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, 3800 Richardson Road South, Hope
Hull, Alabama, Thursday, April 25, 2002 at 10:00 A.M., Local Time, to
consider and act upon the following:
1. To elect six 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 22, 2002 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: March 29, 2002
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.
3800 Richardson Road South
Hope Hull, Alabama 36043
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PROXY STATEMENT
Annual Meeting of Stockholders
April 25, 2002
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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, 3800 Richardson Road South, Hope
Hull, Alabama 36043, on Thursday, April 25, 2002, 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 3800
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 March 29, 2002.
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 did not have notice of the
matter at least 45 days before March 22, 2002. 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 22,
2002 (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 22, 2002:
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, 2001.
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 22,
2002, 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 as a group, 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
- --------------- --------------- ------------------------ --------
Directors
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Common Stock Teddy G. Allen** 0 *
Common Stock William L. Dickinson 62,173 (2) 1.0%
Common Stock William Mustard** 0 *
Common Stock Jan H. Stenbeck** 0 *
Common Stock Henry Guy** 0 *
Common Stock Jerry O. Tuttle 38,943 (3) *
Executive Officers
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Who are not Directors
---------------------
Common Stock Robert G. Kaseta 58,500 (4) *
Common Stock Thomas R. Dickinson 43,500 (5) *
Common Stock Tom B. Dake 17,200 (6) *
Common Stock Jeffrey Q. Palombo 20,000 (7) *
Common Stock Edward F. Crowell 19,020 (8) *
Common Stock Executive officers and directors 259,336 (2)(3)(4)(5) 4.4%
as a group (11 persons) (6)(7)(8)
- ---------------------
* 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
22, 2002, and within sixty days of March 22, 2002, 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 3,200 shares of Common Stock owned by Mr. Kaseta,
49,500 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.
(5) Represents 1,000 shares of Common Stock owned by Mr. Dickinson and
42,500 shares of Common Stock that Mr. Dickinson may acquire upon
exercise of stock options.
(6) Represents 1,600 shares of Common Stock owned by Mr. Dake, 12,500
shares of Common Stock that Mr. Dake may acquire upon exercise of
stock options and 3,100 shares of Common Stock owned by Mr. Dake's
wife. Mr. Dake disclaims beneficial ownership of the shares owned by
his wife.
(7) Represents 20,000 shares of Common Stock that Mr. Palombo may
acquire upon exercise of stock options.
(8) Represents 20 shares of Common Stock owned by Mr. Crowell and
19,000 shares of Common Stock that Mr. Crowell may acquire upon
exercise of stock options.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
At the Meeting, six 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 six
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 66 Chairman of the Board of Directors
William L. Dickinson 77 Director
William Mustard 49 Director
Henry Guy 33 Director
Jan H. Stenbeck 59 Director
Jerry O. Tuttle 67 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, includes teleservices, television
and media and specialized electronics industries. 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. W. 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. 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.
Mr. Guy has served as a director of the Company since October
2001. As XSource Corporation's Chief Operating Officer, Mr. Guy is
responsible for oversight of corporate and portfolio company operations
as well as new venture sourcing and creation. Mr. Guy joined XSource
in 2000 after having spent 2 years as CFO of XSource portfolio company,
Ephibian, Inc. Before joining Ephibian, Mr. Guy spent six years as a
U.S. Naval officer, serving in a variety of operational assignments.
Mr. Guy also sits on the boards of Contest, Inc., Bassett, Spruce
Technologies, and Netcom AB.
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 Tele2 AB, Modern
Times Group MTG AB, Invik & Co. AB, Metro International S.A., Transcom
Worldwide S.A. and Banque Invik SA, a Luxembourg bank.
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 foregoing 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. T. Dickinson (age 57) 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 49) 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 2001 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 and Mr. Dickinson. The
Audit Committee, which reviews the Company's financial and accounting
practices and controls, held two meetings during the fiscal year ended
December 31, 2001. 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 2001 and 2000, the Company recorded sales of $-0- and
$14,000, respectively, to 3C Communications International S.A., a
Luxembourg corporation and a wholly owned subsidiary of Tele2 AB. At
December 31, 2001 and 2000, there were no accounts receivable on such
sales.
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, 2001, 2000 and 1999 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 2001 $212,502 $ -- 10,000 --
President and 2000 $208,400 69,600 10,000 --
Chief Executive Officer 1999 $205,442 -- 50,000 --
Tom B. Dake 2001 $130,754 $ -- 10,000 --
Vice President, 2000 $120,284 40,550 20,000 --
Finance and Chief 1999 $102,649 -- 5,000 --
Financial Officer
Robert G. Kaseta 2001 $142,980 $ -- 5,000 --
Vice President, 2000 $136,776 46,119 -- --
Engineering of 1999 $130,508 -- 15,000 $50,430 (1)
Miltope
Jeffrey Q. Palombo 2001 $136,480 $ -- 10,000 --
Vice President, 2000 $121,455 49,982 -- --
Business Development 1999 $112,948 -- 10,000 --
of Miltope
Edward F. Crowell 2001 $115,737 $ -- 5,000 --
Vice President, 2000 $109,658 21,755 -- --
Human Resources 1999 $102,827 -- 8,000 --
of Miltope
_______________________
(1) Represents relocation expenses paid by the company to relocate to
Boulder, Colorado.
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, 2001. No stock
options were exercised by such executive officers during the 2001
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 27,500 42,500 -- --
Tom B. Dake 7,500 27,500 -- --
Robert G. Kaseta 45,750 16,250 -- --
Jeffrey Q. Palombo 18,750 16,250 -- --
Edward F. Crowell 17,000 11,000 -- --
- -------------------------------
(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 31, 2001 that was the last trading date of
the year 2001. The last sale price of the Company's Common Stock on
December 31, 2001 on The NASDAQ Stock Market was $1.47
Termination Policies and 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, 2001.
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. W. Dickinson 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, 2001, 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
lower portion of the range of salaries paid by the other companies
surveyed.
Bonus targets 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. As of March 22, 2002, the Compensation Committee had not
determined bonus amounts for executive officers of the Company.
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 2001 fiscal year do not exceed $1
million for any named executive officer included in the Summary
Compensation Table.
COMPENSATION COMMITTEE
Teddy G. 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, 1996, and ending
December 31, 2001, 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
1996 1997 1998 1999 2000 2001
---- ---- ---- ---- ---- ----
NASDAQ STOCK MARKET 100 122 173 321 193 153
NASDAQ NON-FINANCIAL 100 117 172 337 196 150
MILTOPE GROUP INC. 100 107 41 25 23 51
NOTE - REFLECTS $100 INVESTED IN 1996 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, 2001. 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 & Touche") which includes Deloitte Consulting
for professional services rendered for the audit of the Company's
annual financial statements for the fiscal year ended December 31, 2001
and for the reviews of the financial statements included in the
Company's Quarterly Reports on Form 10-Q for that fiscal year were
$115,000.
ALL OTHER FEES
The aggregate fees billed by Deloitte & Touche for services
rendered to the Company, other than the services described above under
"Audit Fees", for the fiscal year ended December 31, 2001 were $59,500,
including an employee benefit plan audit of $10,000 and tax preparation
and consultation services of $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, 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
communication 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 he 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, 2001 for filing with the Securities and
Exchange Commission.
AUDIT COMMITTEE
William L. Dickinson
Jerry O. Tuttle
ANNUAL REPORT
All stockholders of record as of March 22, 2002 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, 2001, which contains certified financial statements of the
Company for the fiscal years ended December 31, 2001 and 2000.
STOCKHOLDER PROPOSALS
Stockholder proposals must be received by January 3, 2003 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
March 29, 2002