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.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act
Rule 0-11 (Set forth the amount on which the filing fee is calculated and
state how it was
determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee previously paid with the preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the
filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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 offices of the Company at 80 Cabot Court, Hauppauge, New York 11788, at
10:00 a.m., Eastern
Daylight Savings Time, on June 26, 2000, for the following purposes:
1. To elect the Board of Directors for the ensuing year.
2. To consider and act upon a proposal to amend the Company's
Certificate of Incorporation
to reduce the authorized number of shares of common stock from
25,000,000 to
10,000,000.
3. To consider and act upon a proposal to adopt the Company's 2000
Stock Option Plan.
4. To ratify the appointment of Goldstein Golub Kessler, LLP as
independent auditors and
accountants for the Company for the fiscal year ending December 31,
2000.
5. 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 15, 2000, 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
May 22, 2000
ORBIT INTERNATIONAL CORP.
80 CABOT COURT
HAUPPAUGE, NEW YORK 11788
(631) 435-8300
______________________
PROXY STATEMENT
______________________
The accompanying proxy is solicited by the Board of Directors of Orbit
International Corp. (the
"Company") for use at the Annual Meeting of Stockholders (the "Annual
Meeting") to be held at 10:00 a.m.,
Eastern Daylight Savings Time, on June 26, 2000, 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 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 amendment to the Company's Certificate of Incorporation
to reduce the authorized
number of shares of Common Stock from 25,000,000 to 10,000,000, FOR the
adoption of the 2000 Stock
Option Plan and FOR the ratification of the appointment of Goldstein Golub
Kessler, 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 24, 2000, 2,025,864 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 15, 2000 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
Proposals 2-4.
This proxy material is being mailed to stockholders commencing on or
about May 22, 2000.
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, John Molloy, Stanley Morris, and
Marc Pfefferle, each a current
Director, for re-election to the Board of Directors and has decided not to
fill the vacancy at this time. Proxies
cannot be voted for a greater number of persons than the number of nominees
named.
The persons named in the accompanying proxy intend to vote for the
election of the nominees listed
herein as directors. 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.
<TABLE>
<CAPTION>
Name of Nominee Age Position
<S> <C> <C>
Dennis Sunshine 53 President, Chief Executive
Officer and Director
Bruce Reissman 50 Executive Vice President, Chief Operating
Officer and Director
Mitchell Binder 44 Vice President - Finance, Chief
Financial Officer
and Director
John Molloy 70 Director
Stanley Morris 57 Director
Marc Pfefferle
43 Director
</TABLE>
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.
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.
Marc Pfefferle has been a Managing Director of the Carl Marks Consulting
Group, Co. which
specializes in enhancing growth and shareholder value in middle market
companies. Mr. Pfefferle has been
with the Carl Marks Consulting Group, Co. since 1992. Mr. Pfefferle also
serves as a Board Advisor to
Precision Combustion, Inc. and has served as an interim manager of The Wiz,
Fabric Bonanza and Aerospace
Supply. He has been a director of the Company since 1998.
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 of Directors (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 held three meetings during the fiscal year ended December
31, 1999. All directors
attended at least 75% of the meetings.
The Audit Committee of the Board currently consists of John Molloy,
Stanley Morris and Marc
Pfefferle, a majority of whom are independent as independence is defined in
Rule 4200(a)(15) of the National
Association of Securities Dealers ("NASD") listing standards, as amended on
December 14, 1999. The Audit
Committee held one meeting during the fiscal year ended December 31, 1999.
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. Pursuant to Rule 4310(c)(26)(A) of the NASD listing standards, as
amended, the Board has adopted
an Audit Committee Charter which sets forth the composition of the Audit
Committee, the qualifications of
Audit Committee members and the responsibilities and duties of the Audit
Committee. A copy of the Audit
Committee Charter is attached as Appendix A.
The Compensation Committee of the Board currently consists of John
Molloy, Stanley Morris and
Marc Pfefferle. The Compensation Committee held one meeting during the
fiscal year ended December 31,
1999. This Committee makes recommendations to the Board 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 on
any proposed plan or program which would benefit primarily the senior
executive group.
The Stock Option Committee of the Board 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, 1999. 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 does not have a nominating committee. This function is
performed by the Board 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.
EXECUTIVE OFFICERS OF THE COMPANY
The names and ages of the executive officers of the Company as of April
28, 2000 and their positions
with the Company are as follows:
<TABLE>
<S> <C> <C>
Name of Nominee Age Position
Dennis Sunshine 53 President, Chief Executive
Officer and Director
Bruce Reissman 50 Executive Vice President, Chief Operating
Officer and Director
Mitchell Binder 44 Vice President - Finance, Chief
Financial Officer
and Director
Harlan Sylvan 49 Treasurer, Secretary and Controller
</TABLE>
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,
1999, 1998 and 1997,
compensation paid by the Company to the Chief Executive Officer and to each
other executive officer of the
Company that received more than $100,000 in salary and bonus during the fiscal
year ended December 31,
1999 including salary, bonuses, stock options and certain other compensation
(each, a "Named Executive"):
<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1)
<S> <C> <C> <C> <C>
NAME AND YEAR SALARY BONUS ($) ALL OTHER
PRINCIPAL POSITION ($) COMPENSATION($)
Dennis Sunshine, 1999 319,000 17,600 6,148(2)
President and Chief 1998 355,000 55,509 7,761(3)
Executive Officer 1997 346,000 113,080 7,355(4)
Bruce Reissman, 1999 267,000 17,600 5,470(2)
Executive Vice 1998 355,000 39,200 7,122(3)
President and
Chief Operating Officer 1997 346,000 64,070 6,753(4)
Mitchell Binder, 1999 239,000 12,800 4,393(2)
Vice President - 1998 262,000 30,372 5,180(3)
Finance and
Chief Financial Officer 1997 255,000 50,976 4,878(4)
Harlan Sylvan 1999 108,000 5,600 2,681(2)
Treasurer, 1998 115,000 8,569 2,775(3)
Secretary and
Controller 1997 109,000 8,240 2,677(4)
</TABLE>
__________________
(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) Includes $3,200, $3,200, $3,200 and $2,037 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 $2,948,
$2,270, $1,193 and $644,
respectively.
(3) Includes $5,000, $5,000, $4,066 and $2,172 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 $2,761,
$2,122, $1,114 and $603,
respectively.
(4) Includes $4,750, $4,750, $3,807 and $2,108 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 $2,605,
$2,003, $1,071 and $569,
respectively.
The following table sets forth certain information concerning options
granted to the Named Executives
during the fiscal year ended December 31, 1999.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Individual Grants
Name Number Percent Exerci Expirat PotentialRealizableValue
atAssumed
of of se or ion Annual Ratesof
Securiti Total Base Date Stock PriceAppreciationfor
es Options Price Option Term5% ($)
10%($)
Underlyi Granted ($/Sh
ng to are)
Options Employees
Granted in Fiscal
Year
Dennis 0 0
Sunshine -- --
Bruce 0 0
Reissman -- --
Mitchell 0 0
Binder -- --
Harlan Sylvan 0 0
-- --
</TABLE>
AGGREGATED OPTION EXERCISES DURING THE FISCAL YEAR ENDED DECEMBER 31,
1999 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, 1999 by the
Named Executives. No options were exercised by any of the Named Executives
during the fiscal year ended
December 31, 1999.
<TABLE>
<S> <C> <C> <C> <C>
Number of SecuritiesUnderlying UnexercisedOptions at Fiscal Year
EndValue of UnexercisedIn-the-Money Optionsat
Fiscal Year End
Name Exercisable Unexercisable Exercisable Unexercisable
Dennis Sunshine91,666 0 $0 $0
Bruce Reissman 86,666 0 $0 $0
Mitchell Binder66,666 0 $0 $0
Harlan Sylvan 16,666 0 $0 $0
</TABLE>
EMPLOYMENT AGREEMENTS
Dennis Sunshine has entered into an amended and restated employment
agreement with the Company
which commenced in February 1999 (the "Current Sunshine Employment
Agreement"). Under the terms of
Mr. Sunshine's previous employment agreement (the "Previous Sunshine
Employment Agreement"), Mr.
Sunshine was entitled to receive an annual base salary of $340,000 and a bonus
equal to 4.00% of the
Company's pre-tax earnings. Under the terms of the Current Sunshine
Employment Agreement, Mr. Sunshine
is entitled to receive an annual base salary of $290,000 and a bonus equal to
4.00% of the Company's pre-tax
earnings between $500,000 and $1,000,000; 5.00% of the Company's pre-tax
earnings between $1,000,001
and $2,000,000; 6.0% of the Company's pre-tax earnings between $2,000,001 and
$3,000,000; and 7.5% of
the Company's pre-tax earnings in excess of $3,000,001. The Current 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 Current 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 Current Sunshine Employment Agreement which violation is not
remedied within 30 days after
written notice from the Company. The Current Sunshine Employment Agreement
may also be terminated by
the Company on not less than three years' prior notice.
The Current 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 Previous
Sunshine Employment Agreement also provided for the purchase by Mr. Sunshine
of 100,000 shares of
Common Stock at $.10 per share. Such shares are subject to vesting over a
period of three years which
commenced on April 1,1997.
Bruce Reissman has entered into an amended and restated employment
agreement with the Company
(the "Reissman Employment Agreement") which commenced in February 1999. Under
the terms of Mr.
Reissman's previous employment agreement, Mr. Reissman was entitled to receive
an annual base salary of
$340,000 and a bonus equal to 1.77% of the first $5,000,000 of the Company's
pre-tax earnings and 2.65%
of any additional pre-tax earnings. Under the terms of the Reissman
Employment Agreement, Mr. Reissman
is entitled to receive an annual base salary of $240,000 and a bonus equal to
2.40% of the Company's pre-tax
earnings between $500,000 and $1,000,000; 3.00% of the Company's pre-tax
earnings between $1,000,001
and $2,000,000; 3.6% of the Company's pre-tax earnings between $2,000,001 and
$3,000,000; and 4.5% of
the Company's pre-tax earnings in excess of $3,000,001. 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 amended and restated employment
agreement with the Company
(the "Binder Employment Agreement") which commenced in February 1999. Under
the terms of Mr. Binder's
previous employment agreement, Mr. Binder was entitled to receive an annual
base salary of $255,000 and a
bonus equal to 1.46% of the first $5,000,000 of the Company's pre-tax earnings
and 2.20% of any additional
pre-tax earnings. Under the terms of the Binder Employment Agreement, Mr.
Binder is entitled to receive an
annual base salary of $218,000 and a bonus equal to 1.60% of the Company's
pre-tax earnings between
$500,000 and $1,000,000; 2.00% of the Company's pre-tax earnings between
$1,000,001 and $2,000,000;
2.4% of the Company's pre-tax earnings between $2,000,001 and $3,000,000; and
3.0% of the Company's
pre-tax earnings in excess of $3,000,001. 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 Current 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 received
directors fees of $3,750
per quarter. Beginning January 1, 2000, non-employee directors will receive
directors fees of $1,250 per
quarter. The Board determined that such a decrease was consistent with recent
cost-cutting measures
undertaken by the Company and is in the best interests of the Company.
Employee directors are not
compensated for services as a director. All directors are reimbursed for
expenses incurred on behalf of the
Company. Pursuant to the Company's 1995 Stock Option Plan for Non-Employee
Directors, non-employee
Directors are 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, John
Molloy and Marc Pfefferle,
each of whom is a non-employee member of the Company's Board of Directors.
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 Pfefferle comprise the Compensation Committee.
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 1999 will not
result in any material loss of tax deductions for the Company.
SURRENDER OF PREVIOUSLY GRANTED OPTIONS
In December 1997, the Stock Option Committee awarded to Messrs. Sunshine,
Reissman, Binder and
Sylvan 35,000, 35,000, 20,000 and 10,000 stock options, respectively in
recognition of an effort leading to an
anticipated award of a long term project utilizing the Company's products in a
trading floor environment. In
August 1998, when it became apparent to management that the project was not as
imminent as expected,
Messrs. Sunshine, Reissman, Binder and Sylvan requested that such options be
canceled. The Stock Option
Committee then canceled the options and returned them to the pool of options
available for grant under the
1995 Stock Option Plan.
STEPS TAKEN DURING FIRST QUARTER 1999
In the first quarter of 1999, Dennis Sunshine, the President and Chief
Executive Officer, Bruce
Reissman, the Executive Vice President and Chief Operating Officer, and
Mitchell Binder, the Vice President
- -tax earnings fall below a certain level and rewards the executive on an
escalating basis as the
Company's pre-tax earnings increase, and (c) a surrender of stock options
granted to them in December 1997.
The respective Employment Agreements of such executives were amended and
restated in February 1999 to
reflect such changes. The executives agreed with the Compensation Committee
that the steps taken not only
were prudent but also served as an example to the Company's remaining employees.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. Sunshine's base salary and bonus for the fiscal year ended December
31, 1999 was determined
by the terms of the Current Sunshine Employment Agreement which was entered
into in February 1999 and
is described elsewhere in this proxy statement. Mr. Sunshine was not granted
any options during the fiscal year
ended December 31, 1999. The Compensation Committee believes that Mr.
Sunshine's base salary level and
bonus formula as set forth in the Current Sunshine Employment Agreement fairly
reflect the outstanding
contributions Mr. Sunshine has made to the Company's market and financial
position as well as Mr.
Sunshine's commitment to the continued success of the Company. During 1999,
Mr. Sunshine was
instrumental in instituting and overseeing several cost-cutting measures
undertaken by the Company in order
to counteract the difficult business environment for the defense sector. Mr.
Sunshine also actively sought new
strategic commercial markets for many of the Company's existing and new
products. The Company believes
that each of the foregoing events helped to stabilize the Company's financial
condition.
COMPENSATION COMMITTEE STOCK OPTION COMMITTEE
Stanley Morris Stanley Morris
John Molloy John Molloy
Marc Pfefferle
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 December
31, 1994, 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 NASDAQ
12/94 100 100 100
12/95 50 136.3 141.33
12/96 125 175.03 173.89
12/97 182.14 181.52 213.07
12/98 87.50 237.05 300.25
12/99 26.19 171.89 542.43
The Peer Group is comprised of five companies in the defense electronics
industry - Aeroflex 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 five 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 28, 2000 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) (2) Percent of Class
Dennis Sunshine
c/o 80 Cabot Court
Hauppauge, New York 423,379(3) 19.99%
Bruce Reissman
c/o 80 Cabot Court
Hauppauge, New York 317,871(4) 15.05%
Parsow Partnership, Ltd.
2222 Skyline Drive
Elkhorn, Nebraska 123,333 6.09%
Mitchell Binder
c/o 80 Cabot Court
Hauppauge, New York 73,332(5) 3.50%
Harlan Sylvan
c/o 80 Cabot Court
Hauppauge, New York 17,666(6) *
John Molloy
1815 Parliament Road
Leucadia, California 3,664(7) *
Stanley Morris
2470 Cove Court
Bellmore, New York 4,664(7) *
Marc Pfefferle
135 East 57th Street
New York, New York 1,9998) *
All officers and directors
as a group
(7 persons)(3)(4)(5)(6)(7)(8)842,580 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) All share numbers reflect the one-for-three reverse stock split effected
by the Company on October 4,
1999.
(3) Includes 230,538 shares held by Mr. Sunshine's wife and 1,000 shares held
in her IRA. Also includes
options to purchase 91,666 shares of Common Stock.
(4) Includes options to purchase 86,666 shares of Common Stock.
(5) Includes options to purchase 66,666 shares of Common Stock.
(6) Includes options to purchase 16,666 shares of Common Stock.
(7) Includes options to purchase 2,998 shares of Common Stock.
(8) Includes options to purchase 1,999 shares of Common Stock.
* Less than one percent.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
All of the Company's insurance policies are either underwritten by or
placed by Rampart Brokerage
Corporation ("Rampart"), a company for which Stanley Morris, a director of
the Company, serves as
President. Rampart underwrites various insurance policies for the Company
(including property and liability
coverages). In addition, through a wholly-owned subsidiary, Rampart places
the Company's life insurance and
health insurance. For the property and liability coverages, Rampart pays, on
the Company's behalf, the
premiums owing with respect to such policies, directly to the insurance
carriers. The Company pays the
premiums on its life and health insurance policies directly to the relevant
insurance carriers. The Company
does not pay to Rampart any commissions or other fees for placing these
policies. Rampart receives any such
commissions directly from the respective insurance carriers. The Company has
competitively priced its
insurance in the marketplace and believes it obtains insurance on terms no
less favorable than it could obtain
from a third party.
PROPOSAL 2
AMENDMENT TO CERTIFICATE OF INCORPORATION
The Board of Directors has unanimously declared it advisable and
unanimously recommends to the
Company's stockholders that Article FOURTH of the Company's Certificate of
Incorporation be amended to
reduce the authorized number of shares of the Company's Common Stock from
25,000,000 to 10,000,000.
A copy of Article FOURTH of the Company's Certificate of Incorporation, as
proposed to be amended by the
resolution adopted by the Board of Directors, is attached as Appendix B.
As a result of the Company's 1-for-3 reverse stock split effected on
October 4, 1999, the number of
authorized shares of Common Stock far exceeds the number of shares of Common
Stock currently outstanding
and the number of shares reserved for issuance upon the exercise of
outstanding options and warrants. The
reduction in the authorized number of shares of Common Stock, as proposed,
will reduce the Company's
Delaware franchise tax, which is calculated based on the number of authorized
shares.
The Board of Directors recommends a vote FOR the approval of an amendment
to the Company's
Certificate of Incorporation to reduce the number of authorized shares of
Common Stock from 25,000,000 to
10,000,000 which is designated as proposal 2 on the enclosed proxy card.
PROPOSAL 3
2000 EMPLOYEE STOCK OPTION PLAN
APPROVAL OF THE 2000 EMPLOYEE STOCK OPTION PLAN
The Company's Stock Option Committee and the Board has unanimously
recommended, and at the
meeting the stockholders will be asked to approve, the adoption of the Orbit
International Corporation 2000
Employee Stock Option Plan (the "2000 Plan"). A description of the 2000 Plan,
which is attached hereto as
Annex C, appears below.
The 1995 Plan. The 1995 Employee Stock Option Plan (the "1995 Plan") was
approved by the
Shareholders at the 1996 Annual Meeting. A total of 500,000 shares of Common
Stock were authorized and
have been reserved for issuance under the 1995 Plan. As of March 27, 2000,
all of the options to purchase
such shares have been granted.
The 2000 Plan. The purpose of the 2000 Plan is to afford an incentive to
employees, corporate
officers and other key persons to acquire a proprietary interest in the
Company and to attract and retain key
personnel. A total of 200,000 shares of Common Stock are authorized and have
been reserved for issuance
under the 2000 Plan. The 2000 Plan does not replace the Company's 1995 Plan.
Since options to purchase
all of the authorized shares under the 1995 Plan have been granted, the 2000
Plan will operate to authorize and
reserve additional shares of common stock for the grant of options on the same
terms as under the 1995 Plan.
The 2000 Plan provides for the granting of both non-qualified stock options
and "incentive stock options"
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended. Incentive Stock options
may be granted to individuals who, at the time of grant, are employees of the
Company or any of its
subsidiaries. Non-qualified stock options may be granted to directors who are
also employees, officers,
consultants, agents or independent contractors of the Company or any of its
subsidiaries. Under the 2000 Plan,
no options may be granted after March 27, 2010.
The 2000 Plan is administered by the Stock Option Committee. Subject to
the terms of the 2000 Plan,
the Stock Option Committee has full and final authority to (a) determine the
persons to be granted options, (b)
determine the number of shares subject to each option and whether or not
options shall be incentive stock
options or non-qualified stock options, (c) determine the exercise price per
share of the options (which, in the
case of incentive stock options, may not be less per share than 100%, and in
the case of incentive stock options
granted to 10% stockholders, may not be less per share than 110%, of the fair
market value per share of the
Common Stock on the date the option is granted), (d) determine the time or
times when each option shall be
granted and become exercisable and (e) make all other determinations under the
2000 Plan. In determining
persons who are to receive options and the number of shares to be covered by
each option, the Stock Option
Committee will consider the person's position, responsibilities, service,
accomplishments, present and future
value to the Company, the anticipated length of his or her future service, and
other relevant factors. Members
of the Stock Option Committee are not eligible to receive options under the
2000 Plan.
An optionee whose relationship with the Company or any related
corporation ceases for any reason
(other than termination for cause, death or total disability, as such terms
are defined in the 2000 Plan) may
exercise options in the three-month period following such cessation (unless
such options terminate or expire
sooner by their terms). Upon termination for cause, options expire
immediately, and upon the death or total
disability of an optionee during the term of employment or within a
three-month period from termination (other
than for cause), options may be exercised by a legatee or legatees of such
optionee under such individual's last
will and testament or by his or her personal representatives or distributees,
at any time within 12 months (or,
in the case of incentive stock options, three months) after his or her death
or total disability (unless such options
terminate or expire sooner by their terms). Unexercised options granted under
the 2000 Plan shall terminate
upon a merger, reorganization or liquidation of the Company; however,
immediately prior to such a transaction,
optionees may exercise such options without regard to whether the vesting
requirements have been satisfied.
It is estimated that 92 individuals are currently eligible to participate
in the 2000 Plan.
The following table sets forth the number of options to be granted under
the 2000 Plan, assuming
stockholder approval, to the Chief Executive Officer and the Company's four
most highly compensated
executive officers whose total annual salary and bonus exceeded $100,000 for
the fiscal ended December 31,
1999:
NEW PLAN BENEFITS
2000 EMPLOYEE STOCK OPTION PLAN
<TABLE>
<S> <C> <C>
Name and Position Dollar Value Number of Shares
Underlying Options
Dennis Sunshine 0 0
Bruce Reissman 0 0
Mitchell Binder $5,391 1,797
Harlan Sylvan $59,100 30,000
Other Executive Officers 0 0
as a Group
Non-Executive Employees as $65,010 33,000
a Group
</TABLE>
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE 2000 PLAN UNDER CURRENT LAW
An optionee will recognize no taxable income at the time an option is
granted.
Incentive Stock Options
An optionee will recognize no taxable income at the time of exercise of
an incentive stock option. If
the optionee makes no disposition of the acquired shares within two years
after the date of grant of the incentive
stock option, or within one year after the transfer of such shares, the
employee will recognize no taxable income
and any gain or loss that is realized on a subsequent disposition of such
shares will be treated as long-term
capital gain or loss. As to options exercised, the excess, if any, of the
fair market value of the shares on the
date of exercise over the option price will be an item of tax preference for
purposes of computing the alternative
minimum tax.
If the foregoing holding period requirements are not satisfied, the
optionee will realize (i) ordinary
income for federal income tax purposes in the year of disposition in an amount
equal to the lesser of (a) the
excess, if any, of the fair market value of the shares on the date of exercise
over the option price thereof, or (b)
the excess, if any, of the selling price over the optionee's adjusted basis of
such shares (provided that the
disposition is a sale or exchange with respect to which a loss (if sustained)
would be recognized by such
individual) and (ii) capital gain equal to the excess, if any, of the amount
realized upon the disposition of shares
over the fair market value of such shares on the date of exercise. The capital
gain described in part (ii) of the
previous sentence will be long-term capital gain if the disposition is made
more than one year after the exercise
of the option (but is disqualified because it occurs within two years of the
date of grant). The Company will
be required to collect withholding taxes with respect to the income described
in part (i).
Non-Qualified Stock Options
An optionee will be required to include in their gross income as
compensation (ordinary income) in the
year of exercise of a non-qualified stock option the difference between the
fair market value on the exercise date
of the shares transferred and the option price. The Company will be required
to collect withholding taxes with
respect to such income. On the sale or disposition of the shares so received,
the optionee will recognize capital
gain equal to the excess, if any, of the amount realized over the fair market
value of the shares as of the date
of exercise. This will be long-term capital gain if the disposition is made
more than one year after the option
is exercised.
Effect on the Company
The Company will be entitled to a deduction for federal income tax
purposes at the same time and in
the same amount as the optionee is considered to be in receipt of compensation
income in connection with the
exercise of non-qualified stock options or, in the case of an incentive stock
option, a disqualifying disposition
of shares received upon exercise thereof. If the holding period requirements
outlined above are met, no
deduction will be available to the Company in connection with an incentive
stock option. The Company may
not be able to deduct compensation to certain employees to the extent
compensation exceeds one million dollars
per tax year. Covered employees include the chief executive officer and the
four other highest compensated
officers of the Company for that tax year. Certain performance-based
compensation including stock options
are exempt provided that, among other things, the stock options are granted by
a compensation committee of
the Board of Directors which is comprised solely of two or more outside
directors and the plan under which
the options are granted is approved by stockholders. The 2000 Employee Stock
Option Plan will not qualify
as performance-based compensation.
The Board of Directors recommends a vote FOR the adoption of the
Company's 2000 Employee Stock
Option Plan, which is designated as Proposal 3 on the enclosed proxy card.
PROPOSAL 4
INDEPENDENT ACCOUNTANTS
RATIFICATION OF APPOINTMENT OF AUDITORS
The firm of Ernst & Young LLP, independent auditors, audited the books
and records of the Company
for the fiscal year ended December 31, 1998. On February 21, 2000, the Board
of Directors approved the
engagement of Goldstein Golub Kessler LLP as its independent auditors for the
fiscal year ended December
31, 1999. The Company determined to change its independent auditors on the
basis of the significant savings
in the amount of fees paid and not as a result of a dispute or disagreement
with Ernst & Young LLP.
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 Goldstein Golub Kessler
LLP to audit the books and
accounts of the Company for the current fiscal year.
Representatives of Goldstein Golub Kessler 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 deems the ratification of the appointment of
Goldstein Golub Kessler LLP as
the auditors for the Company to be in the Company's best interest and
recommends a vote "FOR" such
ratification.
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, 1999,
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 2001 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, 2001, 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, INCLUDING THE
FINANCIAL STATEMENTS AND SCHEDULES FILED THEREWITH. WRITTEN REQUESTS
FOR SUCH REPORT SHOULD BE ADDRESSED TO THE OFFICE OF THE SECRETARY,
ORBIT INTERNATIONAL CORP., 80 CABOT COURT, HAUPPAUGE, NEW YORK 11788.
ORBIT INTERNATIONAL CORPORATION
ANNUAL MEETING OF STOCKHOLDERS -JUNE 26, 2000
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 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 Annual
Meeting of Stockholders to be held at the offices of the Company at 80 Cabot
Court, Hauppauge, New York 11788, on Monday, June 26, 2000, 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 AND FOR THE REMAINING THREE PROPOSALS.
(Continued and to be signed and dated on the other side)
Please mark
your votes
as this
example
THE DIRECTORS RECOMMEND A VOTE FOR PROPOSAL 1
1. Election of Directors FOR All nominees WITHHOLD
AUTHORITY
listed (except as markedto vote for all
to the contrary, see nominees listed
instruction below) at left
Dennis Sunshine, Bruce Reissman,
Mitchell Binder, John Molloy,
Stanley Morris and Marc Pfefferle
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, LINE THROUGH THE NAME OF THE NOMINEE ABOVE.
THE DIRECTORS RECOMMEND A VOTE FOR PROPOSAL 2.
2. Proposal to amend the Certificate
of Incorporation of authorized
shares of Common Stock from
25,000,000 to 10,000,000. For Against Abstain
THE DIRECTORS RECOMMEND A VOTE FOR PROPOSAL 3.
3. Proposal to approve the 2000
Employee Stock Option Plan For Against Abstain
THE DIRECTORS RECOMMEND A VOTE FOR PROPOSAL 4
4. Proposal to ratify Goldstein Golub
Kessler LLP
as independent auditors. 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 , 2000
Signature(s)
Signatures
Please sign
exactly as your name appears and return this
proxy immediately
in the enclosed stamped self-addressed
envelope.
APPENDIX A
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS OF ORBIT INTERNATIONAL CORP.
The Audit Committee is appointed by the Board of Directors (the "Board") to
assist the Board in its oversight responsibilities. The
Audit Committee shall, through regular reports to the Board, (1) monitor the
integrity of the Company's financial statements of the Company,
(2) monitor the Company's compliance with legal and regulatory requirements,
(3) monitor the independence and performance of the
Company's internal and independent auditors.
The Audit Committee shall have the authority to retain any special legal,
accounting, or other consultants or experts it deems necessary
in the performance of its duties. The Audit Committee may conduct any
investigation necessary to fulfilling its responsibilities and may request
any officer or employee of the Company or the Company's outside counsel or
independent auditor to meet with any members of, or consultants
to, the Committee.
The Audit Committee shall meet at least once each fiscal year and more
frequently if circumstances dictate.
Membership of the Committee
The members of the Audit Committee shall be appointed by the Board. The
Audit Committee shall be comprised of not less than two
members of the Board, each of whom shall meet the independence, experience and
all other requirements of the Nasdaq National Market. If the
Audit Committee shall be comprised of three or more members of the Board, then
at least a majority of such committee members must meet the
independence requirements as stated in NASD Rule 4310(c)(26)(B).
Responsibilities and Duties
The Audit Committee shall:
1. Review and reassess the adequacy of this Charter at least annually and
submit the charter to the Board with any recommended changes to
the Board for approval.
2. Recommend to the Board the appointment of the independent auditor,
evaluate with the Board the performance of the independent
auditor, and approve any discharge of any independent auditors when
circumstances warrant.
3. Approve the fees and any other significant compensation to be paid to the
independent auditor, who is ultimately accountable to the
Audit Committee and the Board.
4. Review and discuss with the independent auditor the auditor's
independence consistent with Independence Standards Board Standard 1,
and, if it so determines, recommend that the full Board take appropriate
action to oversee the independence of the auditor.
5. Review the independent auditor's audit plan regarding the planning, scope
and staffing of the audit.
6. Review with management, independent auditor, and internal auditors the
Company's financial reporting processes and controls,
including significant financial risk exposures and the steps management
has taken to monitor and control such exposures.
7. Review with management, independent auditor, and internal auditors
significant financial reporting findings and judgments made
during, or in connection with, preparation of the Company's financial
statements.
8. Review the Company's annual audited financial statements to be included
in the Company's Annual Report on Form 10-K with
management and independent auditor prior to filing or distribution.
Review shall include any significant issues regarding
accounting and auditing principles, practices, and judgments as well as
the adequacy of internal controls that could significantly
affect the Company's financial statements.
9. Review with management and independent auditor the Company's quarterly
financial results prior to the release of earnings and
filing and distribution of its Form 10-Q.
10. Review significant recommended changes to the Company's auditing and
accounting principles and practices by management,
independent auditor, or internal auditors.
11. Obtain from the independent auditor verification that Section 10A of the
Securities Exchange Act of 1934 has not been
implicated.
12. Prepare an annual report to shareholders to be included in the Company's
proxy statement
as required by the Securities and Exchange Commission
13. Discuss with the independent auditor matters required to be communicated
to audit
committees in accordance with AICPA SAS 61.
14. Review the organizational structure, plan, and budget of the internal
audit department.
15. Review the appointment, performance, and replacement of the senior
internal auditing
executive.
16. Review the internal auditing committee's significant reports to
management and the
management's responses.
17. Review with Company counsel any legal matters that may have a significant
impact on the
Company's financial statements, the Company's compliance with applicable
laws, and any
significant reports or inquiries received from governmental and
regulatory agencies.
18. Obtain reports from management, the Company's senior internal auditing
executive, and the
independent auditor that the Company's subsidiary and foreign affiliated
entities are in compliance
with any applicable legal requirements.
19. Review self-assessment of audit committee performance and report to the
Board on significant
results of foregoing activities.
20. Meet during annual and separate executive meetings with the independent
auditor, senior internal
auditing executive, and chief financial officer.
21. Perform any other activities deemed appropriate by the Board and
consistent with this Charter, the
Company's by-laws, and governing laws.
The Audit Committee has the responsibilities established in this Charter and
is not responsible 1) to
plan or conduct audits, 2) to verify that the Company's financial statements
are complete, accurate, and in
accordance with generally accepted accounting principles, 3) to resolve
disagreements between
management, internal auditors, and the independent auditor, or 4) to assure
compliance with laws and
regulations.
APPENDIX B
ORBIT INTERNATIONAL CORP.
2000 EMPLOYEE STOCK OPTION PLAN
(Approved and adopted by the Board of Directors on March 26, 2000)
STATEMENT OF PURPOSE
The 2000 Employee Stock Option Plan (the "Plan") is intended to afford an
incentive to employees, corporate officers and other key
persons employed or retained by ORBIT INTERNATIONAL CORP., (the "Company") and
its subsidiaries (within the meaning of Section
424(f) of the Internal Revenue Code of 1986, as amended, hereinafter referred
to as the "Code") and affiliates to acquire a proprietary interest in
the Company and to enable the Company and its subsidiaries and affiliates to
attract and retain such persons.
STATEMENT OF THE PLAN
1. Shares Subject to the Plan
Subject to the provisions of Paragraph 10, the total number of shares of
stock which may be subject to options granted under the Plan
shall be 200,000 shares of the Common Stock, par value $.10 per share, of the
Company ("Common Stock"). Options granted hereunder may be
either Incentive Stock Options (as hereinafter defined) or non-incentive stock
options. The Company shall at all times while the Plan is in effect
reserve such number of shares of Common Stock as will be sufficient to satisfy
the requirements of outstanding options granted under the Plan.
The shares of Common Stock to be issued upon exercise of options granted under
the Plan shall be either authorized and unissued shares or
treasury shares. In the event any option granted under the Plan shall expire
or terminate for any reason without having been exercised in full or
shall cease for any reason to be exercisable in whole or in part, the
unpurchased shares subject thereto may again be subjected to an option under
the Plan.
2. Eligibility
Options may be granted only to employees, salaried officers and other key
persons employed or retained by the Company or its
subsidiaries ("Eligible Persons"). As used in this Plan, the term
"subsidiaries" shall include subsidiaries of a subsidiary. Directors who are not
salaried officers or employees of the Company or its subsidiaries or who are
members of the Committee (as hereinafter defined) shall not be
eligible for the grant of options under this Plan. Subject to Section 5,
nothing contained in the Plan shall be construed to prohibit the grant of one
or more options under the Plan to an Eligible Person by reason of his or her
holding options to purchase shares of Common Stock or any other
securities of the Company granted otherwise than under the Plan.
3. Administration of the Plan
(a) The Plan shall be administered by a committee (the "Committee") composed
of at least two non-employee directors, each of
whom shall be a disinterested person, as defined by Rule 16b-3(c)(2)(i) under
the Securities Exchange Act of 1934, as amended (the "34 Act"),
which Committee shall be appointed by the Board. Within the limits of the
express provisions of the Plan, the Committee shall have the authority
to determine, in its absolute discretion, the individuals to whom, and the
time or times at which, options shall be granted, the number of shares to
be subject to each option, the option exercise price of the shares covered by
each option and the term of each option. In making such
determinations, the Committee may take into account such factors as the
Committee, in its absolute discretion, shall deem relevant. Subject to
the express provisions of the Plan, the Committee shall also have the
authority to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it, to determine the terms and provisions of the
respective option instruments or agreements (which need not be identical)
and to make all other determinations and take all other actions necessary or
advisable for the administration of the Plan. The Committee's
determinations on the matters referred to in this Paragraph 3 shall be
conclusive. Any determination by a majority of the members of the
Committee shall be deemed to have been made by the whole Committee.
(b) Each member of the Committee shall be indemnified and held harmless by
the Company against any cost or expense (including
counsel fees) reasonably incurred by him or her, or liability (including any
sum paid in settlement of a claim with the approval of the Company)
arising out of any act or omission to act in connection with the Plan unless
arising out of such members' own fraud or bad faith, to the extent
permitted by applicable law. Such indemnification shall be in addition to any
rights of indemnification the members may have as directors or
otherwise under the By-laws of the Company, any agreement or vote of
stockholders or disinterested directors or otherwise.
4. Option Exercise Price
Except for Incentive Stock Options, the exercise price of each option granted
under the Plan shall be determined by the Committee in its
absolute discretion, but in no event shall such price be less than the par
value of the shares of Common Stock subject to the option. The exercise
price for Incentive Stock Options shall not be less than 100% of the fair
market value per share of the Common Stock at the time the option is
granted, nor less than 110% of such fair market value in the case of an
Incentive Stock Option granted to an individual who, at the time the
option is granted, is a 10% Holder (as hereinafter defined). The fair market
value of shares of Common Stock shall be determined in good faith
by the Committee, with the approval of the Board.
5. Maximum Option Grant
With respect to options which are intended to qualify as Incentive Stock
Options, the aggregate fair market value (determined as of the
time the option is granted) of the Common Stock with respect to which
Incentive Stock Options granted to any optionee (whether under this
Plan or under any other stock option plan of the Company or its subsidiaries)
become exercisable for the first time in any calendar year may not
exceed $100,000. The number of shares of Common Stock for which any optionee,
in any calendar year, may be granted options under the Plan
not treated as Incentive Stock Options shall be limited to not more than
200,000.
6. Exercise of Options
(a) The Committee, in its absolute discretion, shall determine the time or
times at which any option granted under the Plan may be
exercised; provided, however, that each such option (i) shall be exercisable
by an optionee only if such optionee was an Eligible Person (and in
the case of an Incentive Stock Option, was an employee or salaried officer of
the Company or any of its subsidiaries) at all times beginning from
the date of the grant of the option to a date not more than three months
(except as provided in Section 8 below) before exercise of the option,
(ii) may not be exercised prior to the expiration of at least six months from
the date of grant except in the case of the death or disability of the
optionee or otherwise with the approval of the Committee or the Board of
Directors or, if the option agreement evidencing such option so
provides, upon a "change of control", (iii) shall expire no later than the
expiration of ten years (five years in the case of an Incentive Stock
Option granted to a 10% Holder) from the date of its grant, and (iv) shall not
be exercisable by an optionee until such optionee executes and
delivers a written representation to the effect that he or she is acquiring
the Common Stock for investment and not with the intent of distributing
the same (unless such Common Stock shall be appropriately registered under the
Securities Act of 1933 or exempt from registration thereunder).
As a condition of the grant of an option, the Committee, in its absolute
discretion, may require an Eligible Person to enter into an employment
agreement with the Company or any affiliate of the Company covering a period
of at least one year following the grant, and if the grant
specifically requires, compliance with all terms and conditions of any such
employment agreement shall be a condition to the exercise by the
optionee of his or her option (provided, however, that such compliance may be
waived by the Committee in its absolute discretion).
(b) Options granted under the Plan shall be exercised by the delivery
by the holder thereof to the Company at its principal offices
(to the attention of the Secretary) of written notice of the number of shares
with respect to which the option is being exercised, accompanied by
payment in full of the option exercise price of such shares. The exercise
price shall be payable in cash; provided, however, that in lieu of payment
in cash, an optionee may, with the approval of the Company's Board of
Directors and on the recommendation of the Committee, pay for all or
part of the shares to be purchased upon exercise of his or her option (i) by
tendering to the Company shares of the Company's Common Stock
owned by such optionee and having a fair market value (as determined pursuant
to Paragraph 4) equal to the exercise price (or the balance
thereof) applicable to such optionee's option or (ii) by payment to the
Company in cash of a per share price equal to one-tenth of the exercise
price (but in no event less than the par value of the Common Stock) with the
remainder of the exercise price satisfied by the issuance of a
promissory note (the "Note"), in form satisfactory to counsel to the Company
at the time of grant, subject to the following conditions: (A) the
Note will mature and be payable on the tenth anniversary of the exercise date,
shall bear interest and be payable at such time or times as the
Committee, in its absolute discretion, may determine; provided, however, that
interest payments shall be required to be made not less frequently
than annually; (B) the interest rate on the outstanding principal amount of
the Note shall not be less than the applicable federal rate (determined
pursuant to Section 1274 of the Code) on the date of the Note; (C) the
optionee will have the right to prepay at any time the entire, and from
time to time any portion of the, unpaid principal of the Note, any such
prepayments shall be applied to the payments to be made under the Note
in the inverse order of their maturity and no prepayment shall in any way
obligate the Company to forgive or accelerate the forgiveness of any
portion of the Note; (D) the Company shall have the right to require the
optionee to pledge the shares acquired pursuant to any exercise of an
option pursuant to this Section 6(b) as security for payment of the Note and
to require such optionee to enter into a pledge agreement with
respect to such shares in form and substance satisfactory to counsel to the
Company; and (E) upon the termination of employment with the
Company or its subsidiaries or affiliates for any reason whatsoever, other
than death, disability, or retirement, the entire unpaid balance due on
the Note shall become and be immediately due and payable, with accrued
interest, on the sixtieth day after such termination, however upon the
termination of employment by reason of death, disability or retirement, the
payment terms of the Note shall not accelerate and the Note shall
remain the obligation of the optionee or the optionee's estate.
(c) The holder of an option shall have none of the rights of a stockholder
with respect to the shares covered by his or her option until
such shares shall be issued to him or her upon the exercise of his or her
option.
7. Termination of Service
In the event that the service of an individual to whom an option has been
granted under the Plan shall terminate (otherwise than by
reason of his or her death or total disability, or for cause), such option may
be exercised (if and to the extent that such individual was entitled to
do so at the date of termination of his or her service) at any time within
three months after such termination and in no event after the expiration
of the term of the option. No option granted under the Plan may be exercised
by an optionee following termination of such optionee's
employment for cause. "Termination for cause" shall mean dismissal for
dishonesty, conviction or confession of a crime punishable by law
(except minor violations), fraud, misconduct or disclosure of confidential
information. If the service of an individual to whom an option has been
granted under the Plan shall be suspended pending an investigation of whether
or not the individual shall be terminated for cause, all of the
individuals rights under any option granted hereunder likewise shall be
suspended during the period of investigation.
8. Death or Total Disability of an Option Holder
In the event of the death or total disability of an individual to whom an
option has been granted under the Plan (i) while serving as an Eligible
Person or (ii) within three months after the termination of such service,
otherwise than for cause, such option may be exercised (if and to the
extent that the deceased individual was entitled to do so at the date of his
or her death or total disability) by a legatee or legatees of such
optionee under such individual's last will and testament or by his or her
personal representatives or distributees, at any time within twelve months
after his or her death or total disability, but in no event after the
expiration of the term of the option.
As used in this Plan, the term "total disability" refers to a mental or
physical impairment of the individual which has lasted or is expected to last
for a continuous period of 12 months or more and which causes the individual
to be unable, in the opinion of the Company and two (if more than
one is required by the Company in its sole discretion) independent physicians,
to perform his or her duties for the Company and to be engaged in
any substantial gainful activity. Total disability shall be deemed to have
occurred on the first day after the Company and the two (if more than
one is required by the Company in its sole discretion) independent physicians
have furnished their opinion of total disability to the Committee.
9. Non-transferability of Options
Except as provided in the following sentence, an option shall not be
transferable otherwise than by will or the laws of descent and
distribution and is exercisable during the lifetime of the employee only by
him or his guardian or legal representative. The Committee shall have
discretionary authority to grant options which will be transferable to members
of an optionee's immediate family, including trusts for the benefit
of such family members and partnerships in which such family members are the
only partners. A transferred option would be subject to all of the
same terms and conditions as if such option had not been transferred. Upon any
attempt to transfer an option granted under this Plan otherwise
than as permitted hereunder, or upon the levy of attachment or similar process
upon such option, such option shall automatically become null
and void and of no further force and effect.
10. Form of Option
Each option granted pursuant to the Plan shall be evidenced by an agreement
(the "Option Agreement") which shall clearly identify the
status of the options granted thereunder (i.e, whether an Incentive Stock
Option or non-incentive stock option) and which shall be substantially
in the form attached hereto as Exhibit A. The Option Agreement shall comply in
all respects with the terms and conditions of the Plan and may
contain such additional provisions, including, without limitation,
restrictions upon the exercise of the option, as the Committee shall deem
advisable.
11. Adjustments Upon Change in Capitalization
In the event of changes in the outstanding shares of Common Stock of the
Company by reason of stock dividends, stock splits, reverse
stock splits, recapitalizations, mergers, consolidations, combinations or
exchanges of shares, separations, reorganizations or liquidations, the
number and class of shares available under the Plan, the number and class of
shares or the amount of cash or other assets or securities available
upon the exercise of any option granted hereunder and the number of shares as
to which options are to be granted to an optionee shall be
correspondingly adjusted, to the end that the optionee's proportionate
interest in the Company, any successor thereto or in the cash, assets or
other securities into which shares are converted or exchanged shall be
maintained to the same extent, as near as may be practicable, as
immediately before the occurrence of any such event. All references in this
Plan to "Common Stock" from and after the occurrence of such event
shall be deemed for all purposes of this Plan to refer to such other class of
shares or securities issuable upon the exercise of options granted
pursuant hereto.
12. Material Transaction, Liquidation or Dissolution of the Company
(a) In the event of a reorganization, merger or consolidation in which
the Company is not the surviving corporation, or a sale of
all or substantially all of the assets of the Company to another person or
entity (each a "Material Transaction"), unless otherwise provided in the
Option Agreement, the Committee shall:
i. Provide for the assumption of outstanding options, or the
substitution of outstanding options for new options, for equity
securities of the surviving, successor or purchasing corporation, or a parent
or subsidiary thereof, with appropriate adjustments as to the number,
kind and option prices of shares subject to such options, as determined in
good faith by the Board of Directors in its sole discretion; or
ii. Provide that the vesting of each outstanding option shall
automatically be accelerated so that 100% of the unvested
shares of Common Stock covered by such option shall be fully vested upon the
consummation of the Material Transaction, and
1. Provide notice to optionees that all outstanding options
must be exercised on or before a specified date (which
date shall be at least five days from the date of notice), after which the
options shall terminate; or
2. Terminate each outstanding option in its entirety and
exchange such options for a payment of cash, securities
and/or property equal to the fair market value of the Common Stock into which
the options are convertible, less the exercise price for such
options.
(b) In the event of the dissolution or liquidation the Company,
whether voluntary or otherwise, that is not a Material Transaction,
all outstanding but unexercised options must be exercised, if at all, within
the ninety (90) day period commencing on the date specified in
subparagraph (c) below. All options which become exercisable during the ninety
(90) day period commencing on the date specified in
subparagraph (b) below, shall terminate at the end of such ninety (90) day
period to the extent not exercised prior thereto.
(c) The date specified in this subparagraph (b) is the date of the
earliest to occur of the following events:
i. The entry, in a court having jurisdiction, of an order that the
Company be liquidated or dissolved;
ii. Adoption by the stockholders of the Company of a resolution
resolving that the Company be liquidated or dissolved
voluntarily; or
iii. Adoption by the stockholders of the Company of a
resolution to the effect that the Company cannot, by reason of its
liabilities, continue its business and that it is advisable to liquidate or
dissolve the Company
Notwithstanding anything herein to the contrary, in no event may any option
granted hereunder be exercised after the expiration of the
term of such option.
13. Further Conditions of Exercise
Each option granted under the Plan shall be subject to the requirement that
if at any time the Committee shall determine, in its absolute
discretion, that it is necessary or desirable as a condition of, or in
connection with the grant of such option or the exercise thereof, to effect or
obtain, as the case may be, (i) the listing, registration or qualification of
the shares subject to such option upon any securities exchange or under
any state or federal law; or (ii) the consent or approval of any governmental
body; or (iii) any investment representation or agreement by the
individual desiring to exercise such option; or (iv) an opinion of counsel for
the Company, then, no such option may be exercised in whole or in
part unless such listing, registration, qualification, consent, approval,
investment or representation agreement or opinion shall have been effected
or obtained, as the case may be, free of any condition not acceptable to the
Board or the Committee.
14. Termination, Modification and Amendment
(a) The Plan (but not options previously granted under the Plan) shall
terminate on, and no options shall be granted after, the
tenth anniversary of its adoption by the Board; provided that the Board may at
any time terminate the Plan prior thereto.
(b) The Board shall have complete power and authority to modify or
amend the Plan (including the form of Option Agreement)
from time to time in such respects as it shall deem advisable; provided,
however, that the Board shall not, without the approval of the votes
represented by a majority of the outstanding Common Stock of the Company
present or represented and entitled to vote at a meeting of
stockholders duly held in accordance with the applicable laws of the Company's
jurisdiction of incorporation or by the written consent of
stockholders owning stock representing a majority of the votes of the
Company's outstanding stock entitled to vote, (i) increase the maximum
number of shares which in the aggregate are subject to options under the Plan
(except as provided by Section 11), (ii) extend the term of the
Plan or the period during which options may be granted or exercised, (iii)
reduce the option price, in the case of Incentive Stock Options below
100% (110% in the case of an Incentive Stock Option granted to a 10% Holder)
of the fair market value of the Stock issuable upon exercise of
options at the time of the granting thereof, other than to change the manner
of determining the fair market value thereof, (iv) increase the
maximum number of shares of Common Stock for which any employee may be granted
options under the Plan pursuant to Section 5, (v)
materially increase the benefits accruing to participants under the Plan, (vi)
modify the requirements as to eligibility for participation in the Plan,
or (vii) with respect to options which are Incentive Stock Options amend the
Plan in any respect which would cause such options to no longer
qualify for Incentive Stock Option treatment pursuant to the Internal Revenue
Code; provided, however, that none of the provisions referred to
in Section (c)(2)(ii) of Rule 16b-3 promulgated under the 34 Act, may be
amended more frequently than once every six months other than to
comport with changes in the Internal Revenue Code, the Employee Retirement
Income Security Act or the rules thereunder. No termination or
amendment of the Plan shall, without the consent of the individual optionee,
adversely affect the rights of such optionee under an option
theretofore granted to him or under such optionee's Option Agreement.
15. Taxes
The Company may make such provisions as it may deem appropriate for the
withholding of any taxes which it determines is required in
connection with any options granted under the Plan or the exercise of such
options, including the withholding of shares purchased upon exercise.
The Company may further require notification from the optionees upon any
disposition of Common Stock acquired pursuant to the exercise of
options granted hereunder.
16. Effectiveness Of The Plan
The Plan shall become effective immediately upon its approval and adoption by
the Board, subject to approval by a majority of the votes
of the outstanding shares of capital stock of the Company cast at any duly
called annual or special meeting of the Company's stockholders held
within one year from the date of Board adoption and approval.
17. Code References and Definitions
Whenever reference is made in this Plan to a section of the Internal Revenue
Code, the reference shall be to said section as it is now in
force or as it may hereafter be amended by any amendment which is applicable
to this Plan. The term "subsidiary" shall have the meaning given
to the term "subsidiary corporation" by Section 424(f) of the Internal Revenue
Code. The term "Incentive Stock Option" shall have the meaning
given to it by Section 422 of the Internal Revenue Code. The term "10% Holder"
shall mean any person who, for purposes of Section 422 of the
Internal Revenue Code owns more than 10% of the total combined voting power of
all classes of stock of the employer corporation or of any
subsidiary corporation.
18. Miscellaneous
With respect to persons subject to Section 16 of the 34 Act, transactions
under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934 Act. To the extent
any provision of the Plan or action by the Committee fails to so
comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Committee.
EXHIBIT A
ORBIT INTERNATIONAL CORP.
NON-QUALIFIED STOCK OPTION AGREEMENT
TO: _____________________
We, Orbit International Corp. ("we" or the "Company"), are pleased to inform
you that you have been awarded stock
options under the Orbit International Corp. 2000 Employee Stock Option Plan
(the "Plan"). When you sign and return to the
Company the Acceptance and Acknowledgment attached to this Stock Option
Agreement you will be entitled to receive non-
qualified stock options for the purchase of ___________ shares (the "Option")
of the Company's Common Stock at an exercise
price of $____ per share. A copy of the Plan is attached, and the provisions
thereof, including, without limitation, those relating to
withholding taxes, are incorporated into this Agreement by reference. You are
sometimes referred to herein as the "Optionee."
The terms of the Option are as set forth in the Plan and in this Agreement.
Certain of the terms set forth in the Plan are
summarized below; however, reference should be made to the Plan for the
complete terms.
Term: This option shall terminate ten years from date of grant, unless
sooner terminated.
Exercise: During your lifetime only you can exercise the Option. The Plan
also provides for exercise of the Option by the
personal representative of your estate or the beneficiary thereof following
your death. You may use the Notice of Exercise in the
form attached to this Agreement when you exercise the Option.
Notices: All notices sent in connection with this Option shall be in writing
and, if to the Company, shall be delivered
personally to the Secretary of the Company or mailed to its principal office,
addressed to the attention of the Secretary and, if to the
Optionee, shall be delivered personally or mailed to the Optionee at the
address noted on the attached Acceptance and
Acknowledgment. Such addresses may be changed at any time by notice from one
party to the other.
Payment for Shares: The Option may be paid for by delivery to the Company of
the following together with the properly
executed Notice of Exercise:
(a) Cash, personal check (unless, at the time of exercise, the Plan
Administrator
determines otherwise), bank certified or cashier's checks;
(b) Unless the Plan Administrator in its sole discretion determines otherwise,
shares of the capital stock of the Company held by you having a fair market
value at the time
of exercise, as determined in good faith by the Plan Administrator, equal to
the exercise price;
(c) A properly executed Notice of Exercise together with cash, personal check
(unless, at the time of exercise, the Plan Administrator determines
otherwise), bank certified
or cashier's checks equal to one-tenth of the exercise price and a promissory
note in favor of
the Company equal to the remaining exercise price.
The forms of payment set forth in paragraphs (b) and (c) above shall not be
allowable
for those persons who are subject to Section 16(b) of the Securities Exchange
Act of 1934 at
the time of exercise. The Company shall have the right to require you to
enter into a pledge
agreement with regard to any shares acquired pursuant the form of payment set
forth in
paragraph (c).
Upon receipt of written notice of exercise and payment and delivery of any
other
required documentation, the Company shall deliver to the person exercising the
Option a
certificate or certificates for such shares. It shall be a condition to the
performance of the
Company's obligation to issue or transfer Common Stock upon exercise of this
option that the
Optionee pay, or make provision satisfactory to the Company for the payment
of, any taxes
which the Company is obligated to collect with respect to the issue or
transfer of Common
Stock upon exercise.
Termination: If your employment by the Company is terminated for cause (as
defined
in the Plan), the Option will terminate as of the first discovery by the
Company of any such
cause. If your employment stops because of your death or total disability,
the Option shall
terminate 12 months after your employment stops. Otherwise the Option will
terminate 3
months after your employment with the Company ends.
Nothing in the Plan or in this Agreement shall confer on the Optionee any
right to
continue in the employ of the Company or any parent or subsidiary of the
Company or
interfere in any way with the right of the Company or any parent or subsidiary
of the Company
to terminate the employment of the Optionee at any time.
Transfer of Option: The Option is not transferable except by will or by the
applicable
laws of descent and distribution.
Vesting: The Option vests one year from the date hereof.
Date of Grant: The date of grant of the Option is _______________.
YOUR PARTICULAR ATTENTION IS DIRECTED TO SECTION 6 OF THE
PLAN WHICH DESCRIBES CERTAIN IMPORTANT CONDITIONS RELATING
TO FEDERAL AND STATE SECURITIES LAWS THAT MUST BE SATISFIED
BEFORE THE OPTION CAN BE EXERCISED AND BEFORE THE COMPANY
CAN ISSUE ANY SHARES TO YOU. THE COMPANY HAS NO OBLIGATION TO
REGISTER THE SHARES THAT WOULD BE ISSUED UPON THE EXERCISE OF
YOUR OPTION, AND IF SUCH SHARES ARE NOT REGISTERED, YOU WILL
NOT BE ABLE TO EXERCISE THE OPTION UNLESS AN EXEMPTION FROM
REGISTRATION IS AVAILABLE. AT THE PRESENT TIME, EXEMPTIONS
FROM REGISTRATION UNDER FEDERAL AND STATE SECURITIES LAWS
ARE VERY LIMITED AND MIGHT BE UNAVAILABLE TO YOU PRIOR TO THE
EXPIRATION OF THE OPTION. CONSEQUENTLY, YOU MIGHT HAVE NO
OPPORTUNITY TO EXERCISE THE OPTION AND TO RECEIVE SHARES UPON
SUCH EXERCISE. IN ADDITION, YOU SHOULD CONSULT WITH YOUR TAX
ADVISOR CONCERNING THE RAMIFICATIONS TO YOU OF HOLDING OR
EXERCISING YOUR OPTIONS OR HOLDING OR SELLING THE SHARES
UNDERLYING SUCH OPTIONS.
You understand that, during any period in which the shares which may be
acquired
pursuant to your Option are subject to the provisions of Section 16 of the
Securities Exchange
Act of 1934 (and you are also so subject), in order for your transactions
under the Plan to
qualify for the exemption from Section 16(b) provided by Rule 16b-3, a total
of six months
must elapse between the grant of the Option and the sale of shares underlying
the Option.
All decisions or interpretations made by the Stock Option Committee with
regard to
any question arising hereunder or under the Plan shall be binding and
conclusive on the
Company and the Optionee.
This Agreement shall bind and inure to the benefit of the parties hereto and
the
successors and assigns of the Company and, to the extent provided in the Plan,
the executors,
administrators, legatees, and heirs of the Optionee.
Please execute the Acceptance and Acknowledgment set forth below on the
enclosed
copy of this Agreement and return it to the undersigned.
Very truly yours,
ORBIT INTERNATIONAL CORP.
By: ______________________________
Dennis Sunshine
Dated: ________________ President and Chief Executive Officer
INSTRUCTION: PLEASE COMPLETE THE INFORMATION REQUESTED
BELOW, DETACH THIS PAGE AFTER SIGNING WHERE INDICATED AND
RETURN TO THE COMPANY.
ACCEPTANCE AND ACKNOWLEDGMENT
I, a resident of the State of __________________________________, accept
the non-
qualified stock option described in the Non-Qualified Stock Option Agreement
dated
________________ and in the Orbit International Corp. 2000 Employee Stock
Option Plan
and acknowledge receipt of a copy of this Agreement, including a copy of the
Plan. I have
read and understand all the provisions and limitations of the Plan,
particularly those relating to
non-qualified stock options and the provisions of Section 6 of the Plan
relating to securities
regulations.
Dated: ____________________________________
_______________________________________ __________________________________
Social Security Number Signature
Name: ____________________________
(please print)
Address: __________________________
__________________________________
__________________________________
ORBIT INTERNATIONAL CORP.
NOTICE OF EXERCISE
_________________________________________
(Name, please print)
________________________________________
(Date)
Orbit International Corp.
80 Cabot Court
Hauppauge, New York 11788
Gentlemen:
I hereby exercise my right to purchase shares of Common Stock of
Orbit International Corp., a Delaware corporation, pursuant
to, and in accordance with, the Orbit International Corp. 2000 Non-Qualified
Stock Option Agreement ("Agreement") dated _____________.
As provided in that Agreement, I deliver herewith a certified or bank
cashier's check in the amount of the aggregate option price. Please deliver
to me stock certificates representing the subject shares registered as follows:
Name: _____________________________________________________
Address: ___________________________________________________
___________________________________________________________
Social Security Number _______________________________________
The aggregate exercise price is $ (total number of shares to be
purchased x $____).
(1) Tax Implications. I understand that there are certain tax implications
to my exercise of my right to purchase shares of Common
Stock under the Agreement. I further understand that it is my obligation to
confer with my own tax advisor with respect to such tax
implications.
(2) Securities Regulation. I understand that the Company may require me
to represent that the shares of Common Stock I propose to
purchase are not being acquired for resale of such securities.
Very truly yours,
____________________________
Signature
