MILTOPE GROUP INC.
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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To the Stockholders of Miltope Group Inc.:
The Annual Meeting of Stockholders (the "Meeting") of Miltope
Group Inc., a Delaware corporation (the "Company"), will be held at the
Company's corporate headquarters, 500 Richardson Road South, Hope Hull,
Alabama, Thursday, April 19, 2001 at 10:00 A.M., Local Time, to
consider and act upon the following:
1. To elect seven directors of the Company to serve as the Board of
Directors until the next annual meeting of stockholders and until
their successors are elected and qualified; and
2. To consider and act upon such other matters as may properly come
before the Meeting or any adjournment thereof.
Only stockholders of record of the Common Stock, $.01 par value,
of the Company at the close of business on March 16, 2001 shall be
entitled to receive notice of, and to vote at, the Meeting, and at any
adjournment or postponements thereof. A Proxy and a Proxy Statement
for the Meeting are enclosed herewith.
All stockholders are cordially invited to attend the Meeting. If
you do not expect to be present, you are requested to fill in, date and
sign the enclosed Proxy, which is solicited by the Board of Directors
of the Company, and to mail it promptly in the enclosed envelope to
make sure that your shares are represented at the Meeting. In the
event you decide to attend the Meeting in person, you may, if you
desire, revoke your Proxy and vote your shares in person.
By Order of the Board of Directors
TOM B. DAKE
Secretary
Dated: April 4, 2001
IMPORTANT
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THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM. A SELF-
ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS
REQUIRED IF MAILED WITHIN THE UNITED STATES.
MILTOPE GROUP INC.
500 Richardson Road South
Hope Hull, Alabama 36043
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PROXY STATEMENT
Annual Meeting of Stockholders
April 19, 2001
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GENERAL
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Miltope Group
Inc., a Delaware corporation (the "Company"), to be voted at the Annual
Meeting of Stockholders of the Company (the "Meeting") to be held at
the Company's corporate headquarters, 500 Richardson Road South, Hope
Hull, Alabama 36043, on Thursday, April 19, 2001, at 10:00 A.M., Local
Time, and any adjournment or postponements thereof, for the purposes
set forth in the accompanying Notice of Annual Meeting of Stockholders
and in this Proxy Statement.
The principal executive offices of the Company are located at 500
Richardson Road South, Hope Hull, Alabama 36043. The approximate date
on which this Proxy Statement and the accompanying Proxy will first be
sent or given to stockholders is April 4, 2001.
A Proxy, in the accompanying form, which is properly executed,
duly returned to the Company and not revoked will be voted in
accordance with the instructions contained therein and, in the absence
of specific instructions, will be voted (i) for the election as
directors of persons who have been nominated by the Board of Directors
and (ii) in accordance with the judgment of the person or persons
voting the proxies on any other matter that may be properly brought
before the Meeting provided the Company di not have notice of the
matter at least 45 days before March 27, 2001. Each such Proxy granted
may be revoked at any time thereafter by writing to the Secretary of
the Company prior to the Meeting, or by execution and delivery of a
subsequent Proxy or by attendance and voting in person at the Meeting,
except as to any matter or matters upon which, prior to such
revocation, a vote shall have been cast pursuant to the authority
conferred by such Proxy.
VOTING SECURITIES
Stockholders of record as of the close of business on March 16,
2001 (the "Record Date"), will be entitled to notice of, and to vote
at, the Meeting or any adjournments thereof. On the Record Date there
were outstanding 5,871,523 shares of the Common Stock, $.01 par value.
There was no other class of voting securities outstanding at that date.
Each holder of Common Stock is entitled to one vote for each share held
by such holder. The presence, in person or by proxy, of the holders of
a majority of the outstanding shares of Common Stock is necessary to
constitute a quorum at the Meeting. Under the rules of the Securities
and Exchange Commission, boxes and a designated blank space are
provided on the proxy card for stockholders to mark if they wish to
withhold authority to vote for one or more nominees for director.
Votes withheld in connection with the election of one or more of the
nominees for director will be counted as votes cast against such
individuals and will be counted toward the presence of a quorum for the
transaction of business. If no direction is indicated the proxy will
be voted for the election of the nominees for director. Under the
rules of the National Association of Securities Dealers, Inc. ("NASD"),
a broker "non-vote" has no effect on the outcome of the election of
directors or the establishment of a quorum for such election. The form
of proxy does not provide for abstentions with respect to the election
of directors; however, a stockholder present at the Meeting may abstain
with respect to such election. The treatment of abstentions and broker
"non-votes" with respect to the election of directors is consistent
with applicable Delaware law and the Company's By-Laws.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the
ownership of voting securities of the Company by each person who is
known to the management of the Company to have been the beneficial
owner of more than 5% of the outstanding shares of the Company's Common
Stock as of March 16, 2001:
Amount and
Nature of
Name and Address Beneficial Percent
Title of Class of Beneficial Owner Ownership* of Class
- -------------- -------------------- ----------- --------
Common Stock Great Universal Incorporated 3,664,478 62.4%
($.01 par value) 153 E. 53rd Street
Suite 5900
New York, NY 10022
Common Stock Dimensional Fund 324,900 (1) 5.5%
($.01 par value) Advisors Inc.
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
- -----------------------------------
* Unless otherwise noted, all shares are directly owned.
(1) Dimensional Fund Advisors Inc. ("Dimensional"), a registered
investment advisor, reported beneficial ownership of 324,900 shares of
the Company's Common Stock as of December 31, 2000. According to
Dimensional, all of the shares are held in portfolios of DFA Investment
Dimensions Group Inc. (the "Fund"), a registered open-end investment
company, or in series of the DFA Investment Trust Company (the
"Trust"), a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, all of which Dimensional Fund Advisors Inc. serves as
investment manager. Dimensional disclaims beneficial ownership of all
such shares. Dimensional reported that it had sole dispositive power
with respect to 324,900 shares, and sole voting power with respect to
324,900 shares.
OWNERSHIP OF COMMON STOCK BY DIRECTORS, NOMINEES AND OFFICERS
The following table sets forth certain information as of March 16, 2001,
regarding the ownership of voting securities of the Company by (i) each
director and nominee of the Board of Directors of the Company, (ii) each
executive officer of the Company and Miltope Corporation named in the
Summary Compensation Table, and (iii) all directors and executive officers
of the Company,and as to the percentage of outstanding shares held by them
on that date:
Name of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership(1) of Class
- --------------- --------------------- ----------------------- --------
Common Stock Teddy G. Allen** 0 *
Common Stock William L. Dickinson 41,412 (2) *
Common Stock William Mustard** 0 *
Common Stock Jan H. Stenbeck** 0 *
Common Stock Teri Spencer** 0 *
Common Stock Jerry O. Tuttle 18,182 (3) *
Common Stock Lawrence P. Farrell, Jr. 6,418 (4) *
Common Stock Robert G. Kaseta 49,000 (5) *
Common Stock Thomas R. Dickinson 28,500 (6) *
Common Stock Tom B. Dake 9,250 (7) *
Common Stock Jeffrey Q. Palombo 16,250 (8) *
Common Stock Christopher Wright 3,500 (9) *
Common Stock Executive officers and directors 172,512 (2)(3)(4)(5) 2.9%
as a group (13 persons) (6)(7)(8)(9)
- -----------------------------
* Represents less than one percent of the class.
** Affiliated with Great Universal Incorporated, the principal stockholder
of the Company
(1) Unless otherwise noted, all shares are directly owned. Includes
shares that may be acquired pursuant to options exercisable on March
16, 2001, and within sixty days of March 16, 2001, pursuant to Rule
13d-3 under the Securities Exchange Act of 1934, as amended.
(2) Represents shares of Common Stock that Mr. Dickinson may acquire
upon exercise of stock options.
(3) Represents shares of Common Stock that Mr. Tuttle may acquire upon
exercise of stock options.
(4) Represents shares of Common Stock that Mr. Farrell may acquire
upon exercise of stock options
(5) Represents 1,200 shares of Common Stock owned by Mr. Kaseta,
42,000 shares of Common Stock that Mr. Kaseta may acquire upon exercise
of stock options and 5,800 shares of Common Stock held by Mr. Kaseta's
wife. Mr. Kaseta disclaims beneficial ownership of the shares owned by
his wife.
(6) Represents 1,000 shares of Common Stock owned by Mr. Dickinson and
27,500 shares of Common Stock that Mr. Dickinson may acquire upon
exercise of stock options.
(7) Represents 100 shares of Common Stock owned by Mr. Dake, 6,250
shares of Common Stock that Mr. Dake may acquire upon exercise of stock
options and 2,900 shares of Common Stock owned by Mr. Dake's wife. Mr.
Dake disclaims beneficial ownership of the shares owned by his wife.
(8) Represents 16,250 shares of Common Stock that Mr. Palombo may
acquire upon exercise of stock options.
(9) Represents 3,500 shares of Common Stock that Mr. Wright may
acquire upon exercise of stock options.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
At the Meeting, seven directors are to be elected to serve until
the next annual meeting of stockholders and until their successors
shall be duly elected and shall qualify. Unless otherwise specified,
all proxies received will be voted in favor of the election of the
seven nominees of the Board of Directors named below as directors of
the Company. All of the nominees are presently directors of the
Company. The term of the current directors expires at the Meeting.
Should any of the nominees not remain a candidate for election at the
date of the Meeting (which contingency is not now contemplated or
foreseen by the Board of Directors), proxies solicited hereunder will
be voted in favor of those nominees who do remain candidates and may be
voted for substitute nominees selected by the Board of Directors.
Assuming a quorum is present, a vote of a majority of the shares
present, in person or by proxy, at the Meeting is required to elect
each of the nominees as a director in accordance with the Company's By-
Laws.
The following table sets forth the names of the nominees, their
ages, and their current positions with the Company:
Name Age Title
- ------------------------- ---- ----------------------------------
Teddy G. Allen 65 Chairman of the Board of Directors
William L. Dickinson 76 Director
Lawrence P. Farrell, Jr. 57 Director
William Mustard 48 Director
Teri Spencer 38 Director
Jan H. Stenbeck 58 Director
Jerry O. Tuttle 66 Director
Mr. Allen has served as Chairman of the Board of Directors of the
Company since June 1997 and prior to that date as a director of the
Company since November 1996. He has served in business development
capacities since November 1996, at Great Universal Incorporated, which,
through its operating subsidiaries, provides teleservices, television
and media and specialized electronics products and services. Prior to
that, Mr. Allen provided consulting services in identifying and
pursuing international business opportunities since January 1994. In
December 1993, Mr. Allen retired from the United States Army as a
Lieutenant General. Mr. Allen served in the United States Army for a
period of more than thirty years and held a wide variety of important
command and staff positions culminating in his ultimate assignment as
Director of the Defense Security Assistance Agency.
Mr. Dickinson has served as a director of the Company since
February 1993. Mr. Dickinson served as United States Representative to
Congress from the 2nd District of Alabama from 1964 to January 1993.
Mr. Dickinson was a ranking Republican for eleven years on the House
Armed Services Committee, and a senior Republican on the House
Subcommittee on Procurement and Military Systems and the House
Subcommittee on Military Installations and Facilities prior to his
retirement in 1993.
Mr. Farrell has served as a director of the Company since January
2000. Currently, Mr. Farrell is a consultant to a number of companies,
such as Raytheon and BAE Systems, engaged in doing business with the
Department of Defense. Mr. Farrell retired from the United States Air
Force in October 1998 having achieved the rank of Lieutenant General.
Prior to his retirement, Mr. Farrell served in the United States Air
Force for a period of more than thirty years. During his time of
service Mr. Farrell held a wide variety of command and staff positions
culminating in his assignment as deputy chief of staff for plans and
programs, Headquarters United States Air Force, Washington, D.C.
Mr. Mustard has served as a director of the Company since June
1995. Mr. Mustard has served since November 18, 1996, as President,
Chief Executive Officer and a director of Great Universal Incorporated,
which is engaged in teleservices, television and media and specialized
electronics industries. Prior to that, he served as President (Acting)
and Chief Financial Officer of Great Universal Incorporated, since
1993. He is also a director of XSource Corporation and a trustee of
the 1999 Great Universal LLC Trust. Since March 1990, Mr. Mustard has
held various positions, including director, at Millicom International
Cellular S.A. ("MIC"), an international cellular telecommunications
concern headquartered in Luxembourg.
Ms. Spencer has served as a director of the Company since February
1998. Ms. Spencer has served as President and Chief Executive Officer
of Ephibian Incorporated (formerly Integrated Systems and Internet
Solutions, Incorporated) since its founding in August 1996. Prior to
founding Ephibian Incorporated, Ms. Spencer held a variety of technical
and management positions with the United States Army Information
Systems Command.
Mr. Stenbeck has served as a director of the Company since
November 1987. He has served as a director of Great Universal
Incorporated since its inception in 1993. Additionally, he has served
as a director of MIC, since December 1990, and as Chairman of the Board
of MIC since May 1991. Mr. Stenbeck is the Chairman of, and the
controlling stockholder in, Industriforvaltnings AB Kinnevik
("Kinnevik"), a holding company which is the controlling shareholder of
several large Swedish and international enterprises with worldwide
operations. Mr. Stenbeck has been active in the management of Kinnevik
for more than 15 years. See "Certain Relationships and Related
Transactions." Mr. Stenbeck is also the Chairman of Tele II AB, Modern
Times Group MTG AB, Invik & Co. AB, Banque Invik SA, a Luxembourg bank,
and Societe Europeenne de Communication S.A..
Mr. Tuttle has served as a director of the Company since February
1998. Most recently, Mr. Tuttle has been involved in the formation of
several business to business e-commerce ventures. Mr. Tuttle served as
Senior Vice President of ManTech International Corporation, ("ManTech")
and President of ManTech Systems Engineering Corporation from October
1996 to January 2000. Prior to joining ManTech, Mr. Tuttle was
associated with Oracle Government as Vice President, Business
Development and Chief Staff Officer. In December 1993, Mr. Tuttle
retired from the United States Navy as a Vice Admiral. The culmination
of his naval career was his assignment as Director of Space and
Electronic Warfare, a position he held until his retirement.
In addition to the directors of the Company, Mr. Thomas R.
Dickinson is President and Chief Executive Officer, and Mr. Tom B. Dake
is Vice President Finance and Chief Financial Officer, of the Company
and Miltope Corporation, an Alabama corporation ("Miltope").
Mr. Dickinson (age 56) has served as President and Chief Executive
Officer of the Company and Miltope Corporation since January 15,1999.
Mr. Dickinson joined Miltope in October 1998 as Chief Operating
Officer. In September 1998, Mr. Dickinson retired from the United
States Army as a Brigadier General. Mr. Dickinson held several command
and staff positions culminating in his final assignment as the Chief of
Ordnance for the United States Army.
Mr. Dake (age 48) has served as Vice President Finance and Chief
Financial Officer of the Company and Miltope Corporation since April
21, 1999. Mr. Dake joined Miltope in May 1997 as Controller and served
as Acting Chief Financial Officer from October 1998 through April 1999.
Prior to joining Miltope, Mr. Dake served in a financial executive
capacity with various manufacturing companies.
BOARD OF DIRECTORS AND COMMITTEES
During the 2000 fiscal year, there were five regular and special
meetings of the Board of Directors.
The Board of Directors has designated from among its members an
Audit Committee, which consists of Mr. Tuttle, Mr. Farrell and Mr.
Dickinson. The Audit Committee, which reviews the Company's financial
and accounting practices and controls, held one meeting during the
fiscal year ended December 31, 2000. The Company has a Stock Option
Committee of the Board of Directors for the Company's 1995 Plan that
consists of Messrs. Allen, Mustard and Tuttle. The Company has a
Compensation Committee of the Board of Directors which reviews the
compensation of the Company's employees, including establishing
performance based bonuses for certain executive officers of the Company
and Miltope. The Compensation Committee consists of Messrs. Allen,
Mustard and Tuttle. The Company does not have a standing nominating
committee.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company was formed in 1984 as a wholly owned subsidiary of
Stonebrook Group Inc., a Delaware corporation ("Stonebrook") which
owned approximately 55.6% of the outstanding Common Stock of the
Company through December 31, 1994. Miltope Corporation was formed in
1975 and was a wholly owned subsidiary of Stonebrook until it became a
wholly owned subsidiary of the Company in June 1984. In January 1995,
XSource Corporation (formerly Innova International Corporation), a
Delaware corporation, acquired 62.8% of the outstanding shares of the
Common Stock of the Company pursuant to certain share exchange
transactions with Stonebrook and Stuvik AB, a Swedish corporation and,
at such time, a holder of 7.2% of the outstanding shares of the
Company's Common Stock. Prior to June of 1999 XSource Corporation was
a subsidiary of Great Universal Incorporated, a Delaware corporation
("GUI"), and a wholly owned subsidiary of MIC-USA Inc. ("MIC-USA"), a
Delaware corporation and a wholly owned subsidiary of MIC. In
connection with the reorganization of GUI in June 1999, the Company
became a subsidiary of GUI, which became a wholly owned subsidiary of
Great Universal LLC, a Delaware limited liability company ("GU-LLC"),
whose sole member from the date of reorganization until December 31,
1999 was MIC-USA. On December 31, 1999 MIC-USA formed the 1999 Great
Universal LLC Trust (the "Trust") and assigned all ownership interest
of GU-LLC to the Trust. Mr. Jan H. Stenbeck, a director of the Company,
is also a director and Chairman of XSource Corporation, GUI and MIC. In
addition, Mr. William Mustard is President, Chief Executive Officer and
a director of GUI, a director of XSource Corporation and a trustee of
the Trust.
During 2000 and 1999, the Company recorded sales of $14,000 and $-0-,
respectively, to 3C Communications International S.A., a Luxembourg
corporation and a wholly owned subsidiary of Societe Europeenne de
Communication S.A.. At December 31, 2000 and 1999, accounts receivable
were $-0- and $19,000, respectively. During 2000 and 1999, the Company
recorded sales of $-0- and $44,000, respectively to Get.2.Net
Corporation, an affiliate of the Company through certain common
ownership. At December 31, 2000 and 1999, accounts receivable were $-0-
and $52,000, respectively.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Summary Compensation Table
The following table shows all the cash compensation paid or to be
paid by the Company or by Miltope, its wholly owned subsidiary, as well
as certain other compensation paid or accrued during the fiscal years
ended December 31, 2000, 1999 and 1998 to the President and Chief
Executive Officer of the Company and the four other most highly
compensated executive officers. There were no restricted stock awards
or long-term incentive plan payouts to any of the executive officers
named in the following table.
Long Term
Compensation
Annual Compensation Awards
------------------- ------------
Number
of
Securities All
Name and Underlying Other
Principal Position Year Salary Bonus Options Compensation
--------------------- ---- ------ ------- ---------- ------------
Thomas R. Dickinson 2000 $208,400 $69,600 10,000 --
President and 1999 $205,442 -- 50,000 --
Chief Executive Officer 1998 $ 36,794 -- -- --
Tom B. Dake 2000 $120,284 $40,550 20,000 --
Vice President, 1999 $102,649 -- 5,000 --
Finance and Chief 1998 $ 78,205 -- -- --
Financial Officer
Robert G. Kaseta 2000 $136,776 $46,119 -- --
Vice President, 1999 $130,508 -- 15,000 $50,430(1)
Engineering of 1998 $139,848 -- 15,000 --
Miltope
Jeffrey Q. Palombo 2000 $121,455 $49,982 -- --
Vice President, 1999 $112,948 -- 10,000 --
Business Development 1998 $101,210 -- 5,000 --
of Miltope
Christopher Wright 2000 $115,850 $26,860 -- $19,921(2)
Vice President, 1999 $102,133 -- -- 21,757(1)
Business Development 1998 $ 93,048 -- -- --
of Miltope
_______________________
(1) Represents relocation expenses paid by the company to relocate to
Boulder, Colorado.
(2) Represents commissions paid for sales bookings prior to promotion
to Vice President of Business Development
Stock Options and Fiscal Year-End Option Values
The following table presents the number of outstanding stock
options and the aggregate dollar value of unexercised in-the-money
stock options held by each of the executive officers included in
the Summary Compensation Table at December 31, 2000. No stock
options were exercised by such executive officers during the 2000
fiscal year.
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at Fiscal Year-End Fiscal Year-End (1)
------------------------------ -----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
--------------------- ----------- ------------- ----------- -------------
Thomas R. Dickinson 12,500 47,500 -- --
Tom B. Dake 1,250 23,750 -- --
Robert G. Kaseta 38,250 18,750 -- --
Jeffrey Q. Palombo 15,000 10,000 -- --
Christopher Wright 3,500 -- -- --
(1) Value of unexercised in-the-money stock options is calculated by
subtracting the aggregate exercise price of such options from the fair
market value of the total number of shares underlying the in-the-money
stock options on December 29, 2000 that was the last trading date of
the year 2000. The last sale price of the Company's Common Stock on
December 29, 2000 on The NASDAQ Stock Market was $.6562
EMPLOYMENT AGREEMENTS OF EXECUTIVE OFFICERS AND
TERMINATION OF EMPLOYMENT ARRANGEMENTS
The Company has in place severance and termination policies that
include executive officers as well as all employees of the Company as
of December 31, 2000.
COMPENSATION OF DIRECTORS
Directors who are not compensated by the Company, or its
subsidiaries, Great Universal Incorporated or its affiliates or
subsidiaries presently receive an annual fee of $8,000 and an
additional fee of $1,250 for each meeting of the Board of Directors
attended by such director and $1,250 per meeting of a committee of the
Board which is held on a day other than a day on which a Board meeting
is also held. All directors are reimbursed for out-of-pocket expenses
in attending such meetings.
Mr. Dickinson, Mr. Farrell and Mr. Tuttle may receive stock
options at the commencement of each year of service as a director
entitling each to purchase up to $15,000 worth of the Company's Common
Stock, measured by the market value of such Common Stock on the date of
grant, for an exercise price equal to not less than 85% of the market
value of the Common Stock covered by the options on the date of grant.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors, executive officers and holders of
more than 10% of the Company's Common Stock to file initial reports of
ownership and reports of changes in ownership with the Securities and
Exchange Commission. The Company believes that, during the fiscal year
ended December 31, 2000, its executive officers, directors and holders
of more than 10% of the Company's Common Stock complied with all
Section 16(a) filing requirements. In making these statements, the
Company has relied upon a review of reports on Forms 3, 4 and 5
furnished to the Company during, or with respect to, its last fiscal
year.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The policies of the Compensation Committee regarding executive
compensation are to determine compensation levels based upon a
combination of corporate performance and individual performance
measured against pre-established objectives that are determined each
fiscal year by the Committee and approved by the entire Board of
Directors. The goal is to achieve compensation levels that reflect
both individual performance and incentives based upon common financial
targets.
The salary of the President and Chief Executive Officer is
reviewed annually by the Compensation Committee with reference to a
review of the compensation levels of chief executive officers of
comparable companies in the defense electronics industry and of
selected public companies in the geographic region of the Company which
the Compensation Committee believes are competitors of, or similarly
situated to, the Company. Based upon this review, the salary of the
President and Chief Executive Officer is established. Compensation
levels for other executive officers of the Company are similarly
established. Salaries of the Company's executive officers are in the
middle of the range of salaries paid by the other companies surveyed.
Bonuses are separately established at the beginning of each fiscal
year with reference to the Company's performance measured against pre-
set criteria principally relating to corporate income and growth. At
December 31, 2000, $233,111 of bonuses was accrued to be paid to
executive officers.
Grants of stock options, which generally vest over four years, are
based in substantial part on the Committee's judgment as to the long-
term incentive effect that a grant would have on the executive
officer's and the Company's long-term performance.
Payments of base salary for the 2000 fiscal year do not exceed $1
million for any named executive officer included in the Summary
Compensation Table.
COMPENSATION COMMITTEE
Teddy C. Allen
William Mustard
Jerry O. Tuttle
COMPARISON OF TOTAL STOCKHOLDER RETURN
The following graph sets forth the Company's total stockholder
return over a five-year period, beginning December 31, 1995, and ending
December 31, 2000, as compared to the NASDAQ Stock Market Index and the
NASDAQ Non-Financial Index. The total stockholder return assumes $100
invested at the beginning of the period in the Company's Common Stock,
the NASDAQ Stock Market Index and the NASDAQ Non-Financial Index.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
MILTOPE GROUP INC., NASDAQ STOCK MARKET & NASDAQ NON-FINANCIAL
INDEX
1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ----
NASDAQ Stock Market 100 123 151 213 395 238
NASDAQ Non-Financial 100 121 142 209 409 238
Miltope Group Inc. 100 102 109 42 26 23
NOTE - REFLECTS $100 INVESTED IN 1995 IN COMPANY STOCK AND REFLECTS
YEAR-END VALUE FOR EACH RESPECTIVE YEAR
AUDITORS
Deloitte & Touche LLP were the Company's independent public
auditors for the fiscal year ended December 31, 2000. The Board of
Directors will appoint the auditors for the current fiscal year. It is
expected that Deloitte & Touche LLP will be selected by the Board of
Directors to serve as the Company's auditors for the current fiscal
year. Representatives of Deloitte & Touche LLP intend to be present at
the Meeting and available to respond to appropriate questions and, in
addition, such representatives will be given an opportunity to make a
statement at the Meeting if they so desire. There is a standing audit
committee of the Board of Directors.
AUDIT FEES
The aggregate fees billed by Deloitte & Touche LLP, the member
firms of Deloitte Touche Tohmatsu, and their respective affiliates
(collectively, "Deloitte") for professional services rendered for
the audit of the Company's annual financial statements for the
fiscal year ended December 31, 2000 and for the reviews of the
financial statements included in the Company's Quarterly Reports on
Form 10-Q for that fiscal year were $135,500.
ALL OTHER FEES
The aggregate fees billed by Deloitte for services rendered to the
Company, other than the services described above under "Audit Fees" and
"Financial Information Systems Design and Implementation Fees", for the
fiscal year ended December 31, 2000 were $49,500.
The audit committee has considered whether the provision of non-
audit services is compatible with maintaining the principal
accountant's independence.
AUDIT COMMITTEE REPORT
In compliance with the requirements of the NASDAQ Stock Exchange,
the Audit Committee of the Company adopted a formal written charter
approved by the Board of Directors on July 20, 2000, a copy of which is
attached to this Proxy Statement as Appendix A, which outlines the
Audit Committee's responsibilities and how it carries out those
responsibilities. In connection with the performance of its
responsibilities under this charter, the Audit Committee has:
- Reviewed and discussed the audited financial statements of the
Company with management;
- Discussed with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61 (required
ommunication by external auditors with audit committees):
- Received from the independent auditors disclosures regarding the
auditors' independence required by Independence Standards Board
Standard No. 1 and discussed with the auditors the auditors'
independence; and
- Recommended, based on the review and discussion noted above, 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, 2000 for filing with the Securities and Exchange
Commission.
AUDIT COMMITTEE
William L. Dickinson
Lawrence P. Farrell, Jr.
Jerry O. Tuttle
ANNUAL REPORT
All stockholders of record as of March 16, 2001 are concurrently
being sent a copy of the Company's Form 10K as filed with the United
States Securities and Exchange Commission for the fiscal year ended
December 31, 2000, which contains certified financial statements of the
Company for the fiscal years ended December 31, 2000 and 1999.
STOCKHOLDER PROPOSALS
Stockholder proposals must be received by January 3, 2002 in order
to be considered for inclusion in proxy materials distributed in
connection with the next annual meeting of stockholders. All such
proposals should be in compliance with applicable Securities and
Exchange Commission regulations.
MISCELLANEOUS
As of the date of this Proxy Statement, the Board of Directors of
the Company does not know of any other matter to be brought before the
Meeting. However, if any other matters not mentioned in the Proxy
Statement are properly brought before the Meeting or any adjournments
thereof, the persons named in the enclosed Proxy or their substitutes
will have discretionary authority to vote proxies given in said form,
or otherwise act, in respect of such matters in accordance with their
best judgment.
All of the costs and expenses in connection with the solicitation
of proxies with respect to the matters described herein will be borne
by the Company. In addition to solicitation of proxies by use of the
mails, directors, officers and employees (who will receive no
compensation therefore in addition to their regular remuneration) of
the Company may solicit the return of proxies by telephone, telegram or
personal interview. The Company will request banks, brokerage houses
and other custodians, nominees and fiduciaries to forward copies of the
proxy material to their principals and to request instructions for
voting the proxies. The Company may reimburse such banks, brokerage
houses and other custodians, nominees and fiduciaries for their
expenses in connection therewith.
It is important that proxies be returned promptly. Stockholders
are, therefore, urged to fill in, date, sign and return the Proxy
immediately. No postage need be affixed if mailed in the enclosed
envelope in the United States.
By order of the Board of Directors
TOM B. DAKE
Secretary
April 4, 2001