EXHIBIT 4.1(b)
ORBIT INTERNATIONAL CORP.
2009 INDEPENDENT DIRECTORS INCENTIVE STOCK PLAN
(Approved and adopted by the
Board of Directors on March 5, 2009)
STATEMENT OF PURPOSE
The Orbit International
Corp. 2009 Independent Directors Incentive Stock
Plan is intended to afford an incentive to
non-employee directors retained by
Orbit International Corp. (the "Company") and its subsidiaries and
affiliates to
acquire a proprietary interest in the Company and to enable
the Company and its
subsidiaries and affiliates to
attract and retain such persons.
DEFINITIONS
For purposes of the Plan, the following terms are defined as set
forth below:
a. "Award" means a Stock Option, Stock
Appreciation Right or Restricted
Stock.
b. "Board" means the Board of Directors of
the Company.
c. "Change of Control" has the meaning set
forth in Section 4.2.1.
d. "Code" means the Internal Revenue Code
of 1986, as amended from time to
time, and any successor thereto.
e. "Committee" means the Committee referred
to in Section 3.1.
f. "Common Stock" means common stock, par
value $.10 per share, of the
Company.
g. "Company" means Orbit International
Corp., a Delaware corporation.
h. "Eligible Persons" means the Eligible
Persons referred to in Section 2 of
the Plan.
i. "Exchange Act" means the Securities
Exchange Act of 1934, as amended from
time to time, and any successor thereto.
j. "Fair Market Value" means, as of
any given date, (i) if the Common Stock
is listed or admitted to trade on a national
securities exchange, the closing
price of the Common Stock on the Composite Tape, as published in
The Wall Street
Journal, of the principal national securities exchange on which the
Common Stock
is so listed or admitted to trade, on such date, or, if
there is no trading of
the Common Stock on such date, then the
closing price of the Common Stock as
quoted on such Composite Tape on the
next preceding date on which there was
trading in such shares; (ii) if the Common Stock
is not listed or admitted to
trade on a national securities exchange, the mean
between the closing bid and
asked price for the Common
Stock on such date, as
furnished by the
Over-The-Counter Bulletin Board (the "OTCBB") maintained by
FINRA; (iii) if the
Common Stock is not listed or
admitted to trade on a national securities
exchange and closing bid and asked prices are not
furnished by the OTCBB, the
mean between the closing bid and asked price for the Common
Stock on such date,
as furnished by the Pink Sheets, LLC ("Pink
Sheets") or similar organization;
and (iv) if the stock is
not listed or admitted to trade on a
national
securities exchange and if bid and asked
prices for the Common Stock are not
furnished by the OTCBB, Pink
Sheets or a similar organization, the value
established in good faith by the Committee taking
into account such facts and
circumstances deemed to be material by the Committee to the
value of the Common
Stock in the hands of the
Eligible Person.
Notwithstanding the foregoing, for
purposes of granted Non-Qualified Stock
Options or Stock Appreciation Rights, Fair Market Value of Common
Stock shall be
determined in accordance with the requirements of Code
Section 409A, consistent
with the provisions of Treasury Department
Regulations 1.409A-1(b)(5)(iv)(A).
k. "Non-Qualified Stock
Option" means any Stock Option that
is not an
Incentive Stock Option.
l. "Performance Goals"
means the performance goals
established by the
Committee in connection with the
grant of Restricted Stock.
m. "Plan" means the
Orbit International Corp. 2009 Independent Directors
Incentive Stock Plan, as set forth herein and as
hereinafter amended from time
to time.
n. "Qualified Performance-Based
Award" means an Award of Restricted Stock
designated as such by the
Committee at the time of grant, based
upon a
determination that (i) the recipient is or may be
a "covered employee" within
the meaning of Section 162(m)(3) of the Code in
the year in which the Company
would expect to be able to claim a tax deduction with respect to
such Restricted
Stock and (ii) the Committee wishes such Award to qualify for the
Section 162(m)
Exemption.
o. "Restricted Stock"
means an Award granted under
Section 6.
p. "Stock Appreciation
Right" means an Award granted under
Section 5.
q. "Stock Option" means
an Award granted under Section 4.
r. "Subsidiary" shall
have the meaning given to the
term "Subsidiary
corporation" in Section 424(f) of
the Code.
s. "Termination of
Service" means the termination of the
participant's
service as a director of the Company or any of its
Subsidiaries. A participant
who is a director of a Subsidiary shall also be deemed to incur a
Termination of
Service if the Subsidiary ceases to be such a
Subsidiary, and the participant
does not immediately thereafter
become a director of the Company or another
Subsidiary. Temporary absences from
service because of illness, vacation or
leave of absence and transfers among the Company and its
Subsidiaries shall not
be considered Terminations of
Service. If so determined by the Committee, a
participant shall be deemed not to have incurred a Termination of
Service if the
participant enters into a contract with the
Company or a Subsidiary providing
for the rendering by the participant of
consulting services to the Company or
such Subsidiary on terms approved by
the Committee; however, Termination of
Service of the participant shall
occur when such contract ceases to be in
effect.
In addition, certain other terms used
herein have definitions given to them
in the first place in which
they are used.
STATEMENT OF THE PLAN
1. SHARES SUBJECT TO THE PLAN.
Subject to the provisions of Section 7,
the maximum number of shares which
may be issued under the Plan shall be one hundred thousand
(100,000) shares of
Common Stock, par value $.10 per share, of the Company (the
"Shares"). The
Company shall at all times while the Plan is in effect reserve such
number of
shares of Common Stock as will be sufficient to satisfy the
requirements of
outstanding Awards granted under the Plan. The Shares subject to
the Plan shall
be either authorized and unissued shares or treasury shares of
Common Stock. If
any Award is forfeited, or if any Stock Option (and related Stock
Appreciation
Right, if any) terminates, expires or lapses for any reason
without having been
exercised in full or shall cease for any reason to be exercisable
in whole or in
part, or if any Stock Appreciation Right is exercised for cash, the
unpurchased
Shares subject to such Awards shall again be available for
distribution under
the Plan. No more than 40% of the shares of Common Stock
available for grant
under the Plan as of the first day of any calendar year in which
the Plan is in
effect shall be utilized in that fiscal year for the grant of
Awards in the form
of Restricted Stock.
2. ELIGIBILITY.
Awards may be granted only to directors of
the Company who are not
employees of the Company or its Subsidiaries, to the extent not
prohibited by
law ("Eligible Persons"). As used in this Plan, the term
"Subsidiaries" shall
include Subsidiaries of a Subsidiary.
3. ADMINISTRATION OF THE PLAN.
3.1. The
Plan shall be administered by
either the full Board of
Directors or by a committee (either the full Board or the
committee is referred
to hereinafter as the "Committee") composed of at least two
employee directors,
each of whom shall be a disinterested
person under the Plan, which Committee
shall be appointed by and serve at the pleasure of the Board.
Within the limits
of the express provisions of the Plan, the Committee shall have the
authority to
determine, in its absolute discretion, (i) the individuals to whom,
and the time
or times at which Awards shall
be granted, (ii) whether and to what extent
Non-Qualified Stock Options, Stock Appreciation Rights
and Restricted Stock or
any combination thereof are to be granted hereunder, (iii)
the number of Shares
to be covered by each Award granted hereunder, (iv) subject
to Sections 4.7 and
6.3(G), the terms and conditions of any Award granted
hereunder including, but
not limited to, the option
price, any vesting condition, restriction
or
limitation (which may be related to
the performance of the participant, the
Company or any Subsidiary), and any vesting, acceleration,
forfeiture or waiver
regarding any Award and the shares of Common Stock relating
thereto, (v) modify,
amend or adjust the terms and conditions of any Award, at any
time or from time
to time, including but not limited to,
Performance Goals; provided, however,
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that the Committee may not adjust upwards
the amount payable with respect to
Qualified Performance-Based Awards or
waive or alter the Performance Goals
associated therewith or cause such
Restricted Stock to vest earlier than
permitted by Section 6.3(H), and (vi) under what
circumstances an Award may be
settled in cash or Common Stock
under Sections 6.3(B) and 10.2, provided,
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however, that the Committee shall not have
such power to the extent that the
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mere possession (as opposed to
the exercise) of such power would result in
adverse tax consequences to any participant under Code
Section 409A. In making
such determinations, the Committee may take
into account such factors as the
Committee, in its absolute
discretion, shall deem relevant. Subject to the
express provisions of the Plan, the Committee shall
also have the authority to
interpret the Plan, to prescribe,
amend and rescind rules and regulations
relating to it, to determine the terms and provisions
of the respective option
instruments or agreements (which need not be
identical) and to make all other
determinations and take all other
actions necessary or advisable for the
administration of the Plan. The
Committee's determinations on the matters
referred to in this Section 3.1 shall
be conclusive. Any determination by a
majority of the members of the Committee shall be
deemed to have been made by
the whole Committee.
3.2. Each
member of the Committee shall
be indemnified and held
harmless by the Company against any cost or
expense (including counsel fees)
reasonably incurred by such member,
or liability (including any sum paid in
settlement of a claim with the approval of the Company)
arising out of any act
or omission to act in
connection with the Plan unless arising out of such
member's own fraud or bad faith, to the extent permitted by
applicable law. Such
indemnification shall be in addition
to any rights of indemnification the
members may have as directors or otherwise under the By-laws of the
Company, any
agreement or vote of stockholders
or disinterested directors or otherwise.
4. STOCK OPTIONS.
Stock Options may be granted
alone or in addition to other Awards. Stock
Options granted hereunder can only be
Non-Qualified Stock Options. Any Stock
Option granted hereunder shall be in such form as the Committee may
from time to
time approve. Stock Options granted
under the Plan shall be subject to the
following terms and conditions and
shall contain such additional terms and
conditions as the Committee shall
deem desirable:
4.1. Stock Option
Exercise Price. Subject to adjustments in accordance
with Sections 7 and 8, the exercise price of each Stock Option
granted under the
Plan shall be set forth in the
applicable Option Agreement, but in no event
shall such price be less than the Fair Market Value of the Shares
subject to the
Stock Option on the date the Stock Option is granted.
The Fair Market Value of
the Shares shall be determined in good faith by the Committee, with
the approval
of the Board, in accordance
with the Plan and in accordance
with the
requirements of Code Sections 409A
and the Treasury Regulations thereunder.
4.2 Exercise
of Stock Options.
4.2.1.
Subject to the provisions in this Section 4.3 and in Section
9,
Stock Options may be exercised
in whole or in part. The Committee, in its
absolute discretion, shall determine the time or times at which any
Stock Option
granted under the Plan may be
exercised; provided, however, that each Stock
Option:
(A) shall be exercisable by a participant
only if such participant
was an Eligible Person at all times beginning from the date
of the grant of the
Option to a date not more than three months
(except as otherwise provided in
Section 8) before exercise of
such Stock Option;
(B) may not be exercised prior
to the expiration of at least one
year from the date of grant except in the case of the death or
disability of the
participant or otherwise with the
approval of the Committee or the Board of
Directors or, if the option agreement evidencing such Stock
Option so provides,
upon a "Change of Control" as
defined below;
(C) shall expire no later
than the expiration of ten years from
the date of its grant; and
(D) shall not be
exercisable by a participant until
such
participant executes and delivers a written
representation to the effect that
such participant is acquiring the Common Stock for
investment and not with the
intent of distributing the same (unless such Common Stock shall be
appropriately
registered under the Securities Act
of 1933, as amended, or exempt from
registration thereunder).
A "Change of
Control" as used in this Section 4.3 shall mean any of
the
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following:
(i) any consolidation, merger or sale
of the Company in which the
Company is not the continuing or
surviving corporation or pursuant to which
shares of the Company's stock would be converted into cash,
securities or other
property; or
(ii) the stockholders of the Company
approve an agreement for the
sale, lease, exchange or other
transfer (in one transaction or a series of
related transactions) of all or substantially all of the
assets of the Company;
or
(iii) any approval by the
stockholders of the Company of any plan
or proposal for the liquidation
or dissolution of the Company; or
(iv) the acquisition of
beneficial ownership (within the meaning
of Rule 13d-3 under the
Exchange Act of an aggregate of 30% or more of the
voting power of the Company's outstanding voting securities by any
single person
or group (as such term is used in Rule 13d-3 under the
Exchange Act) during the
12-month period ending on the
date of the latest acquisition, unless such
acquisition was approved by the Board of
Directors prior to the consummation
thereof); or
(v) the appointment of
a trustee in a Chapter 11 bankruptcy
proceeding involving the Company or the conversion of
such a proceeding into a
case under Chapter 7.
4.2.2. Stock
Options granted under the Plan shall be exercised by the
delivery by the holder thereof to the Company at its
principal offices (to the
attention of the Secretary) of
written notice of the number of Shares with
respect to which the Stock Option is being exercised,
accompanied by payment in
full of the Stock Option exercise price of such Shares. The
exercise price shall
be payable in cash by a certified or bank check or such other
instrument as the
Company may accept; provided,
however, that in lieu of payment in cash, a
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participant may, with the approval
of the Company's Board and on
the
recommendation of the Committee, pay
for all or part of the Shares to be
purchased upon exercise of such
participant's Stock Option by:
(A) tendering to the Company shares
of the Company's Common Stock
owned by such participant and having a Fair Market Value (as
determined pursuant
to Section 4.1) equal to the exercise price (or the balance
thereof) applicable
to such participant's Stock Option;
or
(B) complying with any
exercise and sell (or cashless exercise)
program which the Company has
established with a broker-dealer.
4.2.3. The
holder of an option shall have none
of the rights of a
stockholder with respect to the Shares
covered by such holder's option until
such Shares shall be issued to such holder upon
the exercise of such holder's
option.
4.3.
Termination of Service. In the
event that the service of an
individual to whom a Stock
Option has been granted under the Plan
shall
terminate (otherwise than by reason
of such individual's death or total
disability, or for cause), such option may be
exercised (if and to the extent
that such individual was entitled to do so at the
date of termination of such
individual's service) at any time within twelve months
after such termination,
but in no event after the
expiration of the term of the option. No option
granted under the Plan may be exercised by a
participant following termination
of such participant's service for
cause. "Termination for cause" shall mean
dismissal for dishonesty, conviction or confession of a crime
punishable by law
(except minor violations), fraud,
misconduct or disclosure of confidential
information. If the service of an
individual to whom a Stock Option has been
granted under the Plan shall be suspended pending an investigation
of whether or
not the individual shall be terminated for cause, all of the
individuals rights
under any option granted hereunder likewise shall be suspended
during the period
of investigation.
4.4. Death
or Total Disability of a Stock Option Holder. In the
event
of the death or total disability of an
individual to whom a Stock Option has
been granted under the Plan (i) while
serving as an Eligible Person; or (ii)
within three months after the termination of such service, other
than for cause,
such option may be exercised (if and to the extent that the
deceased individual
was entitled to do so at
the date of such individual's death
or total
disability) by a legatee or legatees of such participant under such
individual's
last will and testament or by such
individual's personal representatives or
distributees, at any time within twelve months after such
individual's death or
total disability, but in no
event after the expiration of the term of the
option.
As used in this
Plan, the term "total disability" refers to a mental or
physical impairment of the individual which has
lasted or is expected to last
for a continuous period of twelve months or more and which causes
the individual
to be unable, in the opinion
of the Company and two (if more than one is
required by the Company in its
sole discretion) independent physicians, to
perform such individual's duties for
the Company and to be engaged in any
substantial gainful activity. Total disability shall be
deemed to have occurred
on the first day after the Company and the two (if more than
one is required by
the Company in its sole discretion) independent physicians
have furnished their
opinion of total disability to
the Committee.
4.5.
Non-transferability of Stock Options. A Stock Option shall
not be
transferable otherwise than by will or the laws of descent
and distribution and
is exercisable during the lifetime of the Eligible Person
only by such Eligible
Person or
