SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Report (date of earliest event reported): March 16, 2007
ALLIED HEALTHCARE PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
|(State or other jurisdiction
||(Commission File Number)
1720 SUBLETTE AVENUE, SAINT LOUIS, MISSOURI 63110
(address of principal executive offices)
Registrants telephone number, including area code: (314) 771-2400
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Section 1 Registrants Business and Operations
Item 1.01 Entry into a Material Definitive Agreement.
On February 28, 2007, the Compensation Committee of the Board of Directors recommended to the
Board that the Registrant enter into an Employment Agreement with Earl Refsland, Registrants
president and chief executive officer, in recognition that the stated term of the employment
agreement dated August 24, 1999, had elapsed as of August 24, 2003. Following subsequent approval
by the full Board (other than Mr. Refsland, who abstained), the Employment Agreement was signed by
both parties on March 16, 2007.
The new Employment Agreement with Mr. Refsland calls for an initial annual base salary of
$355,000 (the Annual Salary) plus participation in such incentive awards (in cash or securities)
as may be granted in the discretion of the Registrant upon recommendations or approvals by the
Compensation Committee of the Board of Directors. The Annual Salary may be increased or decreased
in future periods but may not be reduced below $355,000 without Mr. Refslands consent. The
Employment Agreement also provides for participation in employee benefit and welfare programs in
accordance with applicable plans maintained by the Registrant; for reimbursement of expenses
incurred on behalf of the Registrant or in furtherance of its business interests; and perquisites
in the form of a mutually agreed upon automobile and, for so long as the Board of Directors deems
it necessary or appropriate, reimbursement of specified golf club dues and assessments. The
Employment Agreement includes customary provisions concerning non-disclosure of confidential or
proprietary information and non-competition covenants following termination of employment.
The new Employment Agreement with Mr. Refsland is for an initial term of three years but will
be automatically renewed and extended for successive one year periods thereafter unless either Mr.
Refsland or the Registrant gives notice of no renewal not less than 30 days prior to any such
renewal. The Employment Agreement may be terminated by the Registrant in the event of Mr.
Refslands death or disability or unilaterally with or without Cause (as defined). In the event
of a termination without cause (or in the event that Mr. Refsland terminates employment with Good
Reason (as defined)), Mr. Refsland is entitled to continued compensation at the then Annual Salary
for two years and with entitlement continuation of fringe benefits during that period. Good
Reason generally includes changes in the scope duties or location of employment but also includes
(i) Registrants written election not to renew the Employment Agreement and (ii) certain voluntary
resignations by Mr. Refsland following a Change of Control as defined. For purposes of the
foregoing, a Change of Control means
(a) the acquisition by a person other than Clayton Management Company (or any other person
or entity controlled by or under common control with John D. Weil or by a trustee or
personal representative designated by said John D. Weil) of beneficial ownership of more
than fifty percent (50%) of the outstanding common stock of the Company (as beneficial
ownership is determined under Section 13(d) of the Securities Exchange Act); or
(b) a merger or consolidation with another company or entity (regardless of whether the
Company of another entity is the surviving or resulting entity of such merger or
consolidation) other than a merger or consolidation in which immediately upon giving effect
to such merger or consolidation, the persons who were holders of the common stock of the
Company immediately prior thereto continue to be the holders of at least sixty percent (60%)
of the surviving or resulting entity; or
(c) a sale of all or substantially all the assets and operations of the Company to a
A transaction pursuant to which the Company ceases to be required to file periodic or interim
reports under the Securities Exchange Act of 1934 shall not constitute a Change of Control unless
accompanied by a transaction in the form of (a), (b) or (c) above.
In addition to the Employment Agreement with Mr. Refsland, on March 16, 2007, the Registrant
has entered into agreements with each of its other executive officers (all of whom serve as
employees at will) providing that in the event of such a Change of Control and in the further event
such officers employment is terminated by the Registrant or any successor or is voluntarily
terminated by the executive as the result of a change in the scope or location of the officers
duties, then such officer shall be entitled to receive a lump sum payment of one years salary (net
of required withholding) in lieu of any other severance applicable to such termination.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
||ALLIED HEALTHCARE PRODUCTS, INC.
|Date: March 16, 2007
||/s/ Daniel C. Dunn
||Daniel C. Dunn
||Vice-President, Chief Financial Officer and