Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
Commission Only (as per-
mitted by Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ALLIED HEALTHCARE PRODUCTS, INC.
------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
October 10, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
which will be held at the Daniele Hotel, 216 N. Meramec Street, Clayton,
Missouri 63105 at 10:00 a.m., Central Time, on Monday, November 17, 1997. On the
following pages you will find the formal Notice of Annual Meeting and Proxy
Statement.
Whether or not you plan to attend the meeting in person, it is
important that your shares be represented and voted at the meeting. Accordingly,
please date, sign and return the enclosed proxy card promptly.
We hope that you will attend the meeting and look forward to seeing
you there.
Sincerely,
/s/ Dennis W. Sheehan
Dennis W. Sheehan
CHAIRMAN OF THE BOARD
/s/ Uma N. Aggarwal
Uma N. Aggarwal
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
<PAGE>
ALLIED HEALTHCARE PRODUCTS, INC.
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MONDAY, NOVEMBER 17, 1997
-------------------------
To the Stockholders of
Allied Healthcare Products, Inc.:
The Annual Meeting of Stockholders of Allied Healthcare Products,
Inc., a Delaware corporation (the "Company"), will be held at the Daniele Hotel,
216 N. Meramec Street, Clayton, Missouri 63105 on Monday, November 17, 1997, at
10:00 a.m., Central Time, for the following purposes:
(1) To elect nine directors to serve until the next Annual
Meeting of Stockholders or until their successors are elected and
qualified;
(2) To ratify or reject the appointment of Price Waterhouse
LLP as independent auditors of the Company for the fiscal year ending
June 30, 1998; and
(3) To transact such other business as may properly come
before the meeting or any adjournment thereof.
The foregoing items of business are more fully described in the
Proxy Statement accompanying this Notice.
Only stockholders of record at the close of business on September 30,
1997 are entitled to notice of and to vote at the meeting. A list of
stockholders of the Company at the close of business on September 30, 1997 will
be available for inspection during normal business hours from November 3 through
November 14, 1997 at the offices of the Company at 1720 Sublette Avenue, St.
Louis, Missouri 63110 and will also be available at the meeting.
By Order of the Board of Directors,
/s/ Barry F. Baker
Barry F. Baker
VICE PRESIDENT - FINANCE, CHIEF
FINANCIAL OFFICER AND SECRETARY
St. Louis, Missouri
October 10, 1997
- ------------------------------------------------------------------------------
PLEASE FILL OUT, DATE AND SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT IN
THE ACCOMPANYING POSTAGE PAID ENVELOPE, EVEN IF YOU PLAN TO ATTEND THE
MEETING. YOU MAY REVOKE YOUR PROXY IN WRITING, OR AT THE ANNUAL MEETING IF
YOU WISH TO VOTE IN PERSON.
- ------------------------------------------------------------------------------
<PAGE>
ALLIED HEALTHCARE PRODUCTS, INC.
1720 SUBLETTE AVENUE
ST. LOUIS, MISSOURI 63110
-------------------------
PROXY STATEMENT
-----------------
ANNUAL MEETING OF STOCKHOLDERS
MONDAY, NOVEMBER 17, 1997
-------------------------
SOLICITATION AND REVOCATION OF PROXIES
The enclosed proxy is solicited by the Board of Directors of Allied
Healthcare Products, Inc., a Delaware corporation (the "Company"), for use at
the Annual Meeting of Stockholders (the "Annual Meeting") to be held at 10:00
a.m., Central Time, Monday, November 17, 1997, or at any adjournment thereof,
for the purposes set forth herein and in the accompanying Notice of Annual
Meeting of Stockholders. The Annual Meeting will be held at the Daniele Hotel,
216 N. Meramec Street, Clayton, Missouri 63105. The proxy is revocable at any
time prior to its exercise by delivering to the Company a written notice of
revocation or a duly executed proxy bearing a later date or by attending the
Annual Meeting and voting in person.
This proxy material is first being sent to stockholders on or about October
10, 1997.
OUTSTANDING SHARES AND VOTING RIGHTS
Stockholders of record at the close of business on Tuesday, September 30,
1997 are entitled to notice of and to vote at the Annual Meeting. As of the
close of business on that date, there were outstanding and entitled to vote
7,806,682 shares of common stock, $.01 par value ("Common Stock"), each of which
is entitled to one vote. No cumulative voting rights exist under the Company's
Amended and Restated Certificate of Incorporation. For information regarding the
ownership of the Company's Common Stock by holders of more than five percent of
the outstanding shares and by the management of the Company, see "Security
Ownership of Certain Beneficial Owners and Management."
For purposes of determining the presence of a quorum and counting votes on
the matters presented, shares represented by abstentions and "broker non-votes"
will be counted as present, but not as votes cast, at the Annual Meeting. Under
Delaware law and the Company's By-laws, the election of directors at the Annual
Meeting will be determined on the basis of a percentage of votes cast at the
Annual Meeting and requires the affirmative vote of the holders of a majority of
the Company's Common Stock represented and voting at the Annual Meeting for
approval. All other matters expected to be submitted for consideration at the
Annual Meeting require the affirmative vote of the holders of a majority of the
Company's Common Stock represented and voting at the Annual Meeting for
approval.
<PAGE>
ELECTION OF DIRECTORS
The Company's Board of Directors is comprised of a single class. The
directors are elected at the Annual Meeting of the Stockholders of the Company
and each director elected holds office until his or her successor is elected and
qualified. The Board currently consists of nine members. The stockholders will
vote at the 1997 Annual Meeting for the election of nine directors for the
one-year term expiring at the Annual Meeting of Stockholders in 1998. There are
no family relationships among any directors or executive officers of the
Company.
The persons named in the enclosed proxy will vote for the election of
the nominees named below unless authority to vote is withheld. All nominees have
consented to serve if elected. In the event that any of the nominees should be
unable to serve, the persons named in the proxy will vote for such substitute
nominee or nominees as they, in their discretion, shall determine. The Board of
Directors has no reason to believe that any nominee named herein will be unable
to serve.
The Board of Directors recommends voting "FOR" each of the nominees
named below.
The following material contains information concerning the nominees
for election as Directors.
Name of Nominee Age Principal Occupation Director Since
- --------------- --- -------------------- --------------
Uma N. Aggarwal. . . . . 53 President and Chief November 1996
Executive Officer of the
Company, St. Louis, Missouri
David A. Gee . . . . . . 69 President-Emeritus of The May 1991
Jewish Hospital of St.
Louis, St. Louis, Missouri
Samuel A. Hamacher . . . 45 Executive Vice President of May 1992
Harbour Group Industries,
Inc., St. Louis, Missouri
James C. Janning . . . . 50 President of Harbour Group May 1992
Ltd., St. Louis, Missouri
Robert E. Lefton . . . . 66 President and Chief August 1992
Executive Officer of
Psychological Associates,
Inc., St. Louis, Missouri
Donald E. Nickelson. . . 64 Vice Chairman of Harbour May 1992
Group Industries, Inc., St.
Louis, Missouri
William A. Peck . . . . 64 Executive Vice Chancellor April 1994
for Medical Affairs and
Dean, School of Medicine,
Washington University, St.
Louis, Missouri
Dennis W. Sheehan. . . . 63 Chairman of the Board of April 1991
the Company, St. Louis,
Missouri and Chairman of
the Board, President and
Chief Executive Officer of
AXIA Incorporated, Lombard,
Illinois
John D. Weil . . . . . . 56 President of Clayton August 1997
Management Co., St. Louis,
Missouri
Except as set forth below, each of the nominees has been engaged in his
principal occupation described above during the past five years.
Mr. Aggarwal has served as President and Chief Executive Officer of the
Company since November 1996. Mr. Aggarwal served as President and General
Manager of Stanley Mail Media Companies, a division of
2
<PAGE>
The Stanley Works, located in Phoenix, Arizona from 1992 to 1994. He was
self-employed as a consultant providing advice regarding the buy-out and
management of mail order companies from 1994 to 1996.
Mr. Gee has been President-Emeritus of The Jewish Hospital of St. Louis
since January 1991, and served as its President from 1978 to 1990.
Mr. Hamacher has been the Executive Vice President of Harbour Group
Industries, Inc. ("Harbour Group"), which provides corporate development
services to affiliates of Harbour Group, in St. Louis, Missouri, in charge of
corporate development since January 1992. From January 1988 to January 1992, he
was the Vice President - Finance of Harbour Group Ltd. (an affiliate of Harbour
Group which provides operations management services to manufacturing affiliates
of Harbour Group), in St. Louis, Missouri. Mr. Hamacher currently serves as a
director of Omniquip International, Inc. (a manufacturer of telescopic material
handlers).
Mr. Janning has served as President of Harbour Group Ltd. since January
1992. Mr. Janning holds various executive positions with operating companies
owned by affiliates of Harbour Group Ltd. Mr. Janning was previously the
President and Chief Executive Officer of the Company from July 1993 to August
1994 and from May 1996 to November 1996. From May 1988 to January 1992, Mr.
Janning was Group President and/or Chief Operating Officer of Harbour Group Ltd.
and has served as Group President of Harbour Group II Management Co. (an
affiliate of Harbour Group which is the general partner of a private investment
fund) and President of HGM III Co. (an affiliate of Harbour Group which is the
general partner of a private investment fund) since January 1990 and December
1993, respectively.
Dr. Lefton has been the President and Chief Executive Officer of
Psychological Associates, Inc., an international consulting, training and
development firm headquartered in St. Louis, Missouri, since 1958. He presently
serves as a director of Stifel Financial Corp., Wave Technology, Inc. and
Greenfield Industries, Inc.
Mr. Nickelson has been the Vice Chairman of Harbour Group in St. Louis,
Missouri since 1991. From 1988 to 1990, he served as President of PaineWebber
Group, Inc. (an investment banking and brokerage firm). Mr. Nickelson currently
serves as a trustee of the Mainstay Mutual Funds Group and is a member of the
Advisory Panel of Sedgewick James of New York, Inc. He is also Chairman of the
Board and a director of Greenfield Industries, Inc. and Omniquip International,
Inc., and serves as a director of Sugen, Inc., DT Industries, Inc., Corporate
Property Associates #10 ("Associates #10") and Carey Institutional Properties,
Inc. ("Carey") (Carey and Associates #10 are real estate investment trusts
located in New York, New York).
Dr. Peck has served as Executive Vice Chancellor for Medical Affairs since
1993, and Dean of the School of Medicine since 1989, at Washington University,
St. Louis, Missouri. Dr. Peck currently serves as a director of Magna Bank
Holding Company, Reinsurance Group of America, Angelica Corporation and Hologic
Corporation.
Mr. Sheehan has been Chairman of the Board of the Company since November
1992 and Chairman of the Board, President and Chief Executive Officer of AXIA
Incorporated, a privately-owned manufacturer of various commercial and
industrial products, with headquarters in Lombard, Illinois, since 1984. Mr.
Sheehan presently serves as a director of the Chamber of Commerce of the United
States of America and Greenfield Industries, Inc.
Mr. Weil has served as President of Clayton Management Co. since 1973. Mr.
Weil currently serves as a director of Pico Holdings, Inc., Cliffs Drilling Co.,
CleveTrust Realty Investors, Oglebay Norton Co., Southern Investors Service Co.,
Todd Shipyards Corp. and Baldwin Lyons, Inc.
3
<PAGE>
BOARD MEETINGS-COMMITTEES OF THE BOARD
The Board of Directors of the Company held eleven meetings during the
fiscal year ended June 30, 1997. The Board of Directors presently maintains an
Executive Committee, a Compensation Committee, an Audit Committee and a
Nominating Committee.
The Executive Committee consists of Messrs. Gee, Hamacher, Janning,
Nickelson and Sheehan. This committee exercises all powers of the Board of
Directors, to the extent permitted by law, between meetings of the Board. The
Executive Committee held eleven meetings during the fiscal year ended June 30,
1997.
The Compensation Committee consists of Messrs. Gee, Nickelson and
Sheehan. This committee reviews and approves the Company's executive
compensation policy, administers the Company's incentive compensation bonus plan
and makes recommendations concerning the Company's employee benefit policies and
stock option plans in effect from time to time. The Compensation Committee held
one meeting during the fiscal year ended June 30, 1997.
The Audit Committee consists of Messrs. Hamacher, Peck and Sheehan.
This committee recommends engagement of the Company's independent auditors and
is primarily responsible for approving the services performed by the Company's
independent auditors and for reviewing and evaluating the Company's accounting
principles and its systems of internal accounting controls. The Audit Committee
held three meetings during the fiscal year ended June 30, 1997.
The Nominating Committee consists of Messrs. Gee, Janning and Lefton.
This committee recommends nominees to fill vacancies on the Board of Directors.
The Nominating Committee held no meetings during the fiscal year ended June 30,
1997. The Nominating Committee will consider nominees submitted by stockholders
for inclusion on the recommended list of nominees submitted by the Company and
voted on at the Annual Meeting of Stockholders in 1998 if such nominations are
submitted in writing to the Company's headquarters Attention: Nominating
Committee, no later than June 1, 1998.
4
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
HOLDERS OF MORE THAN FIVE PERCENT BENEFICIAL OWNERSHIP
The following table sets forth information regarding all persons known
to the Company to be the beneficial owners of more than five percent of the
Company's Common Stock as of September 30, 1997.
Percent of
Shares Owned Outstanding
Name and Address of Beneficial Owner Beneficially Shares*
- ------------------------------------ ------------ ------------
Heartland Advisors, Inc.(1) . . . . . . . . 1,303,700 16.70%
790 North Milwaukee Street
Milwaukee, WI 53202
John D. Weil(2) . . . . . . . . . . . . . . 832,300 10.66%
200 North Broadway
Suite 825
St. Louis, MO 63102
Washington University(3) . . . . . . . . . 779,000 9.98%
Campus Box 1058
One Brookings Drive
St. Louis, MO 63130
T. Rowe Price Associates, Inc.(4) . . . . . 729,500 9.34%
100 E. Pratt Street
Baltimore, MD 21202
Ryback Management Corporation(5) . . . . . 492,200 6.30%
7711 Carondelet Avenue
Box 16900
St. Louis, MO 63105
Robert Fleming, Inc.(6) . . . . . . . . . . 483,900 6.20%
320 Park Avenue, 11th Floor
New York, NY 10022
- ------------
* All percentages are computed based upon 7,806,682 shares issued and
outstanding as of September 30, 1997.
(1) Information obtained from Amendment No. 1 to Schedule 13G dated August 7,
1997 filed with the Securities and Exchange Commission by Heartland
Advisors, Inc.
(2) Includes shares beneficially owned by Mr. Weil in the following capacities:
792,300 shares owned by Woodbourne Partners, L.P.1, a limited partnership
whose general partner is controlled by Mr. Weil; 5,000 shares owned by
Clayton Management Company, a corporation controlled by Mr. Weil; 10,000
shares owned by Mr. Weil's son for which he disclaims beneficial ownership;
and 25,000 shares issuable pursuant to warrants exercisable within 60 days
from the date hereof pursuant to the Note Purchase Agreement dated August 7,
1997 among the Company, B&F Medical Products, Inc., a Delaware corporation,
Bear Medical Systems, Inc., a California corporation, Hospital Systems,
Inc., a California corporation, Life Support Products, Inc., a California
corporation, BiCore Monitoring Systems, Inc., a California corporation and
each of the purchasers named therein (the "Note Purchase Agreement").
(3) Information obtained from beneficial owner.
5
<PAGE>
(4) Information obtained from Amendment No. 1 to Schedule 13G dated February 10,
1997 filed with the Securities and Exchange Commission by T. Rowe Price
Associates, Inc., as supplemented by Form 13F for the period ended June 30,
1997.
(5) Information obtained from Amendment No. 1 to Schedule 13G dated January 31,
1997 filed with the Securities and Exchange Commission by Ryback Management
Corporation, as supplemented by Form 13F for the period ended March 31,
1997.
(6) Information obtained from Amendment No. 1 to Schedule 13G dated March 19,
1997 filed with the Securities and Exchange Commission by Robert Fleming,
Inc.
BENEFICIAL OWNERSHIP OF MANAGEMENT AND NOMINEES
The following table sets forth information regarding the ownership of
Common Stock of the Company for each director, each executive officer named in
the Summary Compensation Table and all directors and executive officers as a
group as of September 26, 1997.
<TABLE>
<S> <C> <C>
Shares Owned Percent of
Name of Beneficial Owner Beneficially Outstanding Shares+
------------------------ ------------ -------------------
Uma N. Aggarwal(1) . . . . . . . . . . . . . . . 10,000 *
Barry F. Baker(2) . . . . . . . . . . . . . . . 5,000 *
David A. Grabowski(3). . . . . . . . . . . . . . 7,065 *
David A. Gee(4). . . . . . . . . . . . . . . . . 15,000 *
Samuel A. Hamacher(5). . . . . . . . . . . . . . 21,500 *
James C. Janning(6). . . . . . . . . . . . . . . 70,250 *
Gabriel S. Kohn(7) . . . . . . . . . . . . . . . 26,375 *
Robert E. Lefton(8). . . . . . . . . . . . . . . 16,500 *
Donald E. Nickelson(9) . . . . . . . . . . . . . 16,562 *
William A. Peck(10). . . . . . . . . . . . . . . 11,200 *
Dennis W. Sheehan(11). . . . . . . . . . . . . . 33,562 *
John D. Weil(12) . . . . . . . . . . . . . . . . 832,300 10.66%
--------- ------------
All directors and executive officers as a group (12 persons) 1,065,314 13.65%
========= ============
- ------------
<FN>
+ All percentages are computed based upon 7,806,682 shares issued and
outstanding as of September 30, 1997.
* Less than 1.00%.
(1) Represents 10,000 shares owned by Mr. Aggarwal. Excludes 190,000 shares
issuable pursuant to options granted under the 1994 Employee Stock Option
Plan (the "1994 Employee Plan") which are not currently exercisable.
(2) Represents 5,000 shares issuable pursuant to options exercisable within 60
days of the date hereof pursuant to the terms of the 1994 Employee Plan.
Excludes 30,000 shares issuable pursuant to options granted under the 1994
Employee Plan which are not currently exercisable.
(3) Represents 127 shares owned by Mr. Grabowski and 6,938 shares issuable
pursuant to options exercisable within 60 days of the date hereof pursuant
to the terms of the Company's 1991 Employee Plan (the "1991
6
<PAGE>
Employee Plan") and the 1994 Employee Plan (the 1991 Employee Plan and the
1994 Employee Plan are collectively referred to herein as the "Employee
Plans"). Excludes 23,685 shares issuable pursuant to options granted under
the Employee Plans which are not currently exercisable.
(4) Represents 15,000 shares issuable pursuant to options exercisable within
60 days of the date hereof pursuant to the terms of the 1991 Directors
Non-Qualified Stock Option Plan (the "1991 Directors Plan") and the 1995
Directors Non-Qualified Stock Option Plan (the "1995 Directors Plan") (the
1991 Directors Plan and the 1995 Directors Plan are collectively referred
to herein as the "Directors Plans").
(5) Represents 5,000 shares owned by Mr. Hamacher and 16,500 shares issuable
pursuant to options exercisable within 60 days of the date hereof pursuant
to the terms of the Directors Plans.
(6) Represents 55,250 shares owned by Mr. Janning and 15,000 shares issuable
pursuant to options exercisable within 60 days of the date hereof pursuant
to the terms of the Directors Plans.
(7) Represents 2,000 shares owned by Mr. Kohn and 24,375 shares issuable
pursuant to options exercisable within 60 days of the date hereof pursuant
to the terms of the Employee Plans. Excludes 16,625 shares issuable
pursuant to options granted under the Employee Plans which are not
currently exercisable.
(8) Represents 500 shares owned by Dr. Lefton and 16,500 shares issuable
pursuant to options exercisable within 60 days of the date hereof pursuant
to the terms of the Directors Plans.
(9) Represents 15,000 shares issuable pursuant to options exercisable within
60 days of the date hereof pursuant to the terms of the Directors Plans
and 1,562 shares issuable pursuant to warrants exercisable within 60 days
of the date hereof pursuant to the Note Purchase Agreement.
(10) Represents 1,200 shares owned by Dr. Peck and 10,000 shares issuable
pursuant to options exercisable within 60 days of the date hereof pursuant
to the terms of the Directors Plans. Excludes 5,000 shares issuable
pursuant to options granted under the 1991 Directors Plan which are not
currently exercisable.
(11) Represents 10,000 shares owned by Mr. Sheehan, 22,000 shares issuable
pursuant to options exercisable within 60 days of the date hereof pursuant
to the terms of the Directors Plans and 1,562 shares issuable pursuant to
warrants exercisable within 60 days of the date hereof pursuant to the
Note Purchase Agreement. Excludes 4,000 shares of Common Stock owned
by Mr. Sheehan's spouse, as to which Mr. Sheehan disclaims beneficial
ownership.
(12) See information under the heading "Holders of More Than Five Percent
Beneficial Ownership."
</FN>
</TABLE>
No agreements, formal or informal, exist among the various executive
officers and directors with respect to the voting of their shares.
7
<PAGE>
EXECUTIVE OFFICERS
The following provides certain information regarding the executive
officers of the Company who are appointed by and serve at the pleasure of the
Board of Directors:
<TABLE>
<S> <C> <C>
Name Age Position(s)
---- --- -----------
Uma N. Aggarwal...... 53 Director, President and Chief Executive Officer (1)
Barry F. Baker....... 41 Vice President - Finance and Chief Financial
Officer, Secretary and Treasurer (2)
David A. Grabowski... 46 Vice President - Sales and Marketing (3)
Gabriel S. Kohn...... 52 Vice President - Engineering (4)
<FN>
- ------------
(1) See information under the heading "Election of Directors."
(2) Mr. Baker has been Vice President - Finance of the Company since June
1995, Chief Financial Officer since August 1996 and Secretary and Treasurer
of the Company since November 1995. He previously served as Controller of
Storz Instrument Company, a wholly-owned subsidiary of American Home
Products Corp., from 1987 to 1995. Prior thereto, Mr. Baker, a Certified
Public Accountant, served as an auditor with Deloitte & Touche.
(3) Mr. Grabowski has been Vice President - Sales and Marketing of the Company
since January 1997. He previously held the position of Vice President -
International Sales of the Company from 1996 to 1997. Prior to that time,
Mr. Grabowski held the position of Director of Marketing of the company from
1990 to 1996.
(4) Mr. Kohn has been Vice President - Engineering of the Company since 1990. He
previously was Director of Engineering of the Company from 1988 to 1990.
</FN>
</TABLE>
8
<PAGE>
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid or accrued by the
Company for services rendered during the fiscal years indicated to the two chief
executive officers serving during the fiscal year ended June 30, 1997 and each
of the Company's executive officers whose total salary and bonus exceeded
$100,000 during such fiscal year (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
Annual Long-term
Compensation(1) Compensation
--------------------------------------
<S> <C> <C> <C> <C> <C>
Fiscal Stock Option All Other
Name & Principal Position Year Salary(2) Bonus Awards Compensation
- ------------------------- ------ --------- ----- ------ ------------
(In Shares)
Uma N. Aggarwal . . . . . . . . . . . . . 1997 $134,135 -- 200,000 608(3)
President and Chief Executive Officer
James C. Janning . . . . . . . . . . . . 1997 142,500 -- 1,000 --
President and Chief Executive Officer(4) 1996 20,520 -- 4,000 --
1995 9,750 $50,000 -- --
Barry F. Baker. . . . . . . . . . . . . . 1997 114,319 -- 15,000 3,286(5)
Vice President - Finance and Chief Financial 1996 100,000 -- 20,000 144(5)
Officer, Secretary and Treasurer 1995 7,692 -- -- --
David A. Grabowski . .. . . . . . . . . . 1997 136,355 10,000 20,000 3,575(5)
Vice President - Sales Marketing 1996 95,259 10,000 -- 2,346(5)
1995 83,550 3,682 4,000 1,951(5)
Gabriel S. Kohn . . . . . . . . . . . . . 1997 115,279 -- 6,000 7,510(5)
Vice President - Engineering 1996 111,080 -- -- 2,879(5)
1995 106,753 10,600 10,500 5,144(5)
<FN>
- ------------
(1) Excludes certain personal benefits, the total value of which was less than
10% of the total annual salary and bonus for each of the executives.
(2) Includes amounts deferred under the 401(k) feature of the Company's
Retirement Savings Plan. This amount also reflects Mr. Grabowski's car
allowance in the amount of $10,701 for fiscal 1997.
(3) The amount shown represents the amount paid for term life and disability
insurance premiums.
(4) Mr. Janning resigned from the position of President and Chief Executive
Officer of the Company in November 1996.
(5) The amounts shown represent the amounts paid for term life and disability
insurance premiums and matching contributions under the 401(k) feature of
the Company's Retirement Savings Plan.
(6) Grabowski was appointed Vice President - Sales and Marketing of the Company
in January 1997. He held the position of Vice President International Sales
of the Company from 1996 to 1997.
</FN>
</TABLE>
9
<PAGE>
OPTIONS
The following table sets forth information concerning options granted
during the fiscal year ended June 30, 1997 under the Company's stock option
plans to the Named Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
Individual Grants
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Potential Realizable Value at
Number of Percentage of Assumed Annual Rates of
Securities Total Options Stock Price Appreciation
Underlying Granted to Per Share For Option Term (2)
Options Employees in Exercise Expiration -----------------------------
NAME Granted Fiscal 1997(1) Price Date 5% 10%
- ---- ------- -------------- ----- ---- -- ---
Uma N. Aggarwal. . . . 200,000 57.3% $6.88 11/19/06 $865,359 $2,192,990
James C. Janning . . . 1,000 0.3 6.75 8/21/06 4,245 10,751
Barry F. Baker . . . . 15,000 4.3 6.75 8/21/06 63,676 161,266
David A. Grabowski . . 5,000 1.4 6.75 8/21/06 21,225 53,789
15,000 4.3 6.50 2/07/07 80,184 202,202
Gabriel S. Kohn . . . 6,000 1.7 6.75 8/21/06 25,470 64,547
<FN>
- --------------
(1) A total of 349,000 options were granted to employees under the 1994 Employee
Plan during fiscal 1997, the purpose of which is to provide a financial
incentive to key employees who are in a position to make significant
contributions to the Company. Options granted pursuant to the 1994 Employee
Plan have an exercise price equal to the market price on the date of grant.
Generally, options become exercisable with respect to one-fourth of the
shares covered thereby on each anniversary of the date of grant, commencing
on the second anniversary thereof, however, certain options granted to Mr.
Aggarwal become exercisable in 10% increments upon each 15% increase in the
Company's stock price sustained over a twenty day trading period. (See
information under heading "Certain Transactions" )
(2) Potential realizable value is calculated based on an assumption that the
price of the Company's Common Stock appreciates at the annual rate shown (5%
and 10%), compounded annually, from the date of grant of the option until
the end of the option term. The value is net of the exercise price but is
not adjusted for the taxes that would be due upon exercise. The 5% and 10%
assumed rates of appreciation are mandated by the rules of the Securities
and Exchange Commission (the "SEC") and do not in any way represent the
Company's estimate or projection of future stock prices.
</FN>
</TABLE>
10
<PAGE>
The following table sets forth information concerning option exercises
and the value of unexercised options held by the Named Executive Officers as of
June 30, 1997.
AGGREGATED OPTION EXERCISED IN FISCAL YEAR 1997 AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
Value of Unexercised,
Number of Unexercised In-the-Money
Options at Options at
June 30, 1997 June 30, 1997
-----------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares
Acquired Value
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
Uma N. Aggarwal. . . . -- -- 10,000 190,000 --(1) --(1)
James C. Janning . . . -- -- 15,000 -- --(1) --(1)
Barry F. Baker . . . . -- -- -- 35,000 --(1) --(1)
David A. Grabowski . . -- -- 6,438 24,312 --(1) --(1)
Gabriel S. Kohn. . . . -- -- 21,625 19,375 --(1) --(1)
<FN>
- ------------
(1) No options held by this officer at June 30, 1997 were in-the-money.
</FN>
</TABLE>
COMPENSATION OF DIRECTORS
Each director who is not an employee of the Company is entitled to
receive an annual fee of $10,000 for his services as a director and additional
fees of $750 for attendance at each meeting of the Board of Directors and $300
for attendance at each meeting of committees of the Board of Directors.
Directors are also entitled to reimbursement for their expenses in attending
meetings.
1991 DIRECTORS PLAN. The Company maintains the 1991 Directors Plan,
which provides for the granting of options to the Company's directors who are
not employees of the Company, for up to 100,000 shares of Common Stock (subject
to adjustment in the event of a reorganization, merger, consolidation, stock
split, dividend payable in Common Stock, split-up, combination or other exchange
of shares).
The 1991 Directors Plan is administered by a Stock Option Committee of
two or more members of the Board of Directors. Directors are not eligible to
serve on such committee if such director has been granted an option under the
plan during the twelve-month period preceding appointment to the committee, and
no option may be granted to a director while serving on the committee.
Options granted or to be granted under the 1991 Directors Plan may not
be exercised for a period of two years from the date of grant and thereafter
become exercisable on a cumulative basis in 25% increments beginning on the
second anniversary of the date of grant and concluding on the fifth anniversary
of the date of grant. All options granted under the 1991 Directors Plan expire
ten years from the date of grant.
Options granted or to be granted under the 1991 Directors Plan are
nontransferable, and the exercise price must be equal to the fair market value
of the Common Stock on the date of grant as determined pursuant to the 1991
Directors Plan. Upon exercise, the exercise price must be paid in full in cash
or such other consideration as the Stock Option Committee may permit, subject to
approval by a majority of the directors who have not been granted options under
any plan of the Company during the previous twelve months.
The 1991 Directors Plan provides for the grant of options thereunder
for the purchase of 10,000 shares of Common Stock to each eligible
11
<PAGE>
director on the date of the Company's initial public offering, each eligible
director who subsequently becomes a director, and an additional option to the
Chairman of the Board (provided he is an eligible director) with respect to
5,000 shares of Common Stock on the date he is elected to such office. In
connection with the adoption of the 1995 Directors Plan, the 1991 Directors Plan
was terminated in November 1995.
1995 DIRECTORS PLAN. The 1995 Directors Plan provides for the granting
of non-qualified stock options for up to 150,000 shares of Common Stock (subject
to adjustment in the event of a reorganization, merger, consolidation, stock
split, dividend payable in Common Stock, split-up, combination or other exchange
of shares) to the members of the Board of Directors who are not employees of the
Company or any of its subsidiaries.
Pursuant to the express terms of the 1995 Directors Plan, options to
purchase 10,000 shares of Common Stock are granted to each eligible director on
the date such person is first elected to the Board of Directors of the Company.
An option to purchase an additional 5,000 shares of Common Stock is granted to
each eligible director on the date such person is first elected to serve as
Chairman of the Board of the Company. These options may not be exercised for a
period of two years from the date of grant and thereafter become exercisable on
a cumulative basis in 25% increments beginning on the second anniversary of the
date of grant and concluding on the fifth anniversary thereof.
In addition, the 1995 Directors Plan provides that options to purchase
1,000 shares of Common Stock are granted to each eligible director on the date
such person is re-elected to the Board of Directors by the vote of the
stockholders, at the annual or other meeting at which directors are elected, and
that options to purchase 500 shares of Common Stock are granted to each eligible
director on the date such person is elected or re-elected to serve as Chairman
of a Committee maintained by the Board of Directors from time to time. These
options may not be exercised for a period of one year from the date of grant and
thereafter are exercisable in full.
In recognition of their past service to the Company, the 1995
Directors Plan also provided for the grant of options to purchase 3,000 shares
of Common Stock to each eligible director who was serving on the Board of
Directors at June 1, 1995 and provided for the grant of options to purchase 500
shares of Common Stock to each eligible director serving as Chairman of a
Committee maintained by the Board of Directors at June 1, 1995. Options granted
to such directors were not exercisable until June 1, 1996, at which time they
became exercisable in full.
Other options may be granted under the 1995 Directors Plan from time
to time pursuant to terms determined by the Board of Directors of the Company.
All options granted under the 1995 Directors Plan are nontransferable and
subject to certain limitations upon the removal or resignation of the director,
as set forth in the 1995 Directors Plan, and expire ten years from the date of
grant. No payments or contributions are required to be made by the directors
other than in connection with the exercise of options. The 1995 Directors Plan
will terminate on November 9, 2005 and no further options may be granted after
such date.
The purchase price for shares of Common Stock to be purchased upon the
exercise of options is equal to the last reported sales price per share of
Common Stock on the Nasdaq National Market on the date of grant (or the last
reported sales price on such other exchange or market on which the Common Stock
is traded from time to time). Upon exercise of an option, the exercise price
must be paid in full in cash or in kind or a combination thereof, by delivery of
shares having a fair market value, or surrender of currently exercisable options
having a value on the date of exercise, equal to the portion of the exercise
price so paid, as determined by the Board of Directors.
As adopted, the 1995 Directors Plan was intended to provide formula
awards in accordance with certain then-applicable exemptive rules of the SEC and
is administered by the Board of Directors, which may delegate administration
thereof to a committee of the Board. The Board may, in its discretion, terminate
or suspend the 1995 Directors Plan at any time. The Board may also amend or
revise the 1995 Directors Plan, or the terms of any option granted under the
1995 Directors Plan, without stockholder approval, provided that such amendment
or revision does not, except as otherwise permitted, increase the number of
shares reserved for issuance under the 1995 Directors Plan, change the purchase
price established or expand the category of
12
<PAGE>
individuals eligible to participate in such plan. No amendment, suspension or
termination will alter or impair any rights or obligations under any option
previously granted without the consent of the grantee. The Company receives no
consideration for the grant of options under the 1995 Directors Plan.
The following table sets forth information with respect to options
outstanding under the Directors Plans:
Date of Number of Exercise Price
Name Grant Shares Per Share
- ---- ------- --------- --------------
Uma N. Aggarwal . . . . . . -- -- --
David A. Gee . . . . . . . 01/13/92 10,000 $8.00
11/09/95 4,000 18.25
11/14/96 1,000 7.13
Samuel A. Hamacher. . . . . 09/14/92 10,000 9.50
11/09/95 5,000 18.25
11/14/96 1,500 7.13
James C. Janning. . . . . . 09/14/92 10,000 9.50
11/09/95 4,000 18.25
11/14/96 1,000 7.13
Robert E. Lefton. . . . . . 09/14/92 10,000 8.13
11/09/95 5,000 18.25
11/14/96 1,500 7.13
Donald E. Nickelson . . . . 09/14/92 10,000 9.50
11/09/95 4,000 18.25
11/14/96 1,000 7.13
William A. Peck . . . . . . 04/29/94 10,000 15.75
11/09/95 4,000 18.25
11/14/96 1,000 7.13
Dennis W. Sheehan . . . . . 01/13/92 10,000 8.00
11/03/92 5,000 9.00
11/09/95 5,000 18.25
11/14/96 2,000 7.13
John D. Weil. . . . . . . . 8/4/97 10,000 7.00
----------------
----------------
Total. . . . . . . . 125,000
================
INDEMNIFICATION AND LIMITATION OF LIABILITY
The Company's Amended and Restated Certificate of Incorporation
provides that the Company's directors are not liable to the Company or its
stockholders for monetary damages for breach of their fiduciary duties, except
under certain circumstances, including breach of the director's duty of loyalty,
acts or omissions not in good faith or involving intentional misconduct or a
knowing violation of law or any transaction from which the director derived
improper personal benefit. The Company's By-laws provide for the indemnification
of the Company's directors and officers, to the full extent permitted by the
Delaware General Corporation Law.
13
<PAGE>
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee, composed entirely of non-employee,
independent members of the Board of Directors, reviews, recommends and approves
changes to the Company's compensation policies and programs for the chief
executive officer, other senior executives and certain key employees. In
addition to the delegated authority in areas of compensation, the Committee
administers the Company's stock option plans and agreements and recommends to
the Board of Directors annual or other grants to be made in connection
therewith.
In the Committee's discharge of its responsibilities, it considers the
compensation, primarily of the chief executive officer and the Company's other
executive officers, and sets overall policy and considers in general the basis
of the levels of compensation of other key employees.
POLICY AND OBJECTIVES. Recognizing its role as a key representative of
the stockholders, the Committee seeks to promote the interests of stockholders
by attempting to align management's remuneration, benefits and perquisites with
the economic well-being of the Company. Since the achievement of operational
objectives should, over time, represent the primary determinant of share price,
the Committee links elements of compensation of executive officers and certain
key employees with the Company's operating performance. In this way, objectives
under a variety of compensation programs should eventually reflect the overall
performance of the Company. By adherence to the above program, the compensation
process should provide for enhancement of stockholder value. Basically, the
Committee seeks the successful implementation of the Company's business strategy
by attracting and retaining talented managers motivated to accomplish these
stated objectives. The Committee attempts to be fair and competitive in its
views of compensation. Thus, rewards involve both business and individual
performance. The key ingredients of the program consist of base salary, annual
cash incentives and long range incentives consisting of stock options.
BASE SALARY. Base salaries for the chief executive officer, as well as
other executive officers of the Company, are determined primarily based on
performance. Generally, the performance of each executive officer is evaluated
annually and salary adjustments are based on various factors including revenue
growth, earnings per share improvement, increases in cash flow, new product
development, market appreciation for publicly traded securities, reduction of
debt and personal performance. In addition, the Committee compares salary data
for similar positions in companies that match the Company's size in sales and
earnings and utilizes such data as a factor in setting base salaries. Specific
reference is made to the annual salary survey published by the Health Industry
Manufacturers Association. Validation of this data is performed by an
independent nationally-recognized compensation consultant. This principle of
combining performance and position in the salary survey range was used in
setting the salary of Mr. Aggarwal. However, with respect to Mr. Janning, the
Company's previous President and Chief Executive Officer, an arrangement was
negotiated whereby Mr. Janning would be compensated at an hourly rate based on
his salary and benefits from Harbour Group Ltd. on a proportionate basis for his
time spent working for the Company. The Committee approves base salary
adjustments for the executive officers, including the chief executive officer.
CASH INCENTIVE COMPENSATION. To reward performance, the chief
executive officer and other executive officers are eligible for annual cash
bonuses. The actual amount of incentive compensation paid to each executive
officer is predicated on an assessment of each participant's relative role in
achieving the annual financial objectives of the Company as well as each such
person's contributions of a strategic nature in maximizing stockholder value. No
cash bonuses were paid to the chief executive officer or the other executive
officers in respect of fiscal 1997, except for Mr. Grabowski who received a
$10,000 cash bonus prior to being appointed as a Named Executive Officer.
STOCK-BASED INCENTIVES. The Company's Employee Plans provide a long
term incentive program for the chief executive officer, other executive officers
and certain other key employees. The basic objective of these plans is the
specific and solid alignment of executive and stockholder interests by forging a
direct relationship between this element of compensation and the stockholders'
level of return. These programs represent a desire by
14
<PAGE>
the Company to permit executives and other key employees to obtain an ownership
position and a proprietary interest in the Company's Common Stock.
Under these plans, approved by the stockholders, the Committee
periodically recommends to the Board of Directors grants of stock options by the
Board of Directors. Generally, the Committee attempts to reflect the optionee's
potential impact on corporate financial and operational performance in the award
of stock options. To date, except with respect to a grant made to Mr. Aggarwal
in connection with the commencement of his employment, stock options under the
plans have been granted with an exercise price equal to the market price of the
Common Stock on the date of grant, expire after ten years, and, after two years,
vest 25% annually. (With respect to Mr. Aggarwal's options, see information
under the heading "Certain Transactions").
Compensation Committee
Dennis W. Sheehan, Chair
David A. Gee
Donald E. Nickelson
15
<PAGE>
PERFORMANCE GRAPH
COMPARISON OF CUMULATIVE TOTAL RETURNS
The following table presents the cumulative return for the Company,
the CRSP Index for Nasdaq Stock Market (US Companies) and an index comprised of
eight companies which the Company believes to present a representative peer
group of the Company. The Nasdaq and the peer group data have been provided by
the Center for Research in Security Prices, Chicago, Illinois, without
independent verification by the Company.
6/30/92 100 100 100
7/31/92 92.647 103.541 116.421
8/31/92 97.059 100.377 115.29
9/30/92 91.176 104.108 124.535
10/30/92 104.412 108.208 128.438
11/30/92 117.647 116.819 151.963
12/31/92 132.353 121.12 153.046
1/29/93 129.412 124.568 140.463
2/26/93 105.882 119.921 120.939
3/31/93 115.346 123.392 120.344
4/30/93 110.91 118.126 115.803
5/28/93 109.431 125.182 117.638
6/30/93 104.17 125.761 116.499
7/30/93 110.122 125.909 114.132
8/31/93 127.98 132.417 111.953
9/30/93 131.742 136.361 113.523
10/29/93 143.718 139.426 118.046
11/30/93 136.233 135.267 119.837
12/31/93 150.44 139.038 127.6
1/31/94 179.023 143.259 136.783
2/28/94 180.528 141.922 134.686
3/31/94 175.165 133.195 127.211
4/29/94 190.265 131.467 126.915
5/31/94 184.225 131.788 127.757
6/30/94 175.943 126.969 118.902
7/29/94 172.91 129.573 117.731
8/31/94 191.111 137.833 136.189
9/30/94 182.738 137.48 135.97
10/31/94 201.012 140.182 137.235
11/30/94 207.103 135.532 146.814
12/30/94 201.905 135.912 146.173
1/31/95 197.317 136.674 155.987
2/28/95 192.728 143.902 161.938
3/31/95 189.01 148.167 171.175
4/28/95 199.766 152.832 171.853
5/31/95 178.253 156.773 177.488
6/30/95 200.627 169.478 181.258
7/31/95 188.281 181.935 194.742
8/31/95 197.54 185.622 192.273
9/29/95 226.863 189.891 197.425
10/31/95 234.579 188.803 199.394
11/30/95 219.146 193.236 198.335
12/29/95 198.405 192.207 200.79
1/31/96 144.928 193.155 208.645
2/29/96 155.004 200.508 212.133
3/29/96 165.156 201.173 210.719
4/30/96 133.994 217.862 187.488
5/31/96 143.343 227.866 198.091
6/28/96 116.147 217.594 183.067
7/31/96 87.895 198.213 185.087
8/30/96 81.617 209.319 197.585
9/30/96 91.034 225.33 181.938
10/31/96 84.756 222.841 161.184
11/29/96 87.895 236.617 163.11
12/31/96 92.604 236.402 171.134
1/31/97 103.591 253.204 158.829
2/28/97 103.591 239.223 153.038
3/31/97 92.604 223.614 152.784
4/30/97 86.325 230.601 138.02
5/30/97 77 256.74 160.623
6/30/97 81.617 264.602 158.263
LEGEND
Symbol Index Description
_______ ALLIED HEALTHCARE PRODUCTS, INC.
....... CRSP Index for Nasdaq Stock Market (US Companies)
- ------- Self-Determined Peer Group
Companies in the Self-Determined Peer Group:
Chad Therapeutics, Inc. Healthdyne Technologies, Inc.
Infrasonics, Inc. Invacare Corporation
Nellcor Puritan Bennett, Inc. Novametrix Medical Systems, Inc.
Respironics, Inc. Sunrise Medical, Inc.
NOTES:
A. The lines represent monthly index levels derived from compounded
daily returns that include all dividends.
B. The indexes are reweighted daily, using the market capitaliztion
on the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a
trading day, the preceeding trading day is used.
D. The index level for all series was set to 100.0 on 06/30/92, the
date of the Company's initial public offering.
16
<PAGE>
CERTAIN TRANSACTIONS
Mr. Aggarwal assumed the position of President and Chief Executive
Officer of the Company pursuant to an employment agreement commencing November
19, 1996, and expiring on November 19, 1998 (the "Employment Agreement"). The
Employment Agreement provides for an annual base salary of $225,000, subject to
periodic upward adjustments as the Board of Directors deems appropriate. In
addition to base salary, the Employment Agreement provides that Mr. Aggarwal is
entitled to receive such incentive compensation payments as the Board of
Directors may determine pursuant to the Company's incentive compensation plan
for the Company, president in accordance with the Company's past practice, or
otherwise. (See information under the heading "Board Compensation Committee
Report on Executive Compensation").
Mr. Aggarwal was also granted an option to purchase 200,000 shares of
Common Stock at an exercise price of $6.875 per share, such options expiring
after a term of 10 years. The vesting schedule with respect to 100,000 of the
options provides that 25% become exercisable two years from the date of grant
with additional 25% increments becoming exercisable each year thereafter. The
remaining 100,000 options become exercisable in 10% increments upon each 15%
increase in the Common Stock price sustained over a twenty day trading period.
During fiscal 1997, options to purchase 10,000 shares became exercisable, all of
which were exercised subsequent to the end of the fiscal year.
Pursuant to the termination provisions of the Employment Agreement, in
the event Mr. Aggarwal's employment is terminated by reason of death, disability
or without "cause" by the Company he is entitled to receive his base salary and
incentive compensation through the remaining term of the agreement. If the
Company terminates Mr. Aggarwal's employment for "cause," he is entitled to
receive his base salary and other benefits through the date of his termination.
If Mr. Aggarwal desires to terminate his employment for any reason, he must give
the Company thirty days written notice and he would then be entitled to receive
his base salary and other benefits through the date of termination.
Additionally, Mr. Aggarwal has agreed not to compete with the Company during the
term of the Employment Agreement and for a two year period thereafter; provided,
however, that if his employment is terminated by the Company for "cause", his
non-competition covenants also terminate.
In December 1996, the Company entered into "change-in-control"
severance agreements with the Named Executive Officers of the Company, and 21
other key employees. Pursuant to each agreement, if an individual is terminated
without cause within two years of a "change-in-control" event (as defined in
each agreement), such individual is entitled to receive a severance benefit of
one year's base salary. Additionally, each agreement has an initial term through
December 31, 1998, which term automatically extends for an additional one year
period each January 1st, unless at least thirty days prior to such January 1st
date the Company gives notice that it does not wish to extend such agreement.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors, executive officers and persons who own more
than ten percent of a registered class of the Company's equity securities to
file with the SEC initial reports of beneficial ownership and reports of changes
in beneficial ownership of common stock and other equity securities of the
Company. Executive officers, directors and greater than ten percent stockholders
are required by SEC regulation to furnish the Company with copies of all Section
16(a) forms which they file.
To the Company's knowledge, based solely on review of information
furnished to the Company, reports filed through the Company and representations
that no other reports were required, all Section 16(a) filing requirements
applicable to its directors, executive officers and greater than ten percent
beneficial owners were complied with during the year ended June 30, 1997.
17
<PAGE>
OTHER INFORMATION
On August 21, 1996, the Board of Directors entered into a Rights
Agreement pursuant to which one preferred stock purchase right (a "Right") per
share of Common Stock was distributed as a dividend to stockholders of record on
the close of business on September 4, 1996. Each Right, when exercisable, will
entitle the holder thereof to purchase one one-hundredth of a share of Series A
Preferred Stock at a price of $40.00 per share. The Rights will be exercisable
only if a person or group acquires 25% or more of the outstanding shares of
Common Stock of the Company or announces a tender offer following which it would
hold 25% or more of such outstanding Common Stock. The Rights entitle the
holders, other than the acquiring person, to purchase Common Stock having a
market value of two times the exercise price of the Right. If, following the
acquisition by a person or group of 25% or more of the Company's outstanding
shares of Common Stock, the Company were acquired in a merger or other business
combination, each Right would be exercisable for that number of the acquiring
company's shares of common stock having a market value of two times the exercise
price of the Right. The Company may redeem the Rights at one cent per Right at
any time until ten days following the occurrence of an event that causes the
Rights to become exercisable for Common Stock. The Rights expire in ten years.
For more information concerning the Rights Agreement and the Rights,
reference is hereby made to the Company's Current Report on Form 8-K dated
August 7, 1996 which was filed with the SEC.
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has selected Price Waterhouse LLP to be the
independent auditors of the Company for the year ending June 30, 1998.
The affirmative vote of the holders of a majority of the Company's
Common Stock represented and voted at the Annual Meeting will be required to
approve and ratify the Board's selection of Price Waterhouse LLP. The Board of
Directors recommends voting "FOR" approval and ratification of such selection.
A representative of Price Waterhouse LLP is expected to be available
at the Annual Meeting to make a statement if such representative desires to do
so and to respond to appropriate questions.
SOLICITATION OF PROXIES
The cost of soliciting proxies will be borne by the Company. In
addition to solicitation by mail, proxies may be solicited by officers,
directors and regular employees of the Company personally or by telephone or
facsimile for no additional compensation. Arrangements will be made with
brokerage houses and other custodians, nominees and fiduciaries to forward
solicitation material to beneficial owners of the stock held of record by such
persons, and the Company will reimburse such persons for their reasonable
out-of-pocket expenses incurred by them in so doing. The Company has engaged D.
F. King & Co., Inc. to solicit proxies in connection with this Proxy Statement,
and employees of that company are expected to solicit proxies in person, by
telephone and by mail. The anticipated cost to the Company of such solicitation
is approximately $3,000 plus reasonable out-of-pocket expenses.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
The rules of the SEC currently provide that stockholder proposals for
the 1998 Annual Meeting must be received at the Company's principal executive
office not less than 120 calendar days prior to the anniversary date of the
release of the Company's proxy statement to stockholders in connection with the
1997 Annual Meeting to be considered by the Company for possible inclusion in
the proxy materials for the 1998 Annual Meeting.
18
<PAGE>
FINANCIAL INFORMATION
The Company's 1997 Annual Report is being mailed to the stockholders
on or about the date of mailing this Proxy Statement. The Company will provide,
without charge to any record or beneficial stockholder as of September 30, 1997,
who so requests in writing, a copy of such 1997 Annual Report or the Company's
1997 Annual Report on Form 10-K (without exhibits), including the financial
statements and the financial statement schedules, filed with the SEC. Any such
request should be directed to Allied Healthcare Products, Inc., 1720 Sublette
Avenue, St. Louis, Missouri 63110, Attention: Barry F. Baker.
OTHER MATTERS
The Board of Directors of the Company is not aware of any other
matters to come before the meeting. If any other matters should come before the
meeting, the persons named in the enclosed proxy intend to vote the proxy
according to their best judgment.
You are urged to complete, sign, date and return your proxy to make
certain your shares of Common Stock will be voted at the 1997 Annual Meeting.
For your convenience in returning the proxy, an addressed envelope is enclosed,
requiring no additional postage if mailed in the United States.
By Order of the Board of Directors,
Uma N. Aggarwal
PRESIDENT AND CHIEF EXECUTIVE OFFICER
October 10, 1997
19
<PAGE>
PROXY
ALLIED HEALTHCARE PRODUCTS, INC.
Annual Meeting of Stockholders - November 17, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF THE COMPANY
The undersigned acknowledges receipt of the Notice of Annual Meeting
of Stockholders and Proxy Statement of Allied Healthcare Products, Inc. (the
"Company"), each dated October 10, 1997, and the Annual Report to Stockholders
on Form 10-K, for the fiscal year ended June 30, 1997, and appoints Uma N.
Aggarwal and Barry F. Baker, or either of them, as the proxies and
attorneys-in-fact, with full power to each of substitution on behalf and in the
name of the undersigned to vote and otherwise represent all of the shares
registered in the name of the undersigned at the 1997 Annual Meeting of
Stockholders of the Company to be held on November 17, 1997 at 10:00 a.m.,
Central Time, at the Daniele Hotel, 216 N. Meramec Street, Clayton Missouri
63105, and any adjournments thereof with the same effect as if the undersigned
were present and voting such shares, on the following matters and in the
following manner:
(continued on reverse side)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
<TABLE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR" ALL NOMINEES LISTED Please mark |----|
IN PROPOSAL 1 AND "FOR" PROPOSAL 2. your votes as | X |
indicated in |----|
this example
<S> <C> <C> <C> <C>
1. To Elect the following persons as directors of the Company to serve 2. To ratify or reject the appointment of Price
for a term of one year or until their successors are elected and qualified: Waterhouse LLP as independent auditors of the
Company for the fiscal year ending June 30, 1998:
FOR all WITHHOLD (INSTRUCTIONS: To withhold
nominees listed AUTHORITY authority to vote for any individual
below to vote all nominee, strike a line through the FOR AGAINST ABSTAIN
(except as marked nominees nominee's name on the list below.) |_| |_| |_|
to the listed below
contrary)
|_| |_| Uma N. Aggarwal, David A. Gee,
Samuel A. Hamacher, James C. The shares represented by this proxy will be voted
Janning, Robert E. Lefton, Donald E. in accordance with the specification made. If no
Nickelson, William A. Peck, Dennis specification is made, the shares represented by
W. Sheehan, John D. Weil this proxy will be voted "FOR" all nominees listed
in Proposal 1, "FOR" Proposal 2 and in the
3. To transact such other business as may PLEASE MARK THE FOLLOWING BOX discretion of the proxies on such other business
properly come before the meeting or any IF YOU PLAN TO ATTEND THE as may properly come before the meeting.
adjournment thereof, according to the proxies' MEETING.
discretion, and in their discretion. |_|
Dated: _______________________________, 1997
______________________________________
Name typed or printed
______________________________________
Signature(s)
______________________________________
Capacity (Title or Authority, i.e.
Executor, Trustee)
Please date and sign exactly as your name(s)
appears on the stock certificate. If shares are
held by joint tenants, both should sign. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title as
such. If a corporation, please sign in full
corporate name by president or other authorized
officer. If a partnership, please sign in
partnership name by authorized person. This proxy
PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY IN THE votes all shares held in all capacities unless
ENCLOSED ENVELOPE otherwise specified.
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FOLD AND DETACH HERE
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