UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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 Rule 14a-12
ORBIT INTERNATIONAL CORP.
---------------------------
(Name of Registrant as Specified in Its Charter)
N/A
---
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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[ ] 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:
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(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 Sheraton Long Island, 110 Vanderbilt Motor
Parkway, Smithtown, New York 11788, at 10:00 a.m., Eastern Daylight Savings
Time, on June 19, 2009, for the following purposes:
1. To elect the Board of Directors for the ensuing year.
2. To consider and act upon a proposal to adopt the Company's 2009
Independent Directors Incentive Stock Plan.
3. To ratify the appointment of McGladrey & Pullen, LLP as independent
auditors and accountants for the Company for the fiscal year ending December 31,
2009.
4. 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 13, 2009, 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
MARK TUBLISKY
Secretary
Hauppauge, New York
May 14, 2009
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 19, 2009, at the Sheraton Long Island, 110 Vanderbilt
Motor Parkway, Smithtown, New York 11788, and any adjournment thereof. This
proxy material is being mailed to stockholders commencing on or about May 14,
2009.
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 the Company's 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 affect the outcome of the election of directors or
the ratification of the appointment of the independent auditors, or the adoption
of the 2009 Independent Directors Incentive Stock Plan. With respect to all
other matters, if any, 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 adoption of the 2009 Independent Directors Incentive Stock
Plan, FOR the ratification of the appointment of McGladrey & Pullen, LLP and in
accordance with the proxy-holder's best judgment as to any other matters raised
at the Annual Meeting.
At the close of business on May 13, 2009, there were 4,594,312 shares of
Common Stock outstanding and eligible for voting at the Annual Meeting. The
number of shares outstanding does not reflect any share repurchases from April
29, 2009 through May 13, 2009. Each stockholder of record is entitled to one
vote for each share of Common Stock held on all matters that come before the
Annual Meeting. Only stockholders of record at the close of business on May 13,
2009, are entitled to notice of, and to vote at, the Annual Meeting.
REVOCABILITY OF PROXY
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, by executing and delivering to the Company a later dated proxy
reflecting contrary instructions, or by appearing at the Annual Meeting and
taking appropriate steps to vote in person.
NO DISSENTER'S RIGHTS
Under Delaware law, stockholders are not entitled to dissenter's rights of
appraisal with respect to Proposal 2.
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 maximum
number of directors is currently fixed at eight, and the number of directors is
currently seven. The Company has nominated seven persons consisting of Dennis
Sunshine, Bruce Reissman, Mitchell Binder, Bernard Karcinell, Lee Feinberg,
Sohail Malad and Fredric Gruder, each a current Director, for re-election to the
Board of Directors. 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
nominees and executive officers of the Company and is based on the records of
the Company and information furnished to it by such persons. Reference is made
to the section of this Proxy entitled, "Security Ownership of Certain Beneficial
Owners and Management," for information pertaining to stock ownership by the
nominees and executive officers of the Company.
Name of Nominee Age Independent Position
- --------------- --- ----------- --------
Dennis Sunshine 62 No President, Chief Executive
Officer and Director
Bruce Reissman 59 No Executive Vice President,
Chief Operating Officer
and Director
Mitchell Binder 53 No Executive Vice President,
Chief Financial Officer
and Director
Mark Tublisky 70 No Secretary (President,
Behlman Electronics, Inc.)
David Gutman 57 No President and Chief Operating
Officer of Tulip Development
Laboratory, Inc.
Kenneth J. Ice 47 No President and Chief Operating
Officer of Integrated Combat
Systems
David Goldman 39 No Treasurer and Controller
Bernard Karcinell 70 Yes Director
Lee Feinberg 62 Yes Director
Sohail Malad 34 Yes Director
Fredric Gruder 63 Yes Director
BIOGRAPHICAL INFORMATION
Dennis Sunshine has been President and Chief Executive Officer of the
Company since March 1995 and a director of the Company since 1988. Mr. Sunshine
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.
Bruce Reissman has been Executive Vice President and Chief Operating
Officer of the Company since March 1995 and a director of the Company since
1992. Mr. Reissman has held various positions with the Company since 1975,
including Vice President-Marketing from April 1988 to March 1995 and Director of
Sales and Marketing from 1976 to April 1988.
Mitchell Binder has been Executive Vice President of the Company since
2006, Vice President-Finance from 1986 to 2006 and its Chief Financial Officer
since 1983. He has been a director of the Company since 1985. Mr. Binder has
held various positions with the Company since 1983, including Treasurer and
Assistant Secretary from 1983 to March 1995.
Mark Tublisky has been Secretary of the Company since March 2003 and has been
President of Behlman Electronics, Inc. since its acquisition by the Company from
Astrosystems, Inc. in 1996. Mr. Tublisky held various positions at Astrosystems,
Inc. from 1969 to 1996, including General Manager of its Automatic Test Division
and then as General Manager of the Behlman Division.
David Gutman has been President and Chief Operating Officer of Tulip Development
Laboratory, Inc. ("Tulip") and TDL Manufacturing, Inc. since August 2008. Prior
thereto, he was Vice President, Operations and Business Development for Aydin
Displays from 2000 to 2007.
Kenneth J. Ice has been President and Chief Operating Officer of Integrated
Consulting Services, Inc. d/b/a Integrated Combat Systems ("ICS") since its
acquisition by the Company on December 31, 2007. Prior thereto, he had been
Chief Executive Officer of ICS since 1995.
David Goldman has been Treasurer of the Company since June 2004 and Controller
since April 2003. Prior thereto, he was Assistant Controller of Frequency
Electronics, Inc., a commercial and defense electronics supplier, from April
1999 until April 2003 and Accounting Supervisor from May 1995 to April 1999.
Bernard Karcinell has been a director of the Company since 2000. Mr.
Karcinell is a certified public accountant licensed in Florida since 1989. He
also performs financial advisory services to several individuals and
corporations. Prior thereto, he was a Partner at KPMG LLP and former President
and CEO of Designcraft Jewel Industries and CCR Video Corp.
Lee Feinberg has been a director of the Company since February 2004. Mr.
Feinberg is recently retired (November 2008) as a Managing Director of UBS
Financial Services Inc. and had functional responsibility as the Head of
Corporate Employee Financial Services. Mr. Feinberg had been with UBS Financial
Services, formerly PaineWebber, since 1987.
Sohail Malad has been a director of the Company since July 2007. He
currently serves as a partner for Karla Enterprises, LLC an investment and
development firm. From 2006 through 2008, Mr. Malad was founder and partner of
Monarch Activist Partners LP ("Monarch") based in San Diego, CA, which owned in
excess of 5% of the outstanding shares of the Company. From 2004 through 2006,
Mr. Malad was a consultant with the Los Angeles office of the Boston Consulting
Group.
Fredric Gruder has been a director of the Company since March 2008. Mr. Gruder,
an attorney at law, has been a sole practitioner since December 2001. He
specializes in mergers and acquisitions and corporate/securities law. He is a
graduate of Yale Law School and from July 1998 through July 2006, served on the
Board of Directors of Harvey Electronics, Inc., a specialty retailer and custom
installer of high quality audio/video consumer electronics and home theater
products.
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.
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.
INFORMATION ABOUT THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors (the "Board") held ten (10) meetings and conducted
other business by unanimous written consent during the fiscal year ended
December 31, 2008. All directors attended at least 75% of the meetings held by
the Board and by all committees of the Board. Pursuant to the terms of the
Company's acquisition of Integrated Combat Systems, Kenneth J. Ice, ICS's
President and Chief Operating Officer, is entitled to attend all Board meetings.
The Company's 2008 annual meeting was attended by six of the Company's seven
directors. Attendance at the Company's annual meetings is strongly encouraged,
however, is not mandatory.
Stockholders may contact the Board by mail addressed to the entire Board, or to
one or more individual directors, at 80 Cabot Court, Hauppauge, New York 11788,
Attn: Secretary. All communications directed to the Board or individual
directors in this manner will be relayed to the intended recipients.
The Board has established an audit committee, nominating and corporate
governance committee, and a compensation 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.
Audit Committee
The Audit Committee of the Board currently consists of Bernard Karcinell,
Lee Feinberg, Sohail Malad and Fredric Gruder, each of whom is independent as
such term is defined in Rule 4200(a)(15) of the Nasdaq listing standards, as
amended. The Board has determined that Bernard Karcinell is an "audit committee
financial expert" as defined by the laws of the Securities and Exchange
Commission ("SEC"). The Audit Committee held five (5) meetings during the
fiscal year ended December 31, 2008. 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. The Audit Committee 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 Chief
Financial Officer and 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. 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 the rules mandated by the SEC and the
Nasdaq 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 current copy of the Company's Audit Committee Charter
accompanies this proxy statement as Appendix A hereto.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee was formed in March 2003, held
one (1) meeting during the fiscal year ended December 31, 2008 and currently
consists of Lee Feinberg, Bernard Karcinell, Sohail Malad and Fredric Gruder,
each of whom is independent as such term is defined in Rule 4200(a)(15) of the
Nasdaq listing standards, as amended. The Committee evaluates the appropriate
size of the Board, recommends a change in the composition of members of the
Board to reflect the needs of the business, interviews prospective candidates
and formally proposes the slate of directors to be elected at each Annual
Meeting of Stockholders. A current copy of the Nominating and Corporate
Governance Committee's charter accompanies the Company's proxy statement filed
on April 28, 2004 as Appendix A thereto.
Although the Nominating and Corporate Governance Committee has not established
minimum qualifications for director candidates, it will consider, among other
factors:
- Broad experience; diversity,
- Wisdom and integrity,
- Judgment and skill,
- Understanding of the Company's business environment,
- Experience with businesses and other organizations of comparable
size,
- Ability to make independent analytical inquiries,
- The interplay of the candidate's experience with the experience of
other Board members,
- The extent to which the candidate would be a desirable addition to
the Board and any committees of the Board, and
- Willingness to devote adequate time to the Board.
The Nominating and Corporate Governance Committee will consider all director
candidates recommended by stockholders. Any stockholder who desires to recommend
a director candidate may do so in writing, giving each recommended candidate's
name, biographical data and qualifications, by mail addressed to the Chairman of
the Nominating and Corporate Governance Committee, in care of Orbit
International Corp., 80 Cabot Court, Hauppauge, New York 11788. A written
statement from the candidate consenting to being named as a candidate and, if
nominated and elected, to serve as a director, must accompany any stockholder
recommendation. Members of the Nominating and Corporate Governance Committee
will assess potential candidates on a regular basis.
Compensation Committee
The Compensation Committee of the Board currently consists of Fredric
Gruder, Bernard Karcinell and Sohail Malad, each of whom is independent as such
term is defined in Rule 4200(a)(15) of the Nasdaq listing standards, as amended.
The Compensation Committee held three (3) formal meetings and met from time to
time on an informal basis during the fiscal year ended December 31, 2008. The
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. The Compensation Committee
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
Compensation Committee also reviews and approves financial measures and targets
for annual incentive plans under employment agreements for the three senior
executive officers of the Company entered into in January 2008. During 2006 and
2007, the Compensation Committee utilized the services of a compensation
consultant in the process of creating new employment contracts for the three
executive officers.
Policies And Procedures Regarding Related Party Transactions
The Company has established conflict of interest policies, to which all
directors, executive officers and key employees are subject. They are required
to disclose to the Company's Chief Compliance Officer in writing each outside
relationship, activity and interest that creates a potential conflict of
interest. All directors, executive officers and other key employees are required
to disclose in writing each year whether they are personally in compliance with
such policy. In addition each director and executive officer is required to
complete an annual questionnaire which calls for disclosure of any transactions
in which the Company is or is to be a participant, on the one hand, and in which
such director or executive officer or any member of his family has a direct or
indirect material interest, on the other. The Board of Directors is of the
opinion that these procedures are sufficient to allow for the review, approval
or ratification of any transactions with related persons that would be required
to be disclosed under applicable SEC rules.
Complaint Procedure; Communications with Directors
The Sarbanes-Oxley Act of 2002 requires companies to maintain procedures to
receive, retain and respond to complaints received regarding accounting,
internal accounting controls or auditing matters and to allow for the
confidential and anonymous submission by employees of concerns regarding
questionable accounting or auditing matters. The Company currently has such
procedures in place. Any employee of the Company may report concerns regarding
these matters in the manner specified in the Company's Whistle Blower Policy
which is posted at the Company's Hauppauge facility. A printed copy of the
Company's Whistle Blower Policy will be provided to any shareholder upon request
to the Company at 80 Cabot Court, Hauppauge, New York 11788, or by telephone
(631) 435-8300.
REPORT OF THE AUDIT COMMITTEE
Management has the primary responsibility for the integrity of the
Company's financial information and the financial reporting process, including
the system of internal control over financial reporting. McGladrey & Pullen, LLP
("M&P"), the Company's independent registered public accounting firm, is
responsible for conducting an independent audit of the Company's financial
statements in accordance with the standards of the Public Company Accounting
Oversight Board (United States) and expressing an opinion on the financial
statements based upon the audit. The Audit Committee is responsible for
overseeing the conduct of these activities by management and M&P.
As part of its oversight responsibility, the Audit Committee has reviewed
and discussed the audited financial statements and the adequacy of financial
controls with management and M&P. The Audit Committee also has discussed with
M&P the matters required to be discussed by Statement on Auditing Standards No.
61 (Communication with Audit Committees). The Audit Committee has received the
written disclosures and the letter from M&P required by the applicable
requirements of the Public Company Accounting Oversight Board regarding the
independent accountant's communication and has discussed with M&P their firm's
independence.
Based upon these reviews and discussions, the Audit Committee recommended
to the Board of Directors that the audited financial statements be included in
the Company's Annual Report on Form 10-K for the year ended December 31, 2008
for filing with the SEC.
Members of the Audit Committee
BERNARD KARCINELL
LEE FEINBERG
SOHAIL MALAD
FREDRIC GRUDER
THE FOREGOING REPORT SHALL NOT BE DEEMED TO BE "SOLICITING MATERIAL" OR TO
BE "FILED" WITH THE SECURITIES AND EXCHANGE COMMISSION AND SHOULD NOT BE DEEMED
INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE
THIS PROXY STATEMENT INTO ANY FILING UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, EXCEPT TO THE
EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE
AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth, with respect to the Company's fiscal years ended
December 31, 2008, December 31, 2007, and December 31, 2006, all compensation
earned by each person who is required to be listed pursuant to Item 402(m)(2) of
Regulation S-K.
NON-EQUITY
NAME AND STOCK OPTION INCENTIVE PLAN ALL OTHER
PRINCIPAL POSITION BONUS($) AWARDS AWARDS COMPENSATION COMPENSATION TOTAL
YEAR SALARY ($) ($)(1)(2)(3) ($) ($)(4) ($)(5) ($)
- -------------------- ---------- ---------- ------- --------------- ---------- ------------- ------------- --------
Dennis Sunshine 2008 449,000 0 91,667 0 117,863 112,795 771,325
- -------------------------- ---------- ---------- -------- --------------- ---------- ------------- ------------- --------
President and Chief 2007 423,000 0 50,000 0 95,400 78,526 646,926
- -------------------------- ---------- ---------- -------- --------------- ---------- ------------- ------------- --------
Executive Officer 2006 413,000 0 50,000 0 87,000 74,500 624,500
- -------------------------- ---------- ---------- -------- --------------- ---------- ------------- ------------- --------
Bruce Reissman 2008 389,300 0 62,500 0 0 33,797 485,597
- -------------------------- ---------- ---------- -------- --------------- ---------- ------------- ------------- --------
Executive Vice President, 2007 412,000 0 54,405(3) 0 95,400 33,125 594,930
- -------------------------- ---------- ---------- -------- --------------- ---------- ------------- ------------- --------
Chief Operating Officer 2006 402,000 0 76,000(3) 0 87,000 33,144 598,144
- -------------------------- ---------- ---------- -------- --------------- ---------- ------------- ------------- --------
Mitchell Binder 2008 300,600 0 57,500 0 33,818 34,879 426,797
- -------------------------- ---------- ---------- -------- --------------- ---------- ------------- ------------- --------
Executive Vice President, 2007 318,000 0 50,000 0 47,700 31,269 446,969
- -------------------------- ---------- ---------- -------- --------------- ---------- ------------- ------------- --------
Chief Financial Officer 2006 310,000 0 50,000 0 43,000 30,191 433,191
- -------------------------- ---------- ---------- -------- --------------- ---------- ------------- ------------- --------
Mark Tublisky 2008 197,400 0 5,222 0 36,184 14,814 253,620
- -------------------------- ---------- ---------- -------- --------------- ---------- ------------- ------------- --------
Secretary (President, 2007 190,000 0 0 0 28,300 13,611 231,911
- -------------------------- ---------- ---------- -------- --------------- ---------- ------------- ------------- --------
Behlman Electronics, Inc.) 2006 174,000 0 0 0 23,000 12,879 209,879
- -------------------------- ---------- ---------- -------- --------------- ---------- ------------- ------------- --------
Kenneth J. Ice(6) 2008 180,000 0 0 0 18,975 8,850 207,825
- -------------------------- ---------- ---------- -------- --------------- ---------- ------------- ------------- --------
President, Integrated 2007 0 0 0 0 0 0 0
- -------------------------- ---------- ---------- -------- --------------- ---------- ------------- ------------- --------
Combat Systems 2006 0 0 0 0 0 0 0
- -------------------------- ---------- ---------- -------- --------------- ---------- ------------- ------------- --------
(1) In October 2004, each of Messrs. Sunshine, Reissman and Binder received
93,750 shares of Common Stock, valued at $5.32 per share, the fair market value
of the stock on the date of grant. The shares were awarded as a retention award
to remain with the Company for ten years. The shares are held in escrow,
subject to forfeiture and vest over ten years. The shares vest provided each
officer is still employed, and are subject to acceleration for death or a change
of control (as defined in the Stock Escrow Agreement), as follows: (i) 28,125
shares, which vested at October 13, 2007 and (ii) 9,375 shares, which vest each
year for the years October 13, 2008 through October 13, 2014.
(2) In June 2008, Messrs Sunshine, Reissman and Binder received 17,605,
5,281, and 2,112, respectively, of Common Stock, valued at $7.10 per share,
pursuant to a Long Term Incentive Plan ("LTIP"). The shares vest ratably each
December 31 over a three year period for Sunshine and Reissman and over a two
year period for Binder, provided each officer is still employed, and are subject
to acceleration for death or change in control.
(3) In February 2004, Mr. Reissman received 12,500 shares of Common Stock,
valued at $6.42 per share, the fair market value of the stock on the date of
grant. The shares vested, as follows: (i) 4,167 shares at February 24, 2005 and
2006 and (ii) 4,166 shares at February 24, 2007.
(4) Non-Equity Incentive Plan Compensation consists of the accrued incentive
bonus on pre-tax income as defined in each executive's employment agreement.
(5) See the "All Other Compensation Table" below for additional information.
(6) Mr. Ice commenced employment as of January 1, 2008 pursuant to the
acquisition of Integrated Combat Systems, effective December 31, 2007.
ALL OTHER COMPENSATION TABLE
The following table describes each component of the "All Other Compensation" in
the Summary Compensation Table set forth above.
LIFE LONG TERM LONG TERM MEDICAL COUNTRY
401(K) PLAN INSURANCE CAR LEASE/ DISABILITY CARE REIMB CLUB
NAME OF EXECUTIVE CONTRIBUTIONS PREMIUMS CAR USAGE PREMIUM PREMIUM PLAN DUES TOTAL
- ---------------- -------------- -------- --------- ---------- ----------- -------- -------- -----------
2008 $ 4,600 $ 33,066 $ 22,254 $ 4,961 $ 7,446 $ 7,188 $33,280 $112,795
2007 $ 4,400 $ 33,066 $ 22,200 $ 4,961 $ 7,446 $ 6,453 - $78,526
D. Sunshine 2006 $ 4,400 $ 33,066 $ 17,979 $ 4,961 $ 7,446 $ 6,648 - $74,500
- -------------------------- -------------- ------------------------ ----------- ----------- ------- ---------- ----------
2008 $ 4,600 $ 6,650 $ 10,745 $ 3,730 $ 4,478 $ 3,594 - $33,797
2007 $ 4,400 $ 6,650 $ 10,745 $ 3,626 $ 4,478 $ 3,226 - $33,125
B. Reissman 2006 $ 4,400 $ 6,650 $ 10,744 $ 3,523 $ 4,478 $ 3,349 - $33,144
- -------------------------- -------------- ------------------------ ----------- ----------- -------- ---------- ---------
2008 $ 5,944 $ 4,450 $ 13,072 $ 4,798 $ 3,021 $ 3,594 - $34,879
2007 $ 4,400 $ 4,450 $ 11,374 $ 4,798 $ 3,021 $ 3,226 - $31,269
M. Binder 2006 $ 4,318 $ 4,450 $ 10,255 $ 4,798 $ 3,021 $ 3,349 - $30,191
- -------------------------- -------------- ------------------------ ----------- ----------- -------- ---------- ----------
2008 $ 4,020 - $ 7,200 - - $ 3,594 - $14,814
2007 $ 3,185 - $ 7,200 - - $ 3,226 - $13,611
M. Tublisky 2006 $ 2,330 - $ 7,200 - - $ 3,349 - $12,879
- -------------------------- -------------- ------------------------ ----------- ----------- ------- ---------- ----------
2008 $ 4,050 - $ 4,800 - - - - $8,850
2007 $ - - - - - - - -
K. Ice 2006 $ - - - - - - - -
- -------------------------- -------------- ------------------------ ----------- ----------- ------- ---------- ----------
GRANTS OF PLAN-BASED AWARDS IN 2008
None.
Employment Agreements
On December 11, 2007, Orbit's Board of Directors (the "Board") authorized the
Company to enter into employment agreements with its senior management, which
went into effect on January 1, 2008. The full texts of the Employment Agreements
are filed as Exhibits to the Company's Current Report on Form 8-K for December
11, 2007 and are incorporated herein by reference. The following discussion
provides a summary of the material terms of the Employment Agreements, which
discussion is qualified in its entirety by reference to the entire text of the
Employment Agreements.
The Sunshine Employment Agreement
On December 14, 2007, the Company entered into an employment agreement with
Dennis Sunshine, its Chief Executive Officer (the "Sunshine Employment
Agreement"). The Sunshine Employment Agreement provides for an annual base
salary of $449,000 ("Base Salary"). The term of the agreement is for three
years commencing on January 1, 2008 (the "Term"). Mr. Sunshine is eligible to
participate in an executive annual incentive plan ("AIP") that is approved by
the Company's Compensation Committee. Pursuant to such AIP, for each year
during the Term, Mr. Sunshine could receive up to 100% of his Base Salary, with
an annual target incentive of 50% of Base Salary, based on the satisfaction of
certain financial and strategic objectives approved by the Board each year
during the Term. Mr. Sunshine shall also be eligible to participate in an
executive long term incentive plan ("LTIP") that is approved by the Board under
which Mr. Sunshine would be entitled to receive cash, shares or options (with a
three year vesting schedule) to purchase the Company's stock with a value of
$125,000 annually during the Term. In addition, Mr. Sunshine may be awarded
an annual discretionary bonus ("Bonus") during the Term by the Company's
Compensation Committee, at its sole discretion. Mr. Sunshine is entitled to
receive other benefits under his employment agreement including reimbursement of
country club fees and vehicle expenses. During the Term, the Company shall
maintain life insurance on Mr. Sunshine in the amount of one million
dollars.
If the Company decides not to extend Mr. Sunshine's employment agreement
beyond the Term, terminates Mr. Sunshine without Cause, or Mr. Sunshine resigns
for Good Reason (as those terms are defined in his employment agreement), Mr.
Sunshine shall be entitled to receive a severance amount equal to two years of
his Base Salary and two years of his AIP, and all non-vested shares or options
received under his LTIP shall accelerate and vest on the date of termination. In
the event of a Change in Control (as that term is defined in his employment
agreement), Mr. Sunshine shall be entitled to receive the maximum amount that
can be paid to him 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 (approximately three times his Base Salary) along with other benefits
set forth in his employment agreement.
Mr. Sunshine is entitled to participate in the Company's executive benefit
programs and is subject to certain non-competition and non-solicitation
provisions in his employment agreement, which extend for a period of three years
following the termination of the Term of Mr. Sunshine's employment with the
Company.
The Binder Employment Agreement
On December 14, 2007, the Company entered into an employment agreement with
Mitchell Binder, its Chief Financial Officer and Executive Vice President -
Finance (the "Binder Employment Agreement"). The Binder Employment Agreement is
substantially similar to the Sunshine Employment Agreement. The following
discussion provides a summary of the material terms of the Binder Employment
Agreement, which discussion is qualified in its entirety by reference to the
entire text of the Binder Employment Agreement.
The Binder Employment Agreement provides for an annual base salary of
$300,600 ("Base Salary"). The term of the agreement is for two years commencing
on January 1, 2008 (the "Term"). Mr. Binder is eligible to participate in an
executive annual incentive plan ("AIP") that is approved by the Company's
Compensation Committee. Pursuant to such AIP, for each year during the Term,
Mr. Binder could receive up to 37.5% of his Base Salary, with an annual target
incentive of 25% of Base Salary, based on the satisfaction of certain financial
and strategic objectives approved by the Board each year during the Term. Mr.
Binder shall also be eligible to participate in an executive long term
incentive plan ("LTIP") that is approved by the Board under which Mr. Binder
would be entitled to receive cash, shares or options (with a two year
vesting schedule) to purchase the Company's stock with a value of $15,000
annually during the Term. In addition, Mr. Binder may be awarded an annual
discretionary bonus ("Bonus") during the Term by the Company's Compensation
Committee, at its sole discretion. Mr. Binder is entitled to receive other
benefits under his employment agreement including vehicle expenses. During the
Term, the Company shall maintain life insurance on Mr. Binder in the amount of
one million dollars.
If the Company decides not to extend the agreement beyond the Term,
terminates Mr. Binder without Cause, or Mr. Binder resigns for Good Reason (as
those terms are defined in his employment agreement), Mr. Binder shall be
entitled to receive a severance amount equal to two years of his Base Salary and
two years of his AIP, and all non-vested shares or options received under his
LTIP shall accelerate and vest on the date of termination. In the event of a
Change in Control (as that term is defined in his employment agreement), Mr.
Binder shall be entitled to receive the maximum amount that can be paid to him
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
(approximately three times his Base Salary) along with other benefits set forth
in his employment agreement.
Mr. Binder is entitled to participate in the Company's executive benefit
programs and is subject to certain non-competition and non-solicitation
provisions in his employment agreement, which extend for a period of two years
following the termination of the Term of Mr. Binder's employment with the
Company.
The Reissman Employment Agreement
On December 14, 2007, the Company entered into an employment agreement with
Bruce Reissman, the Chief Operating Officer and Executive Vice President (the
"Reissman Employment Agreement"). The Reissman Employment Agreement is also
substantially similar to the Sunshine Employment Agreement. The following
discussion provides a summary of the material terms of the Reissman
Employment Agreement, which discussion is qualified in its entirety by
reference to the entire text of the Reissman Employment Agreement.
The Reissman Employment Agreement provides for an annual base salary of
$389,300 ("Base Salary"). The term of the agreement is for three years
commencing on January 1, 2008 (the "Term"). Mr. Reissman is eligible to
participate in an executive annual incentive plan ("AIP") that is approved by
the Company's Compensation Committee. Pursuant to such AIP, for each year
during the Term, Mr. Reissman could receive up to 52.5% of his Base Salary, with
an annual target incentive of 35% of Base Salary, based on the satisfaction of
certain financial and strategic objectives approved by the Board each year
during the Term. Mr. Reissman shall also be eligible to participate in an
executive long term incentive plan ("LTIP") that is approved by the Board under
which Mr. Reissman would be entitled to receive cash, shares or options (with a
three year vesting schedule) to purchase the Company's stock with a value of
$37,500 annually during the Term. In addition, Mr. Reissman may be awarded an
annual discretionary bonus ("Bonus") during the Term by the Company's
Compensation Committee, at its sole discretion. Mr. Reissman is entitled to
receive other benefits under his employment agreement including reimbursement of
country club fees and vehicle expenses. During the Term, the Company shall
maintain life insurance on Mr. Reissman in the amount of one million dollars.
If the Company decides not to extend Mr. Reissman's employment agreement
beyond the Term, terminates Mr. Reissman without Cause, or Mr. Reissman resigns
for Good Reason (as those terms are defined in his employment agreement), Mr.
Reissman shall be entitled to receive a severance amount equal to two years of
his Base Salary and two years of his AIP, and all non-vested shares or options
received under his LTIP shall accelerate and vest on the date of termination.
In the event of a Change in Control (as that term is defined in his employment
agreement), Mr. Reissman shall be entitled to receive the maximum amount that
can be paid to him 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 (approximately three times his Base Salary) along with other benefits
set forth in his employment agreement.
Mr. Reissman is entitled to participate in the Company's executive benefit
programs and is subject to certain non-competition and non-solicitation
provisions in his employment agreement, which extend for a period of three years
following the termination of the Term of Mr. Reissman's employment with the
Company.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END 2008
The table on the following page summarizes, for each of the executive officers
named in the Summary Compensation Table, grants of stock options and restricted
stock outstanding at December 31, 2008. The market value of the stock awards is
based on the closing market price of our stock on December 31, 2008 which was
$1.77.
OUTSTANDING EQUITY AWARDS AT YEAR-END
OPTION AWARDS STOCK AWARDS (A)(B)
------------------------------------- -------------------------------------------------
Option Option Option Stock Number of Market Equity Value of
Grant # # Exercise Expiration Award Shares Value Incentive Unearned
Date Exercisable Unexercisable Price Date Date Not Vested Not Vested Plan Awards Shares
--------- ----------- ------------- ------ --------- ---------- ---------- ----------- ---------- ------
D. Sunshine 1/25/2001 70,313 - $ 1.07 1/25/2011
7/29/2003 31,250 - $ 4.51 7/29/2013
6/25/2004 31,250 - $ 5.96 6/25/2014 - -
10/13/2004 56,250 $ 100,000
6/18/2008 11,736 21,000
B. Reissman 1/25/2001 66,563 - $ 1.07 1/25/2011
7/29/2003 31,250 - $ 4.51 7/29/2013
6/25/2004 31,250 - $ 5.96 6/25/2014 - -
10/13/2004 56,250 $ 100,000
6/18/2008 3,438 6,000
M. Binder 3/27/2000 140,251(C) - $ 1.92 3/27/2010
1/25/2001 29,944 - $ 1.07 1/25/2011
7/29/2003 31,250 - $ 4.51 7/29/2013
6/25/2004 31,250 - $ 5.96 6/25/2014
10/13/2004 56,250 $ 100,000 - -
6/18/2008 1,056 2,000
M. Tublisky 7/29/2003 8,438 - $ 4.51 7/29/2013 - - - - -
8/14/2008 3,250 $ 6,000
K. Ice - - - - - - - - -
(A) In October 2004, each of Messrs. Sunshine, Reissman and Binder received
93,750 shares of Common Stock, valued at $5.32 per share, the fair market value
of the stock on the date of grant. The shares were awarded as a retention award
to remain with the Company for ten years. The shares are held in escrow, subject
to forfeiture and vest over ten years. The shares vest provided each officer is
still employed, and are subject to acceleration for death or a change of control
(as defined in the Stock Escrow Agreement), as follows: (i) 28,125 shares, which
vested at October 13, 2007 and (ii) 9,375 shares, which vest each year for the
years October 13, 2008 through October 13, 2014.
(B) In June 2008, Messrs Sunshine, Reissman and Binder received 17,605, 5,281,
and 2,112, respectively, of Common Stock, valued at $7.10 per share, pursuant to
a Long Term Incentive Plan ("LTIP"). The shares vest ratably each December 31
over a three year period for Sunshine and Reissman and over a two year period
for Binder, provided each officer is still employed, and are subject to
acceleration for death or change in control.
(C) On February 13, 2009, 112,500 of Mr. Binder's stock options, scheduled to
expire on March 27, 2010, were cancelled by the Compensation Committee. On the
same date, the Compensation Committee granted to Mr. Binder 85,000 stock options
at an exercise price of $2.00 per share expiring on February 12, 2015. The
vesting schedule of the option is as follows: one-sixth vested on February 13,
2009 and one-sixth vests on February 13 of each year thereafter through 2014.
OPTION EXERCISES AND STOCK VESTED
This table provides information about any options that were exercised, or any
stock that vested in 2008.
OPTION AWARDS STOCK AWARDS
# OF SHARES VALUE # OF SHARES VALUE
ACQUIRED REALIZED ON ACQUIRED ON REALIZED ON
NAME OF EXECUTIVE ON EXERCISE EXERCISE VESTING VESTING
----------------- ----------- -------- ------- -----------
D. Sunshine - - 15,244 $38,513
B. Reissman - - 11,218 $31,357
M. Binder - - 10,431 $29,994
M. Tublisky - - - -
K. Ice - - - -
COMPENSATION OF DIRECTORS
Directors of the Company who are not employed by the Company received
director fees of $2,000 per quarter ($8,000 per annum). Employee directors are
not compensated for services as a director. All directors are reimbursed for
expenses incurred on behalf of the Company. In January 2009, The Board of
Directors approved an increase of cash compensation to outside directors from
$8,000 to $12,000 per annum and an annual grant of $3,000 worth of restricted
stock that will vest over a two year period. The following table sets forth
compensation paid to each non-employee director during 2008:
Stock Non-Equity All
Fees Earned or Stock Option Incentive Other
Name Paid in Cash Awards Awards(1) Plan Comp. Compensation Total
- ----- ------------ ------ -------- --------- ----- -----
Lee Feinberg $8,000 - $ 3,643 - - $11,643
Bernard Karcinell $8,000 - $ 3,643 - - $11,643
Sohail Malad $8,000 - $ 3,643 - - $11,643
Fredric Gruder $4,578 - $12,582 - - $17,160
Robert Mitzman (2) $8,000 - $ 3,643 - - $11,643
Arthur Rhein (3) $2,000 - $ 0 - - $ 2,000
(1) Pursuant to the Company's 1995 Stock Option Plan for Non-Employee
Directors, non-employee directors are entitled to an initial grant of 2,064
shares upon first election or appointment to the Board and annual grants of
options to purchase 1,250 shares of Common Stock. The amounts reflect the
dollar amount recognized for financial statement reporting purposes for the
fiscal year ended December 31, 2008, in accordance with SFAS 123R, which was
equal to the grant date fair value of the options. Pursuant to a change to
outside director compensation made in January 2009, outside directors will no
longer receive stock options as part of annual compensation.
(2) Resigned December 31, 2008.
(3) Resigned January 31, 2008.
As of December 31, 2008, each person that served as a director during 2008 held
the following outstanding options to purchase Common Stock:
Option Option
Number of Securities Exercise Price Grant
Name Underlying Outstanding Options ($) Date
- ------- -------------------------------- -------------- -----------
Lee Feinberg 2,604 6.42 2/24/04
1,250 5.96 6/25/04
1,250 8.78 6/24/05
1,250 7.11 6/23/06
1,250 9.07 6/22/07
1,250 7.10 6/18/08
Bernard Karcinell 2,604 2.04 8/7/00
520 1.05 6/29/01
520 3.01 6/28/02
520 3.70 6/27/03
1,250 5.96 6/25/04
1,250 8.78 6/24/05
1,250 7.11 6/23/06
1,250 9.07 6/22/07
1,250 7.10 6/18/08
Fredric Gruder 2,604 8.50 3/5/08
1,250 7.10 6/18/08
Sohail Malad 2,604 8.83 7/2/07
1,250 7.10 6/18/08
Robert Mitzman 2,604 8.83 7/2/07
1,250 7.10 6/18/08
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors is responsible for
determining the compensation of executive officers of the Company, as well as
compensation awarded pursuant to the Company's Plans (defined below).
Messrs. Gruder, Karcinell and Malad served on the Compensation Committee
during 2008, with Mr. Gruder serving as Chairman.
No member of the Compensation Committee is or has been an officer or
employee of the Company or any of its subsidiaries. In addition, no member of
the Compensation Committee had any relationships with the Company or any other
entity that require disclosure under the proxy rules and regulations promulgated
by the SEC.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 10, 2009, certain information
with respect to persons known by the Company to be the beneficial owners of more
than 5% of the Common Stock.
Beneficial Ownership
of Common Stock
Number of Percentage of
Shares Class
---------- --------------
Name and Address
- ----------------
Al Frank Asset Management, Inc. (1) 464,520 10.1%
32392 Coast Highway
Laguna Beach, CA 32651
Elkhorn Partners Limited Partnership (2) 569,186 12.4%
222 Skyline Drive
Elkhorn, NB 68022
Nicusa Capital Partners, LP (3) 411,044 8.9%
17 State Street Suite 1650
New York, NY 10004
(1) Based on a Statement on Schedule 13G filed by Al Frank Asset Management,
Inc. with the SEC on February 17, 2009.
(2) Based on Form 4 filed by Elkhorn Partners Limited Partnership with the
SEC on April 6, 2009.
(3) Based on Schedule 13F-HR filed by Nicusa Capital Partners, LP with the
SEC on February 13, 2009.
OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth, as of April 13, 2009, information
concerning the beneficial ownership of Common Stock by each director, each of
the executive officers named in this proxy statement and all current directors
and executive officers as a group. Under rules of the SEC, persons who have
power to vote or dispose of securities, either alone or jointly with others, are
deemed to be the beneficial owners of such securities. Each person reflected in
the table below has both sole voting and investment power with respect to the
shares included in the table, except as described in the footnotes below.
Shares Subject to Percent
Number of Shares Owned Exercisable of
Name of Beneficial Owner Directly or Indirectly Options Total Class(8)
- ---------------------------------------- --------------------- --------------------- ------- -------
Dennis Sunshine, President
and Chief Executive Officer (1) (2) 322,814 132,813 455,627 9.6%
Bruce Reissman, Executive Vice
President, Chief Operating Officer (3) 375,200 129,063 504,263 10.7%
Mitchell Binder, Executive Vice
President, Chief Financial Officer (4) 110,487 134,362(4) 244,849 5.2%
Mark Tublisky, Secretary (5) 6,350 8,438 14,788 *
David Goldman, Treasurer (6) 3,750 3,000 6,750 *
David Gutman, President, (7)
Chief Operating Officer, Tulip
Development Laboratory, Inc. 2,500 - 2,500 *
Kenneth Ice, President,
Chief Operating Officer
Integrated Combat Systems 95,746 - 95,746 2.1%
Lee Feinberg, Director 1,470 8,854 10,324 *
Bernard Karcinell, Director 5,470 10,414 15,884 *
Sohail Malad, Director 1,470 3,854 5,324 *
Fredric Gruder, Director 1,470 3,854 5,324 *
All officers and directors
as a group (11 persons) 926,727 434,652 1,361,379 27.0%
- ----------------------------------------
* Less than one percent
(1) Includes 132,187 shares held by Mr. Sunshine's wife Francine Sunshine.
(2) Includes 123,052 restricted shares subject to forfeiture.
(3) Includes 75,960 restricted shares subject to forfeiture.
(4) Includes 63,913 restricted shares subject to forfeiture. Does not
include options to purchase 70,833 shares of Common Stock not currently
exercisable.
(5) Includes 3,250 restricted shares subject to forfeiture.
(6) Includes 2,750 restricted shares subject to forfeiture.
(7) Includes 2,500 restricted shares subject to forfeiture.
(8) Based on 4,597,794 shares issued and outstanding as of May 13, 2009.
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 person. Includes any securities that such person
has the right to acquire within sixty days pursuant to options, warrants,
conversion privileges or other rights.
-27-
PROPOSAL 2
2009 INDEPENDENT DIRECTORS INCENTIVE STOCK PLAN
APPROVAL OF THE 2009 INDEPENDENT DIRECTORS INCENTIVE STOCK PLAN
The Company's Board of Directors has unanimously recommended, and at the
Annual Meeting the stockholders will be asked to approve, the adoption of the
Orbit International Corp. 2009 Independent Directors Incentive Stock Plan (the
"2009 Plan"). A description of the 2009 Plan appears below, and a copy of the
2009 Plan is attached to this Proxy as Appendix B.
The purpose of the 2009 Plan is to afford an incentive to non-employee
directors to acquire a proprietary interest in the Company and to attract and
retain such persons. A total of 100,000 shares of Common Stock are authorized
and have been reserved for issuance under the 2009 Plan. The 2009 Plan is
intended to replace the Company's 1995 Stock Option Plan for Non-Employee
Directors. Since most of the options to purchase the authorized shares under
the prior plan have been granted and the prior plan is soon to expire, the 2009
Plan will operate to authorize and reserve additional shares of common stock for
the grant of options and/or restricted stock awards to the Company's independent
directors. The 2009 Plan provides for the granting of non-qualified stock
options ("NQSO's") not intended to qualify under Section 422 of the Internal
Revenue Code of 1986, as amended. In addition, the 2009 Plan calls for the
granting of stock appreciation rights ("SAR's") and restricted stock awards.
(The SAR's, options and restricted stock are collectively referred to as
"awards."). Non-qualified stock options may be granted to directors who not
employees of the Company or any of its subsidiaries. Under the 2009 Plan, no
options may be granted after March 5, 2019.
The 2009 Plan shall be administered either by the full Board of Directors,
or by the Stock Option Committee comprised of at least two directors who are
employees of the Company and each of whom shall be a disinterested person under
the 2009 Plan (either the full Board or the Committee is hereinafter referred to
as the ("Stock Option Committee"). Subject to the terms of the 2009 Plan, the
Stock Option Committee has full and final authority to (a) determine the persons
to be granted awards, (b) determine the number of shares subject to each award,
the consideration received for the grant of each award, and whether or not
options, SAR's or restricted stock awards shall be granted, (c) determine the
exercise price per share of the options, (which may not be less per share than
100% 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
2009 Plan. In determining persons who are to receive awards and the number of
shares to be covered by each award, the Stock Option Committee will consider the
person's 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 awards under the 2009 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 2009 Plan) may exercise options in
the twelve-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 after his or her
death or total disability (unless such options terminate or expire sooner by
their terms). Unexercised options granted under the 2009 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 and any other restrictions
have been satisfied.
There are four (4) individuals currently eligible to participate in the
2009 Plan, each of whom is a non-employee director. The closing price of our
common stock on the Nasdaq Capital Market on April 16, 2009, was $2.91 per
share.
On March 5, 2009, the three disinterested members of the Board of Directors
unanimously awarded to each of the four independent directors of the Company,
Bernard Karcinell, Lee Feinberg, Sohail Malad and Fredric Gruder 1,470
restricted shares of Common Stock. The shares had a value of $3,000 based on a
price of $2.04 per share which was in excess of the then current fair market
value. The shares will vest 50% after one year and 50% after two years.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE 2006 PLAN UNDER CURRENT LAW
The Company has been advised by counsel that in general, under the Internal
Revenue Code, as presently in effect a participant will not be deemed to
recognize any income for Federal Income Tax purposes at the time an award is
granted or made, nor will the Company be entitled to a tax deduction at that
time. However, when any part of an option or SAR is exercised, when restrictions
on restricted stock lapse, or when an unrestricted stock award is made, the
federal income tax consequences may be summarized as follows:
1. In the case of an exercise of an NQSO, the participant will generally
recognize ordinary income in an amount equal to the excess of the fair market
value of the shares on the exercise date over the option price.
2. In the case of an exercise of an SAR, the participant will generally
recognize ordinary income on the exercise date in an amount equal to any cash
and the fair market value of any unrestricted shares received.
3. In the case of an exercise of an option or SAR payable in restricted
stock, or in the case of an award of restricted stock, the immediate federal
income tax effect for the participant will depend on the nature of the
restrictions. Generally, the fair market value of the stock will not be taxable
as ordinary income until the year in which the participant's interest in the
stock is freely transferable or is no longer subject to a substantial risk of
forfeiture. However, the participant may elect to recognize income when the
stock is received, rather than when the interest in the stock is received, the
stock is freely transferable or is no longer subject to a substantial risk of
forfeiture. If the participant makes this election, the amount taxed to the
participant as ordinary income is determined as of the date of receipt of the
restricted stock.
4. Upon the exercise of an NQSO, the exercise of a SAR, the award of stock,
or the recognition of income on restricted stock, the Company will generally be
allowed an income tax deduction equal to the ordinary income recognized by a
participant. When a cash payment is made pursuant to the award, the recipient
will recognize the amount of the cash payment as ordinary income, and the
Company will generally be entitled to a deduction in the same amount.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF THE COMPANY'S
2009 INDEPENDENT DIRECTORS INCENTIVE STOCK PLAN, WHICH IS DESIGNATED AS PROPOSAL
2 ON THE ENCLOSED PROXY CARD.
PROPOSAL 3
INDEPENDENT ACCOUNTANTS
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board, upon the recommendation of the Audit Committee, has appointed
McGladrey & Pullen, LLP ("M&P") as independent accountants for the Company to
audit the books and accounts of the Company for the current fiscal year ending
December 31, 2009.
In October 2007, certain partners of Goldstein Golub Kessler LLP (GGK)
became partners of M&P. As a consequence, GGK resigned as our auditors December
11, 2007 and M&P was appointed as the Company's new independent registered
public accounting firm for the year ended December 31, 2007.
Pertaining to the year ending December 31, 2007, GGK had a continuing
relationship with RSM McGladrey, Inc. ("RSM") from which it leased auditing
staff who are full-time, permanent employees of RSM and through which its
partners provided non-audit services. GGK has no full-time employees and
therefore, none of the audit services performed were provided by permanent
full-time employees of GGK. GGK manages and supervises the audit and audit
staff, and is exclusively responsible for the opinion rendered in connection
with its examination.
Representatives of M&P 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.
AUDIT FEES AND AUDIT RELATED FEES
In accordance with the Audit Committee's charter and pursuant to SEC rules,
the Audit Committee reviewed all services performed by M&P and GGK for the
Company in its fiscal years ended December 31, 2008 and 2007, within and outside
the scope of their quarterly and annual auditing function. The aggregate fees
billed and to be billed by the Company's independent auditors for each of the
last two fiscal years are as follows:
December 31, 2007 December 31, 2008
----------------- -----------------
Audit fees - McGladrey & Pullen, LLP $145,000 $ 247,000
Audit fees - Goldstein
Golub Kessler LLP $ 46,000 $ 0
Audit related fees -
McGladrey & Pullen, LLP $ 64,000 $ 78,000
Tax fees $ 29,000 $ 35,000
All other fees -
Goldstein Golub Kessler LLP $ 32,000 $ 0
Audit fees consist of fees related to professional services rendered during 2008
and 2007 in connection with the audit of our annual financial statements, the
review of interim financial statements included in each of our Quarterly Reports
on Form 10-Q, and other professional services provided by our registered public
accounting firm in connection with statutory or regulatory filings or
engagements.
Audit-related fees were for audit and due diligence work related to the
acquisition of Integrated Consulting Services, Inc. ("ICS") for the year
December 31, 2007.
AUDIT COMMITTEE PRE-APPROVAL POLICY
M&P was retained to audit the consolidated financial statements for the
years ended December 31, 2008 and 2007. In addition, M&P and GGK were retained
to provide other auditing and advisory services in the 2008 and 2007 fiscal
years. M&P and GGK have to maintain objectivity and independence in their audit
of the financial statements. To minimize relationships that could appear to
impair the objectivity of M&P and GGK, the Audit Committee has restricted the
non-audit services that M&P and GGK and its aligned company may provide to
primarily tax services and merger and acquisition due diligence and audit
services, and has determined that we would obtain even these non-audit services
from M&P and GGK and/or its aligned company only when the services offered by
M&P and GGK and its aligned company are more effective or economical than
services available from other service providers.
The Audit Committee also has adopted policies and procedures for
pre-approving all non-audit work performed by M&P and GGK or any other
accounting firms. Specifically, the audit committee has pre-approved the use of
M&P and GGK and its aligned company for specific types of services within the
following categories of non-audit services: merger and acquisition due diligence
and audit services; tax services; internal control reviews; and reviews and
procedures that are requested of M&P and GGK. In each case, the Audit Committee
has also set a specific annual limit on the amount of such services which we
would obtain from M&P and GGK, and has required management to report the
specific engagements to the Committee on a quarterly basis and to obtain
specific pre-approval from the Audit Committee for all engagements.
THE BOARD OF DIRECTORS DEEMS THE RATIFICATION OF THE APPOINTMENT OF
MCGLADREY & PULLEN, LLP AS THE AUDITORS FOR THE COMPANY TO BE IN THE COMPANY'S
BEST INTEREST AND RECOMMENDS A VOTE "FOR" SUCH RATIFICATION.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 SEC 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 SEC 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, 2008,
all Section 16(a) filing requirements applicable to its officers, directors, and
greater than ten percent beneficial owners were complied with.
STOCKHOLDER PROPOSALS
No person who intends to present a proposal for action at a forthcoming
stockholders' meeting of the Company may seek to have the proposal included in
the proxy statement or form of proxy for such meeting unless such person (a) is
a record beneficial owner of at least 1% or $2,000 in market value of shares of
Common Stock, has held such shares for at least one year at the time the
proposal is submitted, and such person shall continue to own such shares through
the date on which the meeting is held, (b) provides the Company in writing with
such person's name, address, the number of shares held by such person and the
dates upon which such person acquired such shares with documentary support for a
claim of beneficial ownership and a statement that such person intends to
continue to hold the shares through the date of the meeting, (c) notifies the
Company of such person's intention to appear personally at the meeting or by a
qualified representative under Delaware law to present such person's proposal
for action, and (d) submits such person's proposal timely. A proposal to be
included in the proxy statement or proxy for the Company's next annual meeting
of stockholders will be submitted timely only if the proposal has been received
at the Company's executive offices at 80 Cabot Court, Hauppauge, New York 11788
no later than January 21, 2010. If the date of such meeting is changed by more
than 30 calendar days from the date such meeting is scheduled to be held under
the Company's By-Laws, or if the proposal is to be presented at any meeting
other than the next annual meeting of stockholders, the proposal must be
received at the Company's principal executive office at a reasonable time before
the solicitation of proxies for such meeting is made.
Even if the foregoing requirements are satisfied, a person may submit only
one proposal of not more than 500 words including any accompanying statement. A
supporting statement is required if requested by the proponent for inclusion in
the proxy materials, and under certain circumstances enumerated in the SEC's
rules relating to the solicitation of proxies. The Company may be entitled to
omit the proposal and any statement in support thereof from its proxy statement
and form of proxy if the foregoing eligibility or procedural requirements are
not met or some other bases such as the proposal deals with a matter relating to
the Company's ordinary business operations.
DELIVERY OF PROXY MATERIALS TO HOUSEHOLDS
As permitted by applicable law, only one copy of this proxy statement and
annual report is being delivered to stockholders residing at the same address,
unless such stockholders have notified the Company of their desire to receive
multiple copies of this proxy statement or the Company's annual report.
The Company will promptly deliver, upon oral or written request, a separate copy
of this proxy statement and/or the Company's annual report to any stockholder
residing at an address to which only one copy of either such document was
mailed. Requests for additional copies should be directed to the Company's
Secretary, at the Company's corporate offices at Orbit International Corp., 80
Cabot Court, Hauppauge, New York 11788, or by telephone at (631) 435-8300.
Stockholders who share an address can request the delivery of separate copies of
future proxy statements or the Company's annual report upon written request
which should be directed to the Company's Secretary, at the Company's corporate
offices at Orbit International Corp., 80 Cabot Court, Hauppauge, New York 11788
or by telephone at (631) 435-8300.
Stockholders who share an address can request the delivery of a single copy of
this proxy statement or a single copy of the Company's annual report upon
written request. Such request should be directed to the Company's Secretary, at
the Company's corporate offices at Orbit International Corp., 80 Cabot Court,
Hauppauge, New York 11788 or by telephone at (631) 435-8300.
AVAILABILITY OF PROXY MATERIALS
The Notice of Annual Meeting, Proxy Statement, and Annual Report on Form
10-K for the fiscal year ended December 31, 2008, are available at
www.Orbitintl.com. Instead of receiving future copies of our Notice of Annual
Meeting, Proxy Statement, and Annual Report on Form 10-K by mail, shareowners of
record and most beneficial owners can elect to receive an e-mail that will
provide electronic links to these documents. Opting to receive your proxy
materials online will save us the cost of producing and mailing documents to
your home or business, and also will give you an electronic link to the proxy
voting site.
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.
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.
AUDIT COMMITTEE SHALL MEET AT LEAST ONCE EACH FISCAL YEAR AND MORE
FREQUENTLY IF CIRCUMSTANCES DICTATE.
MEMBERSHIP OF THE COMMITTEE
of the Committee
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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
and Duties
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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.
-43-
1040898.4
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.
2009 INDEPENDENT DIRECTORS INCENTIVE STOCK PLAN
(Approved and adopted by the Board of Directors on March 5, 2009)
STATEMENT OF PURPOSE
The Orbit International Corp. 2009 Independent Directors Incentive Stock
Plan is intended to afford an incentive to non-employee directors retained by
Orbit International Corp. (the "Company") and its subsidiaries 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.
DEFINITIONS
For purposes of the Plan, the following terms are defined as set forth below:
a. "Award" means a Stock Option, Stock Appreciation Right or Restricted
Stock.
b. "Board" means the Board of Directors of the Company.
c. "Change of Control" has the meaning set forth in Section 4.2.1.
d. "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.
e. "Committee" means the Committee referred to in Section 3.1.
f. "Common Stock" means common stock, par value $.10 per share, of the
Company.
g. "Company" means Orbit International Corp., a Delaware corporation.
h. "Eligible Persons" means the Eligible Persons referred to in Section 2 of
the Plan.
i. "Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor thereto.
j. "Fair Market Value" means, as of any given date, (i) if the Common Stock
is listed or admitted to trade on a national securities exchange, the closing
price of the Common Stock on the Composite Tape, as published in The Wall Street
Journal, of the principal national securities exchange on which the Common Stock
is so listed or admitted to trade, on such date, or, if there is no trading of
the Common Stock on such date, then the closing price of the Common Stock as
quoted on such Composite Tape on the next preceding date on which there was
trading in such shares; (ii) if the Common Stock is not listed or admitted to
trade on a national securities exchange, the mean between the closing bid and
asked price for the Common Stock on such date, as furnished by the
Over-The-Counter Bulletin Board (the "OTCBB") maintained by FINRA; (iii) if the
Common Stock is not listed or admitted to trade on a national securities
exchange and closing bid and asked prices are not furnished by the OTCBB, the
mean between the closing bid and asked price for the Common Stock on such date,
as furnished by the Pink Sheets, LLC ("Pink Sheets") or similar organization;
and (iv) if the stock is not listed or admitted to trade on a national
securities exchange and if bid and asked prices for the Common Stock are not
furnished by the OTCBB, Pink Sheets or a similar organization, the value
established in good faith by the Committee taking into account such facts and
circumstances deemed to be material by the Committee to the value of the Common
Stock in the hands of the Eligible Person.
Notwithstanding the foregoing, for purposes of granted Non-Qualified Stock
Options or Stock Appreciation Rights, Fair Market Value of Common Stock shall be
determined in accordance with the requirements of Code Section 409A, consistent
with the provisions of Treasury Department Regulations 1.409A-1(b)(5)(iv)(A).
k. "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
l. "Performance Goals" means the performance goals established by the
Committee in connection with the grant of Restricted Stock.
m. "Plan" means the Orbit International Corp. 2009 Independent Directors
Incentive Stock Plan, as set forth herein and as hereinafter amended from time
to time.
n. "Qualified Performance-Based Award" means an Award of Restricted Stock
designated as such by the Committee at the time of grant, based upon a
determination that (i) the recipient is or may be a "covered employee" within
the meaning of Section 162(m)(3) of the Code in the year in which the Company
would expect to be able to claim a tax deduction with respect to such Restricted
Stock and (ii) the Committee wishes such Award to qualify for the Section 162(m)
Exemption.
o. "Restricted Stock" means an Award granted under Section 6.
p. "Stock Appreciation Right" means an Award granted under Section 5.
q. "Stock Option" means an Award granted under Section 4.
r. "Subsidiary" shall have the meaning given to the term "Subsidiary
corporation" in Section 424(f) of the Code.
s. "Termination of Service" means the termination of the participant's
service as a director of the Company or any of its Subsidiaries. A participant
who is a director of a Subsidiary shall also be deemed to incur a Termination of
Service if the Subsidiary ceases to be such a Subsidiary, and the participant
does not immediately thereafter become a director of the Company or another
Subsidiary. Temporary absences from service because of illness, vacation or
leave of absence and transfers among the Company and its Subsidiaries shall not
be considered Terminations of Service. If so determined by the Committee, a
participant shall be deemed not to have incurred a Termination of Service if the
participant enters into a contract with the Company or a Subsidiary providing
for the rendering by the participant of consulting services to the Company or
such Subsidiary on terms approved by the Committee; however, Termination of
Service of the participant shall occur when such contract ceases to be in
effect.
In addition, certain other terms used herein have definitions given to them
in the first place in which they are used.
STATEMENT OF THE PLAN
1. SHARES SUBJECT TO THE PLAN.
Subject to the provisions of Section 7, the maximum number of shares which
may be issued under the Plan shall be one hundred thousand (100,000) shares of
Common Stock, par value $.10 per share, of the Company (the "Shares"). 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 Awards granted under the Plan. The Shares subject to the Plan shall
be either authorized and unissued shares or treasury shares of Common Stock. If
any Award is forfeited, or if any Stock Option (and related Stock Appreciation
Right, if any) terminates, expires or lapses for any reason without having been
exercised in full or shall cease for any reason to be exercisable in whole or in
part, or if any Stock Appreciation Right is exercised for cash, the unpurchased
Shares subject to such Awards shall again be available for distribution under
the Plan. No more than 40% of the shares of Common Stock available for grant
under the Plan as of the first day of any calendar year in which the Plan is in
effect shall be utilized in that fiscal year for the grant of Awards in the form
of Restricted Stock.
2. ELIGIBILITY.
Awards may be granted only to directors of the Company who are not
employees of the Company or its Subsidiaries, to the extent not prohibited by
law ("Eligible Persons"). As used in this Plan, the term "Subsidiaries" shall
include Subsidiaries of a Subsidiary.
3. ADMINISTRATION OF THE PLAN.
3.1. The Plan shall be administered by either the full Board of
Directors or by a committee (either the full Board or the committee is referred
to hereinafter as the "Committee") composed of at least two employee directors,
each of whom shall be a disinterested person under the Plan, which Committee
shall be appointed by and serve at the pleasure of the Board. Within the limits
of the express provisions of the Plan, the Committee shall have the authority to
determine, in its absolute discretion, (i) the individuals to whom, and the time
or times at which Awards shall be granted, (ii) whether and to what extent
Non-Qualified Stock Options, Stock Appreciation Rights and Restricted Stock or
any combination thereof are to be granted hereunder, (iii) the number of Shares
to be covered by each Award granted hereunder, (iv) subject to Sections 4.7 and
6.3(G), the terms and conditions of any Award granted hereunder including, but
not limited to, the option price, any vesting condition, restriction or
limitation (which may be related to the performance of the participant, the
Company or any Subsidiary), and any vesting, acceleration, forfeiture or waiver
regarding any Award and the shares of Common Stock relating thereto, (v) modify,
amend or adjust the terms and conditions of any Award, at any time or from time
to time, including but not limited to, Performance Goals; provided, however,
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that the Committee may not adjust upwards the amount payable with respect to
Qualified Performance-Based Awards or waive or alter the Performance Goals
associated therewith or cause such Restricted Stock to vest earlier than
permitted by Section 6.3(H), and (vi) under what circumstances an Award may be
settled in cash or Common Stock under Sections 6.3(B) and 10.2, provided,
--------
however, that the Committee shall not have such power to the extent that the
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mere possession (as opposed to the exercise) of such power would result in
adverse tax consequences to any participant under Code Section 409A. 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 Section 3.1 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.
3.2. 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 such member, 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
member's 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. STOCK OPTIONS.
Stock Options may be granted alone or in addition to other Awards. Stock
Options granted hereunder can only be Non-Qualified Stock Options. Any Stock
Option granted hereunder shall be in such form as the Committee may from time to
time approve. Stock Options granted under the Plan shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions as the Committee shall deem desirable:
4.1. Stock Option Exercise Price. Subject to adjustments in accordance
with Sections 7 and 8, the exercise price of each Stock Option granted under the
Plan shall be set forth in the applicable Option Agreement, but in no event
shall such price be less than the Fair Market Value of the Shares subject to the
Stock Option on the date the Stock Option is granted. The Fair Market Value of
the Shares shall be determined in good faith by the Committee, with the approval
of the Board, in accordance with the Plan and in accordance with the
requirements of Code Sections 409A and the Treasury Regulations thereunder.
4.2 Exercise of Stock Options.
4.2.1. Subject to the provisions in this Section 4.3 and in Section 9,
Stock Options may be exercised in whole or in part. The Committee, in its
absolute discretion, shall determine the time or times at which any Stock Option
granted under the Plan may be exercised; provided, however, that each Stock
Option:
(A) shall be exercisable by a participant only if such participant
was an Eligible Person at all times beginning from the date of the grant of the
Option to a date not more than three months (except as otherwise provided in
Section 8) before exercise of such Stock Option;
(B) may not be exercised prior to the expiration of at least one
year from the date of grant except in the case of the death or disability of the
participant or otherwise with the approval of the Committee or the Board of
Directors or, if the option agreement evidencing such Stock Option so provides,
upon a "Change of Control" as defined below;
(C) shall expire no later than the expiration of ten years from
the date of its grant; and
(D) shall not be exercisable by a participant until such
participant executes and delivers a written representation to the effect that
such participant 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, as amended, or exempt from
registration thereunder).
A "Change of Control" as used in this Section 4.3 shall mean any of the
-------------------
following:
(i) any consolidation, merger or sale of the Company in which the
Company is not the continuing or surviving corporation or pursuant to which
shares of the Company's stock would be converted into cash, securities or other
property; or
(ii) the stockholders of the Company approve an agreement for the
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of the Company;
or
(iii) any approval by the stockholders of the Company of any plan
or proposal for the liquidation or dissolution of the Company; or
(iv) the acquisition of beneficial ownership (within the meaning
of Rule 13d-3 under the Exchange Act of an aggregate of 30% or more of the
voting power of the Company's outstanding voting securities by any single person
or group (as such term is used in Rule 13d-3 under the Exchange Act) during the
12-month period ending on the date of the latest acquisition, unless such
acquisition was approved by the Board of Directors prior to the consummation
thereof); or
(v) the appointment of a trustee in a Chapter 11 bankruptcy
proceeding involving the Company or the conversion of such a proceeding into a
case under Chapter 7.
4.2.2. Stock 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 Stock Option is being exercised, accompanied by payment in
full of the Stock Option exercise price of such Shares. The exercise price shall
be payable in cash by a certified or bank check or such other instrument as the
Company may accept; provided, however, that in lieu of payment in cash, a
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participant may, with the approval of the Company's Board and on the
recommendation of the Committee, pay for all or part of the Shares to be
purchased upon exercise of such participant's Stock Option by:
(A) tendering to the Company shares of the Company's Common Stock
owned by such participant and having a Fair Market Value (as determined pursuant
to Section 4.1) equal to the exercise price (or the balance thereof) applicable
to such participant's Stock Option; or
(B) complying with any exercise and sell (or cashless exercise)
program which the Company has established with a broker-dealer.
4.2.3. The holder of an option shall have none of the rights of a
stockholder with respect to the Shares covered by such holder's option until
such Shares shall be issued to such holder upon the exercise of such holder's
option.
4.3. Termination of Service. In the event that the service of an
individual to whom a Stock Option has been granted under the Plan shall
terminate (otherwise than by reason of such individual's 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 such
individual's service) at any time within twelve months after such termination,
but in no event after the expiration of the term of the option. No option
granted under the Plan may be exercised by a participant following termination
of such participant's service 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 a Stock 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.
4.4. Death or Total Disability of a Stock Option Holder. In the event
of the death or total disability of an individual to whom a Stock 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, other 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 such individual's death or total
disability) by a legatee or legatees of such participant under such individual's
last will and testament or by such individual's personal representatives or
distributees, at any time within twelve months after such individual's 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 twelve 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 such individual's 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.
4.5. Non-transferability of Stock Options. A Stock Option shall not be
transferable otherwise than by will or the laws of descent and distribution and
is exercisable during the lifetime of the Eligible Person only by such Eligible
Person or such Eligible Person's guardian or legal representative.
Notwithstanding the foregoing, the Committee shall have discretionary authority
to grant Stock Options which will be transferable to members of a participant'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 a Stock 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.
4.6. Evidence of Stock Option Grant. Each option granted pursuant to
the Plan shall be evidenced by an agreement (the "Option Agreement") which shall
clearly identify the status of the Stock Options granted thereunder. 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.
5. STOCK APPRECIATION RIGHTS
5.1. Grant and Exercise. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the Plan. In the
case of a Non-Qualified Stock Option, such rights may be granted either at or
after the time of grant of such Stock Option. A Stock Appreciation Right shall
terminate and no longer be exercisable upon the termination or exercise of the
related Stock Option.
A Stock Appreciation Right may be exercised by a participant in accordance
with Section 5.2 by surrendering the applicable portion of the related Stock
Option in accordance with procedures established by the Committee. Upon such
exercise and surrender, the participant shall be entitled to receive an amount
determined in the manner prescribed in Section 5.2. Stock Options which have
been so surrendered shall no longer be exercisable to the extent the related
Stock Appreciation Rights have been exercised.
5.2. Terms and Conditions. Stock Appreciation Rights shall be subject
to such terms and conditions as shall be determined by the Committee, including
the following:
(A) Stock Appreciation Rights shall be exercisable only at such
time or times and to the extent that the Stock Options to which they relate are
exercisable in accordance with the provisions of Section 4 and this Section 5.
(B) Upon the exercise of a Stock Appreciation Right, a participant
shall be entitled to receive an amount in cash, shares of Common Stock or both,
in value equal to the excess of the Fair Market Value of one share of Common
Stock over the option price per share specified in the related Stock Option
multiplied by the number of shares in respect of which the Stock Appreciation
Right shall have been exercised, with the Committee having the right to
determine the form of payment.
(C) Stock Appreciation Rights shall be transferable only to
permitted transferees of the underlying Stock Option in accordance with Section
4.5.
(D) Upon the exercise of a Stock Appreciation Right, the Stock
Option or part thereof to which such Stock Appreciation Right is related shall
be deemed to have been exercised for the purpose of the limitation set forth in
Section 1 on the number of shares of Common Stock to be issued under the Plan,
but only to the extent of the number of shares covered by the Stock Appreciation
Right at the time of exercise based on the value of the Stock Appreciation Right
at such time.
(E) Except in connection with a change in capitalization, the
price at which Stock Appreciation Rights may be exercised, shall not be reduced
to less than the Fair Market Value on the date such Stock Appreciation Rights
were granted.
6. RESTRICTED STOCK
6.1. Administration. Shares of Restricted Stock may be awarded either
alone or in addition to other Awards granted under the Plan. The Committee shall
determine the Eligible Persons to whom and the time or times at which grants of
Restricted Stock will be awarded, the number of shares to be awarded to any
Eligible Person, the conditions for vesting, the time or times within which such
Awards may be subject to forfeiture and any other terms and conditions of the
Awards, in addition to those contained in Section 6.3.
6.2. Awards and Certificates. Shares of Restricted Stock shall be
evidenced in such manner as the Committee may deem appropriate, including
book-entry registration or issuance of one or more stock certificates. Any
certificate issued in respect of shares of Restricted Stock shall be registered
in the name of such Eligible Person and shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such Award,
substantially in the following form:
"The transferability of this certificate and the shares of stock represented
hereby are subject
to the terms and conditions (including forfeiture) of the Orbit International
Corp.
2009 Independent Directors Incentive Stock Plan and a Restricted Stock
Agreement.
Copies of such Plan and Agreement are on file at the offices of Orbit
International Corp.,
80 Cabot Court, Hauppauge, NY 11788."
The Committee may require that the certificates evidencing such shares be held
in custody by the Company until the restrictions thereon shall have lapsed and
that, as a condition of any Award of Restricted Stock, the participant shall
have delivered a stock power, endorsed in blank, relating to the Common Stock
covered by such Award.
6.3. Terms and Conditions. Shares of Restricted Stock shall be subject
to the following terms and conditions:
(A) The Committee may, prior to or at the time of grant, designate an
Award of Restricted Stock as a Qualified Performance-Based Award, in which event
it shall condition the grant or vesting, as applicable, of such Restricted Stock
upon the attainment of Performance Goals. If the Committee does not designate an
Award of Restricted Stock as a Qualified Performance-Based Award, it may also
condition the grant or vesting thereof upon the attainment of Performance Goals.
Regardless of whether an Award of Restricted Stock is a Qualified
Performance-Based Award, the Committee may also condition the grant or vesting
thereof upon the continued service of the participant. The conditions for grant
or vesting and the other provisions of Restricted Stock Awards (including
without limitation any applicable Performance Goals) need not be the same with
respect to each recipient. The Committee may at any time, in its sole
discretion, accelerate or waive, in whole or in part, any of the foregoing
restrictions; provided, however, that in the case of Restricted Stock that is a
-------- -------
Qualified Performance-Based Award, the applicable Performance Goals have been
satisfied and further, provided, however, that the Committee shall not have such
------- -------- -------
power to the extent that the mere possession (as opposed to the exercise) of
such power would result in adverse tax consequences to any participant under
Code Section 409A.
(B) Subject to the provisions of the Plan and the Restricted Stock Agreement
referred to in Section 6.3(F), during the period, if any, set by the Committee,
commencing with the date of such Award for which such participant's continued
service is required (the "Restriction Period"), and until the later of (i) the
expiration of the Restriction Period and (ii) the date the applicable
Performance Goals (if any) are satisfied, the participant shall not be permitted
to sell, assign, transfer, pledge or otherwise encumber shares of Restricted
Stock; provided, however, that the foregoing shall not prevent a participant
-------- -------
from pledging Restricted Stock as security for a loan, the sole purpose of which
is to provide funds to pay the option price for Stock Options.
(C) Except as provided in this Section 6.3(C) and Sections 6.3(A) and 6.3(B)
and the Restricted Stock Agreement, the participant shall have, with respect to
the shares of Restricted Stock, all of the rights of a stockholder of the
Company holding the class or series of Common Stock that is the subject of the
Restricted Stock, including, if applicable, the right to vote the shares and the
right to receive any dividends. If so determined by the Committee in the
applicable Restricted Stock Agreement, (i) cash dividends on the class or series
of Common Stock that is the subject of the Restricted Stock Award shall be
automatically deferred and reinvested in additional Restricted Stock, held
subject to the vesting of the underlying Restricted Stock, or held subject to
meeting Performance Goals applicable only to dividends; and (ii) dividends
payable in Common Stock shall be paid in the form of Restricted Stock of the
same class as the Common Stock with which such dividend was paid, held subject
to the vesting of the underlying Restricted Stock, or held subject to meeting
Performance Goals applicable only to dividends.
(D) Except to the extent otherwise provided in the applicable Restricted
Stock Agreement or Sections 6.3(A), 6.3(B), 6.3(E) or 8.1(D), upon a
participant's Termination of Service for any reason during the Restriction
Period or before the applicable Performance Goals are satisfied, all shares
still subject to restriction shall be forfeited by the participant.
(E) Except to the extent otherwise provided in Section 8.1(D), in the event
that a participant retires or such participant's employment is involuntarily
terminated, the Committee shall have the discretion to waive, in whole or in
part, any or all remaining restrictions with respect to any or all of such
participant's shares of Restricted Stock.
(F) If and when any applicable Performance Goals are satisfied and the
Restriction Period expires without a prior forfeiture of the Restricted Stock,
unlegended certificates for such shares shall be delivered to the participant
upon surrender of the legended certificates.
(G) Each Award shall be confirmed by, and be subject to, the terms of a
Restricted Stock Agreement.
(H) Notwithstanding the foregoing, but subject to the provisions of Section
8 hereof, no Award in the form of Restricted Stock, the vesting of which is
conditioned only upon the continued service of the participant, shall vest
earlier than the first anniversary of the date of grant, and no award in the
form of Restricted Stock, the vesting of which is conditioned upon the
attainment of a specified Performance Goal or Goals, shall vest earlier than the
first anniversary of the date of grant thereof.
7. 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 Award granted
hereunder and the number of Shares to be issued pursuant to an Award shall be
correspondingly adjusted, to the end that the participant'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 or payment of Awards granted pursuant hereto.
8. MATERIAL TRANSACTION, LIQUIDATION OR DISSOLUTION OF THE COMPANY.
8.1. 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:
(A) provide for the assumption of outstanding Awards, or the
substitution of outstanding Awards for new Awards, for equity securities of the
surviving, successor or purchasing corporation, or a parent or Subsidiary
thereof, with appropriate adjustments as to the number, kind, vesting and prices
of Shares subject to such Awards, as determined in good faith by the Board in
its sole discretion, or
(B) provide that the vesting of each outstanding Stock Option and Stock
Appreciation Right shall automatically be accelerated so that 100% of the
unvested Shares covered by such Award shall be fully vested upon the
consummation of the Material Transaction, and
(i) provide notice to Participants that all outstanding Stock Options
must be exercised on or before a specified date (which date shall be at least
ten days from the date of notice), after which the Stock Options and Stock
Appreciation Rights shall terminate; or
(ii) terminate each outstanding Stock Option and Stock Appreciation
Right in its entirety and exchange such Award for a payment of cash, securities
and/or property equal to the Fair Market Value of the Common Stock into which
such Award convertible, less the exercise price for such Award.
(C) provide that the restrictions and deferral limitations applicable to any
Restricted Stock shall lapse, and such Restricted Stock shall become free of all
restrictions and become fully vested and transferable, and
(D) the Committee may also make additional adjustments and/or settlements of
outstanding Awards as it deems appropriate and consistent with the Plan's
purposes.
Notwithstanding the foregoing, for purposes of Sections 8.1(A), 8.1(B),
8.1(C) and 8.1(D), the Committee shall not have any of the foregoing powers to
the extent that the mere possession (as opposed to the exercise) of such power
would result in adverse tax consequences to any participant under Code Section
409A.
8.2. In the event of the dissolution or liquidation the Company, whether
voluntary or otherwise, that is not a Material Transaction, all outstanding
unexercised Stock Options and Stock Appreciation Rights must be exercised, if at
all, within the ninety day period commencing on the date specified in Section
8.3 below. All such Awards which become exercisable during the ninety day period
commencing on the date specified in Section 8.3 below, shall terminate at the
end of such ninety day period to the extent not exercised prior thereto.
8.3. The date specified in this Section 8.3 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.
9. FURTHER CONDITIONS.
Each Award 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 and/or
issuance of Award 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 Award upon any securities exchange or under any state or federal law;
(ii) the consent or approval of any governmental body;
(iii) any investment representation or agreement by the individual desiring
to be issued or to exercise an Award granted under the Plan; or
(iv) an opinion of counsel for the Company,
then, no Award may be issued or exercised, as the case may be, 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.
10. EXCHANGE AND BUYOUT OF AWARDS.
10.1. The Committee may, at any time or from time to time, authorize
the Company, with the consent of the respective participants, to issue new
Awards in exchange for the surrender and cancellation of any or all outstanding
Awards.
10.2. The Committee may, at any time or from time to time, authorize the
Company to buy from a participant an Award previously granted with payment in
cash, Shares (including Restricted Stock) or other consideration, based on such
terms and conditions as the Committee and the participant may agree.
11. TERMINATION, MODIFICATION AND AMENDMENT.
11.1. The Plan (but not Awards previously granted under the Plan) shall
terminate on, and no Awards 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 upon the adoption of a resolution of the Board.
11.2. The Board shall have complete power and authority to modify or amend
the Plan in whole or in part and 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 number of Shares available for the grant of Awards
under Section 1 of the Plan (except as provided in Section 7);
(ii) extend the term of the Plan or the period during which Awards may be
granted or exercised;
(iii) reduce the Stock Option price below 100% of the Fair Market Value of
the Shares issuable upon exercise of Stock Options at the time of the granting
thereof, other than to change the manner of determining the Fair Market Value
thereof;
(iv) alter the maximum number of Shares available for the grant of Awards in
the form of Stock Options and Restricted Stock;
(v) materially increase the benefits accruing to participants under the
Plan;
(vi) modify the requirements as to eligibility for participation in the
Plan;
(vii) modify the nature of the Awards which may be granted under the Plan;
and
(viii) alter the provisions set forth in Section 6.3(H) with respect to
minimum vesting schedules relating to Awards in the form of Restricted Stock.
No termination or amendment of the Plan shall, without the consent of the
individual participant, adversely affect the rights of such participant under an
Award theretofore granted to such participant.
11.3. The Board may amend the Plan at any time to comply with Code
Section 409A, the regulations promulgated thereunder and other Treasury or IRS
guidance regarding or affecting Code Section 409A, provided that such amendment
will not result in taxation to any Eligible Person under Code Section 409A. The
Committee, to minimize or avoid any sanction or damages to an Eligible Person,
or to any other person from a violation of Code Section 409A under the Plan, may
undertake correction of any violation or participate in any available correction
program, as described in Notice 2008-113 or other Treasury or IRS guidance.
12. TAXES.
12.1. Withholding. The Company and any subsidiary or affiliate is
authorized to withhold from any Award granted, any payment relating to an Award
under the Plan, including from a distribution of stock, amounts of withholding
and other taxes due or potentially payable in connection with any transaction
involving an Award, and to take such other action as the Committee may deem
advisable to enable the Company and employee Participants to satisfy obligations
for the payment of withholding taxes and other tax obligations relating to any
Award. This authority shall include authority to withhold or receive Stock or
other property and to make cash payments in respect thereof in satisfaction of
an Eligible Person's withholding obligations, either on a mandatory or elective
basis in the discretion of the Committee. Other provisions of the Plan
notwithstanding, only the minimum amount of Stock or cash deliverable in
connection with an Award necessary to satisfy statutory withholding requirements
will be withheld.
12.2. Requirement of Notification of Code Section 83(b) Election. If
any Participant shall make an election under Section 83(b) of the Code (to
include in gross income in the year of transfer the amounts specified in Code
Section 83(b)) or under a similar provision of the laws of a jurisdiction
outside the United States, such Participant shall notify the Company of such
election within ten days of filing notice of the election with the Internal
Revenue Service or other governmental authority, in addition to any filing and
notification required pursuant to regulations issued under Code Section 83(b) or
other applicable provision.
13. 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 stockholders 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.
14. DESIGNATION OF BENEFICIARY BY PARTICIPANT.
A participant may designate one or more beneficiaries to receive any rights and
payments to which such participant may be entitled in respect of any option
granted under the Plan in the event of such participant's death. Such
designation shall be on a written form acceptable to and filed with the
Committee. The Committee shall have the right to review and approve beneficiary
designations. A participant may change the participant's beneficiary(ies) from
time to time in the same manner as the original designation, unless such
participant has made an irrevocable designation. Any designation of beneficiary
under the Plan (to the extent it is valid and enforceable under applicable law)
shall be controlling over any other disposition, testamentary or otherwise, as
determined by the Committee. If no designated beneficiary survives the
participant and is living on the date on which any right or amount becomes
payable to such participant's beneficiary(ies), such payment will be made to the
legal representatives of the participant's estate, and the term "beneficiary" as
used in the Plan shall be deemed to include such person or persons. If there is
any question as to the legal right of any beneficiary to receive a distribution
under the Plan, the Committee may determine that the amount in question be paid
to the legal representatives of the estate of the participant, in which event
the Company, the Committee, the Board and the Committee and the members thereof
will have no further liability to any person or entity with respect to such
amount.
15. CERTIFICATES.
All Shares delivered under this Plan will be subject to such stock transfer
orders, legends and other restrictions as the Committee may deem necessary or
advisable, including restrictions under any applicable federal, state or foreign
securities law, or any rules, regulations and other requirements promulgated
under such laws or any stock exchange or automated quotation system upon which
the Shares may be listed or quoted and each stock certificate evidencing such
Shares and other certificates shall have the appropriately legend.
16. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.
16.1. The issuance of Awards under the Plan will not be effective
unless such issuance is made in compliance with all applicable federal and state
securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which the
Shares may then be listed or quoted, as they are in effect on the date of
issuance/grant and also on the date of exercise or other issuance.
Notwithstanding any other provision in this Plan, the Company will have no
obligation to issue or deliver stock certificates for Shares under this Plan
prior to:
(i) obtaining any approvals from governmental agencies that the
Committee determines are necessary or advisable; and/or
(ii) completion of any registration or other qualification of such Shares
under any state or federal law or ruling of any governmental body that the
Committee determines to be necessary or advisable.
16.2. The Company will be under no obligation to register the Shares
under the Securities Act of 1933, as amended, or to effect compliance with the
registration, qualification or listing requirements of any state securities
laws, stock exchange or automated quotation system, and the Company will have no
liability for any inability or failure to do so.
17. NO OBLIGATION TO EMPLOY.
The Plan shall not constitute a contract of employment and nothing in this Plan
shall confer or be deemed to confer on any participant any right to continue in
the employ of, or to continue any other relationship with, the Company or any
Subsidiary or affiliate of the Company or limit in any way the right of the
Company or any Subsidiary or affiliate of the Company to terminate the
participant's employment or other relationship at any time, with or without
cause.
18. NON-EXCLUSIVITY OF THE PLAN.
Neither the adoption of the Plan by the Board, the submission of the Plan to the
shareholders of the Company for approval, nor any provision of this Plan will be
construed as creating any limitations on the power of the Board or the Committee
to adopt such additional compensation arrangements as the Board may deem
desirable, including, without limitation, the granting of Stock Options
otherwise than under the Plan, and such arrangements may be either generally
applicable or applicable only in specific cases.
19. MISCELLANEOUS PROVISIONS.
19.1. Determinations made by the Committee under the Plan need not be
uniform and may be made selectively among Eligible Persons under the Plan,
whether or not such Eligible Persons are similarly situated.
19.2. No Shares, other Company securities or property, other securities or
property, or other forms of payment shall be issued hereunder with respect to
any option granted under the Plan unless counsel for the Company shall be
satisfied that such issuance will be in compliance with applicable federal,
state, local and foreign legal, securities exchange and other applicable
requirements.
19.3. It is the intent of the Company that the Plan comply in all respects
with Rule 16b-3 under the Exchange Act, that any ambiguities or inconsistencies
in construction of the Plan be interpreted to give effect to such intention and
that if any provision of the Plan is found not to be in compliance with Rule
16b-3, such provision shall be deemed null and void to the extent required to
permit the Plan to comply with Rule 16b-3.
19.4. The appropriate officers of the Company shall cause to be filed any
reports, returns or other information regarding the grant of Stock Options
hereunder or any Shares issued pursuant hereto as may be required by Section 13
or 15(d) of the Exchange Act (or any successor provision) or any other
applicable statute, rule or regulation.
19.5. The validity, construction, interpretation, administration and effect
of the Plan, and of its rules and regulations, and rights relating to the Plan
and Awards granted under the Plan and any agreements in connection therewith,
shall be governed by the substantive laws, but not the choice of law rules, of
the State of New York.
ORBIT INTERNATIONAL CORP.
ANNUAL MEETING OF STOCKHOLDERS - JUNE 19, 2009
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned stockholder in Orbit International Corp. (the "Corporation")
hereby constitutes and appoints Dennis Sunshine, Bruce Reissman, and Mitchell
Binder, and each of them, his/her/its true and lawful attorneys and proxies,
with full power of substitution in and for each of them, to vote all shares of
the Corporation that the undersigned is entitled to vote at the Annual Meeting
of Stockholders to be held at the Sheraton Long Island, 110 Vanderbilt Motor
Parkway, Smithtown, New York 11788, on Wednesday, June 19, 2009, 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 FOR DIRECTORS AND FOR PROPOSALS 2
AND 3.
(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 marked to vote for all
to the contrary, see nominees listed
instruction below) at left
Dennis Sunshine, Bruce Reissman,
Mitchell Binder, Bernard Karcinell,
Lee Feinberg, Sohail Malad
and Fredric Gruder
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, DRAW A LINE THROUGH THE NAME OF THE NOMINEE ABOVE.
THE DIRECTORS RECOMMEND A VOTE FOR PROPOSAL 2.
2. Proposal to approve the 2009
Independent Directors Incentive Stock
Plan For Against
Abstain
THE DIRECTORS RECOMMEND A VOTE FOR PROPOSAL 3
3. Proposal to ratify McGladrey & Pullen, LLP
as independent auditors. For
Against Abstain
4. 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 , 2008
Signature(s)
Signature(s)
Please sign exactly as your name appears on the stock certificate and return
this proxy immediately in the enclosed stamped self-addressed envelope.