SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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 International Corp.
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(Name of Registrant as Specified In Its Charter)
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(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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee previously paid with the preliminary materials:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
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offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and
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(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed: . . . . . . . . . . . . . . . . . . . . . . . . . . .
ORBIT INTERNATIONAL CORP.
80 CABOT COURT
HAUPPAUGE, NEW YORK 11788
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To the Stockholders of Orbit International Corp.:
A Special Meeting of Stockholders of Orbit International Corp. (the
"Company") will be held at the offices of the
Company at 80 Cabot Court, Hauppauge, New York 11788, at 10:00 a.m., Eastern
Daylight Savings Time, on October 1,
1999. The Special Meeting is being called to consider and vote upon a
proposal to effect a one-for-three reverse stock split.
The notice of Special Meeting and the Proxy Statement accompanying this letter
describe more fully the business to be acted
upon at the Special Meeting.
All stockholders are invited to attend the meeting. Stockholders of
record at the close of business on September 3,
1999, 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 to 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
September 10, 1999
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 Corp. (the "Company") for use at
a Special Meeting of Stockholders (the "Special Meeting") to be held at 10:00
a.m., Eastern Daylight Savings Time, on October
1, 1999, at the offices of the Company at 80 Cabot Court, Hauppauge, New York
11788, 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 Special Meeting. The
approval of a majority of the outstanding shares
of Common Stock entitled to vote is required for amendment to the Certificate
of Incorporation to effect the approval of the one-for-
three reverse stock split.
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 proposal to effect a
one-for-three reverse stock split and in accordance with the
proxy-holder's best judgment as to any other matters raised at the Special
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 Special Meeting and taking appropriate steps
to vote in person.
At the close of business on September 1, 1999, 6,077,593 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 September 3, 1999 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 1.
This proxy material is being mailed to stockholders commencing on or
about September 10, 1999.
PROPOSAL 1
TO AMEND THE CERTIFICATE OF
INCORPORATION TO EFFECT THE REVERSE STOCK SPLIT
The Company's Board of Directors has unanimously approved and determined
to submit to the stockholders of the
Company an amendment to the Company's Certificate of Incorporation (the
"Certificate of Incorporation"), to effect a one-for-three
reverse stock split of the Company's outstanding Common Stock (the "Reverse
Split Amendment"). The Company is currently
authorized to issue 25,000,000 shares of Common Stock, par value $.10 per
share, of which 6,077,593 shares were outstanding
on September 1, 1999. If the Reverse Split Amendment is effected, the number
of authorized shares would remain the same, but
the number of shares outstanding would be decreased to approximately 2,025,864
shares. As of the Record Date, there were
outstanding options to purchase an aggregate of 1,190,500 shares of Common
Stock under the Company's 1995 Employees' Stock
Option Plan and the 1995 Stock Option Plan for Non-Employee Directors. After
giving effect to the Reverse Split Amendment
there would be reserved for issuance upon the exercise of options
approximately 396,833 shares of Common Stock. Each
outstanding option would thereafter evidence the right to purchase one-third
of the number of shares of Common Stock previously
covered thereby and the exercise price per share would be three times the
previous exercise price.
The rights and preferences of the Common Stock would be unaffected by the
reverse split. Furthermore, the stockholders'
percentage ownership of the Company and the number of Company stockholders
should not materially change as a result of the
Reverse Split Amendment being effected. The par value per share of Common
Stock would remain at $0.10 following the reverse
stock split; as a consequence, the aggregate capital in excess of par value
attributable to the outstanding Common Stock for
statutory and accounting purposes would be increased.
Nasdaq Market Value of Public Float
Rule 4450 of the Nasdaq Marketplace Rules currently provides that issuers
listed on the Nasdaq National Market (the
"National Market") maintain (i) a minimum bid price of $1.00 per share for the
listed stock and (ii) a market value public float
("MVPF") greater than or equal to $5,000,000. Nasdaq defines public float "as
outstanding shares that are not held directly or
indirectly by any officer or director of the issuer or any other person who is
the beneficial owner of 10 percent (10%) or more of
the total shares outstanding."
In a letter dated May 28, 1999, The Nasdaq Stock Market informed the
Company that it had not maintained the required
MVPF for the 30 trading days immediately prior to the date of the letter.
Failure to maintain a MVPF of greater than $5,000,000
for a minimum of ten consecutive trading days between May 28, 1999 and August
31, 1999 would result in a delisting of the
Common Stock from the National Market. In the alternative, Nasdaq encouraged
the Company to transfer from the National
Market to the Nasdaq SmallCap Market ("SmallCap Market"), assuming that the
Company meets the SmallCap requirements.
The chart below sets for the requirements for listing on the SmallCap Market.
<TABLE>
<S> <C>
NASDAQ SMALLCAP MARKET CRITERIA FOR CONTINUED INCLUSION
Net Tangible Assets $2,000,000(1)
or or
Net Income (2 of last 3 years) $500,000
or or
Market Capitalization $35,000,000
Public Float (shares) 500,000
Market Value of Public Float(2) $1,000,000
Bid Price(3) $1.00
Market Makers(4) 2
Round Lot Stockholders 300
<FN>
1If net Tangible Assets are not greater than or equal
to $2,000,000, then Net Income must be greater than or
equal to $500,000 in the most recent fiscal year or in 2 of 3
most recent fiscal years, or Market Capitalization
must greater than or equal to $35,000,000.
2Deficient if issue fails requirements for 30 consecutive
business days. A Company is recompliant only when
Market Value of Public Float meets the requirement for a minimum
of 10 consecutive business days.
3Deficient if issue fails requirements for 30 consecutive
business days. A Company is recompliant only when
Bid Price meets the requirement for a minimum of 10 consecutive
business days.
4Deficient if issue fails requirements for 10 consecutive
business days.
</TABLE>
If the Company is unable to meet the listing requirements for the
SmallCap Market, the Company's Common Stock will
be delisted from Nasdaq. The Company believes that it can no longer meet the
MVPF requirements for the National Market. The
Company had intended to transfer its listing to the SmallCap Market. However,
the Company currently does not meet the
requirements of the SmallCap Market because it does not meet the minimum bid
price requirement. The Company does meet all
other requirements for listing on the SmallCap Market. If the Reverse Split
Amendment is approved, the Company will meet the
minimum bid price requirement and will qualify for the SmallCap Market. The
Company believes that failure to approve the
Reverse Split Amendment and failure to effect the reverse stock split will
result in the Company's Common Stock being delisted
from Nasdaq.
The Board of Directors believes that such a delisting could adversely
affect the ability of the Company to attract new
investors, may result in decreased liquidity of the outstanding shares of
Common Stock and, consequently, reduce the price at which
such shares trade and increase the transactions costs inherent to trading
shares. The Company believes that if the Reverse Split
Amendment is approved, there is a greater likelihood that the minimum bid
price of the Common Stock will be maintained at over
$1.00 per share. Even though a reverse stock split, by itself, does not
impact a corporation's assets or prospects, reverse stock splits
can result in a decrease in the aggregate market value of a corporation's
equity capital. The Board of Directors, however, believes
that this risk is off-set by the prospect that the reverse stock split will
improve the likelihood that the Company will be able to meet
and maintain the requirements for a SmallCap listing and may, by increasing
the per share price, make an investment in the
Common Stock more attractive for certain investors. There can be no assurance,
however, that approval of the Reverse Split
Amendment will succeed in maintaining the bid price of the Company's Common
Stock above $1.00 per share, or that even if the
Nasdaq minimum bid price requirement is satisfied, the Company's Common Stock
would not be delisted from the SmallCap
Market for other reasons.
Exchange of Stock Certificates
If the Reverse Split Amendment is approved by the Company's stockholders,
the Company will instruct its transfer agent
to act as its exchange agent (the "Exchange Agent") in implementing the
exchange of certificates representing outstanding
Common Stock.
Commencing on the effective date of the Reverse Split Amendment (the
"Effective Date"), holders of Common Stock will
be notified and requested to surrender their certificates representing shares
of Common Stock to the Exchange Agent in exchange
for certificates representing post-reverse split Common Stock. One share of
post-reverse split Common Stock will be issued in
exchange for each three presently issued and outstanding shares of Common
Stock. Beginning on the Effective Date, each
certificate representing shares of the Company's Common Stock will be deemed
for all corporate purposes to evidence ownership
of shares of post-reverse split Common Stock.
Fractional Shares
No scrip or fractional certificates will be issued in connection with the
Reverse Split Amendment. In cases in which the
Reverse Split Amendment would otherwise result in any stockholder holding a
fraction of a share, the Company will pay the
stockholder for such fractional interest on the basis of the average closing
market price of the Common Stock on the Nasdaq for
the 10 trading days immediately preceding the day of the Effective Date. The
payment for each one-third of a share of post-reverse
split Common Stock will be equal to such average closing price of one share of
pre-reverse split Common Stock. Because the price
of the Common Stock fluctuates, the amount to be paid for fractional shares
cannot be determined until such date and may be
greater or less than the price on the date that any stockholder executes a
proxy.
Upon the surrender of stock certificates representing Common Stock,
certificates representing post-reverse split Common
Stock will be delivered. At the same time or as soon as possible thereafter,
any cash payment for a fractional share will be paid
(without interest). In addition, until they have surrendered their stock
certificates for exchange, stockholders will not be entitled
to receive any dividends or other distributions, if any, that may be declared
and payable to holders of record.
Federal Income Tax Consequences
The Reverse Split Amendment should not result in the recognition of gain
or loss. The holding period of the shares of
post-reverse split Common Stock will include the stockholder's respective
holding periods for the shares of pre-reverse split
Common Stock exchanged therefor, provided that the shares of Common Stock were
held as a capital asset. The adjusted basis of
the shares of post-reverse split Common Stock will be the same as the adjusted
basis of the Common Stock exchanged therefor.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material federal income tax
consequences of the proposed reverse stock split. This
summary does not purport to be complete and does not address the tax
consequences to holders that are subject to special tax rules,
such as banks, insurance companies, regulated investment companies, personal
holding companies, foreign entities, nonresident
alien individuals, broker-dealers and tax-exempt entities. This summary is
based on the Internal Revenue Code of 1986, as
amended (the "Code"), Treasury regulations and proposed regulations, court
decisions and current administrative rulings and
pronouncements of the Internal Revenue Service ("IRS"), all of which are
subject to change, possibly with retroactive effect, and
assumes that the shares of Common Stock received in the reverse split will be
held as a "capital asset" (generally, property held
for investment) as defined in the Code. Holders of Common Stock are advised to
consult their own tax advisers regarding the
federal income tax consequences of the proposed reverse stock split in light
of their personal circumstances and the consequences
under state, local and foreign tax laws.
1. The reverse split will qualify as a recapitalization described in
Section 368(a)(1)(E) of the Code.
2. No gain or loss will be recognized by the Company in connection with
the reverse split.
3. No gain or loss will be recognized by a stockholder who exchanges
all of his or her shares of Common Stock
solely for shares of Common Stock.
4. The aggregate basis of the shares of Common Stock to be received in
the reverse split (including any fractional
share deemed received) will be the same as the aggregate basis of the shares
of Common Stock surrendered in exchange therefor.
5. The holding period of the shares of Common Stock to be received in
the reverse split (including any fractional
share deemed received) will include the holding period of the shares of
Common Stock surrendered in exchange therefor.
6. A holder of Common Stock receiving cash in lieu of a fractional
share will be treated as receiving the payment
in connection with a redemption of the fractional share, with the tax
consequences of the redemption determined under Section
302 of the Code. Unless the payment is treated as a dividend, a holder of
Common Stock will generally recognize gain or loss upon
such payment equal to the difference, if any, between such stockholder's basis
in the fractional share (as described in 4., above)
and the amount of cash received. Such gain or loss will be capital gain or
loss and will be long-term capital gain or loss if the
stockholder's holding period (as described in 5., above) exceeds one year. A
holder of Common Stock receiving cash in lieu of a
fractional share may be subject to dividend treatment on such payment unless
the redemption of the fractional share is "not
essentially equivalent to a dividend" under Section 302 of the Code. Based on
a published IRS ruling, dividend treatment is unlikely
if, taking into account the constructive ownership rules set forth in Section
318 of the Code, (a) the stockholder's relative stock
interest in the Company is minimal, (b) the stockholder exercises no control
over the Company's affairs and (c) there is a reduction
in the stockholder's proportionate interest in the Company.
THE FOREGOING SUMMARY IS INCLUDED FOR GENERAL INFORMATION ONLY.
ACCORDINGLY, EACH
HOLDER OF COMMON STOCK OF THE COMPANY IS URGED TO CONSULT WITH HIS OR HER OWN
TAX ADVISER
WITH RESPECT TO THE TAX CONSEQUENCES OF THE PROPOSED REVERSE STOCK SPLIT,
INCLUDING THE
APPLICATION AND EFFECT OF THE LAWS OF ANY STATE, MUNICIPAL, FOREIGN OR OTHER
TAXING
JURISDICTION.
STOCKHOLDER VOTE REQUIRED
The approval of a majority of the outstanding shares of Common Stock
entitled to vote is required for amendment to the
Certificate of Incorporation to effect the approval of the one-for-three
reverse stock split.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
REVERSE SPLIT AMENDMENT.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Set forth below is stock ownership information as of September 1, 1999 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 its Chief Executive Officer
and three other executive officers, 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
c/o 80 Cabot Court
Hauppauge, New York 1,270,138(2) 19.99%
Bruce Reissman
c/o 80 Cabot Court
Hauppauge, New York 953,614(3) 15.05%
Parsow Partnership, Ltd.
2222 Skyline Drive
Elkhorn, Nebraska 370,000 6.09%
Mitchell Binder
c/o 80 Cabot Court
Hauppauge, New York 220,000(4) 3.51%
Harlan Sylvan
c/o 80 Cabot Court
Hauppauge, New York 53,000(5) *
John Molloy
1815 Paliament Road
Leucadia, California 11,000(6) *
Stanley Morris
2470 Cove Court
Bellmore, New York 14,000(6) *
Marc Pfefferle
135 East 57th Street
New York, New York 6,000(7) *
All officers and directors
as a group
(7 persons)(2)(3)(4)(5)(6)(7) 2,527,952 36.71%
(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 9,000 shares of Common Stock.
(7) Includes options to purchase 6,000 shares of Common Stock.
* Less than one percent.
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.
ORBIT INTERNATIONAL CORP.
SPECIAL MEETING OF STOCKHOLDERS -OCTOBER 1, 1999
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned stockholder in Orbit International Corp. ("Corporation")
hereby constitutes and appoints Dennis Sunshine, Bruce Reissman, and Mitchell
Binder,
and each
of 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 Special Meeting of Stockholders to be held at the offices of
the Company at 80 Cabot Court, Hauppauge, New York 11788, on October 1, 1999 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 Special 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 ALL PROPOSALS.
(Continued and to be signed and dated on the other side)
1. Proposal to approve an amendment of
the Company's Certificate of Incorporation
to effect a one-for-three reverse stock split. For Against
Abstain
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 , 1999
Signature(s)
Signatures
Please sign
exactly as your name appears and return this proxy
immediately in the
enclosed stamped self-addressed envelope.
