DEF 14A 1 0001.txt October 6, 2000 Dear Stockholder: You are cordially invited to attend the Annual Meeting of Stockholders which will be held at the Corporate Headquarters of Allied Healthcare Products, Inc., 1720 Sublette, St. Louis, Missouri 63110 at 9:00 a.m., Central Time, on Tuesday, November 14, 2000. 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, John D. Weil Chairman of the Board Earl R. Refsland Chief Executive Officer ALLIED HEALTHCARE PRODUCTS, INC. ____________________ NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TUESDAY, NOVEMBER 14, 2000 ____________________ 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 Corporate Headquarters of Allied Healthcare Products, Inc., 1720 Sublette, St. Louis, Missouri 63110 on Tuesday, November 14, 2000 at 9:00 a.m., Central Time, for the following purposes: (1) To elect five directors to serve until the next Annual Meeting of Stockholders or until their successors are elected and qualified; (2) 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 October 2, 2000 are entitled to notice of and to vote at the meeting. A list of stockholders of the Company at the close of business on October 2, 2000 will be available for inspection during normal business hours from November 1 through November 14, 2000 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, Gregory C. Kowert Vice President-Finance, Chief Financial Officer Secretary & Treasurer St. Louis, Missouri October 6, 2000 -------------------------------------------------------------------------------- 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. -------------------------------------------------------------------------------- ALLIED HEALTHCARE PRODUCTS, INC. 1720 SUBLETTE AVENUE ST. LOUIS, MISSOURI 63110 ____________________ PROXY STATEMENT ____________________ ANNUAL MEETING OF STOCKHOLDERS TUESDAY, NOVEMBER 14, 2000 ____________________ 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 9:00 a.m., Central Time, Tuesday, November 14, 2000, 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 Corporate Headquarters of Allied Healthcare Products, Inc., 1720 Sublette, St. Louis, Missouri 63110. 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 6, 2000. OUTSTANDING SHARES AND VOTING RIGHTS Stockholders of record at the close of business on Monday, October 2, 2000 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" (described below) 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. Proxies submitted by brokers that do not indicate a vote for some of the proposals because the brokers don't have discretionary voting authority and haven't received instructions from the beneficial owners on how to vote on those proposals are called "broker non-votes." ITEM NO. 1 ---------- 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 five members. The stockholders will vote at the 2000 Annual Meeting for the election of five directors for the one-year term expiring at the Annual Meeting of Stockholders in 2001. 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 --------------- --- -------------------- -------------- Brent D. Baird . . . . . . . . . . . . . . . . 61 Chairman of First Carolina Investors, Inc. April 1999 of Buffalo, New York James B. Hickey, Jr. . . . . . . . . . . . . . 47 Private Investor February 1998 William A. Peck. . . . . . . . . . . . . . . . 67 Executive Vice Chancellor for Medical April 1994 Affairs and Dean, School of Medicine, Washington University, St. Louis, Missouri Earl R. Refsland . . . . . . . . . . . . . . . 57 President and Chief Executive Officer of September 1999 the Company, St. Louis, Missouri John D. Weil . . . . . . . . . . . . . . . . . 59 President of Clayton Management Co., August 1997 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. Baird is a private investor and Chairman of First Carolina Investors, Inc., a closed-end, non-diversified management investment company (listed on the Boston Stock Exchange). Mr. Baird currently serves as a director of First Carolina Investors, Inc., Exolon-ESK Company, M & T Bank Corporation, Todd Shipyards Corporation, Merchants Group, Inc., Ecology and Environment, Inc., and Baldwin Piano & Organ Company. Mr. Hickey is a private investor. Mr. Hickey served as President and Chief Executive Officer of Angeion Corporation, based in Minneapolis, Minnesota from July 1998 to January 2000. Mr. Hickey served as President and Chief Executive Officer of Aequitron Medical from 1993 to 1997. Mr. Hickey currently serves as a director of Vital Images, Inc., Angeion Corporation, Pulmonetic Systems, Inc. and Merchants Exchange of St. Louis. 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 Reinsurance Group of America, Angelica Corporation, Hologic Corporation and TIAA CREF Trust. 2 Mr. Refsland has served as President and Chief Executive Officer of the Company since September 1999. From February 1999 to January 2000, Mr. Refsland served as Director and Chairman of the Board of Andros Technologies. From May 1995 to March 1998, Mr. Refsland served as President and CEO of Photometrics Limited. Mr. Refsland previously served as Chief Executive Officer and member of the Board of Directors of Allied Healthcare Products, Inc. from 1986 to 1993. Mr. Weil has served as President of Clayton Management Co. since 1973. Mr. Weil currently serves as a director of Pico Holdings, Inc., Oglebay Norton Co., Southern Investors Service Co., Todd Shipyards Corp. and Baldwin & Lyons, Inc. IF YOU SIGN AND RETURN THE PROXY FORM AND DO NOT SPECIFY OTHERWISE, WE WILL VOTE YOUR SHARES FOR THE ELECTION OF THE FIVE NOMINEES LISTED ABOVE. ITEM NO. 2 ---------- OTHER BUSINESS We do not know of any other matters to be presented at the meeting. If any other matter is properly presented for a vote at the meeting, your shares will be voted by the holders of the proxies using their best judgment. 3 BOARD MEETINGS-COMMITTEES OF THE BOARD The Board of Directors of the Company held five meetings during the fiscal year ended June 30, 2000. The Board of Directors presently maintains a Compensation Committee, an Audit Committee and a Nominating Committee. The Compensation Committee consists of Messrs. Hickey, Baird and Peck. 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 did not hold any meetings during the fiscal year ended June 30, 2000. The Audit Committee consists of Messrs. Peck, Weil and Baird. 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 four meetings during the fiscal year ended June 30, 2000. The Nominating Committee consists of Messrs. Baird, Peck and Weil. This committee recommends nominees to fill vacancies on the Board of Directors. The Nominating Committee did not hold any meetings during the fiscal year ended June 30, 2000. 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 2001 if such nominations are submitted in writing to the Company's headquarters Attention: Nominating Committee, no later than June 1, 2001. 4 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 August 31, 2000.

PERCENT OF SHARES OWNED OUTSTANDING NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY SHARES* ---------------------------------------- ------------- ----------- Heartland Advisors, Inc.(1) 1,947,800 24.95% 790 North Milwaukee Street Milwaukee, WI 53202 John D. Weil(2) 1,478,500 18.93% 200 North Broadway Suite 825 St. Louis, MO 63102 Warburg Pincus Asset Management, Inc.(3) 601,500 7.70% 466 Lexington Avenue New York, New York 10017 Dimensional Fund Advisors Inc.(4) 567,000 7.26% 1299 Ocean Avenue, 11th Floor Santa Monica, CA 90401 __________________ * All percentages are computed based upon 7,806,682 shares issued and outstanding as of October 2, 2000. (1) Information obtained from beneficial owner. (2) Includes shares beneficially owned by Mr. Weil in the following capacities: 1,430,500 shares owned by Woodbourne Partners, L.P., a limited partnership whose general partner is Controlled by Mr. Weil; 4,000 shares owned by Mr. Weil directly; 10,000 shares owned by Mr. Weil's son for which he disclaims beneficial ownership; 9,000 shares issuable within 60 days of the date hereof pursuant to the terms of Directors Plans; 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. (4) Information obtained from beneficial owner.

5 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 22, 2000.

SHARES OWNED PERCENT OF NAME OF BENEFICIAL OWNER BENEFICIALLY OUTSTANDINGSHARES+ ------------------------------------------------------------- ------------ ------------------ Brent D. Baird(1) 132,500 1.70% David A. Grabowski(2) 30,741 * James B. Hickey, Jr.(3) 11,000 * Gabriel S. Kohn(4) 3,500 * Gregory C. Kowert(5) 0 * William A. Peck(6) 24,200 * Earl R. Refsland(7) 183,300 2.35 Eldon P. Rosentrater(8) 18,500 * John D. Weil(9) 1,478,500 18.93% ------------ ------------------ All directors and executive officers as a group (9 persons) 1,926,241 24.68% ============ ================== __________________ + All percentages are computed based upon 7,806,682 shares issued and outstanding as of October 2, 2000. * Less than 1.00%. (1) Represents 81,000 shares owned by Mr. Baird, 50,000 shares held by Personal Holding Company and 10,000 shares by Mr. Baird's retirement plan. Represents 1,500 shares issuable pursuant to options exercisable within 60 days of the date hereof pursuant to the terms of the 1995 Directors Non-Qualified Stock Option Plan (the "1995 Directors Plan"). Excludes 10,000 shares issuable pursuant to options granted under the 1995 Directors Plan which are not currently exercisable. (2) Represents 1,241 shares owned by Mr. Grabowski and 29,500 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 Employee Plan") and the 1994 Employee Plan (the "1994 Employee Plan") (the 1991 Employee Plan and the 1994 Employee Plan are collectively referred to herein as the "Employee Plans"). Excludes 16,250 shares issuable pursuant to options granted under the Employee Plans which are not currently exercisable. (3) Represents 5,000 shares owned by Mr. Hickey and 6,000 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"). Excludes 7,500 shares issuable pursuant to options granted under the Directors Plan which are not currently exercisable. (4) Represents 3,500 shares owned by Mr. Kohn. Mr. Kohn resigned as Vice President Engineering of the Company on March 10, 2000. 6 (5) Excludes 30,000 shares issuable pursuant to options granted under the 1994 Employee Plans which are not currently exercisable. (6) Represents 5,200 shares owned by Dr. Peck and 19,000 shares issuable pursuant to options exercisable within 60 days of the date hereof pursuant to the terms of the Directors Plans. (7) Represents 42,800 shares owned by Mr. Refsland and 135,500 shares issuable pursuant to options exercisable within 60 days of the date hereof pursuant to the terms of the 1999 Incentive Stock Plan. Excludes 406,500 shares issuable pursuant to options granted under the 1999 Incentive Stock Plan which are not currently exercisable. (8) Represents 4,000 shares owned by Mr. Rosentrater and 14,500 shares issuable pursuant to options exercisable within 60 days of the date hereof pursuant to the terms of the Employee Plans. Excludes 2,750 shares issuable pursuant to options granted under the Employee Plans which are not currently exercisable. (9) See information under the heading "Holders of More Than Five Percent Beneficial Ownership."

No agreements, formal or informal, exist among the various executive officers and directors with respect to the voting of the shares. 7 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:

NAME AGE POSITION(S) ---------------------------------- ---- -------------------------------------------------- David A. Grabowski . . . . . . . . 47 Vice President - Sales and Marketing(1) Gregory C. Kowert. . . . . . . . . 53 Vice President-Finance, Chief Financial Officer Secretary & Treasurer(2) Earl R. Refsland . . . . . . . . . 57 Director, President and Chief Executive Officer(3) Eldon P. Rosentrater . . . . . . . 46 Vice President-Operations(4) _______________ (1) Mr. Grabowski has been Vice President - Sale 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. (2) Mr. Kowert has been Vice President - Finance, Chief Financial Officer, Secretary and Treasurer since August, 2000. (3) Mr. Refsland has been Director, President and Chief Executive Officer of the Company since September, 1999. (4) Mr. Rosentrater has been Vice President-Operations of the Company since October 1999. He previously held the position of Assistant to the President from 1998 to 1999. Prior to that time, Mr. Rosentrater held the positions of Director of Information Technologies from 1995 to 1998; Director of Business Development from 1993 to 1995 and Group Product Manager from 1989 to 1993.

8 EXECUTIVE COMPENSATION The following table summarizes the compensation paid or accrued by the Company for services rendered during the fiscal years ended June 30, 2000 by the Chief Executive Officer 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 ANNUAL COMPENSATION(1)

FISCAL STOCK OPTION ALL OTHER NAME & PRINCIPAL POSITION YEAR SALARY(2) BONUS AWARDS COMPENSATION -------------------------------------------- ------ --------- ------- ------------ ------------ (In Shares) Uma N. Aggarwal 2000 $ 17,918 -- -- $139,548(3) Former President and Chief Executive Officer 1999 225,000 -- -- 16,829(4) 1998 225,000 $15,000 -- 102,318(5) David A. Grabowski(10) 2000 155,000 -- -- $ 19,006(6) Vice President - Sales and Marketing 1999 155,000 -- -- 18,124(6) 1998 162,360 10,000 15,000 12,134(6) Gabriel S. Kohn(10) 2000 98,654 -- -- 54,233(7) Former Vice President - Engineering 1999 135,000 -- -- 11,766(8) 1998 125,481 10,000 9,000 11,024(8) Thomas A. Jenuleson(11) 2000 145,000 10,000 -- 4,364(8) Vice President - Finance and 1999 39,000 -- 30,000 -- Chief Financial Officer 1998 -- -- -- -- Earl R. Refsland 2000 228,000 -- 542,000 20,616(9) President and Chief Executive Officer 1999 -- -- -- -- 1998 -- -- -- -- Eldon P. Rosentrater 2000 112,750 -- -- 5,181(8) Vice President - Operations 1999 -- -- -- -- 1998 -- -- -- -- _____________________ (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 (3) The amount shown represents matching contributions under the 401(k) feature of the Company's Retirement Savings Plan, term life and disability insurance premiums and also reflects Mr. Aggarwal's car allowance in the amount of $1,118 for fiscal 2000 and a severance package Totaling $139,548. Mr. Aggarwal resigned as President and Chief Executive Officer of the Company on July 28, 1999. (4) The amount shown represents matching contributions under the 401(k) feature of the Company's Retirement Savings Plan, term life and disability insurance premiums and also reflects Mr. Aggarwal's car allowance (5) The amount shown represents the amount paid for relocation reimbursement; term life and disability insurance premiums; matching contributions under the 401(k) feature of the Company's Retirement Savings Plan; and value realized on Stock Options. 9 (6) The amount shown represents matching contributions under the 401(k) feature of the Company's Retirement Savings Plan, term life and disability insurance premiums and also reflects Mr. Grabowski's car allowance in the amount of $7,701 for fiscal 2000. (7) The amount shown represents the amounts paid for term life and disability insurance premiums, matching contributions under the 401(k) feature of the Company's Retirement Savings Plan and a severance package totaling $54,233. Mr. Kohn resigned as Vice President-Engineering of the Company on March 10, 2000. (8) The amount shown represents 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. (9) The amount shown represents matching contributions under the 401(k) feature of the Company's Retirement Savings Plan, term life and disability insurance premiums and also reflects Mr. Refsland's car allowance in the amount of $5,155 for fiscal 2000. (10) In fiscal 1999, the Company entered into "change-in-control" severance agreements with David A. Grabowski and Gabriel S. Kohn. 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. This agreement commenced on February 11, 1999 for David A. Grabowski and Gabriel S. Kohn and expires on December 31, 2000. (11) Mr. Jenuleson resigned as Vice President-Finance and Chief Financial Officer of the Company on September 22, 2000.

10 OPTIONS The following table sets forth information concerning options granted during the fiscal year ended June 30, 2000 under the Company's stock option plans to the Named Executive Officers.

OPTION GRANTS IN LAST FISCAL YEAR INDIVIDUAL GRANTS ------------------ POTENTIAL REALIZABLE VALUE NUMBER OF PERCENTAGE OF AT 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 2000(1) PRICE DATE 5% 10% ---------------- ---------- -------------- --------- ---------- ------------ ------------ Earl R. Refsland 542,000 96.4% 2.00 09/09 $ 681,722 $ 1,727,617 __________________ (1) No options were granted to employees under the 1991 Employee Plan, 20,000 options were granted to employees under the 1994 Employee Plan and Mr. Refsland's options were granted under the 1999 Incentive Stock Option Plan for a total of 562,000. The purpose of the Plans 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, these 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. Mr. Refsland's options became exercisable at the rate of 6.25% per quarter commencing in December of 1999. (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.

11 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, 2000.

AGGREGATED OPTION EXERCISES IN FISCAL YEAR 2000 AND FISCAL YEAR-END OPTION VALUES VALUE OF UNEXERCISED, NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS AT OPTIONS AT JUNE 30, 2000 JUNE 30, 2000 SHARES -------------------------- -------------------------- ACQUIRED VALUE NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE --------------------- ----------- -------- ----------- ------------- ------------ ------------- David A. Grabowski -- -- 25,750 20,000 (1) (1) Thomas A. Jenuleson -- -- -- 30,000 -- $ 45,000(2) Earl R. Refsland -- -- 101,625 440,375 $139,734(2) $ 605,516(2) Eldon P. Rosentrater -- -- 14,500 2,750 (1) (1) (1) No options held by this officer at June 30, 2000 were in-the-money. An option is "In-the-Money" when the market value exceeds the exercise price of this option. (2) The "Value of Unexercised In-the-Money Options at June 30, 2000" was calculated by determining the difference between the fair market value of the underlying common stock at June 30, 2000 (The Nasdaq closing price of the Allied Healthcare Products, Inc. on June 30, 2000 was $3.375) and the exercise price of the option.

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's 1991 Directors Plan 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. 12 The 1991 Directors Plan provides for the grant of options thereunder for the purchase of 10,000 shares of Common Stock to each eligible 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 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 with the consent of the grantee. The Company receives no consideration for the grant of options under the 1995 Directors Plan. 13 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 -------------------- -------- --------- -------------- Brent D. Baird 04/01/99 10,000 $ 1.875 11/12/99 1,500 2.31 James B. Hickey, Jr. 02/09/98 10,000 7.25 02/09/98 500 7.25 11/16/98 1,500 2.50 11/12/99 1,500 2.31 William A. Peck 04/29/94 10,000 15.75 11/09/95 4,000 18.25 11/14/96 1,000 7.13 11/17/97 1,000 7.63 11/16/98 1,000 2.50 04/01/99 500 1.875 11/12/99 1,500 2.31 John D. Weil 08/04/97 10,000 7.00 11/17/97 1,000 7.63 02/09/98 500 7.25 11/16/98 1,500 2.50 04/01/99 5,000 1.875 11/12/99 1,000 2.31 Total 63,000 ========

14 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. 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 program 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. 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. 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 the Company to permit executives and other key employees to obtain an ownership position and a proprietary interest in the Company's Common Stock. 15 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 upon the optionee's potential impact on corporate financial and operational performance in the award of stock options. Compensation Committee James B. Hickey, Jr. Brent D. Baird William A. Peck 16 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 three 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. Market Index: Nasdaq Stock Market (US Companies) Peer Index: Companies in Self-Determined Group : 5 CTU CHAD THERAPEUTICS INC CXIM CRITICARE SYSTEMS INC IVC INVACARE CORP RESP RESPIRONICS INC SMD SUNRISE MEDICAL INC Comparison of Five-Year Cumulative Total Returns Performance Report for Allied Healthcare Products, Inc. Prepared by the Center for Research in Security Prices Produced on 09/21/2000 including data to 06/30/2000 Date Company Index Market Index Peer Index 06/30/1995 100.000 100.000 100.000 07/31/1995 93.846 107.344 101.358 08/31/1995 98.462 109.522 97.829 09/29/1995 113.077 112.046 106.745 10/31/1995 116.923 111.400 97.785 11/30/1995 109.231 114.014 96.777 12/29/1995 98.892 113.411 98.044 01/31/1996 72.238 113.978 98.734 02/29/1996 77.260 118.323 93.393 03/29/1996 82.320 118.720 96.390 04/30/1996 66.788 128.556 98.346 05/31/1996 71.447 134.451 99.343 06/28/1996 57.892 128.390 94.414 07/31/1996 43.810 116.962 101.346 08/30/1996 40.681 123.534 107.020 09/30/1996 45.375 132.980 104.998 10/31/1996 42.246 131.502 92.311 11/29/1996 43.810 139.654 89.226 12/31/1996 46.157 139.537 93.951 01/31/1997 51.633 149.436 95.480 02/28/1997 51.633 141.166 89.446 03/31/1997 46.157 131.962 88.108 04/30/1997 43.028 136.075 73.667 05/30/1997 38.334 151.486 81.727 06/30/1997 40.681 156.144 88.842 07/31/1997 44.592 172.596 90.944 08/29/1997 43.810 172.339 87.553 09/30/1997 48.504 182.552 98.009 10/31/1997 48.504 173.041 97.979 11/28/1997 49.482 173.953 95.408 12/31/1997 48.504 170.906 87.120 01/30/1998 45.375 176.319 82.987 02/27/1998 43.810 192.900 92.568 03/31/1998 41.463 200.029 101.635 04/30/1998 37.552 203.401 83.484 05/29/1998 32.858 192.099 81.075 06/30/1998 30.511 205.518 78.194 07/31/1998 19.558 203.121 70.408 08/31/1998 15.646 162.854 56.428 09/30/1998 12.517 185.449 61.521 10/30/1998 13.691 193.599 68.310 11/30/1998 15.646 213.281 76.548 12/31/1998 10.170 240.991 77.954 01/29/1999 12.517 275.953 67.638 02/26/1999 9.779 251.249 60.789 03/31/1999 12.126 270.250 61.612 04/30/1999 11.735 278.963 62.698 05/28/1999 11.735 271.232 69.097 06/30/1999 10.855 295.632 68.577 07/30/1999 11.930 290.294 54.937 08/31/1999 17.993 302.556 49.628 09/30/1999 15.646 302.981 47.061 10/29/1999 14.082 327.270 48.757 11/30/1999 17.993 367.055 48.750 12/31/1999 14.864 447.764 47.467 01/31/2000 15.744 431.192 50.847 02/29/2000 20.732 513.454 60.796 03/31/2000 20.340 502.638 68.156 04/28/2000 19.558 422.627 68.396 05/31/2000 20.732 371.603 64.330 06/30/2000 21.123 436.821 70.025 The index level for all series was set to 100.0 on 06/30/1995 17 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, 2000. 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. 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. STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING The rules of the SEC currently provide that stockholder proposals for the 2001 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 2000 Annual Meeting to be considered by the Company for possible inclusion in the proxy materials for the 2001 Annual Meeting. 18 FINANCIAL INFORMATION The Company's 2000 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 October 2, 2000, who so requests in writing, a copy of such 2000 Annual Report or the Company's 2000 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: Chief Financial Officer. 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 2000 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, Earl R. Refsland Chief Executive Officer October 6, 2000 19