Steel Partners II LP – ‘PRRN14A’ on 5/14/99 re: Argan Inc

As of:  Friday, 5/14/99   ·   Accession #:  921895-99-351   ·   File #:  0-05622

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

Revised Preliminary Non-Management Proxy Solicitation Material — Contested Solicitation or Other Situation   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PRRN14A     Preliminary Proxy Statement                           15     66K 

Document Table of Contents

PRRN14A
1st Page of 15
TOC
↑Top
Previous
Next
↓Bottom
Just 1st
 
SCHEDULE 14A
(Rule 14a-101)

 INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

 Proxy Statement Pursuant to Section 14(a)

Filed by the Registrant o                                                       

Filed by a Party other than the Registrant /X/                                  

Check the appropriate box:                                                      

/X/      Preliminary Proxy Statement                          
         / /      Confidential,  for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))                           
/ /      Definitive Proxy Statement                           
/ /      Definitive Additional Materials                      
         / /      Soliciting  Material  Pursuant  to  Section  240.14a-11(c)  or
Section 240.14a-12                          

PUROFLOW INCORPORATED 
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

THE FULL VALUE COMMITTEE
 STEEL PARTNERS II, L.P.
WARREN G. LICHTENSTEIN
ROBERT FRANKFURT
 JAMES BENENSON, JR.
STEVEN WOLOSKY
--------------------------------------------------------------------------------
 (Name of Persons(s) Filing Proxy Statement)

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                        

PRRN14A
2nd Page of 15
TOC
1st
Previous
Next
↓Bottom
Just 2nd
Exchange Act Rule 0-11:                     

--------------------------------------------------------------------------------

(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:                                          

--------------------------------------------------------------------------------

 -2-

PRRN14A
3rd Page of 15
TOC
1st
Previous
Next
↓Bottom
Just 3rd
 PROXY STATEMENT
OF
THE FULL VALUE COMMITTEE

------------------------------------

 1999 ANNUAL MEETING OF STOCKHOLDERS
OF
 PUROFLOW INCORPORATED
------------------------------------

 PLEASE SIGN, DATE AND RETURN THE ENCLOSED GOLD PROXY CARD

         This proxy  statement  (the "Proxy  Statement")  and the enclosed  GOLD
proxy card are being  furnished  to  stockholders  of Puroflow  Incorporated,  a
Delaware  corporation  (the  "Company")  by  The  Full  Value  Committee,   (the
"Committee") in connection  with the  solicitation of proxies from the Company's
stockholders  to be used at the  1999  Annual  Meeting  of  Stockholders  of the
Company,  including any  adjournments or  postponements  thereof and any special
meeting which may be called in lieu thereof (the "Annual Meeting"), to elect the
Committee's nominees, Warren G. Lichtenstein,  Robert Frankfurt, James Benenson,
Jr. and Steven Wolosky (the "Nominees") to the Company's Board of Directors (the
"Company Board") . As Nominees for director,  Messrs.  Lichtenstein,  Frankfurt,
Benenson  and  Wolosky  are  also  deemed  to  be  participants  in  this  proxy
solicitation.  The  principal  executive  offices of the  Company are located at
16559 Saticoy Street,  Van Nuys,  California 91004. This Proxy Statement and the
GOLD proxy card are first being  furnished to the Company's  stockholders  on or
about May __, 1999.                                                             

         The  Company  has set the  record  date  for  determining  stockholders
entitled  to notice of and to vote at the Annual  Meeting as April 30, 1999 (the
"Record  Date")  and has set June 29,  1999 as the date of the  Annual  Meeting.
Stockholders  of record  at the close of  business  on the  Record  Date will be
entitled to one vote at the Annual  Meeting  for each Share (as defined  herein)
held on the Record Date. The Committee,  along with all of the  participants  in
this  solicitation,  is the beneficial owner of an aggregate of 1,336,100 Shares
which  represents  approximately  16.5%  of the  Shares  outstanding  (based  on
information  publicly  disclosed by the Company).  The Committee intends to vote
such Shares for the election of the Nominees.                                   

         THIS  SOLICITATION  IS BEING MADE BY THE COMMITTEE AND NOT ON BEHALF OF
THE BOARD OF DIRECTORS OR MANAGEMENT OF THE COMPANY.                            

         The Committee is soliciting proxies for the election of the Nominees to
the Company  Board.  According  the  Company's  Definitive  Proxy  Statement  on
Schedule 14A filed with the Securities and Exchange Commission on April 26, 1999
(the "Company Proxy Statement"),  the Company is soliciting proxies with respect
to the  appointment  of its auditors for the fiscal year ended January 31, 2000.
The  Committee  expresses  no  opinion  and makes no  recommendation  as to this
proposal. The Committee is not aware of any other proposals to be brought before
the Annual Meeting. However, should other proposals be brought before the Annual
Meeting,  the persons named as proxies in the enclosed GOLD proxy card will vote
on such matters in their discretion.                                            

 IMPORTANT

         Your vote is  important,  no matter how many or how few Shares you own.
The Committee  urges you to sign,  date, and return the enclosed GOLD proxy card
today to vote FOR the election of the Nominees.                                 

         The  Nominees are  committed,  subject to their  fiduciary  duty to the
Company's stockholders, to giving all the Company's stockholders the opportunity
to receive the maximum value for their Shares. A vote FOR the Nominees          

 -3-

PRRN14A
4th Page of 15
TOC
1st
Previous
Next
↓Bottom
Just 4th
will  enable  you - as the  owners of the  Company  - to send a  message  to the
Company's Board that you are committed to maximizing the value of your Shares.  

/ /      If your Shares are  registered  in your own name,  please sign and date
         the  enclosed  GOLD  proxy  card and  return it to the  Committee,  c/o
Innisfree M&A Incorporated, in the enclosed envelope today.   

/ /      If any of your Shares are held in the name of a brokerage  firm,  bank,
         bank nominee or other  institution on the record date, only it can vote
         such  Shares  and only  upon  receipt  of your  specific  instructions.
         Accordingly, please contact the person responsible for your account and
         instruct that person to execute on your behalf the GOLD proxy card. The
         Committee  urges you to  confirm  your  instructions  in writing to the
         person  responsible  for your  account  and to  provide  a copy of such
         instructions to the committee,  c/o Innisfree M&A Incorporated,  who is
         assisting in this  solicitation,  at the address and telephone  numbers
         set forth below, and on the back cover of this proxy statement, so that
         we may be aware of all instructions and can attempt to ensure that such
instructions are followed.                                    

 If you have any questions regarding your proxy,
or need assistance in voting your Shares, please call:

INNISFREE M&A INCORPORATED
501 Madison Avenue, 20th Floor
New York, New York 10022

Call toll-free: (888) 750-5834
Bankers and Brokers Call Collect: (212) 750-5833

 -4-

PRRN14A
5th Page of 15
TOC
1st
Previous
Next
↓Bottom
Just 5th
 THE PLANS OF THE FULL VALUE COMMITTEE

         The  Committee  was  formed  to  solicit  proxies  to  elect a slate of
candidates  to  serve  on the  Company  Board.  Members  of the  Committee  have
beneficially  owned shares (the "Shares") of the Company's common stock, .01 par
value (the "Common Stock") since June 1998. In making their initial  investment,
the members of the Committee  believed there were unexploited  opportunities for
management to increase the value of these  Shares.  The members of the Committee
now believe that the Company's  current business strategy is not the best course
of action for all stockholders.  For example,  the Committee was dismayed by the
recent  actions by the  Company in  offering  certain  directors,  officers  and
employees the  opportunity to purchase  1,000,000  Shares at 75 cents per Share.
Such purchases  represent  approximately 12% of the outstanding  Shares, and the
directors,  officers and  employees  who  participated  were required to make an
initial  payment  of only 20% of the  purchase  price,  with the  balance  being
financed by a  non-recourse  three-year  note from the Company at a below-market
interest  rate.  In  the  Committee's   view,  this  offer  was  a  "sweetheart"
transaction,  representing a breach of the Company Board's  fiduciary  duties at
the  expense  of all  other  stockholders  and  should  have  been  made  to all
stockholders of the Company.                                                    

         In addition, the Committee believes that the market price of the Common
Stock does not reflect the underlying value of the Company and believes that the
sale  of  the  Company  would  be  in  the  best   interests  of  the  Company's
stockholders.  The Company's stock price has been languishing at below $1.00 per
Share since early 1997,  and has not come close to reaching its highest  trading
price of approximately $2.00 per Share achieved in 1996.                        

         For these and other reasons,  the Committee has concluded that the most
attractive  opportunity for increasing the value of the Company's  Common Stock,
on a present  value  basis,  is  through  the sale of the  Company.  We  believe
stockholders  should  elect  directors  committed  to  pursuing  the sale of the
Company in a manner  which will give the  Company's  stockholders  the  greatest
return on their  investment.  In that regard,  the Committee was formed to elect
Warren G. Lichtenstein, Robert Frankfurt, James Benenson, Jr. and Steven Wolosky
to the Company's Board. Upon the consummation of such actions, the Nominees will
take all necessary action to pursue the sale of the Company.                    

         The  Committee  believes  that the sale of the Company  rather than the
continued operation of the Company by current management is in the best interest
of the  Company's  stockholders.  No  assurance  can be given that a sale of the
Company can be accomplished or would produce more favorable financial results or
result in achieving full value for stockholders. The Committee has not solicited
any offers from any potential acquirors of the Company,  nor has it conducted an
appraisal  of the assets of the  Company in order to  determine a fair price for
such a sale.                                                                    

WHY YOU SHOULD VOTE FOR THE NOMINEES

         The Committee believes that the election of the Nominees represents the
best means for the Company's stockholders to maximize the value of their Shares.
As the largest  stockholder of the Company,  the Committee has a strong interest
in the maximizing of the value of your investment.                              

         The Committee is committed to the prompt sale or  restructuring  of the
Company. If elected,  the Nominees are expected to take all actions,  subject to
their fiduciary duties to the Company's  stockholders,  to maximize  stockholder
value,  either  through the sale of the Company to the highest bidder and on the
most  favorable  terms  available  to the Company or,  alternatively,  through a
restructuring  or  recapitalization  designed to  accomplish  these  objectives.
Neither the Committee (nor to its knowledge, any other person on the Committee's
behalf) has made or undertaken any analyses or reports as to whether stockholder
value will be maximized  as a result of this  solicitation  or obtained  reports
from consultants or other outside parties as to whether the proposals  presented
herein would have an effect on  stockholder  value and no assurance can be given
that the Nominees will be able to implement  their plan.  The  Committee  could,
however, in the future, based upon an evaluation of the Company's operations and
future plans,  decide to pursue  another  course of action.  It is not currently
contemplated  that  any  of  the  Nominees  or  any  of  their  affiliates  will
participate in any transaction  with the Company other than in their capacity as
a stockholder, although it is possible that some or all                         

 -5-

PRRN14A
6th Page of 15
TOC
1st
Previous
Next
↓Bottom
Just 6th
of the Nominees or their  affiliates may participate in such  transactions  with
the Company. It is not currently  contemplated that the Committee,  the Nominees
or any of their  affiliates  would receive a commission  in connection  with any
such transaction.                                                               

         If the Nominees are  elected,  they have no current  plans to terminate
the employment of any of the Company's  current  officers.  The Committee is not
aware of any employment  agreement or material agreement to which the Company is
a party,  the  termination or terms of which would be adversely  affected by the
election of the Nominee or a sale of the Company.                               

THE FULL VALUE COMMITTEE AND ITS SLATE

         The Full Value Committee is composed of Warren G. Lichtenstein,  Robert
Frankfurt,  James  Benenson,  Jr. and Steven  Wolosky,  and such  persons  shall
constitute the Nominees for election to the Company Board.  Additional  nominees
will be  nominated  (i) in the event that the Company  purports to increase  the
number of its  directorships to more than four,  and/or (ii) in the event any of
the Nominees are unable for any reason to serve as a Director. Biographical data
on the Nominees is set forth below.  The  Committee was formed on or about April
30, 1999 to undertake  this  solicitation.  The  Committee is an  unincorporated
association  with its office at 150 East 52nd Street,  21st Floor,  New York, NY
10022.  Its telephone  number is (212) 813-1500.  The  Committee's  officers are
Messrs. Lichtenstein, Frankfurt, Benenson and Wolosky.                          

         Warren G.  Lichtenstein  (33) is one of the  Committee's  nominees  for
director. Mr. Lichtenstein has been the Chairman of the Board, Secretary and the
Managing Member of Steel Partners,  L.L.C. ("Steel LLC"), the general partner of
Steel Partners II, L.P. ("Steel") since January 1, 1996. Prior to such time, Mr.
Lichtenstein  was the Chairman and a director of Steel Partners,  Ltd.  ("Former
General  Partner"),  the  general  partner of Steel  Partners  Associates,  L.P.
("Associates"),  which was the general  partner of Steel since 1993 and prior to
January 1, 1996. For information  regarding Steel and Steel LLC, see below under
"Participant  Information".  Mr. Lichtenstein was the acquisition/risk arbitrage
analyst at Ballantrae Partners, L.P., a private investment partnership formed to
invest in risk arbitrage,  special  situations and undervalued  companies,  from
1988 to 1990.  Mr.  Lichtenstein  is a director of the  following  publicly held
companies:  Gateway Industries,  Inc., Rose's Holdings, Inc., PLM International,
Inc. and Saratoga Beverage Group, Inc. Mr.  Lichtenstein also served as Chairman
of the Board of Aydin  Corporation  from  October  5, 1998 until its sale to L-3
Communications Corporation ("L-3") in April 1999 at a price of $13.50 per share,
which represents a premium of approximately  39% over the reported closing price
of $9.69 per share the day preceding the announced  transaction  with L-3. As of
the Record Date, Mr.  Lichtenstein  beneficially  owned 1,336,100  Shares of the
Common  Stock of the  Company,  all of which were owned by Steel.  The  business
address of Mr.  Lichtenstein  is 150 E. 52nd Street,  21st Floor,  New York, New
York 10022. For information regarding Mr. Lichtenstein's  purchases and sales of
Shares  of the  Common  Stock of the  Company  during  the past two  years,  see
Schedule I.                                                                     

         In late 1995,  Steel  commenced  a proxy  solicitation  to replace  the
incumbent  directors  of Medical  Imaging  Centers of  America,  Inc.  ("MICA").
Thereafter,  MICA initiated an action against Steel,  Warren  Lichtenstein,  and
others  in the  United  States  District  Court  for the  Southern  District  of
California,  Medical Imaging Centers of America,  Inc. v.  Lichtenstein,  et al,
Case No. 96-0039B.  On February 29, 1996, the Court issued an Order granting, in
part,  MICA's motion for a preliminary  injunction on the grounds that plaintiff
had  demonstrated  a probability  of success on the merits of its assertion that
defendants had violated Section 13 of the Securities Exchange Act of 1934. Under
the Court's preliminary injunction,  defendants in the action were enjoined from
voting certain of their shares at MICA's annual meeting of shareholders,  except
pursuant to a formula under which they would be voted in the same  proportion as
other  votes cast at the  meeting.  The Court  declined  to  adjourn  the annual
meeting of  shareholders.  At the meeting,  Steel received  sufficient  votes to
elect its  nominees  to the Board of MICA,  after  giving  effect to the Court's
preliminary  injunction.   The  parties  thereafter  settled  their  differences
pursuant to an agreement  under which MICA agreed to initiate an auction process
which, if not concluded  within a certain time period,  would end and thereafter
the  designees  of Steel  would  assume  control of the Board of MICA.  MICA was
ultimately  sold for $11.75 per share, as contrasted with the price of $8.25 per
share,  representing  the closing  price on the day prior to the  initiation  of
Steel's proxy solicitation.                                                     

 -6-

PRRN14A
7th Page of 15
TOC
1st
Previous
Next
↓Bottom
Just 7th
         Robert  Frankfurt  (33)  is one  of  the  nominees  for  director.  Mr.
Frankfurt  joined the Former  General  Partner in 1995 and became a non-managing
member of Steel L.L.C. in 1996. Mr. Frankfurt  concurrently  served as President
of MDM  Technologies  during 1997 and 1998. As of the date hereof Mr.  Frankfurt
does not  beneficially  own any Shares of the Common Stock of the  Company.  Mr.
Frankfurt has not purchased or sold any Shares of Common Stock of the Company in
the past two  years.  The  business  address of Mr.  Frankfurt  is 150 East 52nd
Street, 21st Floor, New York, NY 10022.                                         

         James  Benenson,  Jr. (63) is one of the  nominees  for  director.  Mr.
Benenson has been the Chairman of the Board of Vesper Corporation since 1979 and
Chairman of the Board of Arrowhead  Holdings  Corporation  since 1983.  Prior to
such time, Mr.  Benenson  served in various  capacities with F. Eberstadt & Co.,
Walker,  Hart & Co. and James Benenson & Co. As of the date hereof Mr.  Benenson
does not  beneficially  own  Shares  of the  Common  Stock of the  Company.  Mr.
Benenson has not  purchased or sold any Shares of Common Stock of the Company in
the past two years.  The business  address of Mr.  Benenson is 8223  Brecksville
Road, Brecksville Ohio 44141.                                                   

         Steven Wolosky (43) is one of the nominees for director.  For more than
the past five years,  Mr.  Wolosky has been a partner of Olshan  Grundman  Frome
Rosenzweig  & Wolosky  LLP,  counsel  to Steel  Partners.  Mr.  Wolosky  is also
Assistant Secretary of WHX Corporation,  a NYSE listed company and a director of
Uniflex,  Inc., an AMEX listed company.  As of the date hereof,  Mr. Wolosky did
not beneficially own any Shares of the Common Stock of the Company.  Mr. Wolosky
has not  purchased  or sold any Shares of the Common Stock of the Company in the
past two years.  The business  address of Mr.  Wolosky is 505 Park  Avenue,  New
York, New York 10022.                                                           

         For  further  information  concerning  the  plans  of  the  Full  Value
Committee and the Nominees, see "The Plans of the Full Value Committee."        

         The Full Value Committee, together, beneficially owned 1,336,100 Shares
of Common  Stock as of the  Record  Date,  representing  16.5% of the issued and
outstanding Shares of Common Stock.                                             

         Each of the  Nominees  has  consented  to serve as a director  and,  if
elected,  intends  to  discharge  his  duties  as  director  of the  Company  in
compliance  with  all  applicable  legal  requirements,  including  the  general
fiduciary  obligations  imposed upon  corporate  directors.  By executing a GOLD
proxy  Card,  each  stockholder  will  revoke any prior  consent and will not be
voting his or her Shares for the nominees of the Company.                       

         The Nominees will not receive any  compensation  from the Committee for
their  services  as a  Director  of the  Company.  The  Committee  has agreed to
indemnify  the  Nominees  against  any  costs,  expenses  and other  liabilities
associated  with their  nomination and the election  contest.  The Nominees have
executed written consents agreeing to be a nominee for election as a Director of
the Company and to serve as a Director if so elected.  None of the Nominees have
been  convicted in any criminal  proceedings  (excluding  traffic  violations or
similar  misdemeanors) over the past ten years.  Directors who are not employees
of the Company or its subsidiary  receive an annual retainer of $2,560,  payable
in quarterly  installments,  and a fee of $300 for  participation in meetings of
the Company Board held by means of conference telephone and for participation in
certain meetings of committees of the Company Board.                            

         Except as provided for under "Legal  Proceedings"  herein,  none of the
Nominees is adverse to the Company or any of its  subsidiaries  in any  material
pending legal proceedings.                                                      

         The Committee does not expect that the Nominees will be unable to stand
for election but, in the event that any of the Nominees are unable to do so, the
Shares  represented  by the  enclosed  GOLD  proxy  card  will be voted  for the
remaining  Nominees.  In addition,  the Committee reserves the right to nominate
substitute or  additional  persons if the Company makes or announces any changes
to its Bylaws or takes or announces any other action that has, or if consummated
would have, the effect of disqualifying any of the Nominees.                    

 -7-

PRRN14A
8th Page of 15
TOC
1st
Previous
Next
↓Bottom
Just 8th
         YOU ARE URGED TO VOTE FOR THE  ELECTION OF THE NOMINEES ON THE ENCLOSED
GOLD PROXY CARD.                                                                

 VOTING AND PROXY PROCEDURES

         Only  stockholders  of record on the Record  Date will be  entitled  to
notice of and to vote at the Annual Meeting. Each Share is entitled to one vote.
Stockholders  who sell Shares  before the Record Date (or acquire  them  without
voting rights after the Record Date) may not vote such Shares.  Stockholders  of
record on the Record Date will retain their voting rights in connection with the
Annual  Meeting even if they sell such Shares  after the Record  Date.  Based on
publicly available information, the Committee believes that the only outstanding
class of  securities of the Company  entitled to vote at the Annual  Meeting are
the Shares.  According to publicly  available  information as of March 31, 1999,
there were 8,100,321 Shares issued and outstanding.                             

         Shares  represented by properly executed GOLD proxy cards will be voted
at the Annual  Meeting as marked and,  in the absence of specific  instructions,
will  be  voted  FOR the  election  of the  Nominees  to the  Board,  and in the
discretion  of the persons named as proxies on all other matters as may properly
come  before  the  Annual  Meeting.   Election  of  the  Nominees  requires  the
affirmative  vote of a plurality of the Shares  represented and entitled to vote
at the Annual  Meeting.  Shares for which proxies are marked  "abstain"  will be
treated as Shares present for purposes of  determining  the presence of a quorum
on all  matters.  Proxies  relating  to "street  name"  Shares that are voted by
brokers only on some of the proposals  will  nevertheless  be treated as present
for purposes of determining the presence of a quorum on all matters but will not
be entitled to vote on any proposal which the broker does not have discretionary
voting  power  and has not  received  instructions  from  the  beneficial  owner
("broker non-votes").  Directors are elected by a plurality and the nominees who
receive the most votes will be elected.  Abstentions  and broker  non-votes will
not be taken into account in determining the outcome of the election.           

         Stockholders  of the Company may revoke their proxies at any time prior
to its exercise by attending the Annual  Meeting and voting in person  (although
attendance at the Annual Meeting will not in and of itself constitute revocation
of a proxy) or by delivering a written notice of  revocation.  The delivery of a
subsequently   dated  proxy  which  is  properly  completed  will  constitute  a
revocation of any earlier proxy.  The revocation may be delivered  either to the
Committee in care of Innisfree M&A  Incorporated at the address set forth on the
back cover of this Proxy  Statement or to the Company at 16559  Saticoy  Street,
Van  Nuys,  California  91406 or any  other  address  provided  by the  Company.
Although a revocation  is effective if delivered to the Company,  the  Committee
requests that either the original or  photostatic  copies of all  revocations be
mailed to the Committee in care of Innisfree M&A Incorporated at the address set
forth on the back cover of this Proxy  Statement so that Committee will be aware
of all revocations  and can more  accurately  determine if and when proxies have
been received from the holders of record on the Record Date of a majority of the
outstanding Shares.                                                             

         IF YOU WISH TO VOTE FOR THE  ELECTION  OF THE  NOMINEES  TO THE COMPANY
BOARD, PLEASE SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED GOLD PROXY CARD IN THE
POSTAGE-PAID ENVELOPE PROVIDED.                                                 

 SOLICITATION OF PROXIES

         The  solicitation of proxies  pursuant to this Proxy Statement is being
made by the Committee.  Proxies may be solicited by mail, facsimile,  telephone,
telegraph, in person and by advertisements. Solicitations may be made by certain
officers,  employees or affiliates of the  Committee,  none of whom will receive
additional compensation for such solicitation.                                  

         The Committee has retained  Innisfree M&A Incorporated for solicitation
and advisory services in connection with this solicitation,  for which Innisfree
M&A  Incorporated  will  receive  a fee not to  exceed  $25,000,  together  with
reimbursement for its reasonable out-of-pocket expenses, and will be indemnified
against certain liabilities and                                                 

 -8-

PRRN14A
9th Page of 15
TOC
1st
Previous
Next
↓Bottom
Just 9th
expenses,  including  certain  liabilities  under the federal  securities  laws.
Innisfree  M&A  Incorporated  will solicit  proxies from  individuals,  brokers,
banks,  bank  nominees  and  other  institutional  holders.  The  Committee  has
requested banks, brokerage houses and other custodians, nominees and fiduciaries
to forward all  solicitation  materials to the  beneficial  owners of the Shares
they hold of record. The Committee will reimburse these record holders for their
reasonable  out-of-pocket expenses in so doing. It is anticipated that Innisfree
M&A Incorporated  will employ  approximately 50 persons to solicit the Company's
stockholders for the Annual Meeting.                                            

         The  entire  expense  of  soliciting  proxies  is  being  borne  by the
Committee.  If the  Nominees  are elected to the Company  Board,  the  Committee
intends  to seek  reimbursement  of the  costs  of this  solicitation  from  the
Company.  Unless  otherwise  required by law, the  Committee  does not currently
intend to submit the question of reimbursement of the costs of this solicitation
to a  stockholder  vote.  Costs of this  solicitation  of proxies are  currently
estimated to be approximately $100,000. The Committee estimates that through the
date hereof, its expenses in connection with this solicitation are approximately
$15,000.                                                                        

 PARTICIPANT INFORMATION

         Mr.  Lichtenstein  beneficially  owns 1,336,100 Shares of Common Stock.
None of Messrs.  Frankfurt,  Benenson or Wolosky beneficially owns any Shares of
Common Stock.  The Committee is deemed to beneficially  own 1,336,100  Shares of
Common Stock representing 16.5% of the Shares  outstanding.  No participant owns
any  securities  other than Shares of Common Stock and no  participant  owns any
such Shares of record but not beneficially.                                     

         The general partner of Steel is Steel LLC, a Delaware limited liability
company.  The  principal  business of Steel is  investing in the  securities  of
micro-cap  companies.  The principal  business address of Steel and Steel LLC is
150 East  52nd  Street,  21st  Floor,  New  York,  New  York  10022.  Warren  G.
Lichtenstein  is Chairman of the Board,  Secretary  and the  Managing  Member of
Steel LLC. As of the Record Date,  Steel was the  beneficial  owner of 1,336,100
Shares of the Common Stock of the Company.  Steel LLC does not  beneficially own
any Shares of the Common  Stock of the  Company  on the Record  Date,  except by
virtue of their role in Steel. For information  regarding  Steel's purchases and
sales of Shares of the Common  Stock of the  Company  during the past two years,
see Schedule I.                                                                 

         The  Company  Board has a single  class of  directors.  At each  annual
meeting of  Stockholders,  the  directors  are elected to a one-year  term.  The
Nominees proposed by the Committee, if elected, would serve as directors for the
term  expiring  in 2000 or until the due  election  and  qualification  of their
successors.                                                                     

 LEGAL PROCEEDINGS

         On May 3, 1999,  Steel filed a complaint in the United States  District
Court,  District of Delaware,  naming the Company,  Michael H. Figoff, Reuben M.
Siwek,  Tracy Kent  Pugmire  and Robert A. Smith as  defendants.  The  complaint
alleges  that the  defendants  have  violated  Sections  13(d)  and 14(a) of the
Securities  Exchange  Act of 1934,  as amended.  The  complaint  states that the
defendants  are  using  false and  misleading  material  in the proxy  statement
disseminated to stockholders of the Company by means of the filing of definitive
proxy  materials with the  Securities and Exchange  Commission on or about April
26, 1999, in connection with the Company's  solicitation of proxies for its 1999
annual  meeting.  According  to the proxy  statement,  such proxy  statement  is
anticipated to be mailed to stockholders on or about June 1, 1999. The complaint
also states that the  individual  defendants  have formed an  undisclosed  group
which beneficially owns approximately 14% of the Shares of Common Stock but have
failed to file a  Schedule  13D  disclosing  the  formation  of such  group.  In
addition,  the  complaint  states  that one million  shares of the Company  were
acquired by the individual  defendants and those working with them pursuant to a
stock  issuance  which was without  proper  corporate  purpose  and  designed to
entrench management. Steel has requested, among other things, that a declaration
be made that the proxy  statement of the Company is false and  misleading,  that
the individual  defendants be directed to file a complete and truthful  Schedule
13D, and that the defendants be enjoined from voting proxies  received  pursuant
to their  misleading  solicitation  and the one million shares obtained  through
self-dealing.                                                                   

 -9-

PRRN14A
10th Page of 15
TOC
1st
Previous
Next
↓Bottom
Just 10th
CERTAIN TRANSACTIONS BETWEEN THE COMMITTEE AND THE COMPANY

         Except as set forth in this Proxy  Statement  (including  the Schedules
hereto),  none  of  the  Committee  or any of the  other  participants  in  this
solicitation,  or any of their respective associates: (i) directly or indirectly
beneficially owns any Shares or any securities of the Company;  (ii) has had any
relationship with the Company in any capacity other than as a stockholder, or is
or has been a party to any  transactions,  or  series of  similar  transactions,
since January 1, 1998 with respect to any Shares of the Company;  or (iii) knows
of any transactions since January 1, 1998,  currently proposed  transaction,  or
series of similar transactions,  to which the Company or any of its subsidiaries
was or is to be a party,  in which the amount  involved  exceeds  $60,000 and in
which any of them or their respective  affiliates had, or will have, a direct or
indirect material interest.  In addition,  other than as set forth herein, there
are no contracts,  arrangements or understandings  entered into by the Committee
or any  other  participant  in  this  solicitation  or any of  their  respective
associates  within  the past year with any  person  with  respect  to any of the
Company's  securities,  including,  but not limited to, joint ventures,  loan or
option  arrangements,  puts or calls,  guarantees  against loss or guarantees of
profit, division of losses or profits, or the giving or withholding of proxies. 

         Except as set forth in this Proxy  Statement  (including  the Schedules
hereto),  neither  the  Committee  nor  any of the  other  participants  in this
solicitation,  or any of  their  respective  associates,  has  entered  into any
agreement  or  understanding  with any  person  with  respect  to (i) any future
employment by the Company or its affiliates or (ii) any future  transactions  to
which the Company or any of its affiliates will or may be a party.              

OTHER MATTERS AND ADDITIONAL INFORMATION

         According to the Company  Proxy  Statement,  the Company is  soliciting
proxies with respect to the appointment of the Company's auditors for the fiscal
year ended January 31, 2000.  Please refer to the Company Proxy  Statement for a
detailed  description of this proposal.  The Committee  expresses no opinion and
makes no recommendation on this proposal.  The accompanying GOLD proxy card will
be voted in accordance  with your  instructions  on such card.  You may vote for
approval of the  proposal,  vote against such proposal or abstain from voting on
such proposal by marking the proper box on the GOLD proxy card. If no marking is
made,  you will be deemed to have given a direction  to abstain  from voting the
Shares  represented  by the GOLD proxy card with respect to the approval of this
proposal.                                                                       

         The  Committee is unaware of any other  matters to be considered at the
Annual Meeting. However, the Committee has notified the Company of its intention
to  bring  before  the  Annual  Meeting  such  proposals  as it  believes  to be
appropriate.  Should other proposals be brought before the Annual  Meeting,  the
persons  named as  proxies  on the  enclosed  GOLD  proxy card will vote on such
matters in their discretion.                                                    

         The  information   concerning  the  Company  contained  in  this  Proxy
Statement  and the  Schedules  attached  hereto has been taken from, or is based
upon, publicly available information.  To date, the Committee has not had access
to the books and records of the Company.                                        

 STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING

          The  Company's  Definitive  Proxy  Statement  set March 1, 2000 as the
deadline by which proposals of the Company's  stockholders  that are intended to
be presented by such  stockholders  at the Annual Meeting were to be received by
the Company in order to be considered  for inclusion in the proxy  statement and
form of proxy relating to the Annual Meeting.                                   

                  THE FULL VALUE COMMITTEE

     May__, 1999

-10-

PRRN14A
11th Page of 15
TOC
1st
Previous
Next
↓Bottom
Just 11th
 Transactions in the Shares for the Last Two Years

Shares of Common Stock         Price Per               Date of      
  Purchased                 Share                 Purchase
  ---------                 -----                 --------

STEEL PARTNERS II, L.P. 
          29,100                 .75140                   June 8, 1998
           10,000                 .75000                   June 15, 1998
           17,500                 .77071                   June 19, 1998
           30,000                 .80125                   June 23, 1998
           20,000                 .80125                   June 24, 1998
          15,000                 .80000                   July 2, 1998
           5,000                 .80125                   July 6, 1998
          10,000                 .83250                   July 9, 1998
           20,000                 .82250                   July 13, 1998
           20,000                 .82000                   July 14, 1998
           75,000                 .83167                   July 16, 1998
           28,000                 .83089                   July 27, 1998
          565,000                 .86000                   July 27, 1998
             2,500                 .70750                 October 23, 1998
            20,500                 .75781                 October 27, 1998
            10,000                 .77000                 October 28, 1998
            20,000                 .77000                 October 29, 1998
             5,000                 .77000                 October 30, 1998
            50,000                 .77000                 November 4, 1998
             10,000                 .77000                 November 13, 1998
             10,000                 .80000                 December 31, 1988
            10,000                 .80125                  January 6, 1999
            27,500                 .81227                 January 21, 1999
            10,000                 .80125                 January 25, 1999
            10,000                 .85594                 January 29, 1999
           20,000                 .83250                   March 3, 1999
           20,000                 .84031                   March 5, 1999
           10,000                 .83250                   March 8, 1999

-11-

PRRN14A
12th Page of 15
TOC
1st
Previous
Next
↓Bottom
Just 12th
Shares of Common Stock         Price Per               Date of      
  Purchased                 Share                 Purchase
  ---------                 -----                 --------

           10,000                 .83250                  March 10, 1999
           25,000                 .83250                  March 16, 1999
           25,000                 .89500                  March 25, 1999
           12,000                 .89500                   April 7, 1999
           44,500                 .89720                   April 8, 1999
          129,500                 .90592                  April 22, 1999
           10,000                 .89500                  April 23, 1999

WARREN G. LICHTENSTEIN

 NONE(1)

ROBERT FRANKFURT

NONE

 JAMES BENENSON, JR.

NONE

STEVEN WOLOSKY

NONE

--------                                                                        
    (1)  By  virtue  of  his  position  with  Steel   Partners  II,  L.P.,   Mr.
         Lichtenstein  has the power to vote and dispose of the Company's Shares
         owned by Steel  Partners  II, L.P.  Accordingly,  Mr.  Lichtenstein  is
         considered the  beneficial  owner of the Shares of the Company owned by
Steel Partners II, L.P.                                       

-12-

PRRN14A
13th Page of 15
TOC
1st
Previous
Next
↓Bottom
Just 13th
 IMPORTANT

         Tell your Board what you think!  Your vote is important.  No matter how
many Shares you own,  please give the  Committee  your proxy FOR the election of
the Nominees by taking three steps:                                             

1.       SIGNING the enclosed GOLD proxy card,                

2.       DATING the enclosed GOLD proxy card, and             

         3.       MAILING  the  enclosed  GOLD proxy card TODAY in the  envelope
                  provided  (no  postage  is  required  if mailed in the  United
States).                                    

         If any of your Shares are held in the name of a brokerage  firm,  bank,
bank  nominee or other  institution,  only it can vote such Shares and only upon
receipt of your specific  instructions.  Accordingly,  please contact the person
responsible  for your account and instruct that person to execute the GOLD proxy
card  representing  your Shares.  The Committee  urges you to confirm in writing
your  instructions to the Committee in care of at the address  provided below so
that the Committee  will be aware of all  instructions  given and can attempt to
ensure that such instructions are followed.                                     

         If you  have  any  questions  or  require  any  additional  information
concerning this Proxy Statement,  please contact,  Innisfree M&A Incorporated at
the address set forth below.                                                    

INNISFREE M&A INCORPORATED
501 MADISON AVENUE, 20TH FLOOR
NEW YORK, NEW YORK 10022
 CALL TOLL FREE (888) 750-5834
OR
 BANKS AND BROKERS CALL (212) 750-5833 (COLLECT)

-13-

PRRN14A
14th Page of 15
TOC
1st
Previous
Next
↓Bottom
Just 14th
 PUROFLOW INCORPORATED 1999 ANNUAL MEETING OF STOCKHOLDERS

 THIS PROXY IS SOLICITED ON BEHALF OF THE FULL VALUE COMMITTEE

The undersigned  appoints Warren G. Lichenstein and Robert Frankfurt and each of
them, attorneys and agents with full power of substitution to vote all shares of
common stock of Puroflow  Incorporated  (the  "Company")  which the  undersigned
would be entitled to vote if  personally  present at the 1999 Annual  Meeting of
Stockholders of the Company,  and including at any adjournments or postponements
thereof and at any special meeting called in lieu thereof, as follows:          

THE FULL VALUE  COMMITTEE  RECOMMENDS  A VOTE FOR THE  ELECTION OF THE  NOMINEES
NAMED BELOW. THE COMMITTEE MAKES NO  RECOMMENDATION AS TO THE PROPOSAL SET FORTH
IN ITEM 2.                                                                      

         1.       ELECTION  OF  DIRECTORS:  To elect  the  Nominees,  Warren  G.
                  Lichtenstein, Robert Frankfurt, James Benenson, Jr. and Steven
                  Wolosky,  to  the  Board  of  Directors  of the  Company  (the
"Board");                                   

    FOR [ ]                   WITHHOLD AUTHORITY [ ]

         INSTRUCTION:  To withhold authority to vote for any individual nominee,
write that nominees name in the space provided below.         

I withhold authority to vote for the following nominee(s):    

         2.       To vote for the  appointment  of the  Auditors  for the fiscal
                  year ended  January 31,  2000,  subject to  consummation  of a
                  contract  satisfactory  to  the  Board  of  Directors  of  the
Company.                                    

                  FOR [ ]                 AGAINST [ ]                ABSTAIN [ ]

         3. In  their  discretion  with  respect  to any  other  matters  as may
properly come before the Annual Meeting.                                        

         The  undersigned  hereby revokes any other proxy or proxies  heretofore
given to vote or act with  respect to the shares of common  stock of the Company
held by the undersigned,  and hereby ratifies and confirms all action the herein
named attorneys and proxies, their substitutes, or any of them may lawfully take
by virtue  hereof.  If properly  executed,  this proxy will be voted as directed
above.  If no direction is indicated with respect to the above  proposals,  this
proxy will be voted FOR the election of the Nominees and in the manner set forth
in Item 3 above.  If no direction is made with respect to proposal 2, this proxy
will be treated as a  direction  to abstain  from  voting  with  respect to such
proposal.                                                                       

         This  proxy  will be valid  until the  sooner of one year from the date
indicated below and the completion of the Annual Meeting.                       

DATED:  _________________________________,  1999.                               

PLEASE SIGN EXACTLY AS NAME APPEARS ON THIS PROXY.                            

-------------------------------------------------------                       
(Signature)                                                                     

-------------------------------------------------------                       

-14-

PRRN14A
Last Page of 15
TOC
1st
Previous
Next
↓Bottom
Just 15th
(Signature, if held jointly)                                                  

-------------------------------------------------------                       
(Title)                                                                       

 WHEN SHARES ARE HELD JOINTLY, JOINT OWNERS SHOULD EACH SIGN. EXECUTORS,
ADMINISTRATORS, TRUSTEES, ETC., SHOULD INDICATE THE CAPACITY IN WHICH SIGNING.

IMPORTANT: PLEASE SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED
 ENVELOPE!

IF YOU NEED ASSISTANCE WITH THIS PROXY CARD, PLEASE CALL

INNISFREE M&A INCORPORATED
 CALL TOLL FREE (888) 750-5834

-15-

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘PRRN14A’ Filing		Date		First		Last			Other Filings
		3/1/00		10
		1/31/00		3		14			10KSB40
		6/29/99		3					DEF 14A
		6/1/99		9
Filed on:		5/14/99							SC 13D
		5/3/99		9					DEFR14A,  PREC14A
		4/30/99		3		6			10QSB
		4/26/99		3		9			10KSB40,  SC 13D/A
		4/23/99		12
		4/22/99		12					SC 13D/A
		4/8/99		12
		4/7/99		12					SC 13D/A
		3/31/99		8
		3/25/99		12
		3/16/99		12
		3/10/99		12
		3/8/99		11
		3/5/99		11
		3/3/99		11					SC 13D/A
		1/29/99		11					SC 13D/A
		1/25/99		11
		1/21/99		11
		1/6/99		11					SC 13D/A
		11/13/98		11
		11/4/98		11
		10/30/98		11
		10/29/98		11
		10/28/98		11
		10/27/98		11
		10/23/98		11
		10/5/98		6					SC 13D/A
		7/27/98		11
		7/16/98		11
		7/14/98		11
		7/13/98		11
		7/9/98		11					DEF 14A
		7/6/98		11
		7/2/98		11
		6/24/98		11
		6/23/98		11
		6/19/98		11
		6/15/98		11
		6/8/98		11
		1/1/98		10
		2/29/96		6
		1/1/96		6
									List all Filings