Document:

Unassociated Document

    Exhibit
      10.1

    EMPLOYMENT
      AGREEMENT

    

    THIS
      EMPLOYMENT AGREEMENT ("Agreement") is made and entered into effective as of
      the
      1st day of March, 2007, by and between EARL REFSLAND a resident of Missouri
      ("Executive") and ALLIED HEALTHCARE PRODUCTS, INC., a Delaware corporation,
      for
      itself and on behalf of any of its current or future subsidiary corporations
      (collectively referred to in this Agreement as the "Company").

    

    WITNESSETH:

    

    WHEREAS,
      the Company is engaged in the business of designing, manufacturing and
      distributing a variety of respiratory products used in the health care industry
      in a wide range of hospital and alternate site settings, including, but not
      limited to, sub-acute care facilities, home health care and emergency medical
      care (the "Business");

    

    WHEREAS,
      the Executive has been employed by the Company as the Company's President and
      Chief Executive officer; and 

    

    WHEREAS,
      the Company and the Executive desire that such employment relationship continue
      in accordance with the provisions of this Agreement.

    

    NOW,
      THEREFORE, in consideration of the foregoing recitals and the mutual promises,
      covenants, and agreements hereinafter set forth, and other good and valuable
      consideration, the receipt and sufficiency of which is hereby acknowledged
      by
      the parties hereto, the Company and Executive agree as follows:

    

    1. Term.
      The
      term of Executive's employment with the Company shall continue from the
      effective date of this Agreement, March 1, 2007, (hereinafter the "Effective
      Date"), and will terminate three (3) years thereafter, subject to renewal at
      that time for successive one year terms unless either party shall have notified
      the other in writing not less than thirty (30) days prior to the then current
      expiration date of this Agreement of such party's determination not to renew
      this Agreement (hereinafter the “Term”). 

    

    2. Duties
      of Executive.
      During
      the Term, Executive shall serve as the Chief Executive Officer and President
      of
      the Company, and shall have, subject to the directives of the Board of Directors
      of the Company (the "Board"), supervision and control over, and responsibility
      for, the general management and operation of the Company, and shall have such
      other powers and duties as may from time to time be prescribed by the Board.
      Executive shall devote his full working time and best efforts, skill and
      attention to the Business and interests of the Company. Executive shall follow
      and act in accordance with all policies established by the Company from time
      to
      time. During the Term, Executive shall not actively engage in or be involved
      in
      any business activities other than on behalf of the Company unless prior written
      consent is provided by the Board; provided,
      however,
      Executive may continue to serve on the boards of directors of other companies,
      provided such position does not involve active management, may serve as a
      director of other organizations with the prior consent of the Company, such
      consent not to be unreasonably withheld, and may engage in such charitable
      endeavors and/or other passive ownership activities, provided such activities
      do
      not, whether individually or in the aggregate, materially interfere with
      Executive's duties hereunder. In addition, during the Term, the Company agrees
      to use reasonable efforts to cause Executive to be nominated to the Board and
      to
      remain on the Board.

    

    
      
         

      

      
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    3. Compensation.
      As
      consideration for the services rendered by Executive pursuant to this Agreement,
      the Company agrees to pay to Executive an initial salary at the rate of Three
      Hundred Fifty-Five Thousand Dollars ($355,000) for the first year of the Term
      ("Annual Salary"), which amount shall be payable in accordance with the
      Company's normal payroll practices in effect from time to time. Executive's
      annual salary for the remainder of the Term will be determined at the sole
      discretion of the Board, but in no event will Executive's annual salary be
      reduced below the initial annual salary amount stated herein. All payments
      of
      compensation will be subject to normal employee withholding and all other
      applicable tax deductions.

    

    4. Fringe
      Benefits.
      During
      the Term, Executive may participate in the fringe benefit programs that may
      generally be made available by the Company to management level employees of
      the
      Company from time to time (collectively, "Fringe Benefits"). Executive's
      participation in the Fringe Benefits offered by the Company shall be in
      accordance with the participation guidelines that the Company may establish
      from
      time to time and may require a financial contribution by Executive. In the
      event
      of the death of the Executive during the Term of this Agreement, the Company
      agrees to notify his heirs or representative of any rights he may have under
      this Agreement, any employee benefits under employee benefits sponsored by
      the
      Company to the extent applicable to a deceased employee, and with regard to
      stock options or restricted shares applicable to Executive.

    

    5. Other
      Compensation.

    

    (a) Incentive
      Compensation.
      Commencing on and after the first anniversary of the Effective Date, Executive
      shall be entitled to receive, in addition to his Annual Salary, such incentive
      compensation payments as the Board, in its sole discretion, may determine
      appropriate or necessary and such stock options, restricted shares or other
      benefits as the Board shall determine.

    

    (b) Perquisites.
      The
      Company agrees that: (i) during the Term, the Company shall furnish to the
      Executive an automobile of a type mutually acceptable to the Company and the
      Executive and the Company shall pay all of the expenses for gasoline, insurance,
      maintenance and repairs for such automobile, and (ii) at such time, and for
      so
      long as, the Board, in its discretion, determines necessary or appropriate,
      the
      Company will pay the monthly assessment and/or other monthly charges of the
      Executive for his existing membership in Algonquin Golf Club.

    

    (c) Vacations.
      During
      the Term, the Executive shall be entitled to not less than four (4) weeks of
      compensated vacation for each year of employment.

    

    6. Expenses.
      The
      Company agrees to directly pay or reimburse Executive for necessary and
      reasonable travel, entertainment and other business expenses actually incurred
      by Executive in connection with Executive's duties hereunder and approved by
      the
      Company pursuant to the Company's existing practices. The Company shall
      reimburse Executive for such approved business expenses within a reasonable
      time
      after submission by Executive of true and correct supporting documentation
      as
      may be required by the Company. Without limiting the foregoing, the Company
      will
      pay as its own expense for any professional services reasonably incurred and
      related to the Executive’s obligations under the Sarbanes-Oxley Act of 2002 and
      such regulations and rules promulgated thereunder; provided, however, that
      such
      expenses shall be incurred only with the consent of the Company and using
      counsel or other professional advisors approved by the Company, which consent
      and approval shall not be unreasonably withheld.

    

    
      
         

      

      
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    7. Confidentiality.
      Executive acknowledges and agrees that:

    

    (a) Executive
      has created and will continue to create, has and will continue to have access
      to, and has received and will continue to receive information, documents, and
      materials of a confidential and proprietary nature to the Company and which
      may
      contain trade secrets of the Company or the Company's customers, including,
      without limitation, designs, drawings, formulas, plans, financial information,
      processes, methods, customer lists, prospective customers and other prospects,
      business plans and other information (collectively, "Confidential Information"),
      which would not have been or be disclosed to Executive except for Executive's
      employment with the Company.

    

    (b) Executive
      hereby acknowledges and agrees that Confidential Information is an asset of
      the
      Company, is of a confidential nature and is not generally known to the public,
      and, in order to protect and preserve the goodwill of the Company, must be
      kept
      strictly confidential and used only in the conduct of the Company's business
      from time to time.

    

    (c) Executive
      hereby agrees that during his lifetime he will not disclose or reveal in any
      manner whatsoever any of the Confidential Information to any third party, except
      in the course of and during Executive's employment with the Company or as
      required by law, including without limitation, pursuant to an order of the
      Court
      or other body having jurisdiction over the matter or lawful process or subpoena.
      Executive shall not use any of the Confidential Information in any manner for
      his own benefit or for the benefit of any other person or entity.

    

    (d) Executive
      will promptly return to the Company all written or recorded Confidential
      Information, including all copies and reproductions thereof in Executive's
      possession or under Executive's control, upon the earlier of the Company's
      request or upon the termination of Executive's employment with the Company.
      At
      such time, Executive shall also give the Company all notes, summaries and
      analyses prepared by Executive which relate to or include Confidential
      Information.

    

    (e) The
      Executive has no obligation, express or implied, to refrain from using or
      disclosing to others any knowledge or information (i) which is or hereafter
      shall become available to the public otherwise than by disclosure by the
      Executive in breach of this Agreement, (ii) was available to the Executive
      on a
      nonconfidential basis prior to it disclosure to the Executive through his status
      as an officer of the Company, or (iii) was available or becomes available to
      the
      Executive on a nonconfidential basis from a third party (other than the Company)
      who is not bound by any confidentiality obligation to the Company.

    

    
      
         

      

      
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    8. Survival
      of Confidentiality Provisions.
      Executive acknowledges and agrees that the provisions of paragraph 7 herein
      will
      survive the termination of Executive's employment hereunder and will continue
      in
      full force and effect during and throughout Executive's lifetime.

    

    9. Covenants
      Against Competition and Solicitation.
      Executive covenants and agrees that, at all times while he is employed by the
      Company hereunder and for a period of two (2) years after the effective date
      of
      the termination of Executive's employment (whether or not such occurs after
      the
      Term of this Agreement), he will not, directly or indirectly, in association
      or
      in combination with any other person or entity, as an officer, director or
      shareholder of a corporation, as a member or manager of a limited liability
      company, or as an employee, agent, independent contractor, consultant, advisor,
      joint venturer, partner or otherwise, whether or not for pecuniary benefit,
      whether or not alone or in association with any person or entity:

    

    (a) Carry
      on,
      be engaged in, concerned or take part in, or render services, advise or lend
      money to any person or entity engaged in the Business currently engaged in
      by
      the Company or any business in which the Company may engage while Executive
      is
      employed by the Company hereunder; provided,
      however,
      and
      notwithstanding the foregoing, after the Executive is no longer employed with
      the Company, Executive may carry on, be engaged in, concerned or take part
      in,
      or render services, advise or lend money to any person or entity engaged in
      the
      business of manufacturing respiratory products which do not compete, directly
      or
      indirectly, in any manner with any product or service of the Company which,
      individually or in the aggregate, generated gross revenues to the Company in
      excess of Five Hundred Thousand Dollars ($500,000) annually as of the effective
      date of Executive's termination of employment with the Company.

    

    (b) Engage
      in
      or own, in whole or in part, manage, provide financing to, operate or otherwise
      carry on the business of designing, manufacturing and distributing respiratory
      products used in the health care industry and which, individually or in the
      aggregate, generated annual gross revenues to the Company in excess of Five
      Hundred Thousand Dollars ($500,000) annually, except: (i) in the course of
      Executive's performance of his duties during his employment and then only for
      the benefit of the Company; and (ii) as a holder of less than 1% of the stock
      of
      any corporation whose securities are traded on a national securities
      exchange.

    

    (c) Solicit,
      assist the solicitation of, or encourage any employee or independent contractor
      of the Company to terminate or otherwise modify that person's or entity's
      employment with or retention by the Company for the purpose of encouraging
      that
      person or entity to become employed or retained by any other person or entity
      unrelated to the Company.

    

    (d) Solicit,
      assist the solicitation of, or encourage any person or entity who was a material
      customer of the Company within the one (1) year period immediately preceding
      the
      date as of which Executive's employment is terminated hereunder, to: (i) provide
      the same or similar services as provided by the Company in material competition
      with the Company; (ii) modify in any material manner that person's or entity's
      business relationship with the Company; or (iii) materially modify the terms
      or
      reduce the volume of business which that person or entity transacts with the
      Company.

    

    
      
         

      

      
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    (e) The
      geographic scope of the covenants contained in subparagraphs (a) and (b) above
      shall extend to any state, county, municipality or other locality within or
      without the United States wherein the Company sold or actively attempted to
      sell
      products which, individually or in the aggregate, generated annual gross
      revenues to the Company in excess of Five Hundred Thousand Dollars ($500,000)
      annually. 

    

    (f) If
      Executive terminates his employment with the Company for Good Reason (other
      than
      and excluding on account of a Change of Control), and irrevocably and
      unconditionally waives, in writing, his right to the payment and other benefits
      on account of termination of employment for Good Reason as set forth in this
      Agreement, then the covenants contained in this Section 9 shall
      terminate.

    

    10. Discoveries
      and Inventions.
      Executive agrees that all developments, discoveries and inventions relating
      to
      the Company's Business (collectively referred to as the "Inventions") which
      Executive conceives or makes while employed by the Company shall be the
      exclusive property of the Company whether the Company, in its sole discretion,
      decides to pursue or not to pursue a patent, copyright, trademark, service
      mark
      or other registered embodiment of any kind of any country for such Invention.
      Whenever requested by the Company, whether during or subsequent to Executive's
      employment with the Company, Executive shall execute patent applications and
      other instruments considered necessary by the Company to apply for and obtain
      patents of the United States and foreign countries covering any such
      developments, discoveries or inventions. Executive agrees to assign, and does
      hereby assign to the Company, all title, interest and rights, including
      intellectual property rights, in and to any and all Inventions, and Executive
      agrees to assign to the Company any patents or patent applications arising
      from
      any such Inventions, and agrees to execute and deliver all such assignments,
      patents, patent applications and other documents as the Company may direct.
      Executive agrees to cooperate fully with the Company, both during and after
      Executive's employment with the Company is terminated, to enable the Company
      to
      secure and maintain rights in any such Inventions in any and all countries.
      Without limiting the foregoing, Executive hereby acknowledges that all works
      of
      authorship or invention which relate in any manner to the Company's Business
      which are developed or written during the term of Executive's employment with
      the Company are "works made for hire". Accordingly, Executive agrees to assign,
      and does hereby assign to the Company, any and all copyright rights and all
      other rights and all material prepared by Executive during the term of
      Executive's employment which relate to the Business of the Company.

    

    11. Employer's
      Remedy.
      Executive acknowledges and agrees that the covenants set forth in paragraphs
      7,
      8, 9 and 10 are necessary to protect the Company's legitimate business
      interests, including, without limitation, the Company's strong interest in
      the
      Confidential Information and Inventions and the Company's strong interest in
      maintaining an undisrupted work place. Executive acknowledges and agrees that
      the covenants are reasonable in scope, area, and duration, particularly in
      light
      of Executive's responsibilities and the international scope of the Company's
      business. Executive acknowledges that the services to be rendered by him in
      accordance with the provisions of this Agreement are of a special and unique
      character, and that the restrictions and obligations on his activities as
      contained in paragraphs 7, 8, 9 and 10 are reasonable and are required for
      the
      Company's protection. Executive hereby agrees that if he violates any of the
      provisions contained in paragraphs 7, 8, 9 and 10, the Company may seek from
      the
      arbitrator damages, at law or in equity; provided, however, that the Company
      may
      seek injunctive relief and seek to enjoin Executive from engaging in any
      activity in violation of this Agreement and without regard to the provisions
      of
      Paragraph 13 of this Agreement. For purposes of an action seeking such
      injunctive relief, Executive hereby irrevocably submits to the jurisdiction
      of
      the Circuit Court of the County of St. Louis, Missouri. All rights and remedies
      of the Company hereunder, at law or in equity, are cumulative in nature and
      will
      in no way be, or be deemed to be, the exclusive rights and remedies of the
      Company. If any court finds that the restrictions set forth in paragraphs 7,
      8,
      9 and 10 are unreasonable, this Agreement will be interpreted to include the
      restrictions contained herein to the extent such restrictions are permissible
      under law, giving effect to the intent of the parties that the restrictions
      contained herein shall be effective to the fullest extent possible.

    

    
      
         

      

      
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    12. Termination
      of Employment.

    

    (a) Termination
      By Company without Cause.
      The
      Company shall have the right to terminate Executive's employment hereunder
      without Cause (as defined below) upon providing Executive with written notice
      thereof. Any such termination of employment shall be effective on the date
      specified in such notice, or if no date is specified, then upon receipt by
      Executive of such notice. In the event of any such termination of employment,
      (i) the Company shall continue to pay to Executive, for the period (the
      "Continuation Period") beginning on the effective date of such termination
      of
      employment and ending two (2) years after the effective date of such termination
      of employment an amount per month equal to one-twelfth of Executive's then
      Annual Salary during the Continuation Period in accordance with the provisions
      of Section 3 hereof; (ii) throughout the Continuation Period, Executive shall
      be
      entitled to continued participation under all Fringe Benefit programs in which
      he participates in accordance with the terms thereof to the extent such
      participation is allowed pursuant to the terms thereof and applicable law with
      no increase in any amounts payable by the Company with respect thereto as a
      result of Executive no longer being employed by the Company, or if Executive
      is
      not allowed continued participation pursuant to the terms thereof and applicable
      law, then under another reasonably equivalent plan providing for the same or
      similar coverage but with no increase in any amounts payable by the Company
      with
      respect thereto as a result of Executive no longer being employed by the
      Company; (iii) the Company shall pay to Executive his unpaid Annual Salary,
      if
      any, earned prior to the effective date of the termination of Executive's
      employment in accordance with the Company's normal policies for same; (iv)
      the
      Company shall pay to Executive any incentive compensation payments to which
      Executive is entitled as of the effective date of the termination of Executive's
      employment in accordance with the Company's normal policies for same; and (v)
      the Company shall pay to Executive any business expenses remaining unpaid on
      the
      effective date of the termination of Executive's employment for which Executive
      is entitled to be reimbursed under Section 6 of this Agreement; provided,
      however,
      that
      without limiting any other remedy available hereunder, such payments shall
      immediately terminate upon a breach or violation by Executive of the provisions
      of Sections 7, 8, 9 or 10 hereof and, in such event, the Company shall be
      entitled, in addition to any other remedies it may have, to reimbursement from
      Executive of the amount paid by the Company to Executive during the Continuation
      Period pursuant to subparagraph (i) above. Notwithstanding anything in this
      Agreement
      to the contrary, if the Company terminates the Executive without cause within
      30
      days after a Change in Control, the Executive will be entitled to be paid his
      salary for two (2) years as provided for in Subparagraph 12(a)(i) above.

    

    
      
         

      

      
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    (b) Termination
      by Company for Cause.
      The
      Company may terminate this Agreement for Cause (as defined below) upon providing
      Executive with written notice thereof. Any such termination of employment shall
      be effective on the date specified in such notice, or if no date is specified,
      then upon receipt by Executive of such notice. In the event of such termination
      of employment, the Company shall pay to Executive (i) his unpaid Annual Salary
      through the effective date of such termination of employment, and (ii) any
      business expenses remaining unpaid on the effective date of such termination
      of
      employment for which Executive is entitled to be reimbursed under Section 6
      of
      this Agreement.

    

    (c) Death
      or Disability.
      Executive's employment with the Company shall terminate upon the death or
      Disability (as hereinafter defined), of Executive. Such termination of
      employment shall be effective as of the date of Executive's death, or in the
      event of Executive's Disability, upon the Company's giving Executive 30 days
      written notice thereof. In the event of such termination of employment due
      to
      death or Disability, Executive (or his estate or other designated beneficiary
      upon his death) shall be entitled to receive: (i) his Annual Salary and accrued
      expense reimbursements earned or accrued through the effective date of the
      termination of Executive's employment, (ii) any incentive compensation payments
      to which Executive is entitled as of the effective date of the termination
      of
      Executive's employment; and (iii) such payments, if any, as may be provided
      for
      pursuant to all Fringe Benefit programs in which Executive is participating
      as
      of the effective date of the termination of Executive's employment. All such
      Annual Salary, incentive compensation and/or Fringe Benefit payments payable
      upon termination of Executive's employment as aforesaid shall be paid at or
      following the date of such termination of employment in accordance with the
      Company's normal policies.

    

    (d) Termination
      by Executive for Good Reason.
      Executive shall have the right to terminate his employment hereunder for Good
      Reason (as defined below), if (A) Executive shall have given the Company prior
      written notice of the reason therefor and (B) a period of thirty (30) days
      following receipt by the Company of such notice shall have lapsed and, except
      for the occurrence of a Change of Control (as hereinafter defined), the matters
      which constitute or give rise to such "Good Reason" shall not have been cured
      or
      eliminated by the Company; provided,
      however
      if such
      matters are of a nature that the same cannot be cured or eliminated within
      such
      thirty (30) day period, such period shall be extended for so long as the Company
      shall be endeavoring in good faith to cure or eliminate such matters,
provided,
      further,
      however,
      that
      for the first such failure during each calendar year during the Term, the
      Company shall have thirty (30) days after receipt of written notice of such
      failure to cure such failure, and thereafter during that calendar year no such
      notice and cure period shall be given. In the event the Company shall not take
      such actions within such period, Executive may send another notice to the
      Company electing to terminate his employment hereunder and, in such event,
      Employee's employment hereunder shall terminate and the effective date of such
      termination of employment shall be the third business day after the Company
      shall have received such notice. In the event of any such termination of
      employment, Executive shall be entitled to receive the same payments and
      benefits, subject to the same conditions and limitations, as provided in Section
      12(a) hereof.

    

    
      
         

      

      
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    (e) Termination
      by Executive without Good Reason.
      Executive shall have the right to terminate his employment hereunder without
      Good Reason by giving the Company thirty (30) days prior written notice to
      that
      effect. Such termination of employment shall be effective on the date specified
      in such notice. In addition, the Executive shall be deemed to have terminated
      this Agreement without Good Reason if the Executive provides notices to the
      Company that he does not wish to extend the Term of this Agreement in the
      absence on an event which otherwise constitutes Good Reason. In the event of
      such termination of employment, then the Company shall pay to Executive: (i)
      his
      unpaid Annual Salary through the effective date of such termination of
      employment, and (ii) any business expenses remaining unpaid on the effective
      date of such termination of employment for which Executive is entitled to be
      reimbursed under Section 6 of this Agreement.

    

    (f) Expiration
      of the Term.
      Upon
      the termination of Executive's employment at the Expiration Date, Executive
      shall be entitled to receive: (i) his Annual Salary and accrued expense
      reimbursements earned or accrued through the effective date of such termination
      of Executive's employment, (ii) any incentive compensation payments to which
      Executive is entitled as of the effective date of such termination of
      Executive's employment; and (iii) such payments as may be provided for pursuant
      to all Fringe Benefit programs in which Executive is participating as of the
      effective date of the termination of Executive's employment. All such Annual
      Salary, incentive compensation and/or Fringe Benefit payments payable upon
      termination of Executive's employment as aforesaid shall be paid at or following
      the date of such termination of employment in accordance with the Company's
      normal policies. 

    

    (g) Definitions:

    

    (i) "Cause"
      shall mean: (A) theft, embezzlement, fraud or misappropriation of funds of
      the
      Company; (B) conviction of a felony or other crime involving moral turpitude;
      (C) chemical or alcohol dependency which adversely affects performance of
      Executive's duties; (D) failure to substantially perform (other than as a result
      of physical or mental illness) the duties required under Section 2 hereof in
      any
      material manner; (E) a material breach or violation by Executive of Sections
      7,
      8, 9 or 10 hereof; (F) the Company is convicted of any criminal felony liability
      due to actions taken or failed to be taken by Executive without the consent
      of
      the Company; and (G) failure of Executive (other than as a result of physical
      or
      mental illness) to devote substantially all of his working time to the
      performance of his duties required hereunder.

    

    (ii) “Change
      of Control” for this Agreement and any other Agreement (including the Incentive
      Stock Plan) involving Executive means:

    

    (A)
      the
      acquisition by an individual, entity or group (within the meaning of Section
      13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the
      "Exchange Act")) (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 in the event of the death or
      disability of John D. Weil) of 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);

    

    
      
         

      

      
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    (B)
      a
      merger or consolidation of the Company with another Person (regardless of
      whether the Company or 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 direct or indirect 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
      Person.

    

    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.

    

    (iii) "Disability"
      shall mean that, as a result of Executive's incapacity due to physical or mental
      illness (as determined by a physician mutually acceptable to the Company and
      Executive), Executive shall have been absent from, or does not perform, his
      duties as described hereunder on a substantially full-time basis for 75 days
      during any consecutive 150 day period during the Term, and within ten (10)
      days
      after the Company notifies Executive in writing that it intends to replace
      him,
      shall not have returned to the performance of such duties on a full-time
      basis.

    

    (iv)
      "Good Reason" shall mean the occurrence of any of the following: (A) a material
      breach by the Company in the performance of its obligations hereunder and the
      Company's failure to cure said breach within thirty (30) days after receipt
      of
      written notice of such breach; provided, however if such matters are of a nature
      that the same cannot be cured or eliminated within such thirty (30) day period,
      such period shall be extended for so long as the Company shall be endeavoring
      in
      good faith to cure or eliminate such matters, provided, further, however, that
      for the first such failure during each calendar year during the Term, the
      Company shall have thirty (30) days after receipt of written notice of such
      failure to cure such failure, and thereafter during that calendar year no such
      notice and cure period shall be given; or (B) the occurrence of a Change of
      Control provided Executive elects, within one hundred thirty five (135) days
      after the effective date of such Change of Control, to terminate his employment
      hereunder; said election to be evidenced by written notice of same from
      Executive to the Company within said one hundred thirty five (135) day period;
      (C) the Company requests Executive to relocate to an office outside the St.
      Louis metropolitan area; (D) an assignment to the Executive of any duties which
      are not appropriate for someone in the position of President and Chief Executive
      Officer or the Executive’s duties, responsibilities, status, titles or authority
      with the Company hereunder are materially diminished; (E) the Executive is
      required to report, directly or indirectly, to persons other than the Board
      or
      any other person shall be appointed to a position, or granted or allowed to
      assume duties, responsibilities, status, titles or authority, equal to or
      superior to the Executive’s (provided that a non-executive Chairman of the Board
      shall not be deemed to be such other person); (F) there is any failure to
      nominate or elect the Executive as President and Chief Executive Officer of
      the
      Company and as a member of the Board (and the Executive Committee thereof,
      if
      such committee exists); (G) the Executive is removed from any of the positions
      he holds pursuant hereto, except in connection with the termination of the
      Executive for Cause; (H) the Company fails to assign this Agreement to a
      successor to the Company, or a successor to the Company fails to expressly
      assume and agree to be bound by this Agreement in writing; or (I) the Company
      provides notices to the Executive that it does not wish to extend the Term
      of
      this Agreement.

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    13. Arbitration
      of Disputes.
      The
      Executive and the Company shall resolve any claim, controversy or dispute
      whether concerning, arising out of, or relating to this Agreement, the
      employment relationship between the parties or alleging the violation of either
      a statutory or common law duty or both, by arbitration, except for the remedy
      at
      law or in equity as provided for in paragraph 11 herein which the Company may
      determine to be enforced by any court having applicable jurisdiction. Executive
      or the Company shall invoke this right to arbitrate any such claim, controversy
      or dispute only after first attempting to resolve it through the exhaustion
      of
      any Executive problem solving policy that the Company may establish from time
      to
      time without obtaining a satisfactory result. The Missouri Uniform Arbitration
      Act in effect when any arbitration occurs shall govern the procedures of any
      arbitration between the parties. Any arbitration held in accordance with this
      paragraph shall take place in St. Louis, Missouri, and shall be conducted by
      a
      single arbitrator.

    

    The
      arbitrator may award full reimbursement to the prevailing party for
      out-of-pocket expenses and losses, including, without limitation, reasonable
      attorneys' fees, costs, and expenses arising from the preparation and
      arbitration of the dispute. "Prevailing party" within the meaning of this
      section includes, without limitation, a party who (i) agrees to dismiss an
      action upon the other party's payment of all or a substantial portion of the
      sums allegedly due or the other party's substantial performance of the covenants
      allegedly breached, or (ii) who obtains substantially the relief sought by
      it.

    

    14. Prior
      Agreements.
      Executive represents and warrants to the Company that Executive is not presently
      a party to any agreement containing a non-competition provision or other
      restriction with respect to: (a) the nature of any services or business that
      Executive is entitled to perform or conduct for the Company, or (b) the
      disclosure or use of any information which directly or indirectly relates to
      the
      nature or business of the Company or the services to be rendered by Executive
      to
      the Company. Executive further certifies that he has not disclosed or used,
      and
      will not disclose or use during his employment with the Company, any
      confidential information that he acquired as a result of any previous employment
      or under a contractual obligation of confidentiality before Executive's
      employment by the Company.

    

    15. Notice.
      Any
      notice, agreement, or other communication provided for in this Agreement shall
      be given in writing and will be considered effectively given the day of delivery
      if sent via an overnight delivery service, the actual time of receipt of a
      facsimile transmission, or on the third day after mailing is sent by registered
      or certified mail, postage prepaid return receipt requested and addressed to
      the
      parties as follows:

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    
      	
              If
                to the Company:

            	
              with
                a copy (which shall not

              constitute
                notice) to:

            
	 	 
	
              Allied
                Healthcare Products, Inc.

              1720
                Sublette Avenue

              St.
                Louis, Missouri 63110

              Attn:
                Chairman of the Board

              Fax:
                (314) 771-1241

            	
              Joseph
                D. Lehrer, Esq.

              Greensfelder,
                Hemker & Gale, P.C.

              2000
                Equitable Building

              10
                South Broadway

              St.
                Louis, Missouri 63102

              Fax:
                (314) 241-8624

            
	 	 
	
              If
                to Executive:

            	
              with
                a copy (which shall not 

              constitute
                notice to:

            
	 	 
	
              Earl
                Refsland

              7
                Algonquin Woods

              Glendale,
                Missouri 63122

            	
              James
                F. Bennett

              Dowd
                Bennett LLP

              7733
                Forsyth Blvd.

              Suite
                1410

              St.
                Louis, Missouri 63105

              Fax:
                (314) 863-2111

            

    

     

    or
      to
      another person or address as the Company or Executive may
      designate.

    

    16. Governing
      Law.
      This
      Agreement will be governed by, and construed and interpreted according to,
      the
      laws and decisions of the State of Missouri without regard to the choice of
      law
      provisions thereof.

    

    17. Counterparts;
      Facsimile Signatures.
      This
      Agreement may be executed by the parties hereto on any number of separate
      counterparts, and all such counterparts so executed constitute one agreement
      binding on all the parties hereto notwithstanding that all the parties hereto
      are not signatories to the same counterpart. This Agreement and any other
      document to be executed in connection herewith may be delivered by facsimile
      and
      documents delivered in such manner shall be binding as though an original
      thereof had been delivered.

    

    18. Entire
      Agreement.
      This
      Agreement, and any agreements or documents referred to herein or executed
      contemporaneously herewith, constitutes the entire agreement among the parties
      with respect to the subject matter hereof and supersedes all prior agreements,
      understandings, negotiations and discussions, whether written or oral. There
      are
      no conditions, covenants, agreements, representations, warranties or other
      provisions, express or implied, collateral, statutory or otherwise relating
      to
      the subject matter hereof except as herein provided. Without limiting the
      foregoing, the Prior Employment Agreement is expressly superseded by this
      Agreement and is of no further force or effect. Nothing in this Agreement,
      however, shall prevent or limit the executive’s continuing or future
      participation in any bonus, incentive, equity, insurance, pension, retirement,
      profit sharing, savings, health, dental, disability, welfare, fringe, or other
      benefit plan, policy, practice or arrangement of the Company or any of its
      subsidiaries or other Affiliates, nor shall anything herein limit or reduce
      such
      rights as the Executive may have under any other agreement with the Company
      or
      any of it subsidiaries or other Affiliates. Amounts which are vested benefits
      or
      which the Executive is otherwise entitled to receive under any plan, policy,
      practice or arrangement of the Company or any of its subsidiaries or other
      Affiliates shall be payable in accordance with such plan, policy, practice
      or
      arrangement except as expressly modified by this Agreement.

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    19. Assignability
      and Enforceability. This
      Agreement shall inure to the benefit of the Company and its successors and
      assigns. The Company shall require any successor (whether direct or indirect,
      by
      purchase, merger, consolidation or otherwise) to all or substantially all of
      the
      business or assets of the Company to expressly assume and agree in writing
      to
      perform the Company’s obligations hereunder in the same manner and to the same
      extent that the Company would be required to perform them if no such succession
      had taken place, and shall deliver to the Executive a copy of any document(s)
      embodying such assumption. As used in this Agreement, “the Company” shall mean
      both Allied Healthcare Products, Inc. and any such successor that assumes this
      Agreement, by operation of law or otherwise. This Agreement and all rights
      of
      the Executive hereunder shall inure to the benefit of all be enforceable by
      the
      Executive’s personal legal representatives, executors, administrators,
      successors, heirs, distributes, devisees and legatees.

    

    20. Severability.
      If any
      provision contained in this Agreement is held to be invalid or unenforceable,
      that provision will be severed from this Agreement and that invalidity or
      unenforceability will not affect any other provision of this Agreement, the
      balance of which will remain in and have its intended full force and affect;
      provided, however, if any invalid or unenforceable provision may be modified
      so
      as to be valid and enforceable as a matter of law, that provision will be deemed
      to have been modified to the extent necessary so as to be valid and enforceable
      to the maximum extent permitted by law.

    

    21. Non-Waiver.
      Failure
      to enforce any of the provisions of this Agreement at any time shall not be
      interpreted to be a waiver of such provision or to affect either the validity
      of
      this Agreement or the right of either party thereafter to enforce each and
      every
      provision of this Agreement.

    

    22. Attorneys'
      Fees.
      If
      either party hereto brings any action to enforce his or its rights hereunder,
      the prevailing party in any such action shall be entitled to recover his or
      its
      reasonable attorneys' fees and costs incurred in connection with such
      action.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of the date first
      set forth above.

    

    THIS
      AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
      THE
      PARTIES.

    

    

    
      	
              ALLIED
                HEALTHCARE PRODUCTS, INC.

            	
              EXECUTIVE

            
	
              By:
                

            	
              _________________________

            	
              __________________________

            
	
              Name:

            	
              _________________________

            	
              Earl
                Refsland

            
	
              Title

            	
              _________________________

            	 

    

     

    
      
         

      

      
        13Unassociated Document

     

    Exhibit
      10.2

     

    

    AGREEMENT

    

    This
      Agreement is made and entered this ____ day of ____________, 200_, by and
      between _________________ (“Executive”) and Allied Healthcare Products,
      Inc.

    

    WHEREAS,
      Executive is employed by the Company in a senior management position reporting
      directly to the Company’s chief executive officer and the Company desires to
      assure the continued services of Executive prior to and in the event of any
      “Change of Control” of the Company, as hereinafter defined,

    

    NOW
      THEREFORE, Executive and Company agree as follows: 

    

    In
      the
      event that there shall occur a “Change of Control” of the Company, and in the
      further event that within one year following the date of such Change of Control
      Executive shall: 

    

    (a)
      resign his employment and position with the Company following

    

    (i)
      any
      notification of Executive by the Company or its successor that Executive will
      be
      required to relocate his office to a location more than thirty (30) miles from
      its present location, or 

    

    (ii)
      Executive being subjected to, or requested by the Company or its successor
      to
      agree to, any material adverse changes in the scope, duties and responsibilities
      and authority which is part of Executive’s current position or any reduction in
      title or compensation (it being agreed, however, that circumstances which result
      in the Company no longer being required to file periodic reports under the
      Securities Exchange Act of 1934 shall not be deemed to constitute a material
      adverse change in the scope, duties and responsibility or authority of
      Executive), or 

    

    (iii)
      Executive being subjected to a material and adverse diminution of access to
      the
      chief executive officer of the Company or its successor, or to a working
      environment which renders it impossible for him to perform his duties and
      responsibility to the best of his ability, or

    

    (b)
      be
      involuntarily terminated as an officer and employee by the Company or its
      successor other than for reasons of gross or willful misconduct (with the term
      gross or willful misconduct understood to include any arrest or indictment
      by
      competent authority based on the alleged commission of a felony and also
      including any material nonfeasance of Executive’s duties and responsibilities as
      the same existed prior to the date of the Change of Control),

    

    then
      upon
      such resignation or termination Executive shall be entitled, in addition to
      any
      other severance or rights due him under any other agreement, contract, plan
      or
      provision (whether applicable to Executive individually or to the Company’s
      employees generally), to receive from the Company:

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    (a)
      a
      lump sum payment equal to one year’s base salary payable within 30 days
      following such resignation or termination and payable net of withholding for
      income and other federal and state taxes due thereon; plus

    

    (b)
      reimbursement for Executive’s cost of continued group health insurance (either
      as an employee of the Company or pursuant to “COBRA” elections arising from the
      termination of employment) for a period ending one year following such
      termination;

    

    (c)
      to be
      provided with career transitioning services at a cost not to exceed $10,000
      utilizing an outplacement or counseling service chosen by Executive and
      reasonably acceptable to the Company or its successor. 

    

    The
      entitlement to the payments stipulated and agreed herein will not be diminished
      or offset by any compensation received by Executive from any other source but
      shall be in lieu of any other severance benefits to which Executive would
      otherwise be entitled. Executive agrees that the other provisions of any
      confidentiality, non-disclosure or non-competition agreement with the Company
      shall continue in force in accordance with their respective terms. 

    

    For
      purposes of the foregoing, a “Change of Control” shall mean

    

    (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 successor
      entity.

    

    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.

    

    Anything
      to the contrary herein notwithstanding, Executive understands and acknowledges
      that this Agreement does not constitute a contract of employment and does not
      guarantee employment for any period of time.

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, this Agreement has been executed as of the date first written
      above.

    

    
      	 	
              Allied
                Healthcare Products, Inc.

            
	
              ____________________________

            	 
	
              Executive

            	 
	 	
              By:_______________________

            
	 	
              Earl
                Refsland, President

            

    

    
      
         

      

      
        3

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