SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
[ ] Definitive Proxy Statement Commission Only (as permitted
[X] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Section 240.14a-11(c) or Section
240.14a-12
ALLIED RESEARCH CORP
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than 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
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule, or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
ALLIED RESEARCH CORPORATION
ALLIED RESEARCH CORP. REITERATES THE IMPORTANCE
OF SUPPORTING ALLIED'S CURRENT BOARD OF DIRECTORS
Vienna, Virginia - June 4, 1999 - Dr. Jay Sculley, Chairman of Allied Research
Corporation, reiterated the importance of supporting Allied's present Board of
Directors and management in the face of the proxy contest currently being waged
by Zilkha Capital Partners, L.P., a dissident shareholder. Dr. Sculley
reinforced that, "This proxy fight is an attempt by Zilkha to take control of
Allied without offering a concrete or credible plan that would provide any value
or benefit to shareholders. Furthermore, if Zilkha takes control of the Board of
Directors, they will be able to dismantle Allied's anti-takeover defenses and
deprive you of a fair price for your company."
Dr. Sculley urges shareholders to consider the future of Allied and what is
truly in the best interest of shareholders:
ZILKHA'S ASSERTIONS ARE MISLEADING.
o Zilkha continues to make statements that are misleading and unfounded.
Zilkha states that Allied failed to realize value for its shareholders when
its Board rejected an offer from a third party to acquire the company.
Zilkha failed to disclose to you that this event occurred in 1993 - more
than six years ago. Additionally, Zilkha failed to disclose that the
interested party never began due diligence nor did they ever submit a
binding offer to purchase Allied.
o Furthermore, Zilkha also states that Allied, like themselves, were rejected
by a regional Belgian government in an attempt to acquire arms manufacturer
Fabrique Nationale. In fact, Allied never offered to acquire Fabrique
Nationale nor was the company ever rebuffed by the Belgians. Unlike Zilkha,
Allied enjoys an outstanding relationship with the Belgian government that
is essential to Mecar's continued success.
o Allied has been very forthright with its statements regarding the general
outlook for the current fiscal year. While it is not the company's policy
to offer projections of future operating results, Zilkha's statements that
the company is facing losses for a minimum of three consecutive quarters
and a substantial net loss for the 1999 fiscal year are unfounded, untrue
and not based in fact.
THE FUTURE. WHICH WAY IS BETTER?
o ALLIED RESEARCH TODAY: ON A STEADY COURSE WITH SOLID MANAGEMENT. Allied
Research has recorded 15 consecutive quarters of solid profitability and
shareholder equity has increased 76% in just three years. Allied's VSK
Group, a commercial electronic security business and a key component of
Allied's successful diversification strategy, grew 30% in 1998, and now
provides Allied with an increasing percentage of its corporate profits.
o A REALISTIC ACTION PLAN IS BUILDING A STRONG ALLIED RESEARCH. Under the
current Board, Allied Research has in place a fully-tested and successful
strategic business plan. We've used our defense business to create cash
reserves that have allowed Allied to diversify into the profitable and
growing electronic security industry.
<PAGE>
o ZILKHA ADMITS THEY HAVE NO SPECIFIC PLAN TO MANAGE ALLIED. With their
statement, "...until we replace the Board and are able to analyze the
company from the inside, it is impossible to develop...specific plans",
Zilkha continues to demonstrate little current understanding of Allied's
business, and has therefore, offered no clear, specific, or credible plan
for the management of Allied's business.
o ZILKHA COULD ADVERSELY IMPACT ALLIED'S CURRENT BUSINESS BASE. Allied's
current defense business has been carefully crafted through years of
personal relationships with skilled technical representatives working with
international defense agencies. These strong business bonds could disappear
in an instant if Zilkha gains control of your company.
o HOW WOULD COLT'S HANDGUN LITIGATION AFFECT ALLIED? Zilkha's key holding,
Colt's Manufacturing Co., is already under legal attack by well-funded
trial lawyer groups who, if successful, will punish handgun makers like
Colt's. How would this affect Allied?
THE PRUDENT SPECULATOR SUPPORTS MANAGEMENT.
o Al Frank, publisher of the influential, respected and highly-successful THE
PRUDENT SPECULATOR, warmly endorsed present management. "...we strongly
oppose [Zilkha's] attempt to elect a new slate of directors to replace
Allied's Board...we hardly think replacing a management team that has
produced earnings per share of $1.08, $1.85 and $1.73 in the last three
years is in shareholders best interest."
ZILKHA'S FINANCING PROPOSAL: AN OFFER ALLIED COULD AND DID REFUSE.
o Zilkha presented Allied with a self serving, unnecessary and highly
dilutive convertible note financing proposal which included a demand for
Board seats that would give Zilkha near control of your company without
offering any benefit to all shareholders. Our President met with Zilkha and
presented Zilkha's written proposal to the Allied Board. When politely
rebuffed for obvious and sound business reasons, Zilkha acquired his
present Allied holdings on March 31, 1999. Just 28 days later Zilkha
launched his proxy contest.
ALLIED HAS PLANS FOR PROFITABLE FUTURE GROWTH.
o Allied will continue to seek out and listen to all constructive ideas, both
from shareholders and advisors, and act on those that are in the best
interest of all shareholders.
o Allied fully expects that increased oil prices will loosen up Middle
Eastern defense budgets, driving up backlog at our key defense unit and
fueling our diversified growth.
o Allied will intensify our commercial acquisition program, adding to our
successful effort to date.
o Allied will continue to keep all shareholders, media and institutional
investors advisors absolutely current with our actions and future plans to
grow Allied Research profitably and maximize total shareholder return.
<PAGE>
The management of Allied Research Corporation is concerned that shareholders
will be misled by the Zilkha group campaign and welcomes them to call Corporate
Investor Communications at (877) 460-4348 if they have any questions or would
like to discuss the issues with us. The Board recommends that shareholders
support the current management team by returning only white proxy cards and
discarding any card sent to them by the Zilkha group.
Allied Research Corporation is a defense and electronic security firm. Its
operating units develop and produce ammunition, supply equipment performance
upgrades for defense departments worldwide, and design, produce and market
sophisticated electronic security and access control systems.
Certain statements contained herein are "Forward-Looking" statements as such
term is defined in the Private Securities Litigation Reform Act of 1995. Because
such statements include risks and uncertainties, actual results may differ
materially from those expressed or implied. Factors that could cause results to
differ materially from those expressed or implied include, but are not limited
to, those discussed in filings by the Company with the Securities and Exchange
Commission.
