Item 1.01 Entry into a Material Definitive Agreement.

On August 19, 2008, The Allied Defense Group, Inc. (the "Company") and Global Microwave Systems, Inc. ("GMS"), a subsidiary of the Company, entered into a definitive agreement with GMS Cobham, Inc. and DTC Communications, Inc., subsidiaries of Cobham, plc, for the sale of substantially all of the assets and business of GMS for a purchase price of $26 million, subject to a final working capital adjustment.

The purchase agreement contains customary representations and warranties, as well as indemnifications for breaches of representations, warranties and covenants.

The closing of the transaction is subject to the satisfaction of customary closing conditions, including obtaining regulatory approvals and obtaining other consents and approvals.

A copy of the Asset Purchase Agreement is attached hereto as Exhibit 10.1 and a copy of the press release announcing the transaction is furnished as Exhibit 99.1.

On August 14, 2008, the Board of Directors of the Company amended the compensation package payable to its non-employee directors. The amount of the compensation package remains fixed at $60,000 per annum (except that the Chairman of the Board is entitled to a package of $72,000) and directors continue to receive a minimum of $36,0000 thereof in Company stock. However, directors will now have the option to elect to take some or all of the remaining compensation in Company stock in lieu of cash. The amended plan was enacted to both encourage further Company stock ownership by directors and to assist the Company in its efforts to conserve cash.

Item 9.01 Financial Statements and Exhibits.

Exhibit 10.1 Asset Purchase Agreement
Exhibit 99.1 Press Release, dated August 20, 2008

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