UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
  Form 10-K
  ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
  For the fiscal year ended December 31, 2008
    Commission file number: 1-11376
   THE ALLIED DEFENSE GROUP,
    INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware(State of
    incorporation)

04-2281015(I.R.S. Employer
    Identification No.)   8000 Towers Crescent Drive, Suite 260
    Vienna, Virginia 22182
 (Address of principal executive
    offices, including zip code)
  (703) 847-5268
 (Registrants telephone
    number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Class

Name of ExchangeCommon Stock, $0.10 Par Value

NYSE Alternext Exchange
    (formerly American Stock Exchange)   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller
    reporting
    company þ   Rule 12b-2 o þ
  Form 10-K,




---



##### 





INDEX
   
 PART IItem 1.


Business


1Item 1A.


Risk Factors


7Item 1B.


Unresolved Staff Comments


7Item 2.


Properties


8Item 3.


Legal Proceedings


8Item 4


Submission of Matters to a Vote of Security
    Holders


8PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


9Item 6.


Selected Financial Data


10Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


10Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


22Item 8.


Financial Statements and Supplementary Data


23Item 9.


Changes in and Disagreements With Accountants on
    Accounting and Financial Disclosure


23Item 9A (T).


Controls and Procedures


23Item 9B.


Other Information


24PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


24Item 11.


Executive Compensation


26Item 12.


Security Ownership of Certain Beneficial Owners,
    Management & Related Stockholder Matters


30Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


32Item 14.


Principal Accountant Fees and Services


32PART IVItem 15.


Exhibits and Financial Statement Schedules


32SIGNATURES


34




---



##### 



PART I  ITEM 1.
    BUSINESS          Acquisition Date

Company Involved

Disposition DateMay 31, 1994

VSK Electronics N.V. and Télé Technique
    Générale S.A.

September 18, 2007May 9, 1995

Intelligent Data Capturing Systems N.V.

September 18, 2007December 11, 1999

VIGITEC S.A.

September 18, 2007December 31, 2001

News/Sports Microwave Rental Inc.June 6, 2002

Titan Dynamic Systems, Inc.

March 17, 2008July 31, 2002

SeaSpace Corporation

July 23, 2007August 1, 2004

CMS Security Systems

January 1, 2008November 1, 2005

Global Microwave Systems, Inc.

October 1, 2008     Accounting for the
    Impairment or Disposal of Long-Lived Assets.
  Description
    of Business
  Allied
    Disclosure about
    Segments of an Enterprise and Related Information.
 1




---



##### 



Mecar
    Direct
    Fire Ammunition
  90mm Ammunition
  105mm Ammunition
  120mm Ammunition
  Indirect
    Fire Ammunition
  Mortar Ammunition
  Other Ammunition
 2




---



##### 



Grenades
  Principal
    Activities at Mecar in 2008
      Mecar
    USA
    Principal
    Activities at Mecar USA in 2008
    NSM
  Accounting for the Impairment or Disposal of Long-Lived
    Assets,
 3




---



##### 



Geographic
    Areas and Industry Segments
    Market
    and Customers
        and/or
  and/or
  U.S.-based
 4




---



##### 



Principal
    Customers
    Raw
    Materials and Suppliers
    Marketing
    Research
    and Development
    Backlog
   5




---



##### 



December 31,2008


2007Mecar

$
136,396


$
94,993Mecar USA


49,525



13,965Total

$
185,921


$
108,958     Competition
    and/or
    Seasonal
    Nature of Business
   6




---



##### 



Personnel
    Technical &


Hourly


Part-Time


TechnicalSalaried Employees


Workers


Employees


Consultants


TotalAllied


8















8Mecar


55



274







5



334Mecar USA


6



5











11Total


69



279







5



353     Patents
    and Trademarks
    Environmental
    Regulations
    Available
    Information
  www.allieddefensegroup.com. www.allieddefensegroup.com
     (703) 847-5268
  ITEM 1A.
    RISK
    FACTORS    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS   7




---



##### 



ITEM 2.
    PROPERTIES    Square FootageEntity

Location

Property

Owned


LeasedMecar(1)

Nivelles, Belgium

Office/Mfg


399,068



1,943NSM(2)

Spring Valley, CA

Office/Mfg






10,470Mecar USA(3)

Marshall, TX

Office/Mfg


15,738



36,000     (1)
    
    Mecars principal factory is located approximately
    25 miles south of Brussels near Nivelles, Belgium. The
    factory principally consists of a manufacturing and
    administrative complex which has been occupied by Mecar since
    1989. The manufacturing and the administration facility area is
    approximately 339,000 square feet. There are a number of
    older buildings on the property that are still used in
    conjunction with the new complex. A small test firing range is
    maintained on this property. Mecar also utilizes other test
    firing ranges, including test ranges located in the United
    Kingdom, Spain and Portugal. During most of 2008, Mecar operated
    at approximately
    80-90% of
    its productive capacity, based on the product mix of its backlog
    in 2008.(2)
    
    NSM operates from leased office, production and warehouse
    facility in Spring Valley, California. The facility area is
    approximately 10,000 square feet and is leased through
    June 30, 2013. NSM is currently operating at 60% of its
    productive capacity.(3)
    
    Mecar USA operates from an office and manufacturing facility in
    Marshall, Texas, constructed in 2005 with assistance from the
    local development authority. In addition to the manufacturing
    facility, Mecar USA has leased 36,000 square feet since
    2007. The facilities at Mecar USA have been sized in
    anticipation of future period revenue growth. Mecar USA is
    currently operating at 50% of productive capacity.    ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS      Director Name

For


WithheldJ. H. Binford Peay, III


6,200,808



272,161Ronald H. Griffith


6,254,708



218,261Gilbert F. Decker


6,255,088



217,881John G. Meyer, Jr.


6,187,123



285,846Charles S. Ream


6,252,892



220,077John J. Marcello


6,188,353



284,616Frederick G. Wasserman


4,870,064



1,602,905Tassos D. Recachinas


6,248,792



224,177  8




---



##### 



For

Against

AbstainRatification of BDO Seidman as Independent Registered Public
    Accounting Firm


6,428,046



37,335



7,588  PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES  Market Information.
  2008


2007High


Low


High


Low1st Quarter

$
8.45


$
5.62


$
21.00


$
7.722nd Quarter


7.41



5.01



10.45



6.013rd Quarter


7.16



4.82



10.43



3.754th Quarter


8.35



4.96



8.09



5.00   Stockholders.
  Dividends.
  Equity Compensation Plan Information.
  Number of Securities AvailableNumber of Securities to be


Weighted Average


for Future Issuance UnderIssued Upon Exercise of


Exercise Price of


Equity Compensation PlansOutstanding Options,


Outstanding Options,


(Excluding SecuritiesWarrants and Rights


Warrants and Rights


Reflected in Column (a))(a)


(b)


(c)Equity compensation plans approved by security holders


330,000


$
14.78



191,404Equity compensation plans not approved by security holders(1)


411,593


$
17.89



Total


741,593


$
16.51



191,404     (1)
    
    Consists of 349,297 warrants issued to purchasers of convertible
    notes as part of prior financings and 62,296 warrants issued to
    the financial advisor for such financings. 9




---



##### 



ITEM 6.
    SELECTED
    FINANCIAL DATA    ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS (amounts in thousands of dollars, other than share
    data)  Overview
        
    Mecar.  Mecar designs, develops, manufactures
    and sells ammunition and ammunition related products for
    military use. Substantially all of Mecars revenues are
    derived from the sale of ammunition which is used with weapons
    that are generally considered defensive weapons. From time to
    time, Mecar provides system integration services pursuant to
    which it purchases and resells weapon systems, ammunition
    manufactured by others or consulting services to governments
    looking to develop their own manufacturing capabilities in types
    of ammunition not manufactured by Mecar. Mecars
    manufactured products consist of a wide variety of ammunition
    and grenades in the medium caliber, artillery, anti-tank and
    anti-material categories.
    Mecar USA.  Mecar USA purchases and resells
    ammunition and ammunition related products manufactured by
    others for the benefit of the U.S government and foreign
    governments. Mecar USA substantially expanded this procurement
    business in 2008. Mecar USA also pursues manufacturing contracts
    from the U.S. Government and others for ammunition and
    pyrotechnics devices. Mecar USA became operational in late-2005
    following the construction of a new facility in Marshall, Texas.        Liquidity
    and Capital Resources
   10




---



##### 



Outlook
    for 2009
   11




---



##### 



30-day
      Results
    of Operations
       12




---



##### 



2008


2007For the Years Ended December 31,

Amount


%


Amount


%Revenues

$
144,424



100.0
%

$
38,603



100.0
%Cost and expensesCost of sales


123,969



85.8



41,245



106.8Selling and administrative


19,452



13.5



21,495



55.7Research and development


2,277



1.6



1,617



4.2Impairment of long-lived assets


462



0.3







Operating loss


(1,736
)


(1.2
)


(25,754
)


(66.7
)Other income (expense)Interest income


734



0.5



703



1.8Interest expense


(6,403
)


(4.4
)


(10,878
)


(28.2
)Net loss on fair value of senior convertible notes and warrants


(1,104
)


(0.8
)


(6,663
)


(17.3
)Other  net


(2,253
)


(1.5
)


(562
)


(1.4
)Loss from continuing operations before income taxes


(10,762
)


(7.4
)


(43,154
)


(111.8
)Income tax expense


214



0.2







Loss from continuing operations


(10,976
)


(7.6
)


(43,154
)


(111.8
)Income (loss) from discontinued operations, net of taxGain on sale of subsidiaries


2,750



1.9



29,314



75.9Loss from discontinued operations


(2,216
)


(1.5
)


(7,438
)


(19.2
)534



0.4



21,876



56.7Net loss

$
(10,442
)


(7.2
)%

$
(21,278
)


(55.1
)%Earnings (Loss) per share  basic and diluted:Net loss from continuing operations

$
(1.36
)





$
(5.96
)Net earnings from discontinued operations


0.07







3.02Total loss per share  basic and diluted

$
(1.29
)





$
(2.94
)Weighted average number of common shares:Basic and Diluted


8,045,239







7,244,983   2008
    compared to 2007
  Revenue.
  Revenue by Segment2008


2007% of





% ofAmount


total


Amount


totalMecar

$
112,192



78
%

$
37,822



98
%Mecar USA


32,232



22



781



2Total

$
144,424



100
%

$
38,603



100
%  13




---



##### 



Cost of Sales.
  Cost of Sales as a Percentage of Revenue by Segment2008


2007% of





% ofSegment





SegmentAmount


Revenue


Amount


RevenueMecar

$
93,716



84
%

$
40,385



107
%Mecar USA


30,253



94



860



110Total

$
123,969



86
%

$
41,245



107
%       Selling and Administrative Expenses.
  Selling and Administrative Expenses by Segment2008


2007% of





% ofAmount


Total


Amount


TotalMecar

$
10,250



53
%

$
8,937



42
%Mecar USA


1,082



6



517



2Corporate


8,120



41



12,041



56Total

$
19,452



100
%

$
21,495



100
%  14




---



##### 



Research and Development.
  Impairment of Long-Lived Assets.
  Interest Income.
  Interest expense.
  Net (Loss) Gain on fair value of senior convertible notes and
    warrants.
  Other  Net.
 15




---



##### 



Pre-Tax
    Loss.
  Pre-Tax Income (Loss) by Segment2008


2007% of





% ofTotal





TotalAmount


Revenue


Amount


RevenueMecar

$
(811
)


(1
)%

$
(16,178
)


(42
)%Mecar USA


946



1



(571
)


(2
)Corporate


(10,897
)


(7
)


(26,405
)


(68
)Total

$
(10,762
)


(7
)%

$
(43,154
)


(112
)%     Income Taxes-Expense (Benefit).
  Income (loss) from discontinued operations, net of
    tax.
  Net Loss.
  Earnings (loss) per share  basic and
    diluted.
   16




---



##### 



Backlog.
  Backlog by Segment2008


2007Amount


%


Amount


%Mecar

$
136,396



73
%

$
94,993



87
%Mecar USA


49,525



27



13,965



13Total

$
185,921



100
%

$
108,958



100
%       Balance
    Sheet.
    December 31,2008


2007ASSETSCash, restricted and unrestricted

$
18,482


$
34,703Accounts receivable, net


12,646



6,064Costs and accrued earnings on uncompleted contracts


21,999



37,764Inventories, net


21,508



20,950Other current assets


9,080



36,472Property, plant & equipment and other assets


19,984



24,298TOTAL ASSETS

$
103,699


$
160,251LIABILITIESBank overdraft facility

$
381


$
7,239Accounts payable and accrued liabilities


34,157



39,126Customer deposits


16,731



26,666Other current liabilities


5,229



11,068Senior convertible notes


933



19,392Other long-term liabilities and debt


11,817



11,105TOTAL LIABILITIES


69,248



114,596STOCKHOLDERS EQUITY


34,451



45,655TOTAL LIABILITIES AND STOCKHOLDERS EQUITY

$
103,699


$
160,251  17




---



##### 



18




---



##### 



Cash
    Flows.
    2008


2007Net cash used in operating activities

$
(5,041
)

$
(18,294
)Net cash provided by investing activities


22,459



40,383Net cash used in provided by financing activities


(29,800
)


(16,043
)Effects of exchange rate on cash


(166
)


1,429   Operating Activities.
    Investing Activities.
  Financing Activities.
    Effects of Exchange Rate.
  Allied.
 19




---



##### 



Mecar.
  Mecar USA.
  Stock Repurchases.
  Future Liquidity.
  Off-Balance Sheet Arrangements.
      Recent Accounting Pronouncements.
  Critical
    Accounting Policies
   20




---



##### 




    Revenue recognition
    Inventory reserves and allowance for doubtful accounts
    Foreign currency translations
    Derivative Instruments
    Valuation of deferred income taxes and income tax reserves.  Revenue Recognition.
      EITF 99-19 Reporting Revenue Gross as a Principal versus Net as an
    Agent
  Inventory reserves and allowance for doubtful
    accounts.
 21




---



##### 



Foreign Currency Translation.
  Derivative Instruments. Accounting
    for Derivative Instruments and Hedging Activities
  Valuation of deferred income taxes.
  Forward-Looking
    Statements
    ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK   22




---



##### 



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA    ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURES    ITEM 9A
    (T).CONTROLS
    AND PROCEDURES  Disclosure
    Controls and Procedures
  Rule 13a-15
  Managements
    Report on Internal Control over Financial
    Reporting
           23




---



##### 



Changes
    in Internal Control Over Financial Reporting
      ITEM 9B.
    OTHER
    INFORMATION  Form 8-K
 PART III  ITEM 10.
    DIRECTORS
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE             24




---



##### 



2003-2006. 2000-2001 1998-2000.
              http://www.allieddefensegroup.com.
 25




---



##### 



Executive
    Officers
            http://www.allieddefensegroup.com.
     (703) 847-5268
     Section 16A
    Beneficial Ownership Reporting Compliance
    ITEM 11.
    EXECUTIVE
    COMPENSATION  SUMMARY
    COMPENSATION TABLE
  Change inPensionValue andNonqualifiedNon-Equity


DeferredStock


Option


Incentive Plan


Compensation


All OtherAwards


Awards


Compensation


Earnings


Compensation


TotalName and Principal Position

Year


Salary


Bonus


($)(1)


($)(2)


($)


($)


($)(3)


($)John J. Marcello,


2008


$
303,850






$
38,199














$
55,758


$
397,807Chief Executive Officer


2007



299,000



55,000



77,058















115,152



546,210Monte L. Pickens,


2008


$
247,200










$
27,160










$
27,000


$
301,360Executive Vice President


2007



244,000



50,000







37,688











27,000



358,688Deborah F. Ricci


2008


$
206,000






$
26,513


$
26,579










$
20,462


$
279,554Chief Financial Officer


2007



186,539



50,000



36,842



52,299











18,654



344,334     (1)
    
    The amounts in this column reflect the expense recognized for
    financial statement reporting purposes for the years ended
    December 31, 2008 and 2007, in accordance with
    FAS 123(R), from stock awards and restricted 26




---



##### 



stock grants made under the 2001 Equity Incentive Plan during
    and prior to 2006. Assumptions used in the calculation of these
    amounts are included in Footnote A to the Companys audited
    financial statements included in this
    Form 10-K.(2)
    
    The amounts in this column reflect the expense recognized for
    financial statement reporting purposes for the year ended
    December 31, 2008 and 2007, in accordance with
    FAS 123(R), of option grants made under the 2001 Equity
    Incentive Plan during and prior to 2006. Assumptions used in the
    calculation of these amounts are included in Footnote A to the
    Companys audited financial statements included in this
    Form 10-K(3)
    
    This column includes the contribution to a participants
    401(K) plan account equal to 10% of an employees base
    salary. In 2008 and 2007, this column includes tax payments of
    $28,758 and $88,152, respectively, to Belgium for
    Mr. Marcello based on income earned by Mr. Marcello in
    Belgium. For Mr. Marcello and Mr. Pickens this column
    also includes a payment of $4,000 each for premiums for life
    insurance policies.  OUTSTANDING
    EQUITY AWARDS AT FISCAL YEAR-END
    AS OF DECEMBER 31, 2008
  EquityStock Awards

IncentiveEquity

PlanIncentive

Awards:Option Awards





Plan

MarketEquity









Awards:

or PayoutIncentive









Number of

Value ofPlan







(4) Market

Unearned

UnearnedNumber of

Number of

Awards:





Number of

Value of

Shares,

Shares,Securities

Securities

Number of





Shares or

Shares or

Units, or

Units orUnderlying

Underlying

Securities





Units of

Units of

Other Rights

Other RightsUnexercised

Unexercised

Underlying

Option

Option

Stock that

Stock That

That Have

That HaveOptions (#)

Options (#)

Unearned

Exercise

Expiration

Have Not

Have Not

Not

Not VestedPosition

Exercisable

Unexercisable

Options (#)

Price

Date

Vested (#)

Vested ($)

Vested ($)

($)John J. Marcello,






















4,000


$
24,800







Chief Executive OfficerMonte L. Pickens,


32,000



8,000
(1)





$
23.95



3/6/2010















Executive Vice President






10,000
(2)





$
7.44



3/4/2010















Deborah F. Ricci


18,000



12,000
(3)





$
15.05



5/31/2011



6,000


$
37,200







Chief Financial Officer     (1)
    
    Options vest on January 1, 2009.(2)
    
    Options vest on March 4, 2009.(3)
    
    Options vest equally (6,000) on May 1, 2009 and 2010.(4)
    
    Based on closing price of common stock at December 31, 2008
    of $6.20 per share. 27




---



##### 



POTENTIAL
    PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
                   28




---



##### 



COMPENSATION
    OF DIRECTORS
  and/or
  DIRECTOR
    COMPENSATION
  Change inPensionFees Earned











Value andFees Earned


or Paid in








Non-Equity


Nonqualifiedor Paid


Stock in


Stock


Option


Incentive Plan


Deferred


All Otherin Cash


Lieu of cash


Awards


Awards


Compensation


Compensation


Compensation


TotalName(1)

($)(2)(6)


($)(3)(4)


($)(4)


($)


($)


Earnings


($)(5)


($)J. H. Binford Peay, III

$
21,000


$
33,000


$
36,000














$
62,172


$
152,172John G. Meyer, Jr.

$
14,000


$
22,000


$
36,000


















$
72,000Ronald H. Griffith

$
14,000


$
22,000


$
36,000


















$
72,000Gilbert F. Decker

$
14,000


$
22,000


$
36,000


















$
72,000Charles S. Ream

$
14,000


$
22,000


$
36,000


















$
72,000Frederick G. Wasserman

$
14,000


$
22,000


$
36,000


















$
72,000Tassos D. Recachinas

$
12,000


$
22,000


$
36,000


















$
70,000     (1)
    
    Mr. Marcello, Chief Executive Officer, does not receive
    additional compensation as a director. All of his compensation
    is reported in the Summary Compensation Table.(2)
    
    Mr. Meyer and Mr. Decker have elected to defer their
    cash and stock compensation received as directors until they
    cease to serve on the Board.(3)
    
    Compensation earned in stock in lieu of cash for each of the
    above as a non-employee member for the Companys Board of
    Directors from August 1, 2008 to June 30, 2009.(4)
    
    Cumulative stock compensation for each of the above as a
    non-employee member of the Companys Board of Directors are
    as follows: Mr. Peay, 22,825 shares; Mr. Meyer,
    17,992 shares with 16,431 deferred; Mr. Griffith,
    23,995 shares; Mr. Decker, 21,995 shares with
    19,995 deferred; Mr. Ream, 16,431 shares;
    Mr. Wasserman, 14,794 shares; and Mr. Recachinas,
    10,113 shares as of August 18, 2008.(5)
    
    This is the annual payment for a $1 million life insurance
    policy including the
    gross-up for
    taxes.(6)
    
    Compensation earned and received in cash from January 1,
    2008 to July 31, 2008. 29




---



##### 



ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    Name and Address of

Amount and Nature ofTitle of Class

Beneficial Owner

Beneficial Ownership

Percent of Class(1)Common

Aegis Financial Corporation(2)

1,102,274


13.64
%1100 North Glebe Rd

Owned directlySuite 1040Arlington, Virginia 22201Common

Ironwood Investment Management, LLC(3)

1,071,561


13.26
%21 Custom House Street, Suite 240

Owned directlyBoston, MA 02110Common

Wynnefield Capital Management, LLC(4)

587,235


7.27
%450 Seventh Avenue

Owned directlySuite 509New York, New York 10123Common

Dimensional Fund Advisors LP(5)

573,493


7.10
%Palisades West, Building One

Owned directly6300 Bee Cave Road,Austin, Texas 78746Common

Voyageur Asset Management Inc.(6)

469,970


5.82
%100 South Fifth Street, Suite 2300

Owned directlyMinneapolis, MN 55402Common

Renaissance Techologies LLC(7)

416,300


5.15
%420 Montgomery Street

Owned directlySan Francisco, CA 94163     (1)
    
    Based upon 8,079,509 shares of common stock outstanding.(2)
    
    Aegis Financial Corporation, The Aegis Value Fund and Scott L.
    Barbee jointly filed its Schedule 13G with the SEC on
    February 12, 2009.(3)
    
    Ironwood Investment Management, LLC filed an amended
    Schedule 13G/A with the SEC on February 13, 2009.(4)
    
    Wynnefield Capital Management, LLC, Wynnefield Capital, Inc.,
    Joshua H. Landes, Wynnefield Partners Small Cap Value, L.P.,
    Wynnefield Partners Small Cap Value, L.P. I., and Wynnefield
    Small Cap Value Offshore Fund,Ltd., filed a Schedule 13D/A
    with the SEC on June 29, 2007.(5)
    
    Dimensional Fund Advisors, Inc. (Dimensional),
    a registered investment adviser, filed an amended
    Schedule 13G/A with the SEC on February 9, 2009.(6)
    
    Voyageur Asset management Inc., a registered investment adviser,
    filed its Schedule 13G with the SEC on February 11,
    2009.(7)
    
    Renaissance Technologies LLC (RTC) and James H. Simons (Simons)
    filed Schedule 13G with the SEC on February 13, 2009. 30




---



##### 



Name and Address of

Amount and Nature ofTitle of Class

Beneficial Ownership

Beneficial Owner

Percent of Class(1)Common

J. H. Binford Peay, III

294,330(2)

3.64%Owned directlyCommon

John G. Meyer, Jr.

87,102(3)

1.08%Owned directlyCommon

Monte L. Pickens

42,255(4)

*Owned directlyCommon

Wayne F. Hosking

42,023(4)

*Owned directlyCommon

John J. Marcello

34,508

*Owned directlyCommon

Ronald H. Griffith

33,569

*Owned directlyCommon

Gilbert F. Decker

30,365(5)

*Owned directlyCommon

Deborah F. Ricci

29,807(6)

*Owned directlyCommon

Charles S. Ream

20,516

*Owned directlyCommon

Frederick G. Wasserman

14,794

*Owned directlyCommon

Tassos D. Recachinas

10,113

*Owned directlyCommon

All executive officers and directors as a group

639,382(7)
    Owned directly

7.91%     (1)
    
    Based upon 8,079,509 shares of common stock outstanding
    plus any outstanding options, by director.(2)
    
    Includes stock options for 200,000 shares which may be
    exercised within sixty (60) days.(3)
    
    Includes 16,431 shares issuable upon retirement from the
    Board pursuant to the Directors Deferred Compensation Plan.(4)
    
    Includes stock options for 40,000 shares which may be
    exercised within sixty (60) days.(5)
    
    Includes 19,995 shares issuable upon retirement from the
    Board pursuant to the Directors Deferred Compensation Plan(6)
    
    Includes stock options for 18,000 shares which may be
    exercised within sixty (60) days.(7)
    
    This total includes stock options for 298,000 shares which
    may be exercised within sixty (60) days and
    36,426 shares issuable upon retirement from the Board.*
    
    Less than 1.00% 31




---



##### 



ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
    INDEPENDENCE.    ITEM 14.
    PRINCIPAL
    ACCOUNTING FEES AND SERVICE.    2008


2007Audit fees

$
700


$
1,296Audit-related fees






Tax fees






All other fees






Total

$
700


$
1,296         case-by-case
 PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  Exhibit No.

Description of Exhibits3
.1

Certificate of Incorporation, as amended (Incorporated by
    reference from
    Form 10-Q
    filed in August 2002).3
.2

Amended and Restated By-Laws (Incorporated by reference from
    Form 10-Q
    filed in August 2004).4
.1

Rights Agreement between Allied and Mellon Investor Services,
    LLC (Incorporated by reference from
    Form 8-K
    filed in June 2001).4
.2

First Amendment To Rights Agreement, dated as of June 15,
    2006 (incorporated by reference from
    Form 8-A/A
    filed on June 21, 2006).4
.3

Second Amendment To Rights Agreement, dated as of
    November 30, 2006 (incorporated by reference from
    Form 8-K
    filed on December 7, 2006).10
.1

Employment Agreement between Allied and John J. Marcello
    (Incorporated by reference from
    Form 10-Q
    filed in August 2005).10
.2

Employment Agreement between Allied and Deborah F. Ricci
    (Incorporated by reference from
    Form 10-Q
    filed in May 2007). 32




---



##### 



Exhibit No.

Description of Exhibits10
.3

Employment Agreement between Allied and Monte L. Pickens
    (Incorporated by reference from
    Form 8-K
    filed in April 2003).10
.4

Employment Agreement letter amendment between Allied and Monte
    L. Pickens (Incorporated by reference from
    Form 10-Q
    filed in August 2004).10
.5

Employment Agreement between Allied and Wayne F. C. Hosking, Jr.
    (Incorporated by reference from
    Form 8-K
    filed in April 2004).10
.6

2001 Equity Incentive Plan, as amended (Incorporated by
    reference from Proxy Statements filed in April 2001, April 2002
    and May 2005).10
.7

8% Convertible Debenture, Series A and related
    documents (Incorporated by reference from
    Form 8-K
    filed in July 2002).10
.8

Credit Agreement for MECAR S.A. (Incorporated by reference from
    Form 10-Q
    filed in August 2002).10
.9

Employee Stock Purchase Plan, as amended (Incorporated by
    reference from
    Form 10-Q
    filed in November 2002).10
.10

Lease Agreement, as amended (Incorporated by reference from
    Form 10-Q
    filed in November 2002).10
.11

Amendment to Lease Agreement10
.12

Form of Indemnity Agreement for Directors and Executive Officers
    (Incorporated by reference from
    Form 10-Q
    filed in November 2002).10
.13

International Distribution Agreement (Incorporated by reference
    from
    Form 10-Q
    filed in November 2002).10
.14

Deferred Compensation Plan for Non-Employee Directors
    (Incorporated by reference from
    Form 10-Q
    filed in August 2004).10
.15

Stock Option Agreement-Employee Form (Incorporated by reference
    from
    Form 10-Q
    filed in November 2004)10
.16

Directors Stock Option
    Agreement-Director
    Form (Incorporated by reference from
    Form 10-Q
    filed in November 2004)10
.17

Restricted Stock Agreement (Incorporated by reference from
    Form 10-Q
    filed in May 2005)10
.18

7.5% Senior Subordinated Convertible Notes and related
    documents (Incorporated by reference from
    8-K filed in
    March 2006).10
.19

Amended and Restated Securities Purchase Agreement, dated as of
    June 19, 2007, between The Allied Defense Group, Inc. and
    the Purchasers (Incorporated by reference from
    Form 8-K
    filed June 20, 2007).10
.20

Form of Notes (Incorporated by reference from
    Form 8-K
    filed June 20, 2007).10
.21

Form of Amended and Restated Registration Rights Agreement
    (June 20, 2007).10
.22

MECAR Certificate dated July 11, 2007 (Incorporated by
    reference from
    Form 8-K
    filed July 12, 2007).10
.23

Stock Purchase Agreement, dated as of September 6, 2007
    between Ving Holdings (Belgium) BVBA in incorporation
    (in oprichting), as purchaser and ARC Europe
    SA, as seller (Incorporated by reference from
    Form 8-K
    filed September 10, 2007).10
.24

Consolidated EBITDA Schedule(a)10
.25

Asset Purchase Agreement, dated as of August 19, 2008,
    among The Allied Defense Group, Inc., Global Microwave Systems,
    Inc., GMS Cobham, Inc. and DTC Communications, Inc.
    (Incorporated by reference from
    Form 8-K
    filed on August 20, 2008).21


List of Subsidiaries(a)23


Consent of Independent Registered Public Accounting Firm(a)31
.1

Certification of Chief Executive Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002(a)31
.2

Certification of Chief Financial Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002(a)32


Certification Pursuant to 18 U.S.C Section 1350, as Adopted
    Pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002(a).     (a)
    
    Filed herewith 33




---



##### 



SIGNATURES      By:
    /s/  John
    J. Marcello         By:

/s/  Deborah
    F. RicciDeborah
    F. Ricci.,

Chief Financial Officer and Treasurer

Date: March 30, 2009**********/s/  Gilbert
    F. DeckerGilbert
    F. Decker,

Director

Date: March 30, 2009/s/  Ronald
    H. GriffithRonald
    H. Griffith,

Director

Date: March 30, 2009/s/  John
    J. Marcello.John
    J. Marcello,

Director

Date: March 30, 2009/s/  John
    G. Meyer, Jr.John
    G. Meyer,

Director

Date: March 30, 2009/s/  J.H
    Binford Peay, IIIJ.H
    Binford Peay, III,

Director

Date: March 30, 2009/s/  Charles
    S. ReamCharles
    S. Ream,

Director

Date: March 30, 2009/s/  Tassos
    D. RecachinasTassos
    D. Recachinas,

Director

Date: March 30, 2009/s/  Frederick
    G. WassermanFrederick
    G. Wasserman,

Director

Date: March 30, 2009  34




---



##### 



SECURITIES AND EXCHANGE
    COMMISSION
  Washington, D.C.
    20549
  CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
  December 31, 2008
  FORMING A
    PART OF
 ANNUAL REPORT PURSUANT
    TO
 THE SECURITIES EXCHANGE ACT OF
    1934
  FORM 10-K
 OF
 The Allied Defense Group, Inc.
  F-1




---



##### 



The
    Allied Defense Group Inc.
  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
   
 PageReport of Independent Registered Public
    Accounting Firm


F-3Consolidated Balance Sheets at December 31,
    2008 and 2007


F-4Consolidated Statements of Operations for the
    years ended December 31, 2008 and 2007


F-5Consolidated Statements of Stockholders
    Equity and Comprehensive Loss for the years ended
    December 31, 2008 and 2007


F-6Consolidated Statements of Cash Flows for the
    years ended December 31, 2008 and 2007


F-7Notes to Consolidated Financial Statements


F-8Schedules as of and for the years ended December 31, 2008
    and 2007Schedule I  Condensed Financial
    Information of Registrant


F-39Schedule II  Valuation and
    Qualifying Accounts


F-42   F-2




---



##### 



Report of
    Independent Registered Public Accounting Firm              /s/ BDO Seidman LLP
    F-3




---



##### 



The
    Allied Defense Group, Inc.
  CONSOLIDATED
    BALANCE SHEETS
 December 31,
  2008


2007(Thousands of Dollars, except per shareand share data)ASSETSCurrent AssetsCash and cash equivalents

$
8,816


$
21,651Restricted cash


9,666



13,052Accounts receivable, net


12,646



6,064Costs and accrued earnings on uncompleted contracts


21,999



37,764Inventories, net


21,508



20,950Prepaid and other current assets


4,606



3,947Assets held for sale


4,474



32,525Total current assets


83,715



135,953Property, Plant and Equipment, net


19,525



24,047Other Assets


459



251TOTAL ASSETS

$
103,699


$
160,251CURRENT LIABILITIESCurrent maturities of senior secured convertible notes

$
933


$
13,610Bank overdraft facility


381



7,239Current maturities of foreign exchange contract


405



Current maturities of long-term debt


2,659



823Accounts payable


14,536



15,555Accrued liabilities


16,099



15,264Customer deposits


16,731



26,666Belgium social security


3,522



8,307Income taxes


3,913



3,664Liabilities held for sale


1,316



7,404Total current liabilities


60,495



98,532LONG TERM OBLIGATIONSLong-term debt, less current maturities and unamortized discount


6,681



9,439Senior secured convertible notes, less current maturities






5,782Long-term foreign exchange contract, less current maturities


1,072



Derivative instrument


318



183Other long-term liabilities


682



660Total long-term obligations


8,753



16,064TOTAL LIABILITIES


69,248



114,596CONTINGENCIES AND COMMITMENTSSTOCKHOLDERS EQUITYPreferred stock, no par value; authorized 1,000,000 shares;
    none issued






Common stock, par value, $.10 per share; authorized
    30,000,000 shares; issued and outstanding, 8,079,509 in
    2008 and 8,013,161 in 2007


808



801Capital in excess of par value


55,912



55,355Accumulated deficit


(38,351
)


(27,909
)Accumulated other comprehensive income


16,082



17,408Total stockholders equity


34,451



45,655TOTAL LIABILITIES AND STOCKHOLDERS EQUITY

$
103,699


$
160,251    F-4




---



##### 



The
    Allied Defense Group, Inc.
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
 Years
    Ended December 31,
  2008


2007(Thousands of Dollars, except per share and share data)Revenues

$
144,424


$
38,603Cost and expensesCost of sales


123,969



41,245Selling and administrative


19,452



21,495Research and development


2,277



1,617Impairment of long-lived assets


462



Operating loss


(1,736
)


(25,754
)Other income (expenses)Interest income


734



703Interest expense


(6,403
)


(10,878
)Net loss on fair value of senior convertible notes and warrants


(1,104
)


(6,663
)Other-net


(2,253
)


(562
)(9,026
)


(17,400
)Loss from continuing operations before income taxes


(10,762
)


(43,154
)Income tax expense


214



Loss from continuing operations


(10,976
)


(43,154
)Income (loss) from discontinued operations, net of taxGain on sale of subsidiaries


2,750



29,314Loss from discontinued operations


(2,216
)


(7,438
)534



21,876NET LOSS

$
(10,442
)

$
(21,278
)Earnings (Loss) per share  basic and diluted:Net loss from continuing operations

$
(1.36
)

$
(5.96
)Net earnings from discontinued operations


0.07



3.02Total loss per share  basic and diluted

$
(1.29
)

$
(2.94
)Weighted average number of common shares:Basic and Diluted


8,045,239



7,244,983    F-5




---



##### 



The
    Allied Defense Group, Inc.
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY AND
 COMPREHENSIVE LOSS
  AccumulatedPreferred


Common Stock


Capital





Other


TotalStock, no





$.10


in Excess


Accumulated


Comprehensive


StockholdersPar Value


Shares


Par value


of Par value


(Deficit)


Income


Equity(Thousands of Dollars, except per share and share data)Balance at January 1, 2007

$




6,440,944


$
644


$
43,312


$
(6,631
)

$
18,022


$
55,347Common stock awards






59,986



6



710











716Retired stocks






(1,668
)






(14
)










(14
)Employee stock purchase plan purchases






47,431



4



358











362Common stock converted from Notes






150,500



15



1,392











1,407Common stock issued to noteholders






1,288,000



129



9,415











9,544Directors deferred stock compensation














(275
)










(275
)Issue of stock options














216











216Exercise of warrants






27,968



3



241











244Comprehensive loss:Net loss for the year ended


















(21,278
)






(21,278
)Currency translation adjustment related to sale of The VSK Group






















(4,491
)


(4,491
)Currency translation adjustment






















3,877



3,877Total comprehensive loss


























(21,892
)Balance at December 31, 2007

$




8,013,161


$
801


$
55,355


$
(27,909
)

$
17,408


$
45,655Common stock awards






52,395



5



322











327Retired stocks






(4,402
)






(29
)










(29
)Employee stock purchase plan purchases






18,355



2



107











109Issue of stock options














65











65Directors deferred stock compensation














92











92Comprehensive loss:Net loss for the year ended


















(10,442
)






(10,442
)Currency translation adjustment






















(1,326
)


(1,326
)Total comprehensive loss


























(11,768
)Balance at December 31, 2008

$




8,079,509


$
808


$
55,912


$
(38,351
)

$
16,082


$
34,451    F-6




---



##### 



The
    Allied Defense Group, Inc.



CONSOLIDATED
    STATEMENTS OF CASH FLOWS

Years
    Ended December 31,  2008


2007(Thousands of Dollars)Cash flows from operating activitiesNet loss

$
(10,442
)

$
(21,278
)Less: Gain on sale of subsidiaries


(2,750
)


(29,314
)Discontinued operations, net of tax


2,216



7,438Loss from continuing operations


(10,976
)


(43,154
)Adjustments to reconcile net loss from continuing operations to
    net cash used in operating activities, net of divestitures:Depreciation and amortization


5,147



4,928Impairment of long-lived assets


462



Amortization of debt discount and debt issue costs






3,742Unrealized loss on forward contracts


1,542



(Gain) loss on sale of fixed assets


(7
)


3Net loss related to fair value of notes and warrants


1,104



6,663Interest and penalties converted to debt principal






1,204Provision for estimated losses on contracts


(196
)


1,770Provision for warranty reserves, uncollectible accounts and
    inventory obsolescence


1,591



1,298Common stock and stock option awards


408



1,229Deferred director stock awards


92



(275
)(Increase) decrease in operating assets and increase (decrease)
    in liabilities, net of effects from discontinued businesses
    Restricted cash


2,962



(3,444
)Accounts receivable


(7,542
)


(826
)Costs and accrued earnings on uncompleted contracts


14,762



(12,247
)Inventories


(2,664
)


(2,231
)Prepaid and other current assets


(1,055
)


(1,247
)Accounts payable and accrued liabilities


(4,433
)


16,001Customer deposits


(9,143
)


4,983Deferred compensation


43



15Income taxes


113



(219
)Net cash used in operating activities  continuing
    operations


(7,790
)


(21,807
)Net cash provided by operating activities 
    discontinued operations


2,749



3,513Net cash used in operating activities


(5,041
)


(18,294
)Cash flows from investing activitiesCapital expenditures


(1,803
)


(1,721
)Proceeds from sale of subsidiaries


24,286



43,384Proceeds from sale of fixed assets


7



Net cash provided by investing activities  continuing
    operations


22,490



41,663Net cash used in investing activities  discontinued
    operations


(31
)


(1,280
)Net cash provided by investing activities


22,459



40,383Cash flows from financing activitiesBank overdraft payments


(6,834
)


(7,488
)Principal payments on senior convertible notes


(19,428
)


(20,816
)Debt issue costs






(1,707
)Repayment on capital lease obligations


(848
)


(1,699
)Proceeds from issuance of long-term debt






8,224Net cash transferred from (to) discontinued operations


2,726



436Net increase (decrease) in short-term borrowings


302



(4,661
)Proceeds from employee stock purchases


92



308Proceeds from issuance of senior convertible notes






15,376Retirement of stock


(29
)


(14
)Net cash used in financing activities  continuing
    operations


(24,019
)


(12,041
)Net cash used in financing activities  discontinued
    operations


(5,781
)


(4,002
)Net cash used in financing activities


(29,800
)


(16,043
)Net change in cash of discontinued operations


(287
)


(1,967
)Effects of exchange rate on cash


(166
)


1,429NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS


(12,835
)


5,508Cash and cash equivalents at beginning of year


21,651



16,143Cash and cash equivalents at end of year

$
8,816


$
21,651Supplemental Disclosures of Cash Flow informationCash paid during the period forInterest

$
6,921


$
5,453Taxes

$
345


$
1,036Supplemental Disclosures of Non-Cash Investing and Financing
    ActivitiesIssuance of common stock in exchange of convertible notes

$



$
9,544Interest and financing charges converted to debt principal

$



$
1,580Capital leases

$
53


$
2Conversion of notes

$



$
1,407    F-7




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (Thousands
    of Dollars)
  NOTE A 
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  Basis of Presentation.
  
    ARC Europe, S. A. (ARC Europe), a Belgian company, includes its
    wholly-owned subsidiary Mecar
    Allied Research Corporation Limited (ARC Limited), an inactive
    United Kingdom company,
    Mecar USA, a Delaware corporation,  News/Sports
    Nature of Operations.
  Foreign Currency Translation.
  Reclassifications.
  Use of Estimates.
  Cash and cash equivalents.
  Accounts Receivable.
 F-8




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Costs and Accrued Earnings on Uncompleted
    Contracts.
  Inventories.
  Property, Plant and Equipment.
  Buildings and improvements


20 - 30 yearsMachinery and equipment


3 - 10 yearsDemonstration inventory


3 - 7 years         Impairment of Long-Lived Assets. Accounting for the Impairment or
    Disposal of Long-Lived Assets.
  Derivative Financial Instruments. Accounting for Derivative
    Instruments and Hedging Activities
 F-9




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Revenue
    and Cost Recognition.
  
    Percentage of Completion Method Revenues
    under fixed price contracts are recognized on the
    percentage-of-completion method measured by direct labor
    incurred to total estimated direct labor at completion. The
    actual costs on these contracts may differ from the
    Companys estimate at completion. Provision for estimated
    losses and penalties on contracts are recorded when identified.
    Revenues under cost-plus-fixed-fee contracts are recognized on
    the basis of costs incurred during the period plus the fee
    earned. As contracts extend over one or more years, revisions in
    costs and earnings estimated during the course of the work are
    reflected in the accounting period in which the facts which
    require the revision become known. Costs and accrued profits on
    uncompleted direct and indirect fixed price contracts with
    foreign governments and direct and indirect U.S. government
    foreign military sales (FMS) contracts, which are billable upon
    completion, are carried as costs and accrued earnings on
    uncompleted contracts.
    Other Method  Revenues from service work
    rendered are recorded when performed. Revenues from pass through
    contracts are evaluated based on the guidelines of
    EITF 99-19
    Reporting Revenue Gross as a Principal versus Net as an
    Agent. Accordingly, the Company bases its decision on
    whether to report revenue from such pass through contracts on a
    gross basis or net basis based on the relative strength of each
    of the following factors: whether the Company (1) is the
    primary obligor in the arrangement, (2) has general
    inventory risk, (3) has latitude in establishing price,
    (4) changes the product or performed part of the service,
    (5) has discretion in supplier selection and (6) is
    involved in the determination of product or service
    specifications. There are no provisions related to performance,
    cancellation, termination or refunds.      Advertising.
  Research and Development.
  Capitalization of Software. 98-1 (SOP 98-1), Accounting for the Costs of Computer Software Developed or
    Obtained for Internal Use
  Warranties.
  Environmental Regulations.
 F-10




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Income Taxes.
  Earnings Per Common Share.
  Stock-Based Compensation Share-Based Payments Accounting for Stock-Based
    Compensation, Statement of Cash Flows.
           F-11




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2008Risk free interest rate


1.53
%Expected volatility rate


92.11
%Expected lives  years


1Divided yield


     Major Customers.
  Concentrations of Credit Risk.
    U.S.-based
   F-12




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Recent Accounting Pronouncements. FSP 142-3, Determining the Useful Life of Intangible Assets FSP 142-3 FSP 142-3 FSP 142-3 FSP 142-3
  Disclosures about Derivative Instruments and Hedging
    Activities  an amendment of FASB Statement
    No. 133
  Fair Value Measurements No. 157-2, Effective Date of FASB Statement No. 157 (FSP 157-2), FSP 157-2 FSP 157-2.
  NOTE B 
    LIQUIDITY
    AND CAPITAL RESOURCES     F-13




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Outlook
    for 2009
    30-day
   F-14




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      NOTE C 
    RESTRICTED
    CASH    2008


2007Collateralized performance bonds and advance payment guarantees

$
9,506


$
12,920Other


160



132$
9,666


$
13,052     NOTE D 
    ACCOUNTS
    RECEIVABLE AND COSTS & ACCRUED EARNINGS ON UNCOMPLETED
    CONTRACTS    2008


2007Direct and indirect receivables from governments

$
10,173


$
2,515Commercial and other receivables


3,511



4,18313,684



6,698Less: Allowance for doubtful receivables


(1,038
)


(634
)$
12,646


$
6,064      F-15




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  NOTE E 
    INVENTORIES    2008


2007Raw materials

$
10,714


$
12,005Work in process


10,670



10,720Finished goods


2,919



24,303



22,725Less: Reserve for obsolescence


(2,795
)


(1,775
)$
21,508


$
20,950   NOTE F 
    PROPERTY,
    PLANT & EQUIPMENT    2008


2007Land

$
364


$
381Buildings and improvements


19,600



20,439Machinery and equipment


60,074



61,008Demonstration Equipment


4,194



4,18684,232



86,014Less: Accumulated depreciation


(64,707
)


(61,967
)$
19,525


$
24,047     Capital Leases.
    2008


2007Leased equipment

$
2,962


$
5,520Less: Accumulated amortization


(1,534
)


(2,473
)$
1,428


$
3,047  F-16




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ending December 31,2009

$
4272010


1782011


10Total minimum lease payments


615Less: Amount representing interest


(22
)Present value of net minimum lease payments

$
593   NOTE G 
    IMPAIRMENT
    OF LONG-LIVED ASSETS    NOTE H 
    BANK
    CREDIT FACILITY       F-17




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    NOTE I 
    DERIVATIVE
    FINANCIAL INSTRUMENTS  Derivatives
    not designated as hedges
    Counterparty
    credit risk
    NOTE J 
    FAIR VALUE MEASUREMENTS
  Fair Value Measurements FSP 157-2.
      
    Level 1  Observable inputs such as quoted prices
    in active markets for identical assets or liabilities
    Level 2  Inputs other than quoted prices that
    are observable for the asset or liability, either directly or
    indirectly. These include quoted prices for similar assets or
    liabilities in active markets, quoted prices for identical or
    similar assets or liabilities in markets that are not active and
    amounts derived from valuation models where all significant
    inputs are observable in active markets
    Level 3  Unobservable inputs that reflect
    managements assumptions   F-18




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      SignificantQuoted Prices in


OtherActive Markets for


Observable


SignificantIdentical Assets or


Inputs


UnobservableLiabilities (Level 1)


(Level 2)


Inputs (Level 3)


TotalLiabilitiesSenior secured convertible notes

$



$
933


$



$
933Derivative instrument






318







318Foreign exchange contract






1,477







1,477$



$
2,728


$



$
2,728     NOTE K 
    ACCRUED
    LOSSES ON CONTRACTS AND DEFERRED COMPENSATION  Accrued losses on contracts.
  Deferred compensation.
  NOTE L 
    LONG-TERM
    DEBT    2008


2007Fair value of senior secured convertible notes

$
933


$
19,392SOGEPA loan


8,458



8,837Bank notes payable


289



Capital leases and other


593



1,425Total long-term debt


10,273



29,654Less: Current maturities


(3,592
)


(14,433
)Long-term debt, less current maturities

$
6,681


$
15,221   Senior secured convertible notes.
 F-19




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Accounting
    for Certain Hybrid Instruments and/or and/or
       F-20




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2008


2007Amended Notes

$



$
13,134First Closing of New Notes






476Second Closing of New Notes


933



5,782$
933


$
19,392       2008


2007Amended Notes

$



$
13,763First Closing of New Notes






499Second Closing of New Notes


928



6,095$
928


$
20,357   Warrants
  EITF 00-19, Accounting for Derivative Instruments Index to, and
    Potentially Settled in, a Companys Own Stock
  SOGEPA Loan. Société Wallonne de Gestion et de
    Participations
 F-21




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Bank notes payable.
  Capital lease and other.
    Year

Amount2009

$
3,5922010


2,2342011


2,1742012


2,273Total

$
10,273     NOTE M 
    BENEFIT
    PLANS    NOTE N 
    CONTINGENCIES
    AND COMMITMENTS       F-22




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year

Amount2009

$
4552010


4202011


4202012


4312013


462014 and after


60Total

$
1,832           Indemnification
    provisions
     F-23




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Tax
    Litigation
    Social
    Security Litigation
   F-24




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  NOTE O 
    STOCKHOLDERS
    EQUITY    2001 Equity Incentive Plan.
  1997 Incentive Stock Plan.
  1992 Employee Stock Purchase Plan.
  Rights Agreement.
   F-25




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        The
    following table summarizes option activity:
  2008


2007Weighted





WeightedAverage





AverageExercise





ExerciseShares


Price


Shares


PriceOptions outstanding at beginning of the year


369,500


$
15.39



501,500


$
17.20Options granted


20,000



7.44







Options exercised














Options forfeited










(45,000
)


22.05Options expired


(59,500
)


16.08



(87,000
)


18.21Options outstanding at end of year


330,000


$
14.78



369,500


$
15.39Options exercisable at end of year


290,000







327,500Weighted-average fair value of options, granted during the year

$
2.67






$
   The
    following table summarizes options outstanding at
    December 31, 2008:
  Weighted


ExercisableWeighted


Average





WeightedRange of

Average


Remaining





AverageNumber


Exercise

Exercise


Contractural


Number of


ExerciseOutstanding


Prices

Prices


Term


Options


Prices20,000


$7.44

$
7.44



1.17 Years






$
7.44100,000


8.63


8.63



2.00 Years



100,000



8.63210,000


$15.05 to $23.95


18.41



2.60 Years



190,000



18.39330,000


$7.44 to $23.95

$
14.78







290,000


$
15.03    F-26




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  The following table summarizes restricted stock (nonvested)
    shares outstanding as of December 31,
  2008


2007Weighted Average Grant





Weighted Average GrantRestricted Stock

Shares


Date Fair Value


Shares


Date Fair ValueRestricted at January 1,


43,418


$
17.46



43,299


$
22.25Granted










20,350



10.17Vested


(26,750
)


18.72



(16,531
)


21.97Forfeited










(3,700
)


21.77Restricted shares at December 31,


16,668


$
15.43



43,418


$
17.46     NOTE P 
    OTHER 
    NET    2008


2007Net currency transaction losses

$
(2,366
)

$
(252
)Miscellaneous  net


113



(310
)(2,253
)


(562
)     NOTE Q 
    INCOME
    TAXES      2008


2007Domestic

$
(8,417
)

$
(25,408
)Foreign


(2,345
)


(17,746
)$
(10,762
)

$
(43,154
)  F-27




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2008


2007Current ProvisionDomestic

$



$
1Foreign


214



Total Current Provision


214



1Deferred Provision (Benefit)Domestic






Foreign






(1
)Total Deferred Provision (Benefit)






(1
)Total tax provision

$
214


$
     2008


2007Taxes at statutory rate


34.0
%


34.0
%State taxes, net of federal benefit


(0.6
)


(0.1
)Impact of international operations


0.4



3.1Other permanent differences


(2.8
)


(8.3
)Valuation allowance


(33.0
)


(28.7
)Income taxes


(2.0
)%


0.0
%  F-28




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2008


2007Deferred tax assetsInventory

$
159


$
685Compensation accruals


153



34Valuation adjustments


311



376Accrued expenses


443



495Business tax credits


458



458Deferred compensation


502



579Depreciation and amortization


386



Fair value adjustment of financial instruments


554



Capitalized software


295



486Foreign tax credit carryforwards


13,770



2,290Net operating loss carryforwards


33,223



45,684Gross deferred tax asset


50,254



51,087Valuation allowance


(50,254
)


(43,486
)Total deferred tax assets

$



$
7,601Deferred tax liabilitiesDepreciation and amortization

$



$
864Fair value adjustment of financial instrument






(328
)Accrued foreign dividends






(8,137
)Total deferred liabilities

$



$
(7,601
)Net Deferred Tax Assets (Liabilities)

$



$
        F-29




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        NOTE R 
    EARNINGS
    (LOSS) PER COMMON SHARE    2008


2007Net loss from continuing operations

$
(10,976
)

$
(43,154
)Net earnings from discontinued operations


534



21,876Net loss

$
(10,442
)

$
(21,278
)Weighted average number of basic and diluted shares


8,045,239



7,244,983Basic and diluted net loss per share from continuing operations

$
(1.36
)

$
(5.96
)Basic and diluted net earnings per share from discontinued
    operations


0.07



3.02Total

$
(1.29
)

$
(2.94
)     NOTE S 
    GEOGRAPHIC
    AREAS AND INDUSTRY SEGMENTS  Disclosure about Segments of an
    Enterprise and Related Information.
   F-30




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        2008


2007Revenues from external customersMecar SA

$
112,192


$
37,822Mecar USA


32,232



781$
144,424


$
38,603Interest expenseMecar SA

$
4,834


$
2,820Mecar USA


1



Corporate


1,568



8,058$
6,403


$
10,878Interest incomeMecar SA

$
380


$
410Mecar USA


2



2Corporate


352



291$
734


$
703Income tax expense (benefit)Mecar SA

$



$
(1
)Mecar USA






Corporate


214



1$
214


$
Depreciation and amortizationMecar SA

$
4,698


$
4,400Mecar USA


146



144Corporate


303



384$
5,147


$
4,928Segment earnings (loss) from continuing operations before
    taxesMecar SA

$
(811
)

$
(16,178
)Mecar USA


946



(571
)Corporate


(10,897
)


(26,405
)$
(10,762
)

$
(43,154
) F-31




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2008


2007Segment assetsMecar SA

$
86,161


$
101,802Mecar USA


9,324



3,562Corporate


8,214



54,887$
103,699


$
160,251Capital expenditure for segment assetsMecar SA

$
1,657


$
1,170Mecar USA


135



543Corporate


11



8$
1,803


$
1,721   Amounts
    Net of intersegment receivables.
    Geographic Segment Data2008


2007Revenues from external customers(A)Saudi Arabia

$
75,905


$
20,176United States


16,982



1,959Morocco


16,522



Georgia


15,676



Kuwait


8,535



5,070Venezuela






3,369Nigeria






2,652Bahrain


2,505



Qatar


227



2,586Belgium


1,896



1,423Indonesia


2,618



855Ireland


2,655



312Other Foreign Countries


903



201$
144,424


$
38,603     (A)
    
    Revenues are attributed to countries based on location of
    customers  Geographic Segment Data2008


2007Segment assetsBelgium

$
86,944


$
115,297United Kingdom






18United States(1)


16,755



44,936$
103,699


$
160,251     (1)
    
    Net of inter-segment receivables and investments. F-32




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   2008


2007Property and equipmentBelgium

$
16,811


$
20,609United States


2,714



3,438$
19,525


$
24,047   NOTE T 
    QUARTERLY
    FINANCIAL DATA (UNAUDITED)  First


Second


Third


Fourth2008

Quarter


Quarter


Quarter


Quarter


TotalRevenues

$
26,795


$
40,322


$
49,247


$
28,060


$
144,424Gross margin


5,807



6,838



6,396



1,414



20,455Loss from continuing operations, net of tax


(2,678
)


(673
)


(3,308
)


(4,317
)


(10,976
)Income (loss) from discontinued operations, net of tax


(617
)


1,579



(2,912
)


2,484



534Net loss


(3,295
)


906



(6,220
)


(1,833
)


(10,442
)Basic and diluted earnings (loss) per share:Net loss from continuing operations

$
(0.33
)

$
(0.08
)

$
(0.41
)

$
(0.53
)

$
(1.36
)Net earnings (loss) from discontinued operations


(0.08
)


0.20



(0.36
)


0.31



0.07Total net earnings (loss) per share

$
(0.41
)

$
0.12


$
(0.77
)

$
(0.22
)

$
(1.29
)   First


Second


Third


Fourth2007

Quarter


Quarter


Quarter


Quarter


TotalRevenues

$
5,204


$
1,347


$
10,193


$
21,859


$
38,603Gross margin (loss)


(3,102
)


(5,876
)


424



5,912



(2,642
)Loss from continuing operations, net of tax


(14,395
)


(22,240
)


(5,681
)


(838
)


(43,154
)Income (loss) from discontinued operations, net of tax


(3,459
)


(1,915
)


27,964



(714
)


21,876Net earnings (loss)


(17,854
)


(24,155
)


22,283



(1,552
)


(21,278
)Basic and diluted earnings (loss) per share:Net loss from continuing operations

$
(2.23
)

$
(3.39
)

$
(0.72
)

$
(0.10
)

$
(5.96
)Net earnings (loss) from discontinued operations


(0.53
)


(0.29
)


3.54



(0.09
)


3.02Total net earnings (loss) per share

$
(2.76
)

$
(3.68
)

$
2.82


$
(0.19
)

$
(2.94
)   NOTE U 
    OFF-BALANCE
    SHEET TRANSACTION   F-33




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    NOTE V 
    DISCONTINUED
    OPERATIONS  Accounting for the Impairment or
    Disposal of Long-Lived Assets
  SeaSpace
    Corporation
      The
    VSK Group
     F-34




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Foreign Currency Translation
  CMS
    Security Systems
    Titan
    Dynamics Systems, Inc.
    Global
    Microwave Systems, Inc.
   F-35




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      NS
    Microwave Systems, Inc.
        December 31,2008


December 31, 2007NSM


NSM


GMS


Titan


TotalCash

$
386


$
99


$



$
74


$
173Accounts receivable, net


2,001



2,449



2,375



714



5,538Inventories, net


1,107



1,078



2,678



2,219



5,975Other assets


980



4,722



14,525



1,592



20,839Assets held for sale

$
4,474


$
8,348


$
19,578


$
4,599


$
32,525Accounts payable

$
408


$
815


$
437


$
883


$
2,135Accrued liabilities


500



516



90



241



847Customer deposits


382



169







922



1,091Other liabilities


26



74



3,252



5



3,331Liabilities held for sale

$
1,316


$
1,574


$
3,779


$
2,051


$
7,404  F-36




---



##### 



The
    Allied Defense Group, Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    For The Year Ended December 31, 2008Titan


GMS


NSM


TotalRevenues

$
668


$
10,083


$
6,979


$
17,730Income (loss) before taxes


(140
)


2,215



(4,289
)


(2,214
)Income (loss), net of tax


(140
)


2,214



(4,290
)


(2,216
)Gain on sale of subsidiaries, net of tax


113



2,637







2,750Discontinued operations, net of tax

$
(27
)

$
4,851


$
(4,290
)

$
534     For The Year Ended December 31, 2007CMS SecurityThe VSK Group


Systems


SeaSpace


Titan


GMS


NSM


TotalRevenues

$
23,162


$
149


$
2,947


$
5,107


$
9,945


$
7,070


$
48,380Income (loss) before taxes


3,361



(950
)


(4,312
)


(3,660
)


1,737



(2,481
)


(6,305
)Income (loss), net of tax


2,237



(950
)


(4,313
)


(3,665
)


1,736



(2,483
)


(7,438
)Gain on sale of subsidiaries, net of tax


29,314























29,314Discontinued operations, net of tax

$
31,551


$
(950
)

$
(4,313
)

$
(3,665
)

$
1,736


$
(2,483
)

$
21,876   NOTE W 
    SUBSEQUENT
    EVENTS       F-37




---



##### 



SCHEDULE I 
    CONDENSED FINANCIAL INFORMATION OF REGISTRANT



The
    Allied Defense Group, Inc.
    (Parent Company)



BALANCE
    SHEETS
    December 31, 2008


2007(Thousands of Dollars)ASSETSCash and cash equivalents

$
1,835


$
5,528Restricted cash


160



132Investment in subsidiaries


49,891



54,895Assets Held for Sale, net of liabilities


3,158



25,121Other


961



1,710Total assets

$
56,005


$
87,386LIABILITIES AND STOCKHOLDERS EQUITYLIABILITIESAccounts payable and accrued liabilities

$
3,485


$
4,026Due to subsidiaries


16,174



17,814Income tax


397



103Deferred compensation


234



201Long term debt, less unamortized discount


13



12Derivative instrument


318



183Senior convertible notes


933



19,392Total liabilities


21,554



41,731STOCKHOLDERS EQUITYCommon stock


808



801Capital in excess of par value


55,912



55,355Accumulated (deficit)


(38,351
)


(27,909
)Accumulated other comprehensive income


16,082



17,408Total stockholders equity


34,451



45,655Total liabilities and stockholders equity

$
56,005


$
87,386  F-38




---



##### 



SCHEDULE I 
    CONDENSED FINANCIAL INFORMATION OF
    REGISTRANT  (Continued)
  The
    Allied Defense Group, Inc.
    (Parent Company)
  STATEMENTS
    OF OPERATIONS
    Years ended December 31,
  2008


2007(Thousands of dollars)IncomeIntercompany management fees

$
2,705


$
2,646Interest income from subsidiaries


463



193Other  net


125



1783,293



3,017Costs and expensesAdministrative and other


11,382



21,182Loss on fair value of Senior Notes and warrants


1,104



6,663Loss before equity in operations of subsidiaries


(9,193
)


(24,828
)Loss in continuing operations of subsidiaries, less dividends
    received


(1,783
)


(18,325
)Loss from continuing operations before income taxes


(10,976
)


(43,153
)Income taxes






1Equity from discontinued operations


534



21,876NET LOSS

$
(10,442
)

$
(21,278
)Earnings (loss) per common shareBasic and diluted Net loss from continuing operations

$
(1.36
)

$
(5.96
)Net earnings from discontinued operations


0.07



3.02Total loss per share  basic and diluted

$
(1.29
)

$
(2.94
)Weighted average number of common shares:Basic and Diluted


8,045,239



7,244,983  F-39




---



##### 



SCHEDULE I 
    CONDENSED FINANCIAL INFORMATION OF
    REGISTRANT  (Continued)
  The
    Allied Defense Group, Inc.
    (Parent Company)
    STATEMENTS OF CASH FLOWS
  2008


2007(Thousands of Dollars)Cash flows from operating activitiesNet loss for the year

$
(10,442
)

$
(21,278
)Gain on sale of subsidiaries


(2,750
)


(29,314
)Discontinued Operations, net of tax


2,216



7,438Loss from continuing operations


(10,976
)


(43,154
)Adjustments to reconcile net earnings (loss) to net cash
    provided by (used in) operating activitiesEquity in operations of subsidiaries


1,783



18,325Impairment of long-lived assets


462



Depreciation and amortization


303



384Loss on sale of fixed assets






3Interest and penalties rolled into Notes






1,204Amortization of debenture issue costs and conversion feature






3,742Net loss related to fair value of notes and warrants


1,104



6,663Common stock and stock option awards


408



1,229Deferred director stock awards


92



(275
)Changes in assets and liabilitiesOther assets


319



(112
)Due to subsidiaries


(346
)


23,289Accounts payable and accrued liabilities


(1,848
)


1,248Deferred compensation


33



15Income taxes






1Net cash (used in) provided by operating activities


(8,666
)


12,562Cash flows from investing activitiesCapital expenditures


(11
)


(8
)Equity infusions in subsidiaries






(1,766
)Proceeds from sale of subsidiaries


24,286



1,067Net cash provided by (used in) investing activities


24,275



(707
)Cash flows from financing activitiesProceeds from issuance of long-term debt






15,376Debt issue costs






(1,707
)Principal payments on long-term obligations


(19,428
)


(20,816
)Repayment on capital lease obligations


(13
)


(14
)Proceeds from employee stock purchase plan


92



308Net cash transferred from discontinued operations


104



(3,350
)Retirement of stock


(29
)


(14
)Restricted cash


(28
)


(48
)Net cash used in financing activities


(19,302
)


(10,265
)Net (decrease) increase in cash and equivalents


(3,693
)


1,590Cash and equivalents at beginning of year


5,528



3,938Cash and equivalents at end of year

$
1,835


$
5,528Supplemental Disclosures of Cash Flow Information:Cash paid during the year for:Interest

$
2,259


$
3,363Supplemental of Non-Cash Investing and Financing Activities:Capital leases

$
15


$
2Issuance of common stock in exchange of convertible notes

$



$
9,544Interest and financing charges converted to debt principal

$



$
1,580Conversion of notes

$



$
1,407  F-40




---



##### 



SCHEDULE II  VALUATION AND
    QUALIFYING ACCOUNTS
  The Allied Defense Group, Inc.
  Years ended December 31, 2008 and 2007
  AdditionsBalance at


Charged to


Charged





BalanceBeginning


Costs and


to Other





at End ofDescription

of Period


Expenses


Accounts


Deductions


Period(Thousands of Dollars)Year ended December 31, 2008Estimated losses on contracts

$
1,902


$



$



$
(128
)(1)

$
1,774Allowance for doubtful receivables

$
634


$
447


$



$
(43
)(2)

$
1,038Valuation allowance on inventory

$
1,775


$
1,144


$



$
(124
)

$
2,795Valuation allowances on deferred tax assets

$
43,486


$
6,768


$



$

(3)

$
50,254Year ended December 31, 2007Estimated losses on contracts

$
222


$
1,680


$



$

(1)

$
1,902Allowance for doubtful receivables

$
351


$
242


$
41


$

(2)

$
634Valuation allowance on inventory

$
557


$
1,153


$
65


$



$
1,775Valuation allowances on deferred tax assets

$
33,324


$
10,162


$



$

(3)

$
43,486     (1)
    
    Represents amount of reserve relieved through completion
    of contracts.(2)
    
    Represents write-off of receivables.(3)
    
    Represents amounts of valuation allowance relieved through
    use of deferred tax assets. F-41




---



##### 



EXHIBIT INDEX
   Number

Description of Exhibit

Page10
.24

Consolidated EBITDA


E-221


List of Subsidiaries


E-423


Consent of Independent Registered Public Accounting Firm


E-531
.1

Certification of Chief Executive Officer pursuant to
    Section 302 of Sarbanes-Oxley Act of 2002, dated
    March 30, 2009


E-631
.2

Certification of Chief Financial Officer pursuant to
    Section 302 of Sarbanes-Oxley Act of 2002, dated
    March 30, 2009


E-732


Certification of Chief Executive Officer and Chief Financial
    Officer pursuant to Section 906 of Sarbanes-Oxley Act of
    2002, dated March 30, 2009


E-8  E-1