MILTOPE GROUP INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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, June 11, 1998 at 10:00 A.M., Local Time, to consider
and act upon the following:
1.To elect eight 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 April 22, 1998 shall be
entitled to receive notice of, and to vote at, the Meeting, and at any
adjournment or adjournments 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
JAMES E. MATTHEWS
Secretary
Dated: May 4, 1998
IMPORTANT
---------
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.
<PAGE>
MILTOPE GROUP INC.
500 Richardson Road South
Hope Hull, Alabama 36043
------------------------------
PROXY STATEMENT
Annual Meeting of Stockholders
June 11, 1998
------------------------------
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, June 11, 1998 at 10:00 A.M., Local
Time, and any adjournment or adjournments 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 May 4, 1998.
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. 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 April 22, 1998
(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.
<PAGE>
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 April 17, 1998:
<TABLE>
Amount and
Nature of
Name and Address Beneficial Percent
Title of Class of Beneficial Owner Ownership* of Class
- ---------------- ------------------------ ----------- --------
<S> <C> <C> <C>
Common Stock Innova International Corporation 3,664,478 62.5%
($.01 par value) 57 Union Place
Suite 310
Summit, NJ 07901
Common Stock Dimensional Fund 365,800 (1) 6.2%
$.01 par value) Advisors Inc.
Suite 650
1299 Ocean Avenue
Santa Monica, CA 90401
</TABLE>
- -------------------------------
* Unless otherwise noted, all shares are directly owned.
(1) Dimensional Fund Advisors Inc. ("Dimensional"), a registered
investment advisor, reported beneficial ownership of 365,800 shares of
the Company's Common Stock as of December 31,1997. 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 365,800 shares, and sole voting power with respect to
235,700 shares. Persons who are officers of Dimensional also serve as
officers of the Fund and the Trust. In their capacities as officers of
the Fund and the Trust, these persons vote 51,000 additional shares
which are owned by the Fund and 79,100 shares which are owned by the
Trust.
<PAGE>
OWNERSHIP OF COMMON STOCK BY DIRECTORS, NOMINEES AND OFFICERS
The following table sets forth certain information as of April 22,
1998, 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:
<TABLE>
Name of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership(1) of Class
- -------------- --------------------- ----------------------- --------
<S> <C> <C> <C>
Common Stock Jan H. Stenbeck 0 *
Common Stock Teddy G. Allen 0 *
Common Stock Alvin E. Nashman 50,887 (2) *
Common Stock William L. Dickinson 23,230 (3) *
Common Stock Franklin Miller 0 *
Common Stock William Mustard 0 *
Common Stock Jerry O. Tuttle 0 *
Common Stock Teri Spencer 0 *
Common Stock Robert G. Kaseta 31,000 (4) *
Common Stock James E. Matthews 10,000 (5) *
Common Stock John Cochran 16,820 (6) *
Common Stock Edward F. Crowell 3,520 (7) *
Common Stock Executive officers and directors 135,457 (2)(3)(4)(5) 2.3%
as a group (12 persons) (6)(7)
</TABLE>
- ------------------------
* Represents less than one percent of the class.
(1) Unless otherwise noted, all shares are directly owned. Includes
shares which may be acquired pursuant to options exercisable on April
22, 1998 and within sixty days of April 22, 1998, pursuant to Rule 13d-
3 under the Securities Exchange Act of 1934, as amended.
(2) Represents shares of Common Stock which Dr. Nashman may acquire
upon exercise of stock options.
(3) Represents shares of Common Stock which Mr. Dickinson may acquire
upon exercise of stock options.
(4) Represents 3,000 shares of Common Stock owned by Mr. Kaseta,
22,000 shares of Common Stock which Mr. Kaseta may acquire upon
exercise of stock options and 6,000 shares of Common Stock held by Mr.
Kaseta's wife and children. Mr. Kaseta disclaims beneficial ownership
of the shares owned by his wife and children.
<PAGE>
Notes to Ownership of Common Stock Table continued
--------------------------------------------------
(5) Represents 10,000 shares of Common Stock which Mr. Matthews may
acquire upon exercise of stock options.
(6) Represents 4,320 shares of Common Stock owned by Mr. Cochran and
12,500 shares of Common Stock which Mr. Cochran may acquire upon
exercise of stock options.
(7) Represents 20 shares of Common Stock owned by Mr. Crowell and
3,500 shares of Common Stock which Mr. Crowell may acquire upon
exercise of stock options.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
At the Meeting, eight 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
eight 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 thereunder 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:
<TABLE>
Name Age Title
- --------------------- ------- -----------------------------------
<S> <C> <C>
Teddy G. Allen 62 Chairman of the Board of Directors
Alvin E. Nashman 71 Director
Jan H. Stenbeck 55 Director
William L. Dickinson 73 Director
William Mustard 45 Director
Franklin Miller 62 Director
Jerry O. Tuttle 63 Director
Teri Spencer 35 Director
</TABLE>
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 Innova International Corporation
("IIC") which, through its operating subsidiaries, provides systems
integration products and services and telecommunications consulting
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.
Dr. Nashman has served as a director of the Company since
September 1984 and served as Chairman of the Board of Directors from
October 1992 through June 1997. From 1969 through 1991, he served as
President of Computer Sciences Corporation's System Group and since
1967 he has been a director of Computer Sciences Corporation, a company
which specializes in software and system integration for communications
and computer systems. In addition, Dr. Nashman is a private consultant
and a director of HALIFAX Corporation.
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 Millicom International Cellular S.A., an international
cellular telecommunications concern headquartered in Luxembourg
("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 NetCom Systems AB, Modern Times Group
AB, Invik and Co. and Banque Invik AB, a Luxembourg bank principally
active in private banking, credit cards and treasury.
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. Mustard has served as a director of the Company since June
1995. He has served as President, Chief Executive Officer and a
director of IIC since September 25, 1996. Prior to that, he served as
Chief Financial Officer of IIC since December 13, 1994. Additionally,
Mr. Mustard has served since November 18, 1996, as President, Chief
Executive Officer and a director of Great Universal Incorporated, which
provides satellite television, systems integration services and
telecommunications outsourcing services. Prior to that, he served as
President (Acting) and Chief Financial Officer of Great Universal
Incorporated, since 1993. Since June 1991, Mr. Mustard has held
various positions at Millicom Incorporated, a cellular
telecommunications business ("Millicom").
Mr. Miller has served as a director of the Company since June
1995. Mr. Miller has served as Chairman of IIC since December 13,
1994. Mr. Miller combines a background in telecommunications with
experience in computerization, software engineering, technology
transfer and industrial management. For more than five years, Mr.
Miller has served as President and Chief Executive Officer of
InnovaConsult, Inc., a concern which provides high level
telecommunications consulting services.
Mr.Tuttle has served as a director of the Company since February
1998. Mr. Tuttle has served as Senior Vice President of ManTech
International Corporation, ("ManTech") and President of ManTech Systems
Engineering Corporation since October, 1996. 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.
Ms. Spencer has served as a director of the Company since February
1998. Ms. Spencer has served as President and Chief Executive Officer
of Integrated Systems and Internet Solutions, Inc. ("ISIS 2000") since
its founding in August, 1996. Prior to founding ISIS 2000, Ms. Spencer
held a variety of technical and management positions with the United
States Army Information System Command.
In addition to the directors of the Company, Mr. James E. Matthews
is President and Chief Executive Officer of the Company and Miltope
Corporation, an Alabama corporation ("Miltope") and is Secretary of the
Company.
Mr. Matthews (age 41) has served as President and Chief Executive
Officer of the Company and Miltope since April 30, 1998. Prior to that
time, he served as Vice President Finance, Chief Financial Officer of
the Company and Miltope since November 8, 1995. Also, Mr. Matthews has
served as Secretary of the Company since November 19, 1996. Mr. Matthews
served as Chief Financial Officer of Great Universal Incorporated and
Chief Financial Officer of IIC from January 1998 through April 1998.
Prior to joining the Company in November 1995, Mr. Matthews served for
three years as Controller of CAE Link Corporation, a producer of
military flight simulation systems. Prior to that time, Mr. Matthews
served for five years in various financial executive capacities in the
United States and United Kingdom with Amstrad plc, a producer and
distributor of personal computers and consumer electronics.
BOARD OF DIRECTORS AND COMMITTEES
During the 1997 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 Dr. Nashman 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, 1997. The Company has a Stock Option Committee of the
Board of Directors for the Company's 1995 Plan which consists of
Messrs. Allen, Mustard and Nashman. 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 Nashman.
The Compensation Committee held one meeting during the fiscal year
ended December 31, 1997. 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 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. As of January 1, 1995, IIC, 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 approximately 7.2% of the outstanding shares
of the Company's Common Stock. IIC is a subsidiary of Great Universal
Incorporated, a Delaware corporation and a wholly-owned subsidiary of
MIC-USA Inc., a Delaware corporation and a wholly-owned subsidiary of
MIC. Jan H. Stenbeck, a director of the Company, is also a director of
IIC and Great Universal Incorporated and Chairman and a director of
MIC. Mr. Stenbeck is also Chairman of the Board and, together with
family trusts, owner of approximately 99% of the Common Stock of
Stonebrook, which owns 17.6% of the Common Stock of IIC. In addition,
certain directors of the Company hold positions with IIC as follows:
Teddy Allen is an employee of IIC, Franklin Miller is Chairman of IIC,
and William Mustard is President, Chief Executive Officer and a
director of IIC and President, Chief Executive Officer and a director
of Great Universal Incorporated. James E. Matthews served as Chief
Financial Officer of Great Universal Incorporated and Chief Financial
Officer of IIC from January 1998 through April 1998.
Since January 1, 1992, the Company had made certain loans to
Stonebrook which accrued interest at an annual rate equal to the prime
lending rate plus .75%. During 1996, all loans to the related entity
and accrued interest were repaid to the Company. During 1997, there
were no loans to the related party.
During 1996 and 1997, the Company recorded sales of $1,140,000 and
$10,640,000, respectively, to 3C Communications International S.A., a
Luxembourg corporation and a wholly-owned subsidiary of MIC. At
December 31, 1996 and 1997, accounts receivable on such sales was
$659,000 and $2,910,000, respectively.
<PAGE>
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, 1997, 1996 and 1995 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.
<TABLE>
Long Term
Compensation
Annual Compensation Awards
------------------- -----------
Number
of
Securities All
Name and Underlying Other
Principal Position Year Salary Bonus Options Compensation
- --------------------------- ----- -------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C>
George K. Webster (1) 1997 $241,346 $ 41,143 --
President and 1996 $210,417 $105,109 --
Chief Executive 1995 $179,362 -- 60,000 --
Officer
James E. Matthews 1997 $130,000 $ 41,143
Vice President, Finance 1996 $121,667 $ 40,515 $51,440 (2)
and Chief Financial Officer 1995 $ 16,154 -- 20,000 --
Robert G. Kaseta 1997 $119,426 $ 32,912
Vice President, 1996 $115,024 $ 36,578
Engineering of 1995 $115,024 -- 10,000 $ 7,351 (2)
Miltope
John E. Cochran 1997 $140,000 --
Vice President, 1996 $127,450 $ 39,000 10,000 --
Business Development 1995 $ 67,885 -- 20,000 $49,041 (2)
of Miltope
Edward F. Crowell 1997 $ 95,000 $ 16,451
Vice President, 1996 $ 95,000 $ 19,190 -- --
Human Resources 1995 $ 90,674 -- 7,000 --
of Miltope
- ----------------------
</TABLE>
(1) Resigned from the Company effective April 29, 1998.
(2) Represents relocation expenses paid by the Company to relocate
to Montgomery, Alabama.
<PAGE>
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, 1997. No stock
options were exercised by such executive officers during the 1997
fiscal year.
<TABLE>
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
------------------ -------------------------- --------------------------
<S> <C> <C> <C> <C>
George K. Webster (2) 47,000 30,000 -- --
James E. Matthews 10,000 10,000 $ 1,875 $ 1,875
Robert G. Kaseta 22,000 5,000 $ 938 $ 938
John E. Cochran 12,500 17,500 -- --
Edward F. Crowell 3,500 3,500 $ 656 $ 656
</TABLE>
(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, 1997. The last sale price
of the Company's Common Stock on December 31, 1997 on The NASDAQ
Stock Market was $3.0625.
(2) Resigned from the Company effective April 29, 1998.
EMPLOYMENT AGREEMENTS OF EXECUTIVE OFFICERS AND
TERMINATION OF EMPLOYMENT ARRANGEMENTS
There were no employment agreements or termination of employment
arrangements with executive officers as of December 31, 1997. Under the
terms of Mr. Webster's resignation on April 29, 1998, there is a
severance agreement providing for salary payments and benefits over a
six month period.
COMPENSATION OF DIRECTORS
Directors who are not compensated by the Company, or its
subsidiaries, Stonebrook or affiliates of Stonebrook, 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.
Messrs. Dickinson and Nashman are each entitled to receive stock
options at the commencement of each year of service as a director
entitling him 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.
On September 11, 1997, Messrs. Dickinson and Nashman were each granted
options to purchase 4,559 shares of the Company's Common Stock at a
purchase price of $3.29 per share.
<PAGE>
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, 1997, its executive officers, directors and holders
of more than 10% of the Company's Common Stock complied with all
Section 16(a) filing requirements except with respect to one Form 3
filing of Jerry O. Tuttle and one Form 3 filing of Teri Spencer that
were filed late. 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 which are determined each
fiscal year by the Committee and approved by the entire Board of
Directors. The goal is to achieve compensation levels which 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, 1997, $131,649 of bonuses were 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 1997 fiscal year do not exceed $1
million for any named executive officer included in the Summary
Compensation Table.
This report was furnished by Messrs. Allen, Mustard and Nashman,
all of the members of the Compensation Committee.
COMPARISON OF TOTAL STOCKHOLDER RETURN
The following graph sets forth the Company's total stockholder
return over a five-year period, beginning December 31, 1992, and ending
December 31, 1997, 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 INDEX & NASDAQ NON-FINANCIAL
INDEX
<TABLE>
1992 1993 1994 1995 1996 1997
----- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Nasdaq Stock Market $100 $114.79 $112.21 $158.68 $195.19 $239.63
Nasdaq Non-Financial $100 $115.45 $111.02 $154.71 $187.97 $220.77
Miltope Group Inc. $100 $ 91.67 $100.00 $ 62.50 $ 63.89 $ 68.06
</TABLE>
AUDITORS
Deloitte & Touche LLP were the Company's independent public
auditors for the fiscal year ended December 31, 1997. The auditors for
the current fiscal year will be appointed by the Board of Directors.
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.
<PAGE>
ANNUAL REPORT
All stockholders of record as of April 22, 1998 are concurrently
being sent a copy of the Company's Annual Report for the fiscal year
ended December 31, 1997 which contains certified financial statements
of the Company for the fiscal years ended December 31, 1996 and 1997.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH BENEFICIAL HOLDER
OF ITS COMMON STOCK ON APRIL 22, 1998, ON THE WRITTEN REQUEST OF ANY
SUCH PERSON, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE
FISCAL YEAR ENDED DECEMBER 31, 1997, AS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION. ANY SUCH REQUEST SHOULD BE MADE IN WRITING TO THE
CHIEF FINANCIAL OFFICER, MILTOPE GROUP INC., 500 RICHARDSON ROAD SOUTH,
HOPE HULL, ALABAMA 36043.
STOCKHOLDER PROPOSALS
Stockholder proposals must be received by January 4, 1999 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 therefor 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
JAMES E. MATTHEWS
Secretary
May 4, 1998
<PAGE>
MILTOPE GROUP INC. - 1998 ANNUAL MEETING
JUNE 11, 1998
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned stockholder of MILTOPE GROUP INC., a Delaware
corporation (the "Company"), acknowledges receipt of the Notice of
Annual Meeting of Stockholders and Proxy Statement, dated May 4, 1998,
and hereby constitutes and appoints Teddy G. Allen and James E.
Matthews, or either of them acting singly in the absence of the other,
with the power of substitution in either of them, the proxies of the
undersigned to vote with the same force and effect as the undersigned
all shares of Common Stock of the Company held by the undersigned at
the Annual Meeting of the Stockholders of the Company to be held at
the Company's corporate headquarters, 500 Richardson Road South, Hope
Hull, Alabama 36043, on Thursday, June 11, 1998 at 10:00 A.M., Local
Time, and at any adjournment or adjournments thereof, hereby revoking
any proxy or proxies heretofore given and ratifying and confirming all
that said proxies may do or cause to be done by virtue thereof with
respect to the following matters:
The undersigned hereby instructs said proxies or their substitutes:
1. The election of eight directors
nominated by the Board of Directors:
WITHHOLD AUTHORITY
FOR all nominees listed beloW to vote for all nominees
(except as indicated) listed below
----- -----
NOMINEES: Teddy G. Allen, William L. Dickinson, Franklin Miller,
William Mustard, Alvin E. Nashman, Teri Spencer,
Jan H. Stenbeck, Jerry O. Tuttle
(INSTRUCTION: To withhold authority to vote for any individual
nomineee or nominees, write such nominee's or nominees'
name(s) in the space provided below.)
______________________________________________________________________
2. Upon such other matters as may properly come before the meeting or
any adjournment or adjournments thereof.
This proxy when properly executed will be voted as directed. If
no direction is indicated, the proxy will be voted FOR the
election of the eight named individuals as director.
PLEASE SIGN, DATE AND MAIL
THIS PROXY IMMEDIATELY IN THE
ENCLOSED ENVELOPE.
Date: .................. 1998
................... (L.S.)
.....................(L.S.)
Please sign your name exactly
as it appears hereon. When
signing as attorney, executor,
administrator, trustee or
guardian, please give your
full title as it appears
hereon. When signing as joint
tenants, all parties in the
joint tenancy must sign. When
a proxy given by a
corporation, it should be
signed by an authorized
officer and the corporate seal
affixed. No postage is
required if returned in the
enclosed envelope and mailed
in the United States.
