $993 and $520, respectively.
(7) Consists of forgiveness of indebtedness to the Company.
The following table sets forth certain information concerning
options granted to the Named Executives during the fiscal year ended
December 31, 1996.
Option Grants in Last Fiscal Year
Individual Grants
Number of
Securities
Underlying
Options
Granted(1)
Percent
of
Total
Options
Granted
to
Employees
in Fiscal
Year
Exercise
or Base
Price
($/Share)
Expiration
Date
Potential
Realizable
Annual Rates of
Stock
Price
Appreciation
for
Option Term
5% 10%
Dennis Sunshine
0
0%
$ 0
- -
$0
$0
Bruce Reissman
0
0%
$ 0
- -
$0
$0
Mitchell Binder
25,000
7.59%
$.81
3/1/06
$68,000
$118,000
Harlan Sylvan
25,000
7.59%
$.81
3/1/06
$68,000
$118,000
(1) All options were granted at an exercise price equal to the fair
market value of the Common Stock on the date of grant.
AGGREGATED OPTION EXERCISES DURING THE FISCAL YEAR ENDED DECEMBER 31, 1996 AND
FISCAL YEAR END OPTION VALUES
The following table sets forth certain information concerning the
number and value of securities underlying exercisable and unexercisable
stock options as of the fiscal year ended December 31, 1996 by the
Named Executives. No options were exercised by any of the Named
Executives during the fiscal year ended December 31, 1996.
Number of Securities
Underlying
Unexercised
Options at Fiscal
Year End at Fiscal
Year End
Value of Unexercised
In-the-Money Options
Name
Exercisable
Unexercisable
Exercisable
Unexercisable
Dennis Sunshine
275,000
0
$258,000
$0
Bruce Reissman
260,000
0
$244,000
$0
Mitchell Binder
175,000
25,000
$164,000
$34,000
Harlan Sylvan
25,000
25,000
$ 23,000
$34,000
EMPLOYMENT AGREEMENTS
Until his death on February 24, 1995, Max Reissman was employed by
the Company pursuant to an employment agreement, dated as of July 1,
1992, which provided for annual base compensation of $275,000 (subject
to cost-of-living increases), plus an annual cash bonus equal to 4% of
the Company's pre-tax earnings. Under the agreement, Mr. Reissman's
estate has the right to require the Company to register, under federal
and state securities laws, any securities of the Company owned by him.
As a result of his death, Mr. Reissman's estate is entitled to receive
approximately $265,000 per year for three years following his death.
Dennis Sunshine has entered into an employment agreement with the
Company which commenced in April 1996. Under the terms of Mr.
Sunshine's employment agreement (the "Sunshine Employment Agreement"),
Mr. Sunshine is entitled to receive an annual base salary and a bonus
equal to 4% of the Company's pre-tax earnings. The Sunshine Employment
Agreement provides that the employment of Mr. Sunshine may be
terminated by the Company for "cause." "Cause" is defined as (i)
willful and repeated failure by Mr. Sunshine to perform his duties
under the Sunshine Employment Agreement, which failure is not remedied
within 30 days after written notice from the Company; (ii) conviction
of Mr. Sunshine for a felony; (iii) Mr. Sunshine's dishonesty or
willfully engaging in conduct that is demonstrably and materially
injurious to the Company or (iv) willful violation by Mr. Sunshine of
any provision of the Sunshine Employment Agreement which violation is
not remedied within 30 days after written notice from the Company. The
agreement may also be terminated by the Company on not less than three
years' prior notice.
The Sunshine Employment Agreement contains a provision prohibiting
Mr. Sunshine from competing with the Company for a one year period
following termination of his employment. The agreement also provides
for the purchase by Mr. Sunshine of 300,000 shares of Common Stock at
$.10 per share. Such shares are subject to vesting over a period of
three years commencing on April 1, 1997.
Bruce Reissman has entered into an employment agreement with the
Company which commenced in April 1996. Under the terms of Mr.
Reissman's employment agreement (the "Reissman Employment Agreement"),
Mr. Reissman is entitled to receive an annual base salary and a bonus
equal to 1.77% of the first $5 million of the Company's pre-tax
earnings and 2.65% of any additional pre-tax earnings. The Reissman
Employment Agreement provides that the employment of Mr. Reissman may
be terminated by the Company for "cause" (as defined above). The
agreement may also be terminated by the Company on not less than three
years' prior notice.
Mitchell Binder has entered into an employment agreement with the
Company which commenced in April 1996. Under the terms of Mr. Binder's
employment agreement (the "Binder Employment Agreement"), Mr. Binder is
entitled to receive an annual base salary and a bonus equal to 1.46% of
the first $5 million of the Company's pre-tax earnings and 2.20% of any
additional pre-tax earnings. The Binder Employment Agreement provides
that the employment of Mr. Binder may be terminated by the Company for
"cause" (as defined above). The agreement may also be terminated by
the Company on not less than three years' prior notice.
Each of the Sunshine Employment Agreement, the Reissman Employment
Agreement and the Binder Employment Agreement (the "Employment
Agreements") supersede employment agreements previously entered into
with the Company. The Employment Agreements provide that the employee
is entitled to receive benefits offered to the Company's employees
generally. The Employment Agreements also provide for termination by
the employee on not less than six months' prior notice or upon a
"change of control" (as defined in the Employment Agreements). If the
employee terminates his employment in connection with a change in
control of the Company, then the employee shall be entitled to receive,
as termination pay, the maximum amount that can be paid without any
portion thereof constituting an "excess parachute payment" as defined
in Section 280G(b)(1) of the Internal Revenue Code of 1986, as amended.
COMPENSATION OF DIRECTORS
Directors of the Company who are not employed by the Company
receive directors fees of $3,750 per quarter. Employee directors are
not compensated for services as a director. All directors are
reimbursed for expenses incurred on behalf of the Company. In December
1995, the stockholders approved the Company's 1995 Stock Option Plan
for Non-Employee Directors pursuant to which non-employee Directors
will be entitled to receive annual grants of options to purchase Common
Stock.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee consists of Stanley Morris
and John Molloy, each of whom is a non-employee member of the Company's
Board of Directors, and Dennis Sunshine, who is the Company's Chief
Executive Officer and President.
COMPENSATION COMMITTEE REPORT TO STOCKHOLDERS
The Compensation Committee of the Board of Directors is
responsible for determining the compensation of executive officers of
the Company, other than compensation awarded pursuant to the Company's
Plans which is administered by the Stock Option Committee of the Board
of Directors. Messrs. Morris, Molloy and Sunshine comprise the
Compensation Committee. Mr. Sunshine abstains from any vote regarding
his compensation.
The Stock Option Committee is responsible for granting and setting
the terms of stock options under the Company's 1995 Employee Stock
Option Plan. Messrs. Morris and Molloy serve on the Stock Option
Committee.
General Policies Regarding Compensation of Executive Officers
The Company's executive compensation policies are intended (1) to
attract and retain high quality managerial and executive talent and to
motivate these individuals to maximize shareholder returns, (2) to
afford appropriate incentives for executives to produce sustained
superior performance, and (3) to reward executives for superior
individual contributions to the achievement of the Company's business
objectives. The Company's compensation structure consists of base
salary, annual cash bonuses and stock options. Together these
components link each executive's compensation directly to individual
and Company performance.
Salary. Base salary levels reflect individual positions,
responsibilities, experience, leadership, and potential contribution to
the success of the Company. Actual salaries vary based on the
Compensation Committee's subject assessment of the individual
executive's performance and the Company's performance.
Bonuses. Executive officers are eligible to receive cash bonuses based
on the Compensation Committee's subject assessment of the respective
executive's individual performance and the performance of the Company.
In its evaluation of executive officers and the determination of
incentive bonuses, the Compensation Committee does not assign
quantitative relative weights to different factors and follow
mathematical formula. Rather, the Compensation Committee makes its
determination in each case after considering the factors it deems
relevant, which may include consequences for performance that is below
expectations.
Stock Options. Stock options, which are granted at the fair market
value of the Common Stock on the date of grant, are currently the
Company's sole long term compensation vehicle. The stock options are
intended to provide employees with sufficient incentive to manage from
the perspective of an owner with an equity stake in the business.
In determining the size of individual options grants, the Stock
Option Committee considers the aggregate number of shares available for
grant, the number of individuals to be considered for an award of stock
options, and the range of potential compensation levels that the option
awards may yield. The number and timing of stock option grants to
executive officers are decided by the Stock Option Committee based on
its subjective assessment of the performance of each grantee. In
determining the size and timing of option grants, the Stock Option
Committee weighs any factors it considers relevant and gives such
factors the relative weight it considers appropriate under the
circumstances then prevailing. While an ancillary goal of the Stock
Option Committee in awarding stock options is to increase the stock
ownership of the Company's management, the Stock Option Committee does
not, when determining the amount of stock options to award, consider
the amount of stock already owned by an officer. The Stock Option
Committee believes that to do so could have the effect of
inappropriately or inequitably penalizing or rewarding executives based
upon their personal decisions as to stock ownership and option
exercises.
In 1993, the Internal Revenue Code was amended to limit the
deductibility of compensation paid to certain executives in excess of
$1 million. Compensation not subject to the limitation includes
certain compensation payable solely because an executive attains
performance goals ("performance-based compensation"). Stock options
granted under the 1995 Employee Stock Option Plan did not qualify as
performance-based compensation. The Company's compensation deduction
for a particular executive's total compensation, including compensation
realized from the exercise of stock options, will be limited to $1
million. The Compensation Committee believes that the compensation
paid by the Company in fiscal 1996 will not result in any material loss
of tax deductions for the Company.
Compensation of the Chief Executive Officer
Mr. Sunshine s base salary and bonus for the fiscal year ended
December 31, 1996 was determined by the terms of his employment
agreement which was entered into in April 1996 and is described
elsewhere in this proxy statement. Mr. Sunshine was not granted any
options during the fiscal year ended December 31, 1996. The
Compensation Committee believes that Mr. Sunshine's base salary level
and bonus formula as set forth in his employment agreement fairly
reflects the outstanding contributions Mr. Sunshine has made to the
Company s growth and financial position. During 1996, Mr. Sunshine was
instrumental in the initiation, negotiation and completion of the
Company s acquisition of certain assets of Astrosystems, Inc. and its
subsidiary, Behlman Electronics, Inc. Mr. Sunshine also oversaw the
orderly discontinuation of the Company's apparel business. The Company
believes that each of the foregoing events helped to stabilize and
improve the Company s financial condition.
Compensation Committee Stock Option Committee
Stanley Morris Stanley Morris
John Molloy John Molloy
Dennis Sunshine
PERFORMANCE GRAPH
The graph below compares the cumulative total shareholder return
on the Common Stock for the last five fiscal years with the cumulative
total return on the NASDAQ Stock Market-U.S. Index and a peer group of
comparable companies (the "Peer Group") selected by the Company over
the same period (assuming the investment of $100 in the Common Stock,
the NASDAQ Stock Market-U.S. and the Peer Group on June 30, 1991, and
the reinvestment of all dividends).
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG ORBIT INTERNATIONAL, THE NASDAQ
STOCK MARKET-US INDEX AND A PEER GROUP
(in dollars)
Orbit
International Peer
Corp. Group 1 NASDAQ
6/30/91 100 100 100
6/30/92 143 129 120
6/30/93 168 152 151
12/31/93 132 163 167
12/31/94 50 127 163
12/31/95 25 159 231
12/31/96 63 215 284
* $100 invested on 6/30/91 in stock or index -- including reinvestment
of dividends. Fiscal year ending June 30 through June 30, 1993.
Thereafter, fiscal years presented are December 31.
The Peer Group is comprised of six companies in the defense
electronics industry - Aeroflex Inc., NAI Technologies Inc., Miltope
Group Inc., Megadata Corp., La Barge, Inc. and Astrosystems, Inc. Such
companies were chosen for the Peer Group because they have similar
market capitalizations to the Company and because they represent the
line of business in which the Company is engaged. Each of the six Peer
Group issuers is weighted according to its respective market
capitalization.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Set forth below is stock ownership information as of April 14,
1997 as to each person who owns, or is known by the Company to own
beneficially (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934), more than 5% of the Company Common Stock, and
the number of shares of Common Stock owned by its directors, by all
persons named in the Summary Compensation Table and by all officers and
directors as a group.
Name and Address of Amount and Name of
Beneficial Owner Beneficial Ownership(1) Percent of Class
Dennis Sunshine 1,270,138(2) 19.66%
c/o 80 Cabot Court
Hauppauge, New York
Bruce Reissman 953,614(3) 14.79%
c/o 80 Cabot Court
Hauppauge, New York
Mitchell Binder 220,200(4) 3.45%
c/o 80 Cabot Court
Hauppauge, New York
Harlan Sylvan 53,000(5) *
c/o 80 Cabot Court
Hauppauge, New York
Nathan A. Greenberg 8,000(6) *
7235 Promenade Drive
Boca Raton, Florida
John Molloy 8,000(6) *
1815 Paliament Road
Leucadia, California
Stanley Morris 11,000(6) *
2470 Cove Court
Bellmore, New York 11710
All officers and directors 2,523,952 36.11%
as a group
(7 persons)(2)(3)(4)(5)(6)
(1) Except as otherwise noted in the footnotes to this table, the named
person owns directly and exercises sole voting and investment power
over the shares listed as beneficially owned by such persons.
(2) Includes 690,614 shares held by Mr. Sunshine's wife and 3,000
shares held in her IRA. Also includes options to purchase 275,000
shares of Common Stock.
(3) Includes options to purchase 260,000 shares of Common Stock.
(4) Includes options to purchase 200,000 shares of Common Stock.
(5) Includes options to purchase 50,000 shares of Common Stock.
(6) Includes options to purchase 6,000 shares of Common Stock.
* Less than one percent.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In September 1982, the Company loaned $200,000 to Bruce Reissman,
for the purchase of a residence in connection with his relocation to
California to manage the Company's California operations and sales and
marketing activities. The loan, which is collateralized by a mortgage
on his residence, is non-interest bearing and repayable at the rate of
$6,000 annually. At December 31, 1995 the amount due on the loan was
$121,500 and at December 31, 1996 the amount due on the loan was
$116,000. The Company is currently negotiating with Mr. Reissman with
regard to an accelerated repayment schedule for such loan.
All of the Company's insurance policies (including general
liability and directors' and officers' insurance) are written by
Rampart, a Company for which Mr. Morris serves as President. The
aggregate annual premiums paid to Rampart under the policies are
approximately $845,000. The Company believes it obtains insurance on
terms no less favorable than it could obtain from a third party.
INDEPENDENT ACCOUNTANTS
Ratification of Appointment of Auditors
The firm of Ernst & Young LLP, independent certified public
accountants, has audited the books and records of the Company for the
previous fiscal year. Accordingly, the Board of Directors recommends
that the stockholders vote FOR the ratification of the appointment by
the Board of Directors of the firm of Ernst & Young LLP to audit the
books and accounts of the Company for the current fiscal year.
Representatives of Ernst & Young LLP are expected to be available
at the meeting to respond to appropriate questions and will be given
the opportunity to make a statement if they desire to do so. If the
stockholders do not ratify the appointment of this firm, the
appointment of another firm of independent certified public accountants
will be considered by the Board of Directors.
The Board of Directors deem the ratification of the appointment of
Ernst & Young LLP as the auditors for the Company to be in the
Company's best interest and recommends a vote "FOR" such ratification.
Replacement of Former Accountant.
On July 8, 1996, the Board approved the engagement of Ernst & Young
LLP as its independent auditors for the fiscal year 1996 to replace the
firm of Richard A. Eisner & Company, LLP ("Eisner") who had been
retained by the Company as its independent auditors for fiscal year
ended December 31, 1995 and fiscal years prior thereto. The
termination of Eisner and the engagement of Ernst & Young LLP was
effective July 9, 1996.
The reports of Eisner, previously issued, on the Company's
consolidated financial statements for the two fiscal years immediately
prior to its termination did not contain an adverse opinion or a
disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principles.
During the two fiscal years immediately prior to Eisner's dismissal
and during the period between the start of the 1996 fiscal year and the
date of Eisner's dismissal, there were no disagreements with Eisner on
any matter of accounting principles or practices, financial statement
disclosure or audit scope or procedures, which disagreements, if not
resolved to Eisner's satisfaction, would have caused them to make
reference in connection with that report to the subject matter of the
disagreement.
During the two fiscal years immediately prior to Eisner's dismissal
and during the period between the start of the 1996 fiscal year and the
date of Eisner's dismissal, the Company was not advised by Eisner of
any of the reportable events listed in Item 304(a)(l)(v)(A) through (D)
of Regulation S-K and, during such period, the Company did not consult
with Ernst & Young LLP regarding any matter referenced under Item
804(a)(2) of Regulation S-K.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), requires the Company's directors and executive
officers, and persons who beneficially own more than ten percent of a
registered class of the Company's equity securities, to file with the
Securities and Exchange Commission initial reports of ownership and
reports of changes in ownership of Common Stock and the other equity
securities of the Company. Officers, directors, and persons who
beneficially own more than ten percent of a registered class of the
Company's equities are required by the regulations of the Securities
and Exchange Commission to furnish the Company with copies of all
Section 16(a) forms they file. To the Company's knowledge, based
solely on review of the copies of such reports furnished to the Company
and written representations that no other reports were required, during
the fiscal year ended December 31, 1996, all Section 16(a) filing
requirements applicable to its officers, directors, and greater than
ten percent beneficial owners were complied with.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be considered for inclusion in
the proxy statement for presentation at the Company's 1998 Annual
Meeting of Stockholders must be received at the Company's at its
offices at 80 Cabot Court, Hauppauge, New York 11788 no later than
January 21, 1998, for inclusion in the Company's proxy statement and
form of proxy relating to such meeting. All proposals must comply with
applicable Commission rules and regulations.
OTHER MATTERS
The Board of Directors is not aware of any other matter other than
those set forth in this proxy statement that will be presented for
action at the meeting. If other matters properly come before the
meeting, the persons named as proxies intend to vote the shares they
represent in accordance with their best judgment in the interest of the
Company.
THE COMPANY UNDERTAKES TO PROVIDE ITS STOCKHOLDERS WITHOUT CHARGE A
COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K/A, INCLUDING THE
FINANCIAL STATEMENTS AND SCHEDULES FILED THEREWITH. WRITTEN REQUESTS
FOR SUCH REPORT SHOULD BE ADDRESSED TO THE OFFICE OF THE SECRETARY,
ORBIT INTERNATIONAL, 80 CABOT COURT, HAUPPAUGE, NEW YORK 11788.
ORBIT INTERNATIONAL CORPORATION
Annual Meeting of Stockholders - June 27, 1997
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned stockholder in Orbit International Corporation
("Corporation") hereby constitutes and appoints Dennis Sunshine,
Bruce Reissman, and Mitchell Binder, and each them, his true and
lawful attorneys and proxies, with full power of substitution in
and for each of them, to vote all shares of the Corporation which
the undersigned is entitled to vote at the Annual Meeting of
Stockholders to be held at The Penn Club, 30 West 44th Street, New
York, New York 10036 at 10:00 a.m., Eastern Daylight Savings Time,
or at any postponement or adjournment thereof, on any and all of
the proposals contained in the Notice of the Annual Meeting of
Stockholders, with all the powers the undersigned would possess if
present personally at said meeting, or at any postponement or
adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR THE NOMINEES LISTED ON THE
REVERSE SIDE.
(Continued and to be signed and dated on the other side)
The Directors recommend a vote FOR Proposal 2
X Please mark
your votes
as this example
COMMON
1. Election of
Directors FOR All nominees WITHHOLD AUTHORITY
listed (except as to vote for all
marked to the nominees listed at
contrary, see left
instruction below)
Dennis Sunshine, Bruce Reissman,
Mitchell Binder, Nathan A. Greenberg,
John Molloy and Stanley Morris
INSTRUCTION: To withhold authority to vote for any individual
nominee, line through the name of the nominee above.
2. Proposal to ratify Ernst & Young LLP as FOR AGAINST ABSTAIN
independent auditors.
The above named proxies are granted the authority, in their
discretion, to act upon such other matters as may properly
come before the meeting or any postponement or adjournment
thereof.
Dated , 1997
Signature(s)
Signatures
Please sign exactly as your name appears and return this
proxy immediately in the enclosed stamped self-addressed
envelope.
170946-2
1
170946-2
170946-2
