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:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee previously paid with the preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
ORBIT INTERNATIONAL CORP.
80 CABOT COURT
HAUPPAUGE, NEW YORK 11788
NOTICE OF 2011 ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of Orbit International Corp.:
The 2011 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 24, 2011, for the following purposes:
1. To elect the Board of Directors for the ensuing year.
2. To ratify the appointment of EisnerAmper LLP as independent auditors and
accountants for the Company for the fiscal year ending December 31, 2011.
3. To transact such other business as may properly come before the meeting.
All stockholders are invited to attend the meeting. Stockholders of record
at the close of business on May 16, 2011, the record date fixed by the Board of
Directors, are entitled to notice of, and to vote at, the meeting.
Representation at the meeting in person or by proxy of at least one-third of all
outstanding shares of common stock is required to constitute a quorum. 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.
YOUR VOTE AT THE MEETING IS VERY IMPORTANT TO US REGARDLESS OF THE NUMBER
OF SHARES YOU OWN. 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. PLEASE NOTE, HOWEVER, THAT IF YOUR
SHARES ARE HELD OF RECORD BY A BROKER, BANK, OR OTHER NOMINEE AND YOU WISH TO
VOTE AT THE MEETING, YOU MUST OBTAIN A PROXY ISSUED IN YOUR NAME FROM THAT
RECORD HOLDER.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
STOCKHOLDER MEETING TO BE HELD JUNE 24, 2011:
THIS NOTICE OF ANNUAL MEETING, PROXY STATEMENT, PROXY CARD AND REPORT ON FORM
10-K FOR THE PERIOD ENDING DECEMBER 31, 2010 IS AVAILABLE AT WWW.ORBITINTL.COM
UNDER "INVESTOR RELATIONS".
BY ORDER OF THE BOARD OF DIRECTORS
MARK TUBLISKY
Secretary
Hauppauge, New York
May 17, 2011
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 24, 2011, 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 17,
2011.
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. For the ratification of EisnerAmper LLP as the
independent auditors and accountants for the Company for the year ended December
31, 2011, 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.
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.
All shares of Common Stock represented by properly executed proxies which
are returned and not revoked will be voted in accordance with the instructions,
if any, given therein. If no instructions are provided in a proxy, the shares
of Common Stock represented by such proxy will be voted FOR the Board's nominees
for director, FOR the ratification of the appointment of EisnerAmper 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 16, 2011, there were 4,734,220 shares of
Common Stock outstanding and eligible for voting at the Annual Meeting. 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 16, 2011, 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 either Proposal 1 or 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 duly 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 seven, and the number of
directors is currently five. The Company has nominated five persons consisting
of Mitchell Binder, Bruce Reissman, Bernard Karcinell, 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
----------------- --- ----------- ----------------------------------------------------
Mitchell Binder 55 No President, Chief Executive Officer and Director
Bruce Reissman 61 No Executive Vice President, Chief Operating
Officer and Director
David Goldman 41 No Chief Financial Officer and Treasurer
Mark Tublisky 72 No Secretary and President of Behlman Electronics, Inc.
David Gutman 59 No President and Chief Operating Officer of Tulip
Development Laboratory, Inc.
Kenneth J. Ice 49 No President and Chief Operating Officer of
Integrated Combat Systems
Bernard Karcinell 72 Yes Director
Sohail Malad 36 Yes Director
Fredric Gruder 65 Yes Director
BIOGRAPHICAL INFORMATION
Mitchell Binder has been President and Chief Executive Office since January
1, 2011. Prior thereto, he was 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. In light of Mr. Binder's financial
background and his extensive knowledge of our Company's business developed over
the course of his long career at our Company, the Board has concluded he should
be re-elected to the Board of Directors.
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. In light of Mr. Reissman's technology
background and his extensive knowledge of our Company's business developed over
the course of his long career at our Company, the Board has concluded he should
be re-elected to the Board of Directors.
David Goldman has been Chief Financial Officer since January 1, 2011. Prior
thereto, he was 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.
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. ("TDL") 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.
Bernard Karcinell has been a director of the Company since 2000. Mr. Karcinell
is a retired certified public accountant. He 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. The Board concluded that Mr. Karcinell should be a director
of the Company because of his extensive knowledge of and experience in
accounting, auditing and financial reporting matters.
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 until 2008. From 2004
through 2006, Mr. Malad was a consultant with the Los Angeles office of the
Boston Consulting Group. In light of Mr. Malad's extensive finance background,
his experience in due diligence related to merger and acquisitions, our board
has concluded that Mr. Malad should be re-elected to our Board of Directors.
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. In light of Mr. Gruder's extensive corporate and securities law
background, his merger and acquisitions experience and his service on other
public boards, our board has concluded that Mr. Gruder should be elected to our
Board.
We believe that the nominees for our Board of Directors provide an appropriate
mix of experience and skills relevant to the size and nature of our business. As
more specifically described in such person's individual biographies set forth
above, the directors possess relevant and industry-specific experience and
knowledge, which we believe enhances the Board's ability to oversee, evaluate
and direct our overall corporate strategy.
There are currently no family relationships among any of the directors or
executive officers of the Company. 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
The Board of Directors (the "Board") held nine (9) meetings and acted one
(1) time by unanimous written consent during the fiscal year ended December 31,
2010. All directors attended at least 75% of the meetings held by the Board and
by all committees of the Board with the exception of Fredric Gruder, due to
medical reasons. However, Mr. Gruder attended all meetings subsequent to his
return in June, 2010. 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. Mr. Lee Feinberg resigned
from the Board of Directors on October 6, 2010 and Mr. Dennis Sunshine resigned
effective December 31, 2010.
The Company's 2010 annual meeting was attended by all of the Company's seven
directors with the exception of Fredric Gruder who did not attend due to medical
reasons. 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.
Board Leadership
The Board has no formal policy with respect to separation of the positions
of Chairman and Chief Executive Officer or with respect to whether the Chairman
should be a member of management or an independent director, and believes that
these are matters that should be discussed and determined by the Board from time
to time. Currently, we do not have a Chairman of the Board of Directors.
Risk Management
The Board believes that risk management is an important component of the
Company's corporate strategy. While the Board assesses specific risks at its
committee levels, the Board, as a whole, oversees our risk management process,
and discusses and reviews with management major policies with respect to risk
assessment and risk management. The Board is regularly informed through its
interactions with management and committee reports about risks we face in the
course of our business including economic, financial, operational, legal and
regulatory risks.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board has established an Audit Committee, Nominating and Corporate
Governance Committee, Compensation Committee and a Special Transaction Committee
to assist it in the discharge of its responsibilities. The principal
responsibilities of each committee and the members of each committee are
described below. 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,
Sohail Malad and Fredric Gruder. Lee Feinberg was a member of the Audit
Committee until his resignation on October 6, 2010. The Board annually reviews
the NASDAQ Stock Market listing requirement standards for Audit Committee
membership and has determined that all members of the Audit Committee meet all
NASDAQ Stock Market listing standards for Audit Committee membership, and are
independent as defined in Rule 5605(c)(2)(A)(i) and (ii) of the NASDAQ Stock
Market listing standards. The Board has determined that Bernard Karcinell is an
"audit committee financial expert" as defined under the rules of the Securities
and Exchange Commission ("SEC"). The Audit Committee held five (5) meetings
during the fiscal year ended December 31, 2010. 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 is
available on the Company's website at www.orbitintl.com.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee was formed in March 2003, and
did not hold any meetings during the fiscal year ended December 31, 2010 and
currently consists of Bernard Karcinell, Sohail Malad and Fredric Gruder, each
of whom is independent as such term is defined in Rule 5605(a)(2) of the NASDAQ
Stock Market listing standards. Mr. Feinberg was a member of the Committee until
his resignation on October 6, 2010. 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.
When considering whether directors and nominees have the experience,
qualifications, attributes or skills, taken as a whole, to enable the Board of
Directors to satisfy its oversight responsibilities effectively in light of the
Company's business and structure, the Nominating and Corporate Governance
Committee focuses primarily on each person's background and experience as
reflected in the information discussed in each of the directors' individual
biographies set forth above. The Nominating and Corporate Governance Committee
annually reviews and makes recommendations regarding the composition and size of
the Board so that the Board consists of members with the proper expertise,
skills, attributes, and personal and professional backgrounds needed by the
Board, consistent with applicable regulatory requirements.
The Nominating and Corporate Governance Committee believes that all
directors, including nominees, should possess the highest personal and
professional ethics, integrity, and values, and be committed to representing the
long-term interests of our stockholders. The Nominating and Corporate Governance
Committee will consider criteria including the nominee's current or recent
experience as a senior executive officer, whether the nominee is independent, as
that term is defined in existing independence requirements of the Securities and
Exchange Commission, the business, scientific or engineering experience
currently desired on the Board, geography, the nominee's industry experience,
and the nominee's general ability to enhance the overall composition of the
Board.
The Nominating and Corporate Governance Committee does not have a formal
policy on diversity; however, in recommending directors, the Board considers the
specific background and experience of the Board members and other personal
attributes in an effort to provide a diverse mix of capabilities, contributions
and viewpoints which the Board believes enables it to function effectively as
the Board of Directors of a company with our size and nature of its business.
Although the Nominating and Corporate Governance Committee has not established
minimum qualifications for director candidates, it will consider, among other
factors:
- Broad experience; diversity,
- Judgment, skill, and integrity,
- 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,
- Willingness to devote adequate time to the Board, and
- Whether a particular candidate is independent under the NASDAQ
Stock market listing standards.
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 5605(a)(2) of the NASDAQ Stock Market listing standards.
The Compensation Committee conducted its business by unanimous written consent
and met from time to time on an informal basis during the fiscal year ended
December 31, 2010. 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. 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.
Special Transaction Committee
The Special Transaction Committee of the Board consisted of Fredric Gruder,
Bernard Karcinell and Sohail Malad, each of whom qualified as independent as
such term is defined in Rule 5605(a)(2) of the NASDAQ Stock Market listing
standards. The Special Transaction Committee was formed in October 2010 to
oversee, direct, evaluate and implement any number of strategic alternatives for
the Company including the potential sale of the Company. The Special Transaction
Committee met from time to time on an informal basis and conducted several
informal meetings with the Company's counsel and investment banker. The Special
Transaction Committee was disbanded in February 2011 by a resolution of the
Board of Directors.
CORPORATE GOVERNANCE
---------------------
General
-------
In furtherance of our Board's goals of providing effective governance of our
business and affairs for the long-term benefit of our stockholders and promoting
a culture and reputation of the highest ethics, integrity and reliability, our
board of directors has adopted the following corporate governance measures:
- Charters for our Audit Committee, Nominating and Corporate Governance
Committee and Compensation Committee, as described above;
- Code of Ethics; and
- Employee Whistleblower Policy.
The Audit Committee Charter, Code of Ethics and Employee Whistleblower Policy
are available, free of charge, on the Company's web site at www.orbitintl.com
and in print upon written request to the Company's address to the attention of
the Secretary. The information on our web site is not a part of this Proxy
Statement.
Code of Ethics
----------------
The Board of Directors has adopted a Code of Ethics, which applies to all
directors, officers and employees, including the Company's principal executive
officer and principal financial officer. The Code of Ethics addresses, among
other things:
- Ethical business conduct;
- Compliance with legal requirements;
- Confidentiality of our business information;
- Use of property;
- Avoidance of conflicts of interest;
- Conduct of our accounting operations, preparation of financial reports,
and making of public disclosures; and
- Reporting of any violation of law or the Code of Ethics, unethical
behavior, improper or questionable accounting or auditing, or inaccuracy
in our financial reports or other public disclosures.
Whistleblower Policy
---------------------
The Audit Committee has adopted a Whistleblower Policy that governs the
receipt, retention and treatment of complaints received by us regarding
accounting, internal controls, auditing matters and questionable financial
practices. The Whistleblower Policy is designed to protect the confidential,
anonymous submission by our employees of any concerns that they may have
regarding questionable accounting or auditing matters. The Whistleblower Policy
permits the reporting of those concerns by various means, including email,
letter, or telephone. Complaints will be reviewed under the Audit Committee's
direction, with oversight by the Chairman of the Audit Committee, Compliance
Officer or such other persons as the Audit Committee determines to be
appropriate.
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 stockholder upon request
to the Company at 80 Cabot Court, Hauppauge, New York 11788, or by telephone
(631) 435-8300.
Stockholders and any other parties interested in communicating directly with the
non-management directors of the Company as a group may do so by writing the
Secretary of Orbit International Corp., 80 Cabot Court, Hauppauge, New York
11788. Any communications must state the number of shares of the Company owned
by such stockholder.
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. EisnerAmper LLP
("EisnerAmper"), 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 EisnerAmper.
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 EisnerAmper. The Audit Committee also has discussed
with EisnerAmper the matters required to be discussed by Statement on Auditing
Standards No. 61, as amended (Communication with Audit Committees). The Audit
Committee has received the written disclosures and the letter from EisnerAmper
required by the applicable requirements of the Public Company Accounting
Oversight Board regarding the independent accountant's communication and has
discussed with EisnerAmper 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, 2010
for filing with the SEC.
Members of the Audit Committee
BERNARD KARCINELL
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, 2010, December 31, 2009, and December 31, 2008, all
compensation earned by each person who is required to be listed pursuant to Item
402(m)(2) of Regulation S-K.
NON-EQUITY
STOCK OPTION INCENTIVE PLAN ALL OTHER
NAME AND AWARDS* AWARDS* COMPENSATION COMPENSATION TOTAL
PRINCIPAL POSITION YEAR SALARY ($) BONUS($) ($)(1)(2)(3) ($) ($)(5) ($)(6) ($)
-------------------------- ---- ---------- -------- ------------ --------- --------------- ------------- --------
Dennis Sunshine(8) 2010 449,000 0 125,000 0 0 104,243 678,243
-------------------------- ---- ---------- -------- ------------ --------- --------------- ------------- --------
President and Chief 2009 449,000 0 125,000 0 130,000 110,244 814,244
-------------------------- ---- ---------- -------- ------------ --------- --------------- ------------- --------
Executive Officer 2008 449,000 0 125,000 0 117,863 112,795 804,658
-------------------------- ---- ---------- -------- ------------ --------- --------------- ------------- --------
--------------------------
Bruce Reissman 2010 389,300 0 35,000 0 0 35,946 460,246
-------------------------- ---- ---------- -------- ------------ --------- --------------- ------------- --------
Executive Vice President, 2009 389,300 0 35,000 0 34,064 34,427 492,791
-------------------------- ---- ---------- -------- ------------ --------- --------------- ------------- --------
Chief Operating Officer 2008 389,300 0 35,000 0 0 33,797 458,097
-------------------------- ---- ---------- -------- ------------ --------- --------------- ------------- --------
--------------------------
Mitchell Binder(9) 2010 318,000 0 15,000 0 0 33,830 366,830
-------------------------- ---- ---------- -------- ------------ --------- --------------- ------------- --------
Executive Vice President, 2009 300,600 0 15,000 31,237(4) 46,217 34,050 427,104
-------------------------- ---- ---------- -------- ------------ --------- --------------- ------------- --------
Chief Financial Officer 2008 300,600 0 15,000 0 33,818 34,879 384,297
-------------------------- ---- ---------- -------- ------------ --------- --------------- ------------- --------
--------------------------
Mark Tublisky 2010 213,030 0 0 0 33,105 16,601 262,736
-------------------------- ---- ---------- -------- ------------ --------- --------------- ------------- --------
Secretary (President, 2009 205,330 0 0 0 33,123 14,884 253,337
-------------------------- ---- ---------- -------- ------------ --------- --------------- ------------- --------
Behlman Electronics, Inc.) 2008 197,400 0 15,665 0 36,184 14,814 264,063
-------------------------- ---- ---------- -------- ------------ --------- --------------- ------------- --------
--------------------------
David Gutman(7) 2010 201,154 0 0 0 6,324 20,201 227,679
-------------------------- ---- ---------- -------- ------------ --------- --------------- ------------- --------
President, TDL 2009 200,000 0 0 0 23,400 24,212 247,612
-------------------------- ---- ---------- -------- ------------ --------- --------------- ------------- --------
2008 77,000 0 12,050 0 5,968 9,101 104,119
-------------------------- ---- ---------- -------- ------------ --------- --------------- ------------- --------
*These columns represent the grant date fair value of the awards as calculated
in accordance with FASB ASC 718 (Stock Compensation). Pursuant to SEC rule
changes effective February 28, 2010, we are required to reflect the total grant
date fair values of the option grants in the year of grant, rather than the
portion of this amount that was recognized for financial statement reporting
purposes in a given fiscal year which was required under the prior SEC rules,
resulting in a change to the amounts reported in prior Proxy Statements.
(1) 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.
(2) In March 2009, Messrs. Sunshine, Reissman and Binder received 55,066,
16,272, and 6,607, respectively, of Common Stock, valued at $2.27 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(as to Mr. Sunshine, see footnote
8).
(3) In April 2010, Messrs. Sunshine, Reissman and Binder received 33,967,
9,510, and 4,076, respectively, of Common Stock, valued at $3.68 per share,
pursuant to a Long Term Incentive Plan ("LTIP"). The shares vest ratably each
December 31 over a three year period provided each officer is still employed,
and are subject to acceleration for death or change in control(as to Mr.
Sunshine, see footnote 8).
(4) On February 13, 2009, 112,500 of Mr. Binder's stock options at an
exercise price of $1.92 per share, 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.
(5) Non-Equity Incentive Plan Compensation consists of the accrued incentive
bonus on pre-tax income as defined in each executive's employment agreement. As
part of his arbitration filing, Mr. Sunshine contests that he is owed an amount
under his annual incentive plan for 2010. The Company believes no amounts are
owed to Mr. Sunshine under his annual incentive plan for 2010 and the Company
will vigorously defend its position during the arbitration hearing.
(6) See the "All Other Compensation Table" below for additional information.
(7) Mr. Gutman commenced employment as of August 1, 2008.
(8) The Company elected not to renew the employment agreement of Mr.
Sunshine effectively terminating his employment as of December 31, 2010. The
Company recorded a liability of $1,688,000 at December 31, 2010 for its
estimated contractual obligation and other related costs associated with the
non-renewal of Mr. Sunshine's employment agreement. In March 2011, Mr. Sunshine
filed for an arbitration hearing in the City of New York to settle a dispute
regarding certain contractual obligations owed in connection with the
non-renewal of his employment contract. The arbitration is pending.
(9) Mr. Binder was named President and Chief Executive Officer as of January
1, 2011.
ALL OTHER COMPENSATION TABLE
The following table describes each component of the "All Other Compensation" in
the Summary Compensation Table set forth above.
LONG TERM LONG TERM MEDICAL COUNTRY
401(K) PLAN CAR LEASE/ DISABILITY CARE REIMB CLUB
NAME OF EXECUTIVE CONTRIBUTIONS LIFE INSURANCE PREMIUMS CAR USAGE PREMIUM PREMIUM PLAN DUES TOTAL
-------------------------- -------------- ------------------------ ----------- -------- -------- ------ -------- ---------
2010 $ 4,900 $ 33,066 $ 22,848 $ 4,961 $ 7,446 $8,088 $ 22,934 $104,243
2009 $ 5,526 $ 34,831 $ 22,848 $ 4,961 $ 7,446 $7,157 $ 27,475 $110,244
D. Sunshine 2008 $ 4,600 $ 33,066 $ 22,254 $ 4,961 $ 7,446 $7,188 $ 33,280 $112,795
-------------------------- -------------- ------------------------ ----------- -------- -------- ------ -------- --------
2010 $ 4,900 $ 6,650 $ 12,144 $ 3,730 $ 4,478 $4,044 - $ 35,946
2009 $ 4,900 $ 6,650 $ 11,091 $ 3,730 $ 4,478 $3,578 - $ 34,427
B. Reissman 2008 $ 4,600 $ 6,650 $ 10,745 $ 3,730 $ 4,478 $3,594 - $ 33,797
-------------------------- -------------- ------------------------ ----------- -------- -------- ------ -------- --------
2010 $ 4,900 $ 4,450 $ 12,617 $ 4,798 $ 3,021 $4,044 - $ 33,830
2009 $ 5,135 $ 4,450 $ 13,068 $ 4,798 $ 3,021 $3,578 - $ 34,050
M. Binder 2008 $ 5,944 $ 4,450 $ 13,072 $ 4,798 $ 3,021 $3,594 - $ 34,879
-------------------------- -------------- ------------------------ ----------- -------- -------- ------ -------- --------
2010 $ 4,257 - $ 8,300 - - $4,044 - $ 16,601
2009 $ 4,106 - $ 7,200 - - $3,578 - $ 14,884
M. Tublisky 2008 $ 4,020 - $ 7,200 - - $3,594 - $ 14,814
-------------------------- -------------- ------------------------ ----------- -------- -------- ------ -------- --------
2010 $ 3,334 - $ 15,547 - - $1,320 - $ 20,201
2009 $ 3,372 - $ 19,520 - - $1,300 - $ 24,192
D. Gutman 2008 $ 1,600 - $ 7,150 - - $ 351 - $ 9,101
-------------------------- -------------- ------------------------ ----------- -------- -------- ------ -------- --------
GRANTS OF PLAN-BASED AWARDS IN 2010
In April 2010, Messrs. Sunshine, Reissman and Binder received 33,967, 9,510,
and 4,076, respectively, of Common Stock, valued at $3.68 per share, pursuant to
a Long Term Incentive Plan ("LTIP"). The shares vest ratably each December 31
over a three year period provided each officer is still employed, and are
subject to acceleration for death or change in control.
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 was for three
years commencing on January 1, 2008 (the "Term"). Mr. Sunshine was 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 was also 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 was 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.
The Company decided not to extend Mr. Sunshine's employment agreement
beyond December 31, 2010. Mr. Sunshine is entitled to receive a severance amount
equal to two years of his Base Salary and two years of his AIP (as defined) and
all non-vested shares or options received under his LTIP became vested on the
date of termination. The Company recorded a liability of $1,688,000 at December
31, 2010 for its estimated contractual obligation and other related costs
associated with the non-renewal of Mr. Sunshine's employment agreement.
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") and was amended on December 22, 2009
and December 21, 2010. 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, as amended, provides for an annual base
salary of $328,000 ("Base Salary"). The term of the agreement is for three years
commencing on January 1, 2010 (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 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. 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 maintains 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"). In February 2011, the term of the agreement
was extended through May 31, 2011. The Company is currently negotiating a new
employment agreement with Mr. Reissman. 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 was for three years
commencing on January 1, 2008 (the "Term"). In February 2011, the term of the
agreement was extended through May 31, 2011. 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 extended 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 2010
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, 2010. The market value of the stock awards is
based on the closing market price of our stock on December 31, 2010 which was
$3.79.
OUTSTANDING EQUITY AWARDS AT YEAR-END
OPTION AWARDS STOCK AWARDS (A)(B)(C)(D)(E)
------------------------------------------------------------ --------------------------------------------------------
Option Option Option Number of Market Equity Value of
Grant # # Exercise Expiration Stock Award Shares Value Incentive Unearned
Date Exercisable Unexercisable Price Date Date Not Vested Not Vested Plan Awards Shares
--------- ------------ ------------- ------ --------- ---------- ---------- ----------- ----------- ------
D. Sunshine 7/29/2003 31,250(F) - $ 4.51 7/29/2013 - - - - -
6/25/2004 31,250(F) - $ 5.96 6/25/2014 - - - - -
B. Reissman 7/29/2003 31,250 - $ 4.51 7/29/2013 - - - - -
6/25/2004 31,250 - $ 5.96 6/25/2014 - - - - -
10/13/2004 37,500 $ 142,000 - -
6/18/2008 1,842 $ 7,000 - -
3/11/2009 10,848 $ 41,000 - -
4/13/2010 9,510 $ 36,000 - -
M. Binder 7/29/2003 31,250 - $ 4.51 7/29/2013 - - - - -
6/25/2004 31,250 - $ 5.96 6/25/2014 - - - - -
2/13/2009 26,231(G) 56,667 $ 2.00 2/13/2014 - - - - -
10/13/2004 37,500 $ 142,000 - -
3/11/2009 4,404 $ 17,000 - -
4/13/2010 4,076 $ 15,000 - -
M. Tublisky 7/29/2003 8,438 - $ 4.51 7/29/2013 - - - - -
8/14/2008 1,083 $ 4,000 - -
D. Gutman - - - - 8/14/2008 833 $ 3,000 - -
<FN>
(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, provided each officer is still employed, and are subject to acceleration for death or change in control.
(C) In March 2009, Messrs. Sunshine, Reissman and Binder received 55,066, 16,272, and 6,607, respectively, of Common Stock,
valued at $2.27 per share, pursuant to a Long Term Incentive Plan ("LTIP"). The shares vest ratably each December 31 over a
three year period, provided each officer is still employed, and are subject to acceleration for death or change in control.
(D) In April 2010, Messrs. Sunshine, Reissman and Binder received 33,967, 9,510, and 4,076, respectively, of Common Stock, valued
at $3.68 per share, pursuant to a Long Term Incentive Plan ("LTIP"). The shares vest ratably each December 31 over a three year
period, provided each officer is still employed, and are subject to acceleration for death or change in control.
(E) Pursuant to the non-renewal of Mr. Sunshine's employment agreement effective December 31, 2010, all non-vested shares of
restricted stock vested as of that date.
(F) These stock options were forfeited on March 31, 2011 since the options were unexercised within three months of the end of
Mr. Sunshine's employment.
(G) On February 13, 2009, 112,500 of Mr. Binder's stock options at an exercise price of $1.92 per share, 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 2010.
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 - - 147,644(1) $556,512(1)
----------------- ----------- ----------- ------------ -----------
B. Reissman 66,563 141,592 16,642 $ 58,541
----------------- ----------- ----------- ------------ -----------
M. Binder 54,868 105,401 12,634 $ 42,491
----------------- ----------- ----------- ------------ -----------
M. Tublisky - - 1,083 $ 3,357
----------------- ----------- ----------- ------------ -----------
D. Gutman - - 833 $ 2,582
----------------- ----------- ----------- ------------ -----------
<FN>
(1) Pursuant to the non-renewal of Mr. Sunshine's employment contract, 114,045
shares of restricted stock, valued at $432,687, became vested in 2010.
COMPENSATION OF DIRECTORS
Directors of the Company who are not employed by the Company received director
fees of $3,750 per quarter ($15,000 per annum). Employee directors are not
compensated for services as a director. All directors are reimbursed for
expenses incurred on behalf of the Company. The following table sets forth
compensation earned or paid to each non-employee director during 2010:
Stock Non-Equity All
Fees Earned or Stock Option Incentive Other
Name Paid in Cash Awards Awards Plan Comp. Compensation Total
-------------------- ------------- ------- ---------- ---------- --------------- ---------
Lee Feinberg(1) $14,250 - - - - $14,250
Bernard Karcinell(2) $24,000 - - - - $24,000
Sohail Malad(2) $24,000 - - - - $24,000
Fredric Gruder(2) $27,000 - - - - $27,000
<FN>
(1) Mr. Feinberg directed payment of his entire fee earned as a director to a designated charity. Mr. Feinberg
resigned from the Board of Directors on October 6, 2010.
(2) In October 2010, the Company formed a Special Transaction Committee of the Board of Directors to oversee,
directly evaluate and, if appropriate, implement a potential strategic transaction. Fees earned include compensation
paid to members of the Special Transaction Committee in November and December 2010.
As of December 31, 2010, each person that served as a director during 2010 held
the following outstanding options to purchase Common Stock:
Option Option
Number of Securities Exercise Price Grant
Name Underlying Outstanding Options ($) Date
------- -------------------------------- -------------- -------
Bernard Karcinell 520 3.01 6/28/02
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 2010, 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 15, 2011, 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
----------------------------------------
Elkhorn Partners Limited Partnership (1) 689,734 14.6%
222 Skyline Drive
Elkhorn, NB 68022
Dennis Sunshine (2) 594,137 12.6%
35 Kettlepond Road
Jericho, NY 11753
Atlas Capital Management (3) 293,296 6.2%
8214 Westchester Drive, Suite 650
Dallas, TX 75225
<FN>
(1) Based on Form 4 filed by Elkhorn Partners Limited Partnership with the SEC on March 23, 2011.
(2) Based on Form 4 filed by Dennis Sunshine with the SEC on September 8, 2010.
(3) Based on Schedule 13G filed by Atlas Capital Management with the SEC on February 14, 2011.
OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth, as of April 15, 2011, 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 (6)
---------------------------------------------------------- ------------------------ ------------------ ------- ---------
Mitchell Binder, President and
Chief Executive Officer (1) 107,063 102,898(1) 209,961 4.3%
Bruce Reissman, Executive Vice
President, Chief Operating Officer (2) 451,273 62,500 513,773 10.7%
David Goldman, Chief
Financial Officer and Treasurer (3) 3,750 3,000 6,750 *
Mark Tublisky, Secretary (4) 6,350 8,438 14,788 *
David Gutman, President, (5)
Chief Operating Officer, Tulip
Development Laboratory, Inc. 2,500 - 2,500 *
Kenneth Ice, President
Chief Operating Officer
Integrated Combat Systems 145,746 - 145,746 3.1%
Bernard Karcinell, Director 7,124 520 7,644 *
Sohail Malad, Director 0 0 0 *
Fredric Gruder, Director 0 0 0 *
All officers and directors
as a group (9 persons) 723,806 177,356 901,162 18.4%
----------------------------------------------------------
<FN>
* Less than one percent
** Address is c/o Orbit International Corp., 80 Cabot Court, Hauppauge, New York 11788
(1) Includes 42,419 restricted shares subject to forfeiture. Does not include options to purchase 42,500 shares of
Common Stock not currently exercisable.
(2) Includes 49,264 restricted shares subject to forfeiture.
(3) Includes 917 restricted shares subject to forfeiture.
(4) Includes 1,083 restricted shares subject to forfeiture.
(5) Includes 833 restricted shares subject to forfeiture.
(6) Based on 4,734,220 shares issued and outstanding as of May 16, 2011. 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.
PROPOSAL 2
INDEPENDENT ACCOUNTANTS
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board, upon the recommendation of the Audit Committee, has appointed
EisnerAmper LLP ("EisnerAmper") as independent accountants for the Company to
audit the books and accounts of the Company for the current fiscal year ending
December 31, 2011.
On August 16, 2010, the Audit Committee engaged EisnerAmper to serve as the
Company's new independent registered public accounting firm, after it was
notified on August 16, 2010 that Amper, Politziner and Mattia, LLP ("Amper"), an
independent registered public accounting firm, would not be able to stand for
re-appointment because it combined its practice on that date with that of Eisner
LLP ("Eisner") to form EisnerAmper, an independent registered public accounting
firm. The Company previously filed Form 8-K on August 18, 2010 acknowledging
this change.
During the Company's fiscal year ended December 31, 2009 and through the
date we engaged EisnerAmper, the Company did not consult with Eisner regarding
any of the matters or reportable events set forth in Item 304(a)(2)(i) and (ii)
of Regulation S-K.
The audit report of Amper on the consolidated financial statements of the
Company as of and for the year ended December 31, 2009 did not contain an
adverse opinion or a disclaimer of opinion, and was not qualified or modified as
to uncertainty, audit scope or accounting principles.
In connection with the audit of the Company's consolidated financial
statements for the fiscal year ended December 31, 2009 and through August 16,
2010, there were (i) no disagreements between the Company and Amper on any
matters of accounting principles or practices, financial statement disclosure,
or auditing scope or procedures, which disagreements, if not resolved to the
satisfaction of Amper, would have caused Amper to make reference to the subject
matter of the disagreement in their report on the Company's financial statements
for such year or for any reporting period since the Company's last fiscal year
end and (ii) no reportable events within the meaning set forth in item
304(a)(1)(v) of Regulation S-K.
Representatives of EisnerAmper 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 EisnerAmper, Amper, and
McGladrey & Pullen, LLP ("M&P") for the Company in its fiscal years ended
December 31, 2010 and 2009, 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, 2010 December 31, 2009
----------------- ------------
Audit fees - McGladrey & Pullen, LLP $ - $ 30,000
Audit fees - Amper, Politziner & Mattia, LLP. $ 64,000 $ 192,000
Audit fees - EisnerAmper LLP $ 173,000 $ -
Tax fees - EisnerAmper LLP $ 34,000 $ -
All other fees - McGladrey & Pullen, LLP $ 9,000 $ 8,000
Tax fees - Amper, Politziner & Mattia, LLP $ - $ 29,000
Audit fees consist of fees related to professional services rendered during
2010 and 2009 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 COMMITTEE PRE-APPROVAL POLICY
EisnerAmper and Amper were retained to audit the consolidated financial
statements for the year ended December 31, 2010. Amper was retained to audit the
consolidated financial statements for the years ended December 31, 2009. In
addition, EisnerAmper and Amper were retained to provide other auditing and
advisory services in the 2010 and 2009 fiscal years. EisnerAmper and Amper have
to maintain objectivity and independence in their audit of the financial
statements. To minimize relationships that could appear to impair the
objectivity of EisnerAmper and Amper, the Audit Committee has restricted the
non-audit services that EisnerAmper and Amper 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 EisnerAmper
and Amper only when the services offered by EisnerAmper and Amper 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 EisnerAmper and Amper or any other
accounting firms. Specifically, the audit committee has pre-approved the use of
EisnerAmper and Amper 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 EisnerAmper and Amper. In each case, the Audit Committee
has also set a specific annual limit on the amount of such services which we
would obtain from EisnerAmper and Amper, 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
EISNERAMPER 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, 2010, all Section 16(a) filing requirements applicable to its
officers, directors, and greater than ten percent beneficial owners were
complied with except, Mitchell Binder, President and Director, who filed a Form
4 one day late in connection with the exercise and sale of stock options.
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, 2012. 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, 2010, 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.
[X] 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
Mitchell Binder, Bruce Reissman,
Bernard Karcinell, 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 ratify EisnerAmper LLP
as independent auditors. For Against Abstain
[ ] [ ] [ ]
3. 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 , 2011
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.
ORBIT INTERNATIONAL CORP.
ANNUAL MEETING OF STOCKHOLDERS - JUNE 24, 2011
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned stockholder in Orbit International Corp. (the "Corporation")
hereby constitutes and appoints Mitchell Binder and Bruce Reissman 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 Friday, June 24, 2011, 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 PROPOSAL 2.
(Continued and to be signed and dated on the other side)