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Exhibit 10.3

REUTER MANUFACTURING, INC.
CERTIFICATE OF DESIGNATION
SERIES A CONVERTIBLE PREFERRED STOCK

1.Designation.  The designation of the series of shares is "Series A Convertible
Preferred Stock" (the "Series A Preferred" or the "Preferred Stock"), and the
number of shares of such series will be One Million (1,000,000).

2.Voting Rights.  

2.1General.  At all meetings of the shareholders of the Corporation and in the
case of any actions of shareholders in lieu of a meeting, each holder of
Series A Preferred shall have that number of votes on all matters submitted to
the shareholders that is equal to the number of whole shares of Common Stock
into which such holder's shares of Series A Preferred are then convertible, as
provided in Section 5, at the record date for the determination of the
shareholders entitled to vote on such matters or, if no such record date is
established, at the date such vote is taken or any written consent of such
shareholders is effected. This provision for determination of the number of
votes to which each holder of the Series A Preferred is entitled shall also
apply in cases in which the holders of the Series A Preferred have the right to
vote together as a separate class. Except as may be otherwise provided in this
Certificate or by agreement, the holders of the Common Stock and the holders of
the Series A Preferred shall vote together as a single class on all actions to
be taken by the shareholders of the Corporation.

2.2Quorums.  The presence in person or by proxy of the holders of a majority of
the aggregate number of shares of Common Stock and Series A Preferred then
outstanding (on an as-if converted to Common Stock basis) shall constitute a
quorum of the Common Stock and Series A Preferred.

3.Dividends.  

3.1Dividends.  The holders of Series A Preferred then outstanding shall be
entitled to receive cumulative cash dividends, out of any funds and assets of
the Corporation legally available therefor, prior and in preference to any
declaration or payment of any dividend (other than a Common Stock Dividend)
payable on Common Stock of the Corporation at the annual rate of nine percent
(9%) for the Series A Preferred, and such dividends shall be payable only if, as
and when declared by the Board of Directors of the Corporation (the "Board").
Other than as set forth in the preceding sentence, no dividend or other
distribution shall accrue or be paid with respect to any shares of capital stock
of the Corporation for any period, whether before or after the effective date of
this Certificate, unless and until declared by the Board. In the event any
dividend or distribution is declared or made with respect to outstanding shares
of Common Stock, a comparable dividend or distribution shall be simultaneously
declared or made with respect to the outstanding shares of Series A Preferred
(as if fully converted into Common Stock, including fractions of shares).
Dividends on shares of capital stock of the Corporation shall be payable only
out of funds legally available therefor.

3.2Non-Cash Dividends.  Whenever a dividend provided for in this Section 3 shall
be payable in property other than cash, the value of such dividend shall be
deemed to be the fair market value of such property as determined in good faith
by the Board.

4.Liquidation Rights.  

4.1No Preference of Series A Preferred.  In the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
the assets of the Corporation available for distribution to its shareholders,
whether such assets are capital, surplus, or earnings, shall be distributed
equally, on a per share basis, among the holders of the Common Stock and the
Series A Preferred (on an as-if converted to Common Stock basis).

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4.2Reorganization; Sale of Assets.  The merger, acquisition or consolidation of
the Corporation into or with any other entity or entities which results in the
exchange of outstanding shares of the Corporation for securities or other
consideration issued or paid or caused to be issued or paid by any such entity
or affiliate thereof pursuant to which the shareholders of the Corporation
immediately prior to the transaction do not own a majority of the outstanding
shares of the surviving corporation immediately after the transaction, or any
sale, lease, license (on an exclusive basis) or transfer by the Corporation of
all or substantially all its assets, shall be deemed to be a liquidation,
dissolution or winding up of the Corporation within the meaning of the
provisions of this Section 4.

4.3Determination of Consideration.  To the extent any distribution pursuant to
Section 4.1 consists of property other than cash, the value thereof shall, for
purposes of Section 4.1, be the fair value at the time of such distributions as
determined in good faith by the Board.

5.Conversion.  The holders of the Series A Preferred shall have the following
conversion rights (the "Conversion Rights"):

5.1Optional Conversion of the Series A Preferred.  The Series A Preferred shall
be convertible, without the payment of any additional consideration by the
holder thereof and at the option of the holder thereof, at any time after the
first issuance of shares of Series A Preferred by the Corporation, at the office
of the Corporation or any transfer agent for the Common Stock, into such number
of fully paid and nonassessable shares of Common Stock as is determined by
dividing $0.1777778 by the Conversion Price, determined as hereinafter provided,
in effect at the time of conversion and then multiplying such quotient by each
share of Series A Preferred to be converted. The Conversion Price at which
shares of Common Stock shall be deliverable upon conversion without the payment
of any additional consideration by the holder thereof (the "Conversion Price")
shall at the time of the filing of this Certificate initially be $0.1777778 in
the case of the Series A Preferred. Such initial Conversion Price shall be
subject to adjustment, in order to adjust the number of shares of Common Stock
into which the Series A Preferred is convertible, as hereinafter provided.

5.2Fractional Shares.  No fractional shares of Common Stock shall be issued upon
conversion of the Series A Preferred. In lieu of any fractional share to which
any holder would otherwise be entitled upon conversion of the Series A Preferred
owned by such holder, the Corporation shall pay cash equal to such fraction
multiplied by the then effective Conversion Price or round up to the nearest
whole share.

5.3Mechanics of Optional Conversion.  Before any holder of Series A Preferred
shall be entitled to convert the same into full shares of Common Stock, such
holder shall surrender the certificate or certificates therefor, endorsed or
accompanied by written instrument or instruments of transfer, in form
satisfactory to the Corporation, duly executed by the registered holder or by
such holder's attorney duly authorized in writing, at the office of the
Corporation or of any transfer agent for the Common Stock, and shall give
written notice to the Corporation at such office that such holder elects to
convert the same and shall state therein such holder's name or the name of the
nominees in which such holder wishes the certificate or certificates for shares
of Common Stock to be issued. The Corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Series A
Preferred, or to such holder's nominee or nominees, a certificate or
certificates for the number of shares of Common Stock to which such holder shall
be entitled as aforesaid, together with cash in lieu of any fraction of a share.
Such conversion shall be deemed to have been made immediately prior to the close
of business on the date of such surrender of the shares of Series A Preferred to
be converted, and the person or persons entitled to receive the shares of Common
Stock issuable upon conversion shall be treated for all purposes as the record
holder or holders of such shares of Common Stock on such date. From and after

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such date, all rights of the holder with respect to the Series A Preferred so
converted shall terminate, except only the right of such holder, upon the
surrender of his, her or its certificate or certificates therefor, to receive
certificates for the number of shares of Common Stock issuable upon conversion
thereof and cash for fractional shares.

5.4Certain Adjustments to Conversion Price for Stock Splits, Dividends, Mergers,
Reorganizations, Etc.  

A.Adjustment for Stock Splits, Stock Dividends and Combinations of Common
Stock.  In the event the outstanding shares of Common Stock shall, after the
filing of this Certificate be further subdivided (split), or combined (reverse
split), by reclassification or otherwise, or in the event of any dividend or
other distribution payable on the Common Stock in shares of Common Stock, the
applicable Conversion Price in effect immediately prior to such subdivision,
combination, dividend or other distribution shall, concurrently with the
effectiveness of such subdivision, combination, dividend or other distribution,
be proportionately adjusted.

B.Adjustment for Merger or Reorganization, Etc.  In the event of a
reclassification, reorganization or exchange (other than described in subsection
5.4.A. above) or any consolidation or merger of the Corporation with another
Corporation (other than a merger, acquisition or other reorganization as defined
in Section 4.2, which shall be considered a liquidation pursuant to Section 4
above), each share of Series A Preferred shall thereafter be convertible into
the number of shares of stock or other securities or property to which a holder
of the number of shares of Common Stock of the Corporation deliverable upon
conversion of the Series A Preferred would have been entitled upon such
reclassification, reorganization, exchange, consolidation, merger or conveyance
had the conversion occurred immediately prior to the event; and, in any such
case, appropriate adjustment (as determined by the Board) shall be made in the
application of the provisions herein set forth with respect to the rights and
interests thereafter of the holders of the Series A Preferred, to the end that
the provisions set forth herein (including provisions with respect to changes in
and other adjustments of the applicable Conversion Price) shall thereafter be
applicable, as nearly as reasonably may be, in relation to any shares of stock
or other property thereafter deliverable upon the conversion of the Series A
Preferred.

C.Adjustments for Other Dividends and Distributions.  In the event the
Corporation, at any time or from time to time after the filing of this
Certificate, makes, or fixes a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other distribution payable in
securities of the Corporation other than shares of Common Stock, then and in
each such event, provision shall be made so that the holders of Series A
Preferred shall receive upon conversion thereof, in addition to the number of
shares of Common Stock receivable thereupon, the amount of securities of the
Corporation which they would have received had their Series A Preferred been
converted into Common Stock on the date of such event and had they thereafter,
during the period from the date of such event to and including the conversion
date, retained such securities receivable by them as aforesaid during such
period, subject to all other adjustments called for during such period under
this Section 5.4 with respect to the rights or the holders of the Series A
Preferred.

5.5Notices of Record Date.  In the event of any taking by the Corporation of a
record of the holders of any class of securities for the purpose of determining
the holders thereof who are entitled to receive any dividend (other than a cash
dividend which is the same as cash dividends paid in previous quarters) or other
distribution, any capital reorganization of the Corporation, any
reclassification or recapitalization of the Corporation's capital stock, any
consolidation or merger with or into another Corporation, any transfer of all or
substantially all of the assets of the Corporation or any dissolution,
liquidation or winding up of the Corporation, the Corporation shall mail to each
holder of Series A Preferred at least ten (10) days prior to the date specified
for the taking of a record, a notice specifying the date on which any such
record is to be taken for the purpose of such dividend or distribution.

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SIGNATURES

    REUTER MANUFACTURING, INC.  
Dated: October 12, 2000  
   
By:  
   
/s/ Michael J. Tate

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    Michael Tate     Its:   President and Chief Executive Officer

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REUTER MANUFACTURING, INC. CERTIFICATE OF DESIGNATION SERIES A CONVERTIBLE
PREFERRED STOCK
SIGNATURES