Document:

NU
HORIZONS ELECTRONICS CORP.

    KEY
EMPLOYEE CHANGE-IN-CONTROL SEVERANCE AGREEMENT

    

    This
Agreement is effective as of the 12th day of February, 2008 by and between Nu
Horizons Electronics Corp., a Delaware corporation with its principal place of
business at 70 Maxess Road, Melville, New York 11747 (the “Company”), and Kent
Smith (the “Employee”). Any reference to “Company” herein shall mean Nu Horizons
Electronics Corp. or any successor thereto.

    

    WHEREAS,
the Employee holds a key position with the Company; and

    

    WHEREAS,
the Company recognizes the substantial contributions the Employee has made to
the Company in such position; and

    

    WHEREAS,
the Company now wishes to provide reasonable severance protection to the
Employee in the event of any future “Change-in-Control” of the Company as
defined herein; and

    

    WHERAS,
the Employee and the Company understand that any severance payments made to the
Employee may be subject to the requirements of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”);

    

    NOW,
THEREFORE, in consideration of the continued service of the Employee and the
mutual covenants and agreements herein contained, the Company and the Employee
hereby agree as follows:

    

    
      	
               
      

            	
              1.

            	
              Term
      of Agreement; Employment Status

            

    

    

    (a)           This
Agreement shall be in effect from the effective date hereof throughout the
period of the Employee’s employment with the Company.  In the event of
a “Change-in-Control” of the Company (as defined herein), this Agreement shall
remain in effect until the later of (i) twelve months following the date of such
“Change-in-Control” or (ii) the date on which the Employee receives payment in
full of the severance compensation payable to Employee by the Company pursuant
to Section 2 of this Agreement.

    

    (b)           Notwithstanding
the above, the parties hereby agree that the Employee’s employment is “at-will”
and can be terminated by either party (with or without cause) at any
time.  The benefits provided hereunder shall be in addition to the
Employee’s annual salary, as determined by the Board of Directors of the
Company, and shall not (i) affect the right of the Employee to participate in
any current or future Company retirement plan or in any supplemental
compensation arrangement which constitutes a part of the Company’s regular
compensation structure, or (ii) be deemed salary or other compensation to the
Employee for the purpose of computing benefits to which the Employee may be
entitled under any retirement plan or other arrangement maintained by the
Company for the benefit of its employees.

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              2.

            	
              Payments
      to Employee Following a
Change-in-Control

            

    

    

    In the
event of the complete termination by the Company of Employee’s employment (as
contemplated under Code Section 409A)  within one year following a
“Change-in-Control” (as defined below) of the Company, the Company shall pay
Employee, within thirty (30) days of the termination of employment (subject to
Section 4 below), an amount equal to the average of the base salary paid to the
Employee for the three (3) preceding fiscal years (calculated by adding the base
salary paid for each of the three (3) preceding completed fiscal years and
dividing the sum by three (3), with the quotient equaling the amount to be
paid). All amounts
paid to the Employee under this Section shall be paid in twelve equal
installments over the twelve-month period commencing on the date of such
termination, shall be treated as additional compensation and the Company shall
have the right to deduct any taxes required by law to be withheld with respect
to such amounts.

    

    
      	
               
      

            	
              3.

            	
              Definition
      of Change in Control

            

    

    

    As used
herein “Change-in-Control” means (a) a change in control as such term is
presently defined in Regulation 240.12b-2 under the Securities Exchange Act of
1934 ("Exchange Act"); or (b) if any “person” (as such term is used in Section
13(d) and 14(d) of the Exchange Act) (other than any “person” who on the date of
this Agreement is a director or officer of the Company), becomes the “beneficial
owner” (as defined in Rule 13(d)-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing twenty (20%) percent of
the voting power of the Company’s then outstanding securities, as the case may
be, other than as a result of an acquisition of such securities from or by the
Company; or (c) if during any period of two (2) consecutive years during the
term of Employee's employment, individuals who at the beginning of such period
constitute the Board of Directors of the Company cease for any reason to
constitute at least a majority thereof.

    

    
      	
               
      

            	
              4.

            	
              Specified
      Employee

            

    

    

    In the
event the Employee is classified as a “Specified Employee” as of the date of
termination of employment, as such term is defined in Code Section 409A and the
regulations thereunder, and provided that the payment required pursuant to
Section 2 hereof is determined to be subject to Code Section 409A, then
notwithstanding the terms of Section 2, such payment shall commence on the first
day of the seventh month following the date of the Employee’s termination of
employment.

    

    
      	
               
      

            	
              5.

            	
              Entire
      Agreement; Modification

            

    

    

    This
Agreement constitutes the full and complete understanding of the parties hereto
and will supersede all prior agreements and understandings, oral or written,
with respect to the subject matter hereof.  Each party to this
Agreement acknowledges that no representations, inducements, promises or
agreements, oral or otherwise, have been made by either party, or anyone acting
on behalf of either party, which are not embodied herein and that no other
agreement, statement or promise not contained in this Agreement shall be valid
or binding.  This Agreement may not be modified or amended except by
an instrument in writing signed by the party against whom or which enforcement
may be sought.

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              6.

            	
              Severability

            

    

    

    Any term
or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms of provisions of this Agreement in any
other jurisdiction.

    

    
      	
               
      

            	
              7.

            	
              Notices

            

    

    

    All
notices hereunder shall be in writing and shall be deemed to have been duly
given when delivered by hand, or one day after sending by express mail or other
"overnight mail service," or three days after sending by certified or registered
mail, postage prepaid, return receipt requested.  Notice shall be sent
as follows: if to Employee, to the address as listed in the Company's records;
and if to the Company, to the Company at its office as set forth at the head of
this Agreement, to the attention of its Chief Employee
Officer.  Either party may change the notice address by notice given
as aforesaid.

    

    
      	
               
      

            	
              8.

            	
              Assignability;
      Binding Effect

            

    

    

    This
Agreement shall be binding upon and inure to the benefit of Employee and
Employee’s legal representatives, heirs and distributees, and shall be binding
upon and inure to the benefit of the Company, its successors and
assigns.  This Agreement may not be assigned by the
Employee.  This Agreement may not be assigned by the Company except in
connection with a merger or a sale by the Company of all or substantially all of
its assets and then only provided the assignee specifically assumes in writing
all of the Company's obligations hereunder.

    

    
      	
               
      

            	
              9.

            	
              Governing
      Law; Jurisdiction

            

    

    

    (a)           All
issues pertaining to the validity, construction, execution and performance of
this Agreement shall be construed and governed in accordance with the laws of
the State of New York, without giving effect to the conflict or choice of law
provisions thereof and by the provisions of the Code, including without
limitation, Section 409A of the Code, the Treasury Regulations promulgated
thereunder, and any other applicable pronouncements issued by the Internal
Revenue Service (“IRS”).  This Agreement is intended to comply, and be
administered and interpreted in a manner consistent, with the requirements of
Section 409A of the Code, the Treasury Regulations promulgated thereunder, and
any other applicable pronouncements issued by the IRS, and are intended to be a
good faith, reasonable interpretation thereof.

    

    (b)           Employee
hereby irrevocably submits to the jurisdiction of the state or Federal courts
located in Nassau County, New York in connection with any suit, action or other
proceeding arising out of or relating to this Agreement and hereby agrees not to
assert, by way of motion, as a defense, or otherwise in any such suit, action or
proceeding that the suit, action or proceeding is brought in an inconvenient
forum, that the venue of the suit, action or proceeding is improper or that this
agreement or the subject matter hereof may not be enforced by such
courts.

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    
      
        	
              	
                10.

              	
                Headings

              

      

    

    

    The
headings in this Agreement are intended solely for convenience of reference and
shall be given no effect in the construction or interpretation of this
Agreement.

    

    
      
        	
              	
                11.

              	
                Counterparts

              

      

    

    

    This
Agreement may be executed in several counterparts, each of which shall be deemed
to be an original but all of which together shall constitute one and the same
instrument.

    

    IN
WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an
authorized officer and Employee has hereunto set his or her hand as of the date
first set forth above.

     

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	 
      	
                                  NU
      HORIZONS ELECTRONICS CORP.

                                	 
	 
      	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Kurt Freudenberg

                                	 
	 
      	 
      	
                                  Name:

                                	
                                  Kurt
      Freudenberg

                                	 
	 
      	 
      	
                                  Title:

                                	
                                  Executive
      Vice President 

                                  and
      Chief Financial Officer

                                	 
	 
      	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
      	 
	 
      	
                                  /s/
      Kent Smith

                                	 
	 
      	
                                  Employee:
      Kent
      Smith

                                	 
	 
      	 
      	 
      	 
      	 

                        

                      

                    

                  

                

              

            

          

        

      

    

    

     

    
      
         

      

      
        4Exhibit
10.1

    

    EMPLOYMENT
AGREEMENT

     

    THIS
EMPLOYMENT AGREEMENT ("Agreement") is made and entered into effective as of the
21st
day of December, 2009, (the "Effective Date") 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 begin as of the Effective Date of
this Agreement, and will terminate March 1, 2010, 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.
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    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 Four
Hundred Fifteen Thousand Dollars ($415,000) 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.  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.
 

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    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.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    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.

     

    (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.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (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.
 

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    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, subject to Section 12(i) hereof, (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
("Salary Continuation Payments") 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.

    

      
        
           

        

        
          6

          
            

          

        

        
           

        

      
 

    (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.

     

    (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.
 

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    (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);

     

    (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
 

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    (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

        
          

        

      

      
         

      

    

    (h)           Fringe
Benefits.  In addition, with respect to Executive's continued
participation in any Fringe Benefit programs following termination of
employment, (i) the amount of any expense eligible for reimbursement, or any
in-kind benefit provided, during any taxable year of Executive may not affect
the expenses eligible for reimbursement, or in-kind benefits to be provided, in
any other taxable year, (ii) the reimbursement of an eligible expense must be
made on or before the last day of Executive's taxable year following the taxable
year in which the expense was incurred, and (iii) any right to reimbursement or
in-kind benefits shall not be subject to liquidation or exchange for another
benefit.

    

    (i)           Delay in
Payments.  Anything to the contrary herein notwithstanding, any
Salary Continuation Payments and any reimbursement or provision of an in-kind
benefit pursuant to any Fringe Benefit programs following termination of
employment may not be made before the date that is six (6) months after the date
of Executive's Separation From Service (as defined in (j) below).  Any
Salary Continuation Payments and reimbursements to which Executive would
otherwise be entitled during the first six (6) months following his Separation
From Service shall be accumulated and paid on the first day of the seventh
(7th) month
following the date of his Separation From Service.

    

    (j)           Separation from
Service.  For purposes of this Section 12, Executive shall not
be deemed to have experienced a termination of employment and shall not be
entitled to receive any payments pursuant to this Section 12 unless the
purported termination of employment constitutes a Separation From Service within
the meaning of Treasury Regulation Section 1.409A-1(h).

    

    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.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    14.         Prior
Agreements.

    

    (a)           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.

    

    (b)           This
Employment Agreement revokes and supersedes in its entirety any previous
Employment Agreement between Company and Executive.

    

    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:

    

    
      
        	
                If
      to the Company:

              	
                with
      a copy (which shall not constitute notice) to:

              
	 
      	 
      
	
                Allied
      Healthcare Products, Inc.

              	
                Joseph
      D. Lehrer, Esq.

              
	
                1720
      Sublette Avenue

              	
                Greensfelder,
      Hemker & Gale, P.C.

              
	
                St.
      Louis, Missouri  63110

              	
                2000
      Equitable Building

              
	
                Attn:  Chairman
      of the Board

              	
                10
      South Broadway

              
	
                Fax:  (314)
      771-1241

              	
                St.
      Louis, Missouri  63102

              
	 
      	
                Fax:
      (314) 241-8624

              
	 
      	 
      
	
                If
      to Executive:

              	
                with
      a copy (which shall not constitute notice to:

              
	 
      	 
      
	
                Earl
      Refsland

              	
                James
      F. Bennett

              
	
                7
      Algonquin Woods

              	
                Dowd
      Bennett LLP

              
	
                Glendale,
      Missouri  63122

              	
                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.
 

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    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.

    

    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.
 

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    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.

    

    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:

                  	
                    /s/ John D. Weil

                  	 
      	
                    /s/ Earl Refsland

                  
	
                    Name:

                  	
                    John D. Weil

                  	 
      	
                    Earl
      Refsland

                  
	
                    Title

                  	
                    Chairman of the Board

                  	 
      	 
      

          

        

      

    

    
      
         

      

      
        13

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