-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J3RcBHmQjLoRVn/ff+SYQDkTvDq0d502k8CG+hDTl8YuQQbBTf4F9hBiRuP+0CNq oDNR4PYin02ov0BfyEowhw== 0000074818-01-500008.txt : 20010430 0000074818-01-500008.hdr.sgml : 20010430 ACCESSION NUMBER: 0000074818-01-500008 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010430 FILED AS OF DATE: 20010427 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ORBIT INTERNATIONAL CORP CENTRAL INDEX KEY: 0000074818 STANDARD INDUSTRIAL CLASSIFICATION: WOMEN'S, MISSES', AND JUNIORS OUTERWEAR [2330] IRS NUMBER: 111826363 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 000-03936 FILM NUMBER: 1612696 BUSINESS ADDRESS: STREET 1: 80 CABOT COURT CITY: HAUPPAUGE STATE: NY ZIP: 11788 BUSINESS PHONE: 7136675601 MAIL ADDRESS: STREET 1: 80 CABOT COURT CITY: HAUPPAUGE STATE: NY ZIP: 11788 FORMER COMPANY: FORMER CONFORMED NAME: ORBIT INSTRUMENT CORP DATE OF NAME CHANGE: 19911015 DEF 14A 1 proxy42001a.txt SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant [x] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential, for use of the Commission only (as permitted by Rule 14a-6 (e)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Under Rule14a-12 ORBIT INTERNATIONAL CORP. (Name of Registrant as Specified In Its Charter) SAME_______________ (Name of Person(s) Filing Proxy Statement if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [x] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: [ ] Fee previously paid with the preliminary materials: [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: (2) Form, Schedule or Registration Statement No.: (3) Filing Party: (4) Date Filed: ORBIT INTERNATIONAL CORP. 80 CABOT COURT HAUPPAUGE, NEW YORK 11788 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS To the Stockholders of Orbit International Corp.: The Annual Meeting of Stockholders of Orbit International Corp. (the "Company") will be held at the offices of the Company at 80 Cabot Court, Hauppauge, New York 11788, at 10:00 a.m., Eastern Daylight Savings Time, on June 29, 2001, for the following purposes: 1. To elect the Board of Directors for the ensuing year. 2. To ratify the appointment of Goldstein Golub Kessler, LLP as independent auditors and accountants for the Company for the fiscal year ending December 31, 2001. 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 14, 2001, the record date fixed by the Board of Directors, are entitled to notice of, and to vote at, the meeting. A complete list of stockholders entitled to notice of, and to vote at, the meeting will be open to examination by the stockholders beginning ten days prior to the meeting for any purpose germane to the meeting during normal business hours at the office of the Secretary of the Company at 80 Cabot Court, Hauppauge, New York 11788. Whether or not you intend to be present at the meeting, please sign and date the enclosed proxy and return it in the enclosed envelope. Returning a proxy will not deprive you of your right to attend the annual meeting and vote your shares in person. BY ORDER OF THE BOARD OF DIRECTORS HARLAN SYLVAN Secretary Hauppauge, New York May 21, 2001 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 29, 2001, at the offices of the Company at 80 Cabot Court, Hauppauge, New York 11788, and any adjournment thereof. VOTING SECURITIES; PROXIES The Company will bear the cost of solicitation of proxies. In addition to the solicitation of proxies by mail, certain officers and employees of the Company, without additional remuneration, may also solicit proxies personally by telefax and by telephone. In addition to mailing copies of this material to stockholders, the Company may request persons, and reimburse them for their expenses in connection therewith, who hold stock in their names or custody or in the names of nominees for others to forward such material to those persons for whom they hold stock of the Company and to request their authority for execution of the proxies. One third of the outstanding shares of Common Stock, par value $.10 per share (the "Common Stock"), present in person or represented by proxy shall constitute a quorum at the Annual Meeting. The approval of a plurality of the outstanding shares of Common Stock present in person or represented by proxy at the Annual Meeting is required for election of the nominees as directors. In all matters other than the election of directors, the affirmative vote of the majority of the outstanding shares of Common Stock present in person or represented by proxy at the Annual Meeting is required for adoption of such matters. The form of proxy solicited by the Board of Directors affords stockholders the ability to specify a choice among approval of, disapproval of, or abstention with respect to each matter to be acted upon at the Annual Meeting. Shares of Common Stock represented by the proxy will be voted, except as to matters with respect to which authority to vote is specifically withheld. Where the solicited stockholder indicates a choice on the form of proxy with respect to any matter to be acted upon, the shares will be voted as specified. Abstentions and broker non-votes will not effect the outcome of the election of directors or the ratification of the appointment of the independent auditors. With respect to all other matters, 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 and FOR the ratification of the appointment of Goldstein Golub Kessler LLP and in accordance with the proxy-holder's best judgment as to any other matters raised at the Annual Meeting. A stockholder who has given a proxy may revoke it at any time prior to its exercise by giving written notice of such revocation to the Secretary of the Company, executing and delivering to the Company a later dated proxy reflecting contrary instructions or appearing at the Annual Meeting and taking appropriate steps to vote in person. At the close of business on April 20, 2001, 2,025,864 shares of Common Stock were outstanding and eligible for voting at the meeting. Each stockholder of record is entitled to one vote for each share of Common Stock held on all matters that come before the meeting. Only stockholders of record at the close of business on May 14, 2001 are entitled to notice of, and to vote at, the meeting. NO DISSENTER'S RIGHTS Under Delaware law, stockholders are not entitled to dissenter's rights of appraisal with respect to Proposals 1 and 2. This proxy material is being mailed to stockholders commencing on or about May 21, 2001. PROPOSAL 1 ELECTION OF DIRECTORS The bylaws of the Company provide that each director serves from the date of election until the next annual meeting of stockholders and until his successor is elected and qualified. The specific number of directors is set by a resolution adopted by a majority of the entire Board of Directors. The number of directors is currently fixed at eight, and the number of current directors is seven. The Company has nominated seven persons consisting of Dennis Sunshine, Bruce Reissman, Mitchell Binder, John Molloy, Bernard Karcinell, Denis Feldman, and Mark Manno, each a current Director, for re-election to the Board of Directors and has decided not to fill the vacancy at this time. Proxies cannot be voted for a greater number of persons than the number of nominees named. The persons named in the accompanying proxy intend to vote for the election of the nominees listed herein as directors. Each nominee has consented to serve if elected. The Board of Directors has no reason to believe that any nominee will not serve if elected, but if any of them should become unavailable to serve as a director and if the Board of Directors designates a substitute nominee or nominees, the persons named as proxies will vote for the substitute nominee or nominees designated by the Board of Directors. The following table sets forth certain information with respect to the 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 "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 Position Dennis Sunshine 54 President, Chief Executive Officer and Director Bruce Reissman 51 Executive Vice President, Chief Operating Officer and Director 45 Mitchell Binder Vice President - Finance, Chief 50 Financial Officer Harlan Sylvan and Director Treasurer, Secretary and Controller John Molloy 71 Director Bernard Karcinell 62 Director Denis Feldman Mark Manno 53 Director 34 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 February 1995 and Director of Sales and Marketing from 1976 to April 1988. Mitchell Binder has been Vice President-Finance of the Company since 1986 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. Harlan Sylvan has been Treasurer and Secretary of the Company since March 1995 and Controller of the Company since 1987. John Molloy has been a director of the Company since 1992. Mr. Molloy has been a part-time consultant for Montgomery Associates, a consulting company for the defense industry, since November 1991. Prior thereto he served as Vice President of Marketing for Ocean Technologies Inc., a defense electronics company, from 1986 to 1992. Bernard Karcinell has been a Director of the Company since 2000. Mr. Karcinell is a practicing certified public accountant licensed in Florida since 1989. He also acts as a financial advisor to several individuals and corporations. Prior thereto, he was a Partner at KPMG and former President and CEO of Designcraft Jewel Industries and CCR Video Corp. Denis Feldman has been a Director of the Company since 2000. Mr. Feldman is a founding member of Corporate National Realty, Inc. a commercial real estate broker and Senior Director since 1987. Prior thereto, Mr. Feldman served as CEO of an international trading company. Mr. Feldman also serves on the board of directors of several not-for profit organizations. Mark Manno has been a Director of the Company since April 2001. Mr. Manno is co-founder, director and CFO of Invision.com, Inc., an e-business service provider that was founded in 1995. He is a former Board member of the National Alliance of Sales and Marketing Executives and the Long Island Sales and Marketing Executives. STOCKHOLDER VOTE REQUIRED Election of each director requires a plurality of the votes of the shares of Common Stock present in person or requested by Proxy at the meeting and entitled to vote on the election of directors. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS NAMED ABOVE. COMMITTEES OF THE BOARD - BOARD MEETINGS The Board of Directors (the "Board") has established an audit, a compensation and a stock option committee to assist it in the discharge of its responsibilities. The principal responsibilities of each committee and the members of each committee are described in the succeeding paragraphs. Actions taken by any committee of the Board are reported to the Board of Directors, usually at its next meeting or by written report. The Company's Board held eight meetings during the fiscal year ended December 31, 2000. All directors attended at least 75% of the meetings held by the board of Directors and by all committees of the Board. The Audit Committee of the Board currently consists of John Molloy, Bernard Karcinell and Mark Manno (who replaced Marc Pfefferle upon his resignation in April 2001), each of whom is independent as such term is defined in Rule 4200(a)(15) of the National Association of Securities Dealers ("NASD") listing standards, as amended on December 14, 1999. The Audit Committee held four (4) meetings during the fiscal year ended December 31, 2000. Each year it recommends the appointment of a firm of independent public accountants to examine the financial statements of the Company and its subsidiaries for the coming year. In making this recommendation, it reviews the nature of audit services rendered, or to be rendered, to the Company and its subsidiaries. It reviews with representatives of the independent public accountants the auditing arrangements and scope of the independent public accountants' examination of the financial statements, results of those audits, their fees and any problems identified by the independent public accountants regarding internal accounting controls, together with their recommendations. It also meets with the Company's Controller to review reports on the functioning of the Company's programs for compliance with its policies and procedures regarding ethics and those regarding financial controls and internal auditing. This includes an assessment of internal controls within the Company and its subsidiaries based upon the activities of the Company's internal auditing staffs, as well as an evaluation of the performance of those staffs. The Audit Committee is also prepared to meet at any time upon request of the independent public accountants or the Controller to review any special situation arising in relation to any of the foregoing subjects. Pursuant to Rule 4310(c)(26)(A) of the NASD listing standards, as amended, the Board has adopted an Audit Committee Charter which sets forth the composition of the Audit Committee, the qualifications of Audit Committee members and the responsibilities and duties of the Audit Committee. The Compensation Committee of the Board currently consists of John Molloy, Bernard Karcinell and Denis Feldman. The Compensation Committee did not meet during the fiscal year ended December 31, 2000. This Committee makes recommendations to the Board as to the salaries of the President, sets the salaries of the other elected officers and reviews salaries of certain other senior executives. It grants incentive compensation to elected officers and other senior executives and reviews guidelines for the administration of the Company's incentive programs. It also reviews and approves or makes recommendations to the Board on any proposed plan or program which would benefit primarily the senior executive group. The Stock Option Committee of the Board currently consists of John Molloy and Denis Feldman. The Stock Option Committee was formed on September 1, 1995 and held one meeting during the fiscal year ended December 31, 2000. This Committee is responsible for administering the Company's stock option plans. Specifically, the Committee determines the persons to be granted options as well as the exercise price and term of such. The members of the Stock Option Committee are not eligible to participate in the stock option plans they administer. The Board does not have a nominating committee. This function is performed by the Board as a whole. There are no family relationships among any of the directors or executive officers of the Company except that Bruce Reissman and Dennis Sunshine are brothers-in-law. The Company's executive officers serve in such capacity at the pleasure of the Board. PROPOSAL 2 INDEPENDENT ACCOUNTANTS RATIFICATION OF APPOINTMENT OF AUDITORS The Board Of Directors, upon the recommendation of the Audit Committee, has appointed Goldstein Golub Kessler LLP ("GGK") as independent accountants for the Company to audit the books and accounts of the Company for the current fiscal year. The firm of Ernst & Young LLP ("E&Y"), independent auditors, audited the books and records of the Company for the fiscal year ended December 31, 1998. On February 7, 2000, the Board of Directors approved the engagement of GGK as its independent auditor for the fiscal year ended December 31, 1999 and GGK continued to serve as our independent auditor for the fiscal year ended December 31, 2000. The Company determined to change its independent auditors on the basis of the significant savings in the amount of fees paid and not as a result of a dispute or disagreement with E&Y. The reports of E&Y, as previously issued, did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. The Board has selected GGK to serve as our independent auditors for the fiscal year ended December 31, 2001. GGK has a continuing relationship with American Express Tax and Business Services, Inc ("TBS") from which it leases auditing staff who are full time, permanent employees of TBS and through which its partners provide non-audit services. As a result of this arrangement, 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 staff, and is exclusively responsible for the opinion rendered in connection with its examination. Other services, which do not include Financial Information System Design and Implementation fees, have been provided by TBS and are not included herein. For the fiscal year ended December 31, 2000, fees for the services provided by GGK were as follows: Audit fees THE BOARD OF DIRECTORS DEEMS THE RATIFICATION OF THE APPOINTMENT OF GOLDSTEIN GOLUB KESSLER LLP AS THE AUDITORS FOR THE COMPANY TO BE IN THE COMPANY'S BEST INTEREST AND RECOMMENDS A VOTE "FOR" SUCH RATIFICATION. AUDIT COMMITTEE REPORT The Audit Committee oversees the Company's financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal controls. We reviewed with GGK, who are responsible for expressing an opinion on the conformity of our audited financial statements with generally accepted accounting principles, their judgments as to the quality and acceptability of our accounting principles and any other matters that we are required to discuss under generally accepted auditing standards. In addition, we have discussed GGK's independence from management and the Company including matters set forth in the written disclosures required by Independence Standards Board Standard No. 1 and matters required to be discussed by Statement on Auditing Standards No. 61 pertaining to communications with the Audit Committee. We discussed with GGK the overall scope and plans of their audit. We also discussed with GGK, without management present, the results of their examinations, their evaluations of our internal controls and the overall quality of our financial reporting. Relying on the reviews and discussions referred to above, we recommended to the Board that the audited financial statements be included in the Annual Report on Form 10- KSB for the fiscal year ended December 31, 2000. AUDIT COMMITTEE Bernard Karcinell John Molloy Marc Pfefferle EXECUTIVE COMPENSATION Summary Compensation Table The following table sets forth, for the fiscal years ended December 31, 2000, 1999 and 1998, compensation paid by the Company to the Chief Executive Officer and to each other executive officer of the Company that received more than $100,000 in salary and bonus during the fiscal year ended December 31, 2000 including salary, bonuses, stock options and certain other compensation (each, a "Named Executive Officer"):
ANNUAL COMPENSATION(1) NAME AND YEAR SALARY BONUS ($) ALL OTHER PRINCIPAL POSITION ($) COMPENSATION($) Dennis Sunshine, 2000 325,000 23,000 6,361(2) President and Chief 1999 319,000 17,600 6,148(3) Executive Officer 1998 355,000 55,509 7,761(4)
Bruce Reissman, 2000 270,000 23,000 5,620(2) Executive Vice 1999 267,000 17,600 5,470(3) President and Chief Operating Officer 1998 355,000 39,200 7,122(4)
Mitchell Binder, 2000 244,000 18,000 4,488(2) Vice President - 1999 239,000 12,800 4,393(3) Finance and Chief Financial Officer 1998 262,000 30,372 5,180(4)
Harlan Sylvan 2000 110,000 8,000 2,786(2) Treasurer, 1999 108,000 5,600 2,681(3) Secretary and Controller 1998 115,000 8,569 2,775(4)
__________________ (1) The Company has no long-term incentive compensation plan other than its several stock option plans described herein and various individually granted options. The Company does not award stock appreciation rights, restricted stock awards or long-term incentive plan pay-outs. (2) Includes $3,200, $3,200, $3,200 and $2,101 of matching contributions made by the Company pursuant to the Company's 401(k) Plan for each of Messrs. Sunshine, Reissman, Binder and Sylvan, respectively. Also includes the portion of the insurance premium attributable to the employee and paid by the Company under split dollar insurance policies maintained by the Company for the benefit of Messrs. Sunshine, Reissman, Binder and Sylvan in the amounts of $3,161, $2,420, $1,288 and $686, respectively. (3) Includes $3,200, $3,200, $3,200 and $2,037 of matching contributions made by the Company pursuant to the Company's 401(k) Plan for each of Messrs. Sunshine, Reissman, Binder and Sylvan, respectively. Also includes the portion of the insurance premium attributable to the employee and paid by the Company under split dollar insurance policies maintained by the Company for the benefit of Messrs. Sunshine, Reissman, Binder and Sylvan in the amounts of $2,948, $2,270, $1,193 and $644, respectively. (4) Includes $5,000, $5,000, $4,066 and $2,172 of matching contributions made by the Company pursuant to the Company's 401(k) Plan for each of Messrs. Sunshine, Reissman, Binder and Sylvan, respectively. Also includes the portion of the insurance premium attributable to the employee and paid by the Company under split dollar insurance policies maintained by the Company for the benefit of Messrs. Sunshine, Reissman, Binder and Sylvan in the amounts of $2,761, $2,122, $1,114 and $603, respectively. The following table sets forth certain information concerning options granted to the Named Executive Officers during the fiscal year ended December 31, 2000. OPTION GRANTS IN LAST FISCAL YEAR Individual Grants 681: 682: Name Number of Percent Expiration Date SecuritiesUnderlyingOptions Granted of Exercise or Base Total OptionsGranted to Price Employees ($/Share) in Fiscal Year Dennis Sunshine 0 0 Bruce Reissman 0 0 Mitchell Binder 25,000(1) 16.03% $3.00 3/27/10(1) Mitchell Binder 25,000(2) 16.03% $3.00 3/27/10(2) Mitchell Binder 25,000(3) 16.03% $3.00 3/27/10(3) Mitchell Binder 25,000(4) 16.03% $3.00 3/27/10(4) Harlan Sylvan 30,000(5) 19.23% $1.97 3/27/10(5)
(1) Exercisable on March 27, 2001 (2) Exercisable on March 27, 2002 (3) Exercisable on March 27, 2003 (4) Exercisable on March 27, 2004 (5) Exercisable on March 27, 2001 AGGREGATED OPTION EXERCISES DURING THE FISCAL YEAR ENDED DECEMBER 31, 2000 AND FISCAL YEAR END OPTION VALUES The following table sets forth certain information concerning the number and value of securities underlying exercisable and unexercisable stock options as of the fiscal year ended December 31, 2000 by the Named Executive Officers. No options were exercised by any of the Named Executive Officers during the fiscal year ended December 31, 2000. Number of Securities Value of Unexercised Underlying Unexercised In-the-Money Options Options at Fiscal Year End at Fiscal Year End(1)
Name Exercisable Unexercisable Exercisable Unexercisable Dennis Sunshine91,666 0 $0 $0 Bruce Reissman 86,666 0 $0 $0 Mitchell Binder91,666 75,000 $0 $0 Harlan Sylvan 46,666 0 $0 $0
(1) The closing price for the common stock of the Company on December 31, 2000 was $.55. Accordingly, none of the options were deemed to be In-theEMPLOYMENT AGREEMENTS Dennis Sunshine has entered into an amended and restated employment agreement with the Company which commenced in February 1999 (the "Sunshine Employment Agreement"). Under the terms of the Sunshine Employment Agreement, Mr. Sunshine is entitled to receive an annual base salary of $290,000 (subject to an annual cost of living adjustment) and a bonus equal to 4% of the Company's pre-tax earnings between $500,000 and $1,000,000; 5% of the Company's pre-tax earnings between $1,000,001 and $2,000,000; 6% of the Company's pre-tax earnings between $2,000,001 and $3,000,000; and 7.5% of the Company's pre-tax earnings in excess of $3,000,001. The Sunshine Employment Agreement provides that the employment of Mr. Sunshine may be terminated by the Company for "cause." "Cause" is defined as (i) willful and repeated failure by Mr. Sunshine to perform his duties under the Sunshine Employment Agreement, which failure is not remedied within 30 days after written notice from the Company; (ii) conviction of Mr. Sunshine for a felony; (iii) Mr. Sunshine's dishonesty or willfully engaging in conduct that is demonstrably and materially injurious to the Company or (iv) willful violation by Mr. Sunshine of any provision of the Sunshine Employment Agreement which violation is not remedied within 30 days after written notice from the Company. The Sunshine Employment Agreement may also be terminated by the Company on not less than three years' prior notice and contains a provision prohibiting Mr. Sunshine from competing with the Company for a one year period following termination of his employment Bruce Reissman has entered into an amended and restated employment agreement with the Company (the "Reissman Employment Agreement") which commenced in February 1999. Under the terms of the Reissman Employment Agreement, Mr. Reissman is entitled to receive an annual base salary of $240,000 (subject to an annual cost of living adjustment) and a bonus equal to 2.4% of the Company's pre-tax earnings between $500,000 and $1,000,000; 3% of the Company's pre-tax earnings between $1,000,001 and $2,000,000; 3.6% of the Company's pre-tax earnings between $2,000,001 and $3,000,000; and 4.5% of the Company's pre-tax earnings in excess of $3,000,001. The Reissman Employment Agreement provides that the employment of Mr. Reissman may be terminated by the Company for "cause" (as defined above). The agreement may also be terminated by the Company on not less than three years' prior notice. Mitchell Binder has entered into an amended and restated employment agreement with the Company (the "Binder Employment Agreement") which commenced in February 1999. Under the terms of the Binder Employment Agreement, Mr. Binder is entitled to receive an annual base salary of $218,000 (subject to an annual cost of living adjustment) and a bonus equal to 1.6% of the Company's pre-tax earnings between $500,000 and $1,000,000; 2% of the Company's pre-tax earnings between $1,000,001 and $2,000,000; 2.4% of the Company's pre-tax earnings between $2,000,001 and $3,000,000; and 3 of the Company's pre-tax earnings in excess of $3,000,001. The Binder Employment Agreement provides that the employment of Mr. Binder may be terminated by the Company for "cause" (as defined above). The agreement may also be terminated by the Company on not less than three years' prior notice. Each of the Sunshine Employment Agreement, the Reissman Employment Agreement and the Binder Employment Agreement (the "Employment Agreements") supersede employment agreements previously entered into with the Company. The Employment Agreements provide that the employee is entitled to receive benefits offered to the Company's employees generally. The Employment Agreements also provide for termination by the employee on not less than six months' prior notice or upon a "change of control" (as defined in the Employment Agreements). If the employee terminates his employment in connection with a change in control of the Company, then the employee shall be entitled to receive, as termination pay, the maximum amount that can be paid without any portion thereof constituting an "excess parachute payment" as defined in Section 280G(b)(1) of the Internal Revenue Code of 1986, as amended. COMPENSATION OF DIRECTORS Directors of the Company who are not employed by the Company receive directors fees of $1,250 per quarter. Employee directors are not compensated for services as a director. All directors are reimbursed for expenses incurred on behalf of the Company. Pursuant to the Company's 1995 Stock Option Plan for Non- Employee Directors, non-employee Directors are entitled to receive annual grants of options to purchase Common Stock. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Company's Compensation Committee consists of Denis Feldman, Bernard Karcinell and John Molloy, each of whom is a non-employee member of the Company's Board of Directors, who was never employed by the Company and has no interlocks with any other Company other than as set forth under "Certain Relationships and Related Transactions". COMPENSATION COMMITTEE REPORT TO STOCKHOLDERS The Compensation Committee of the Board of Directors is responsible for determining the compensation of executive officers of the Company, other than compensation awarded pursuant to the Company's Plans which is administered by the Stock Option Committee of the Board of Directors. Messrs. Feldman and Molloy comprise the Compensation Committee. The Stock Option Committee is responsible for granting and setting the terms of stock options under the Company's 1995 Employee Stock Option Plan. Messrs. Feldman and Molloy serve on the Stock Option Committee. GENERAL POLICIES REGARDING COMPENSATION OF EXECUTIVE OFFICERS The Company's executive compensation policies are intended (1) to attract and retain high quality managerial and executive talent and to motivate these individuals to maximize shareholder returns, (2) to afford appropriate incentives for executives to produce sustained superior performance, and (3) to reward executives for superior individual contributions to the achievement of the Company's business objectives. The Company's compensation structure consists of base salary, annual cash bonuses and stock options. Together these components link each executive's compensation directly to individual and Company performance. Salary. Base salary levels reflect individual positions, responsibilities, experience, leadership, and potential contribution to the success of the Company. Actual salaries vary based on the Compensation Committee's subject assessment of the individual executive's performance and the Company's performance. Bonuses. Executive officers are eligible to receive cash bonuses based on the Compensation Committee's subject assessment of the respective executive's individual performance and the performance of the Company. In its evaluation of executive officers and the determination of incentive bonuses, the Compensation Committee does not assign quantitative relative weights to different factors and follow mathematical formula. Rather, the Compensation Committee makes its determination in each case after considering the factors it deems relevant, which may include consequences for performance that is below expectations. Stock Options. Stock options, which are granted at the fair market value of the Common Stock on the date of grant, are currently the Company's sole long term compensation vehicle. The stock options are intended to provide employees with sufficient incentive to manage from the perspective of an owner with an equity stake in the business. In determining the size of individual options grants, the Stock Option Committee considers the aggregate number of shares available for grant, the number of individuals to be considered for an award of stock options, and the range of potential compensation levels that the option awards may yield. The number and timing of stock option grants to executive officers are decided by the Stock Option Committee based on its subjective assessment of the performance of each grantee. In determining the size and timing of option grants, the Stock Option Committee weighs any factors it considers relevant and gives such factors the relative weight it considers appropriate under the circumstances then prevailing. While an ancillary goal of the Stock Option Committee in awarding stock options is to increase the stock ownership of the Company's management, the Stock Option Committee does not, when determining the amount of stock options to award, consider the amount of stock already owned by an officer. The Stock Option Committee believes that to do so could have the effect of inappropriately or inequitably penalizing or rewarding executives based upon their personal decisions as to stock ownership and option exercises. In 1993, the Internal Revenue Code was amended to limit the deductibility of compensation paid to certain executives in excess of $1 million. Compensation not subject to the limitation includes certain compensation payable solely because an executive attains performance goals ("performance-based compensation"). Stock options granted under the 1995 Employee Stock Option Plan did not qualify as performance-based compensation. The Company's compensation deduction for a particular executive's total compensation, including compensation realized from the exercise of stock options, will be limited to $1 million. The Compensation Committee believes that the compensation paid by the Company in fiscal 1999 will not result in any material loss of tax deductions for the Company. SURRENDER OF PREVIOUSLY GRANTED OPTIONS In June 2000, under the terms of a Letter of Intent pursuant to its planned merger with Homing, Inc., the Board of Directors approved the award of 333,333 stock options to each of Messrs. Sunshine, Reissman, and Binder. In December 2000, the Company terminated its planned merger with Homing, Inc. and Messrs. Sunshine, Reissman and Binder subsequently waived all right, title and interest to the stock options. AMENDED EMPLOYMENT AGREEMENTS In the first quarter of 1999, Dennis Sunshine, the President and Chief Executive Officer, Bruce Reissman, the Executive Vice President and Chief Operating Officer, and Mitchell Binder, the Vice President - -tax earnings fall below a certain level and rewards the executive on an escalating basis as the Company's pre-tax earnings increase, and (c) a surrender of stock options granted to them in December 1997. The respective Employment Agreements of such executives were amended and restated in February 1999 to reflect such changes. The executives agreed with the Compensation Committee that the steps taken not only were prudent but also served as an example to the Company's remaining employees. COMPENSATION OF THE CHIEF EXECUTIVE OFFICER Mr. Sunshine's base salary and bonus for the fiscal year ended December 31, 2000 was determined by the terms of the Sunshine Employment Agreement which was entered into in February 1999 and is described elsewhere in this proxy statement. Mr. Sunshine was not granted any options during the fiscal year ended December 31, 1999. The Compensation Committee believes that Mr. Sunshine's base salary level and bonus formula as set forth in the Sunshine Employment Agreement fairly reflect the outstanding contributions Mr. Sunshine has made to the Company's market and financial position as well as Mr. Sunshine's commitment to the continued success of the Company. During 2000, Mr. Sunshine also actively sought new strategic markets for many of the Company's existing and new products that resulted in bookings for the year 2000 exceeding bookings for the years 1998 and 1999 combined. Mr. Sunshine was also instrumental in identifying and entering into a planned merger with a technology company that, although later terminated, attempted to enhance shareholder value. Mr. Sunshine continues to explore other opportunities that could enhance shareholder value. COMPENSATION COMMITTEE STOCK OPTION COMMITTEE Denis Feldman Denis Feldman John Molloy John Molloy PERFORMANCE GRAPH The graph below compares the cumulative total shareholder return on the Common Stock for the last five fiscal years with the cumulative total return on the NASDAQ Stock Market-U.S. Index and a peer group of comparable companies (the "Peer Group") selected by the Company over the same period (assuming the investment of $100 in the Common Stock, the NASDAQ Stock Market-U.S. and the Peer Group on December 31, 1995, and the reinvestment of all dividends). COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* AMONG ORBIT INTERNATIONAL, THE NASDAQ STOCK MARKET-US INDEX AND A PEER GROUP (in dollars) Orbit International Peer Corp. Group NASDAQ 12/95 100 100 100 12/96 250 135.42 123.03 12/97 364.29 153.76 150.68 12/98 174.99 197.07 212.46 12/99 52.38 139.07 394.82 12/00 20.84 823.35 237.37 The Peer Group is comprised of five companies in the defense electronics industry - Aeroflex Inc., Miltope Group Inc., Megadata Corp. and La Barge, Inc. Such companies were chosen for the Peer Group because they have similar market capitalizations to the Company and because they represent the line of business in which the Company is engaged. Each of the four Peer Group issuers is weighted according to its respective market capitalization. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Set forth below is stock ownership information as of April 28, 2001, as to each person who owns, or is known by the Company to own beneficially (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934), more than 5% of the Company's Common Stock, and the number of shares of Common Stock owned by its directors, by all persons named in the Summary Compensation Table and by all officers and directors as a group. Name and Address of Amount and Nature of Beneficial Owner Beneficial Ownership(1) (2) Percent of Class Dennis Sunshine c/o 80 Cabot Court Hauppauge, New York 423,379(3) 19.99% Bruce Reissman c/o 80 Cabot Court Hauppauge, New York 316,871(4) 15.00% Elkhorn Partners Limited Partnership 2222 Skyline Drive Elkhorn, Nebraska 175,800 8.68% Mitchell Binder c/o 80 Cabot Court Hauppauge, New York 98,398(5) 4.65% Harlan Sylvan c/o 80 Cabot Court Hauppauge, New York 47,665(6) 2.30% John Molloy 1815 Parliament Road Leucadia, California 3,997(7) * Bernard Karcinell 3015 South Ocean Blvd. Highland Beach, Florida 1,666(8) * Denis Feldman 7600 Jericho Turnpike Woodbury, New York 1,666(8) * Mark Manno 47 Mall Drive Commack, New York 698 * All officers and directors as a group (8 persons)(3)(4)(5)(6)(7)(8)894,340 38.07% _________________ (1) Except as otherwise noted in the footnotes to this table, the named person owns directly and exercises sole voting and investment power over the shares listed as beneficially owned by such persons. Includes any securities that such person has the right to acquire within sixty days pursuant to options, warrants, conversion privileges or other rights. (2) All share numbers reflect the one-for-three reverse stock split effected by the Company on October 4, 1999. (3) Includes 230,538 shares held by Mr. Sunshine's wife and 1,000 shares held in her IRA. Also includes options to purchase 91,666 shares of Common Stock. (4) Includes options to purchase 86,666 shares of Common Stock. (5) Includes options to purchase 91,666 shares of Common Stock. (6) Includes options to purchase 46,666 shares of Common Stock. (7) Includes options to purchase 3,331 shares of Common Stock. (8) Includes options to purchase 1,666 shares of Common Stock. * Less than one percent. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS In March 2001, the Company completed a sale-leaseback transaction whereby it sold its land and building and entered into a twelve-year net lease with the buyer of the property. In connection with this transaction, Corporate National Realty, Inc., a company that Denis Feldman, a director of the Company, is a senior managing director, earned a commission of $165,000. The Company had competitively priced the sale- leaseback transaction with other real estate brokers and believes the terms of the transaction and the commission paid thereon was no less favorable than it could have obtained from a third party. All of the Company's insurance policies are either underwritten by or placed by Rampart Brokerage Corporation ("Rampart"), a company for which Stanley Morris, a former director of the Company, serves as President. Mr. Morris resigned as a Director in January 2001. Rampart underwrites various insurance policies for the Company (including property and liability coverages). In addition, through a wholly-owned subsidiary, Rampart places the Company's life insurance and health insurance. For the property and liability coverages, Rampart pays, on the Company's behalf, the premiums owing with respect to such policies, directly to the insurance carriers. The Company pays the premiums on its life and health insurance policies directly to the relevant insurance carriers. The Company does not pay to Rampart any commissions or other fees for placing these policies. Rampart receives any such commissions directly from the respective insurance carriers. The Company has competitively priced its insurance in the marketplace and believes it obtains insurance on terms no less favorable than it could obtain from a third party. See sections entitled "Executive Compensation", "Employment Agreements" and "Compensation Committee Report to Stockholders" with respect to related transactions between executive officers and the Company. COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires the Company's directors and executive officers, and persons who beneficially own more than ten percent of a registered class of the Company's equity securities, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of Common Stock and the other equity securities of the Company. Officers, directors, and persons who beneficially own more than ten percent of a registered class of the Company's equities are required by the regulations of the Securities and Exchange Commission to furnish the Company with copies of all Section 16(a) forms they file. To the Company's knowledge, based solely on review of the copies of such reports furnished to the Company and written representations that no other reports were required, during the fiscal year ended December 31, 1999, all Section 16(a) filing requirements applicable to its officers, directors, and greater than ten percent beneficial owners were complied with. STOCKHOLDER PROPOSALS 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 that 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 his name, address, the number of shares held by him and the dates upon which he acquired such shares with documentary support for a claim of beneficial ownership, (c) notifies the Company of his intention to appear personally at the meeting or by a qualified representative under Delaware law to present his proposal for action, and (d) submits his 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, 2002. 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 with a supporting statement if the latter is requested by the proponent for inclusion in the proxy materials, and under certain circumstances enumerated in the Securities and Exchange Commission'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. 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-KSB, INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES FILED THEREWITH. WRITTEN REQUESTS FOR SUCH REPORT SHOULD BE ADDRESSED TO THE OFFICE OF THE SECRETARY, ORBIT INTERNATIONAL CORP., 80 CABOT COURT, HAUPPAUGE, NEW YORK 11788. ORBIT INTERNATIONAL CORPORATION ANNUAL MEETING OF STOCKHOLDERS -JUNE 29, 2001 THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS The undersigned stockholder in Orbit International Corporation ("Corporation") hereby constitutes and appoints Dennis Sunshine, Bruce Reissman, and Mitchell Binder, and each of them, his true and lawful attorneys and proxies, with full power of substitution in and for each of them, to vote all shares of the Corporation which the undersigned is entitled to vote at the Annual Meeting of Stockholders to be held at the offices of the Company at 80 Cabot Court, Hauppauge, New York 11788, on Monday, June 29, 2001, at 10:00 a.m., Eastern Daylight Savings Time, or at any postponement or adjournment thereof, on any and all of the proposals contained in the Notice of the Annual Meeting of Stockholders, with all the powers the undersigned would possess if present personally at said meeting, or at any postponement or adjournment thereof. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE NOMINEES LISTED ON THE REVERSE SIDE AND FOR THE REMAINING THREE PROPOSALS. (Continued and to be signed and dated on the other side) Please mark your votes as this example THE DIRECTORS RECOMMEND A VOTE FOR PROPOSAL 1 1. Election of Directors FOR All nominees WITHHOLD AUTHORITY listed (except as marked to vote for all to the contrary, see nominees listed instruction below) at left Dennis Sunshine, Bruce Reissman, Mitchell Binder, John Molloy, Bernard Karcinell, Denis Feldman and Mark Manno. 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 Goldstein Golub Kessler LLP as independent auditors. For Against Abstain The above named proxies are granted the authority, in their discretion, to act upon such other matters as may properly come before the meeting or any postponement or adjournment thereof. Dated , 2001 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. -----END PRIVACY-ENHANCED MESSAGE-----