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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Amendment #1)
(Rule 14A-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant |_|
Filed by a Party other than the Registrant |X|
Check the appropriate box:
|X| Preliminary Proxy Statement
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
ALLIED RESEARCH CORPORATION
(Name of Registrant as Specified In Its Charter)
ZILKHA CAPITAL PARTNERS, L.P.
LT. GENERAL WILLIAM M. KEYS, USMC (Ret.)
JOHN P. RIGAS
JEAN-CLAUDE ROCH
JOHN R. TORELL III
DONALD E. ZILKHA
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (Check the appropriate box):
|X| No Fee Required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total Fee Paid:
|_| Fee paid previously with preliminary materials:
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
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CONTACT:
Stanley J. Kay
MacKenzie Partners, Inc.
212/929-5940
FOR IMMEDIATE RELEASE:
ZILKHA CAPITAL FILES PRELIMINARY PROXY
MATERIALS TO REPLACE BOARD OF ALLIED RESEARCH
NEW YORK, NEW YORK, MAY 10, 1999 -- Zilkha Capital Partners, L.P. announced
today that it has filed preliminary proxy materials in opposition to management
with the U.S. Securities and Exchange Commission regarding the upcoming June 9
annual meeting of Allied Research Corporation (AMEX:ALR).
Zilkha will solicit proxies seeking to replace the 5 management nominees up for
election this year with a slate of its own, which it is calling "The New
Nominees." The five "New Nominees" are:
- - Lt. General William M. Keys, 62, USMC (Ret.), Chairman of Keys &
Associates, a business consulting firm and President of Value Properties,
a real estate development and management company in New York City. General
Keys also has held many distinguished leadership positions in the Marine
Corps, including Commander, U.S. Marine Corps Forces, Atlantic and is also
a consultant to General Motors Defense, Ltd.;
- - John P. Rigas, 35, a cofounder of Zilkha Capital Partners who has more
than 10 years experience in private equity transactions and the management
of portfolio companies;
- - Jean-Claude Roch, 51, of Lausanne, Switzerland, Vice Chairman of the Board
of Aeroleasing Holding SA, a private airline company and a director of a
number of Belgian companies;
- - John R. Torell, III , 59, Chairman and CEO of a private investment firm
specializing in principal transactions, former President and COO of
Manufacturers Hanover and currently a director of several public companies
including American Home Products Corporation and The Paine Webber Group;
and
- - Donald E. Zilkha, 47, co-founder of Zilkha Capital Partners who has more
than 20 years experience in investment management, merchant banking and
the management of portfolio companies.
- more -
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Zilkha Capital Partners, L.P.
May 10, 1999
Page Two
Nominee John P. Rigas commented, "As major shareholders of Allied Research, with
ownership of more than four percent of the Company, we have been keenly
disappointed with management's performance. Unfortunately, since Allied
management has refused to meet with us or to discuss our ideas for improving the
Company, we have been forced to take this step of soliciting proxies to replace
the management nominees."
Specifically, the Zilkha preliminary proxy materials discuss in detail the
following as summarized reasons for the nomination and election of the New
Nominees:
- - Over the past five years, the Company's return on its common stock has
significantly underperformed the Company's primary competitors and major
market indices.
- - The Company's weak financial performance throughout 1998 and into the
first quarter of 1999 and its dwindling backlog creates significant
concern over the Company's future economic prospects.
- - Because of Allied's long-standing inefficient capital structure, the New
Nominees believe the Board has failed to effectively utilize and deploy
the Company's large cash reserves.
- - The Board has failed to implement a strategic plan to reduce its customer
concentration, diversify its businesses, develop new products or enhance
the synergies among its businesses.
- - The Board has appointed a senior management team which is remote and
dislocated from the Company's primary operations in Europe and whose
interests are not aligned sufficiently with those of stockholders.
Mr. Rigas continued, "If elected, the New Nominees would seek to improve the
Company's performance and enhance stockholder value through a number of steps
including drawing on our extensive experience with and knowledge of the defense
industry to undertake a strategic review of the Company and each of its
businesses. Our plans also call for reorganizing the capital structure of the
Company with a view to better utilization of cash reserves and improving
financing arrangements and strengthening the Company's management team by
calling for increased stock participation among the Board and senior management
and by relocating senior managers to the location of the businesses which they
run."
- more -
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Zilkha Capital Partners, L.P.
May 10, 1999
Page Three
"Through these changes," Mr. Rigas concluded, "We hope to unlock hidden
shareholder value for the benefit of all shareholders and begin to build
long-term value by developing a comprehensive business plan to diversify current
business lines and to divest those which are unsuitable or do not generate an
acceptable return."
Zilkha urges shareholders not to vote any management proxy cards they may
receive until they have had a chance to review the Zilkha materials. Zilkha
intends to mail preliminary proxy materials to shareholders as soon as possible
and encourages all shareholders to read them carefully. Shortly thereafter,
Zilkha will mail definitive proxy materials to all shareholders which will
include a GOLD proxy card which can be used to support the New Nominees.
Zilkha Capital Partners, L.P. is a private equity investment partnership
dedicated to the long-term capital appreciation of its equity, equity-related
and debt investments.
# # #
PARTICIPANT INFORMATION
In addition to Zilkha Capital Partners, the New Nominees and Zilkha Guernsey
Capital Partners, L.P., a private equity fund affiliated with Zilkha Capital
Partners, may be deemed to be participants in the solicitation of proxies, as
such terms are defined in the rules of the Securities and Exchange Commission.
Zilkha Capital Partners beneficially owns 200,000 shares of Allied Research's
common stock representing approximately 4.14% of the outstanding shares of
Allied Research. John P.Rigas and Donald E. Zilkha may each be deemed to
beneficially own the 200,000 shares of Allied Research common stock owned by
Zilkha Capital Partners and Zilkha Guernsey Capital Partners may be deemed to
beneficially own a portion of such shares.
