<PAGE>

EXHIBIT 10.20


                              EMPLOYMENT AGREEMENT
                              --------------------


          THIS EMPLOYMENT AGREEMENT (this "Agreement"), made and entered into by
and between BILL R. SANFORD, residing at 4745 Sherwin Road, Willoughby, Ohio
("Sanford" or "Employee") and STERIS CORPORATION, an Ohio corporation with its
principal place of business at 5960 Heisley Road, Mentor, Ohio  ("Steris" or the
"Company") on the 19th day of June, 2000;


                                  WITNESSETH:

          WHEREAS, Sanford has served the Company prior to March 21, 2000 (the
"Effective Date") in the capacity of Chairman of the Board, President and Chief
Executive Officer; and

          WHEREAS, Sanford's efforts over the last 13 years since he founded the
Company have contributed significantly to the success of the Company and
enhancement of shareholder value; and

          WHEREAS, Sanford and Steris want to document an employment and
succession plan for the orderly transition of management responsibilities to
effectuate Sanford's eventual separation from the Company in accordance with
previous discussions and mutual understandings; and

          WHEREAS, Steris is desirous of retaining Sanford in an appropriate
role, to further enhance shareholder value, based on his leadership abilities
and value to the Company; and

          WHEREAS, Sanford and Steris entered into an Employment Agreement on
March 21, 2000 to set forth their agreement concerning an orderly succession
plan; and

          WHEREAS, Sanford and Steris desire that this Agreement supercede the
Employment Agreement entered into on March 21, 2000 in order to provide for a
more accelerated succession plan.

          NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, Sanford and Steris agree as follows:

          1.   Employment.  (a) From the Effective Date until the Changeover
               ----------
Date (as defined below) (the "Transition Period"), Sanford shall remain as
Chairman of the Board and Chief Executive Officer of the Company at the base
salary of $500,000 and eligible to participate in the Company's Senior Executive
Management Incentive Compensation Plan (the "SEMICP"). Sanford's participation
in the SEMICP shall be prorated based on the number of calendar months
<PAGE>

of fiscal year 2001 prior to and including the month of the Changeover Date (so
that a partial month will be treated as a full month), provided that Sanford
shall receive for such months a fixed amount of $67,500 per month with respect
to the SEMICP. The SEMICP participation shall be calculated and paid as provided
in the SEMICP payable July 15, 2000, with respect to the second calendar
quarter, and August 15, 2000, with respect to the month of July. As Chairman of
the Board and Chief Executive Officer of the Company, Sanford shall do and
perform such reasonable executive and managerial responsibilities and duties as
may be assigned to him heretofore and hereafter from time to time by the Board
of Directors of the Company.

          (b) On the date of the year 2000 annual meeting of the shareholders of
Steris, (the "Changeover Date"), the Board of Directors shall elect a new
Chairman of the Board and new Chief Executive Officer.  Sanford will continue as
an employee serving as Executive Founder and Special Executive Advisor to the
Company ("Executive Founder") reporting to the Board of Directors of the
Company.  The duration of Sanford's employment as Executive Founder shall
commence on the Changeover Date and terminate on the expiration of five (5)
years thereafter unless earlier terminated pursuant to Section 15 of this
Agreement ("Post-CEO Employment Period").  Sanford shall perform such duties as
Executive Founder as may from time to time be assigned by the Board of Directors
relating to specific studies, exploration of strategic alternatives, and/or
similar projects which do not unreasonably conflict with any other employment
responsibilities of Sanford.  While an Executive Founder, the parties recognize
that Sanford may have full-time employment elsewhere.  During the Post-CEO
Employment Period when Sanford serves as Executive Founder, his salary will be
$50,000 per year or, after such time as Sanford accepts full-time employment
elsewhere, $12,000 per year.  On the Changeover Date, the Company shall pay to
Sanford the amount of $3,300,000; which amount shall be paid to the estate of
Sanford in the event of his death prior to the Changeover Date.  All amounts
payable under this Agreement shall be subject to applicable tax and other
withholding and reporting as required by law.

          (c) Sanford has resigned, effective on the Effective Date, his
position as President of the Company.  In addition, Sanford has resigned,
effective the Changeover Date, his positions as Chairman of the Board and Chief
Executive Officer.  Sanford has resigned, effective immediately, (i) from all
other offices of the Company to which he has been elected by the Board of
Directors of the Company (or to which he has otherwise been appointed), (ii)
from all offices of any entity that is a subsidiary of, or is otherwise related
to or affiliated with, the Company, (iii) from all administrative, fiduciary or
other positions he may hold with respect to arrangements or plans for, of or
relating to the Company or any subsidiary or other affiliate of the Company, and
(iv) from any other directorship, office, trustee or other position of any
corporation, partnership, joint venture, trust or other enterprise (each, an
"Other Entity") insofar as Sanford is serving in the directorship, office,
trustee or other position of the Other Entity at the request of the Company;
provided, however, that if such resignation results in noncompliance with any
statute, rule or regulation applicable to any entity, subsidiary, other
affiliate of the Company or Other Entity, such resignation shall be effective at
such time as the resignation would be in compliance with any such statute, rule
or regulation.  Sanford will not (i) seek re-election as a Director of the
Company at the year 2000 annual meeting of shareholders or (ii) accept a
nomination for election as a Director of the Company at any annual or special
meeting of shareholders after the date hereof.  The Company hereby consents to
and accepts such resignations.

                                      -2-
<PAGE>

          2.   Put Option.  During the period commencing on the first
               ----------
anniversary of the Changeover Date and ending on February 28, 2002, the Company
agrees that, upon the request of Sanford, it will repurchase up to 600,000
Common Shares of the Company which Sanford owns as of the date of this Agreement
for a price per share equal to $15.00 ("Stock Purchase Payment"), adjusted as
appropriate to reflect any stock splits, stock or extraordinary dividends,
recapitalizations or other similar changes in the Company's capital structure
between the Effective Date and the closing of the repurchase.  The Company
agrees that Sanford may transfer this Put Option, in whole or in part, to any
transferee of his Common Shares, provided such transferee is Sanford's spouse,
lineal descendant, a trust or other entity whose beneficiaries are Sanford, his
spouse or lineal descendants or any combination thereof and such transfer is in
compliance with applicable federal or state securities laws.

          3.   Loan Repayment.  As of the date hereof, Sanford has an
               --------------
outstanding promissory note payable to the Company (the "Promissory Note")
bearing interest at 5.7% per annum, payable on February 28, 2002.  In the event
that Sanford fully observes, performs and discharges all of his obligations
under this Agreement (except to the extent his earlier death or disability
precludes his performance of services hereunder), the Company will forgive the
Note on February 28, 2002; provided, however, that prior to forgiveness of such
Note Sanford, or his estate, provides the Company with funds in an amount
sufficient for the Company to satisfy any applicable tax requirements.

          4.   Stock Options.  All of Sanford's stock options which are listed
               -------------
on Exhibit A hereto shall remain outstanding to the extent of their original
term during the Transition Period and Post-CEO Employment Period, all in
accordance with the terms of the Amended Nonqualified Stock Option Plan, 1994
Equity Compensation Plan or the 1997 Stock Option Plan (the "Option Plans"), and
the applicable notice of grant or other option agreement. The Company confirms
that the Option Plans (or applicable notice of grant or other option agreement)
provided that all unvested options granted under Option Plans shall vest on the
occurrence of a Change in Control, as defined in the 1994 and 1997 Stock Option
Plans or in the case of the option agreement dated July 23, 1997 upon the
occurrence of similar corporate transactions described therein.

          5.   Continuation of Health Insurance and Other Employment Benefits.
               --------------------------------------------------------------
During the Transition Period and the Post-CEO Employment Period until Sanford
accepts full-time employment elsewhere, (a) Sanford will be entitled to continue
to participate in Steris' insurance, retirement and other employment benefits
programs to the same extent as he participates prior to the date of this
Agreement and (b) in the event Sanford requires an office outside Steris, Steris
shall pay the cost of maintaining such office, but not an amount in excess of
$2,000 per month.

          6.   Other Benefits.  Upon the Changeover Date, or as soon as
               --------------
practicable thereafter, the Company agrees, at no cost to Sanford, to transfer
to Sanford all of its rights in: the Company's rights to the key-man universal
insurance policy on Sanford's life.  Sanford agrees to be liable for costs of
such insurance policy, to the extent not previously paid by the Company. In
addition, for a period of three (3) years after the Changeover Date, Sanford
shall be entitled to have the Company continue to pay all membership dues at two
clubs.  For a period of one (1)

                                      -3-
<PAGE>

year after the Changeover Date, the Company shall provide Sanford with tax
preparation assistance and trust and estate planning assistance, but not an
amount in excess of $10,000 in the aggregate.

          7.   Attorneys' Fees.  On or about the Effective Date, Steris shall
               ---------------
pay Sanford's counsel fees for legal services provided to Sanford in connection
with the negotiation and preparation of this Agreement and the prior Employment
Agreement, but not an amount in excess of $25,000.

          8.   Approval of Announcements/Disclosures.  All announcements
               -------------------------------------
promulgated by Steris, both internal and external, concerning Sanford shall be
reviewed and approved by Sanford prior to distribution and/or dissemination.
Except as required by applicable law, no press releases of any nature regarding
this Agreement shall be made by any party to this Agreement without approval of
the other party.

          9.   Personal Effects.  After the execution and delivery of this
               ----------------
Agreement and prior to the Changeover Date, at no cost to Sanford, Sanford shall
be entitled to his office furniture and furnishings including, but not limited
to, his computers, printers, fax machines, portable phone, awards and other
personal possessions.  Except as may be restricted and subject to Section 12 of
this Agreement, Steris shall transfer to Sanford all software currently
installed on such office computer.

          10.  Competition.  (a)  During the Transition Period and the Post-CEO
               -----------
Employment Period, Sanford shall not, directly or indirectly, do or suffer to be
done any of the following: own, manage, control or participate in the ownership,
management, or control of, or be employed or engaged by or otherwise affiliated
or associated as a consultant, independent contractor or otherwise with any
other corporation, partnership, proprietorship, firm, association, or other
business entity, or otherwise engage in any business, which is in competition
with the Company's business; provided, however, that the ownership of not more
                             --------  ------
than two percent of any class of securities of any entity shall not be deemed a
violation of this Agreement.  Sanford's continued service in the positions which
he currently holds with the approval of the Steris Board of Directors, which are
listed on Exhibit B to this Agreement, or on similar boards of directors or
trustees of institutional investors or nonprofit organizations, shall not be
deemed a violation of this Section 10; provided Sanford is not directly involved
in the management of any competitor. For purposes of this Agreement, the
"Company's business" shall mean any business in which the Company actively
engages now, and any business in which the Company has actively engaged in the
two (2) year period prior to the date hereof, including, without limitation,
providing infection prevention, contamination prevention, microbial reduction
and therapy support systems, products, services and technologies to health care,
scientific, research, food and industrial customers throughout the world.

          (b) In the event Sanford shall violate any provision of this Section
10 as to which there is a specific time period during which he is prohibited
from taking certain actions or from engaging in certain activities as set forth
in such provision, then, in such event, such violation shall toll the running of
such time period from the date of such violation until such violation shall
cease.  The foregoing shall in no way limit the Company's rights under Section
15 of this Agreement.

                                      -4-
<PAGE>

          (c) Sanford has carefully considered the nature and extent of the
restrictions upon him and the rights and remedies conferred upon the Company
under this Section 10 and this Agreement, and hereby acknowledges and agrees
that the same are reasonable in time and territory, are designed to eliminate
competition which otherwise would be unfair to the Company, do not stifle the
inherent skill and experience of Sanford, would not operate as a bar to
Sanford's sole means of support, are fully required to protect the legitimate
interests of the Company and do not confer a benefit upon the Company
disproportionate to the detriment to Sanford.  Sanford further acknowledges that
his obligations in this Section 10 are made in consideration of, and are
adequately supported by the payments by the Company to Sanford described in this
Agreement.

          11.  No Solicitation of Employees.  Sanford agrees that he will not:
               ----------------------------

          (a)  Employ, assist in employing, or otherwise associate in business
     with any person who is, or has been in the 12 month period prior to such
     individual's association with Sanford an employee, officer or agent of the
     Company, or any of its affiliated, related or subsidiary entities, unless
     such employee was involuntarily terminated by the Company or such employee
     contacts Sanford after voluntarily terminating his employment in
     circumstances which do not violate (b) of this Section 11.

          (b)  Induce any person who is an employee, officer or agent of the
     Company, or any of its affiliated, related, or subsidiary entities to
     terminate such relationship.

          12.  Confidential Information.
               ------------------------

          (a) Sanford acknowledges and agrees that in the performance of his
duties as an officer and employee of the Company he was brought into frequent
contact with, had or may have had access to, and/or became informed of
confidential and proprietary information of the Company and/or information which
is a competitive asset of the Company (collectively, "Confidential Information")
and the disclosure of which would be harmful to the interests of the Company or
its subsidiaries.  Confidential Information shall include, without limitation:
(a) customer and distributor information such as names, addresses, sales
histories, purchasing habits, credit status, pricing levels, etc., (b) certain
prospective customer and distributor information lists, etc., (c) product and
systems specifications, schematics, designs, concepts for new or improved
products and services and other products and services data, (d) product and
material costs, (e) suppliers' and prospective suppliers' names, addresses and
contracts, (f) future corporate planning data, (g) production methods and
equipment, (h) marketing strategies, (i) the Company's financial results and
business condition, and (j) any other information which constitutes a "trade
secret" under federal or state law.  Such Confidential Information is more fully
described in Subsection (b) of this Section 12. Sanford acknowledges that the
Confidential Information of the Company gained by Sanford during his association
with the Company was developed by and/or for the Company through substantial
expenditure of time, effort and money and constitutes valuable and unique
property of the Company.

          (b) Sanford will keep in strict confidence, and will not, directly or
indirectly, at any time, disclose, furnish, disseminate, make available, use or
suffer to be used in any manner any Confidential Information of the Company
without limitation as to when or how Sanford may

                                      -5-
<PAGE>

have acquired such Confidential Information. Sanford specifically acknowledges
that Confidential Information includes any and all information, whether reduced
to writing (or in a form from which information can be obtained, translated, or
derived into reasonably usable form), or maintained in the mind or memory of
Sanford and whether compiled or created by the Company, which derives
independent economic value from not being readily known to or ascertainable by
proper means by others who can obtain economic value from the disclosure or use
of such information, that reasonable efforts have been put forth by the Company
to maintain the secrecy of confidential or proprietary or trade secret
information, that such information is and will remain the sole property of the
Company, and that any retention or use by Sanford of confidential or proprietary
or trade secret information after the termination of Sanford's employment with
and services for the Company shall constitute a misappropriation of the
Company's Confidential Information.

          (c) Upon expiration of the Post-CEO Employment Period, Sanford will
immediately return to the Company (to the extent he has not already returned),
equipment, software, electronic files and all other property of the Company,
including, without limitation, property, documents and/or all other materials
(including copies, reproductions, summaries and/or analyses) which constitute,
refer or relate to Confidential Information of the Company.

          (d) Sanford further acknowledges that his obligation of
confidentiality shall survive, regardless of any other breach of this Agreement
or any other agreement, by any party to this Agreement, until and unless such
Confidential Information of the Company shall have become, through no fault of
Sanford generally known to the public or Sanford is required by law (after
providing the Company with notice and opportunity to contest such requirement)
to make disclosure.  Sanford's obligations under this Section 12 are in addition
to, and not in limitation or preemption of, all other obligations of
confidentiality which Sanford may have to the Company under general legal or
equitable principles or statutes.

          13.  Disclosure; Trading Restrictions.
               --------------------------------

          (a) From the date of this Agreement through the end of the Post-CEO
Employment Period, Sanford will communicate his role as Executive Founder and
the contents of Sections 10, 11, 12, 13 and 14 of this Agreement to any person,
firm, association, or corporation other than the Company, which he intends to be
employed by, associated in business with, or represent.

          (b) Sanford shall take no action with respect to the Company's common
shares that is in violation of the Company's policies with respect to trading in
common shares, it being understood that exercise of the put option under Section
2 shall not be deemed in violation of these policies.  The Company will not
prevent Sanford from making any sale of the Company's common shares or from
exercising any options for the Company's common shares on a cashless basis
during any part of any open window period.

          14.  Certain Activities.  During the Transition Period and the Post-
               ------------------
CEO Employment Period, Sanford shall not, and shall cause his affiliates not to,
except within the terms of a specific written consent of the Chairman of the
Compensation Committee of the Board of Directors, propose, discuss or have any
communication with any other person, directly or

                                      -6-
<PAGE>

indirectly, relating in any way to (i) any form of business combination,
acquisition or other transaction relating to the Company or any affiliate of the
Company and any other party or any affiliate of any other party, (ii) any form
of restructuring, recapitalization or similar transaction with respect to the
Company or any affiliate of the Company, or (iii) any demand, request or
proposal to (1) acquire, or offer, propose or agree to acquire, by purchase or
otherwise, any shares of common stock of the Company ("Voting Securities"), (2)
make, or in any way participate in, any solicitation of proxies with respect to
any such Voting Securities of the Company (including, without limitation, by the
execution of action by written consent), become a participant in any election
contest with respect to the Company or seek to influence any person with respect
to any such Voting Securities, (3) participate in or encourage the formation of
any partnership, syndicate or other group which owns or seeks or offers to
acquire beneficial ownership of any such Voting Securities or which seeks to
affect control of the Company or any affiliate of the Company or has the purpose
of circumventing any provision of this Agreement.

          15.  Breach.
               ------

          (a) If Sanford breaches any of the provisions of this Agreement in any
material respect, then the Company may, at its sole option, following reasonable
notice to Sanford and opportunity to cure, terminate all remaining payments and
benefits described in this Agreement and obtain reimbursement from Sanford of
all payments and benefits already provided pursuant to Sections 1, 2, 4, 5 and 6
of this Agreement, plus any expenses and damages incurred as a result of the
breach (including, without limitation, reasonable attorneys' fees), with the
remainder of this Agreement, and all promises and covenants in this Agreement,
remaining in full force and effect.

          (i)  The Company will not terminate pursuant to (a) of this Section 15
     any benefits in which Sanford had vested as of the end of the Transition
     Period under the Company's 401(k) Savings Plan.  Sanford's COBRA rights, if
     any, will not be reduced by any action taken by the Company under (a) of
     this Section 15.

          (ii)  Sanford may challenge any Company action under (a) of this
     Section 15.

          (b) Sanford acknowledges and agrees that the remedy at law available
to the Company for breach by Sanford of any of his obligations under Sections
10, 11, 12 and 14 of this Agreement would be inadequate and that damages flowing
from such a breach would not readily be susceptible to being measured in
monetary terms.  Accordingly, Sanford acknowledges, consents and agrees that, in
addition to any other rights or remedies which the Company may have at law, in
equity or under this Agreement, upon adequate proof of Sanford's violation of
any provision of Sections, 10, 11, 12 and 14 of this Agreement, the Company
shall be entitled to immediate injunctive relief and may obtain a temporary
order restraining any threatened or further breach, without the necessity of
proof of actual damage.

          (c) If the Company breaches any of the provisions of this Agreement in
any material respect, then Sanford may, following reasonable notice to the
Company and opportunity to cure, exercise all rights and remedies which Sanford
may have and the Company shall reimburse Sanford for any costs and expenses
(including, without limitation, attorneys' fees) reasonably incurred in
connection therewith.

                                      -7-
<PAGE>

          16.  Release by Sanford.
               ------------------

          a.   Sanford for himself and his dependents, successors, assigns,
heirs, executors and administrators (and his and their legal representatives of
every kind), hereby releases, dismisses, remises and forever discharges the
Company from any and all arbitrations,, claims (including, without limitations,
claims for attorney's fees), demands, damages, suits, proceedings, actions
and/or causes of action of any kind and every description, whether known or
unknown, which Sanford now has or may have had for, upon, or by reason of any
cause whatsoever (except that this release shall not apply to the obligations of
the Company arising under this Agreement), against the Company ("claims"),
including but not limited to:

          (i)  any and all claims, directly or indirectly, arising out of or
     relating to:
     (A) Sanford's past employment or service with the Company; and (B)
     Sanford's resignation as President and any other position described in
     Section 1(e) of this Agreement.

          (ii)  any and all claims of discrimination, including but not limited
     to, claims of discrimination on the basis of sex, race, age, national
     origin, marital status, religion or disability, including, specifically,
     but without limiting the generality of the  foregoing, any claims under the
     Age Discrimination in Employment Act, as amended (the "ADEA").  Title VII
     of the Civil Rights Act of 1964, as amended, the Americans with
     Disabilities Act of 1990, the Family and Medical leave Act of 1993 and Ohio
     Revised Code Chapter 4112;

          (iii)  any and all claims of wrongful or unjust discharge or breach of
     any contract or promise, express or implied; and

          (iv)  any and all claims under or relating to any and all employee
     compensation, employee benefit, employee severance or employee incentive
     bonus plans and arrangements, including with limitation, the STERIS
     Corporation Health Care Plan, 401(k) Plan, STERIS Corporation 1997 Stock
     Option Plan, STERIS Corporation 1994 Equity Compensation Plan, STERIS
     Corporation Amended and Restated Non-Qualified Stock Option Plan and STERIS
     Corporation Amended Non-Qualified Stock Option Plan, all of which Sanford
     agrees are forfeited upon his resignation other than his rights which are
     set forth in this Agreement, his right to his account balances under the
     401(k) Plan and his right to receive payment under the SEMICP with respect
     to the year ending March 31, 2000; provided that he shall remain entitled
     to the amounts and benefits specified in Sections 4, 5 and 6 above.
     Sanford agrees that he intends to release any and all worker compensation
     claims he may have against the Company by this Agreement, and further
     agrees to execute any documentation as may be reasonably required to
     perfect such release when presented to him by the Company.

          b.   Sanford understands and acknowledges that the Company does not
admit any violation of law, liability or invasion of any of his rights and that
any such violation, liability or invasion is expressly denied.  The
consideration provided under this Agreement is made for the purpose of settling
and extinguishing all claims and rights (and every other similar or dissimilar
matter) that Sanford ever had or now may have or ever will have against the
Company

                                      -8-
<PAGE>

to the extent provided in this Section 16. Sanford further agrees and
acknowledges that no representations, promises or inducements have been made by
the Company other than as appear in this Agreement.

          c.   Sanford further understands and acknowledges that:

          (i)  The release provided for in this Section 16, including, without
     limitation, claims under the ADEA to and including the date of this
     Agreement, is in exchange for the additional consideration provided for in
     this Agreement, to which consideration he was not heretofore entitled; and

          (ii)  He has been advised by the Company to consult with legal counsel
     prior to executing this Agreement and the release provided for in this
     Section 16, has had an opportunity to consult with and to be advised by
     legal counsel of his choice, fully understands the terms of this Agreement,
     and enters into this Agreement freely, voluntarily and intending to be
     bound.

          d.  Sanford will not file a lawsuit or other complaint asserting any
     claim that is released in this Section 16.

          e.  Sanford and the Company acknowledge that the terms and conditions
     of this Agreement are made and are mutually agreed to by the Company and
     Sanford, and that Sanford waives and releases any claim that he has or may
     have to reemployment.

          f.  For purposes of the above provisions of this Section 16, the
     "Company" shall include its predecessors, subsidiaries, divisions, related
     or affiliated companies, officers, directors, stockholders, members,
     employees, heirs, successors, assigns, representatives, agents and counsel.

          17.  Release by the Company.
               ----------------------

          The Company, for itself and its successors and assigns, hereby
releases, dismisses, remises and forever discharges the Executive and his
dependents, successors, assigns, heirs, executors and administrators (and his
and their legal representatives of every kind) (collectively, the "Executive
Releasees") from any and all arbitrations, claims (including, without
limitation, claims for attorneys' fees), demands, damages, suits, proceedings,
actions and/or causes of action of any kind and every description, whether known
or unknown, which it now has or may hereafter have against the Executive
Releasees, on account of any matter which relates in any way, directly or
indirectly, to the past, present of future business or affairs of the Company,
whether known or unknown, relating to or arising out of the Executive's service
as an officer or employee with the Company.

          18.  Continued Availability and Cooperation.
               --------------------------------------

          (a) Sanford shall cooperate fully with the Company and with the
Company's counsel in connection with any present and future actual or threatened
litigation or administrative proceeding involving the Company that relates to
events, occurrences or conduct occurring (or

                                      -9-
<PAGE>

claimed to have occurred) during the period of Sanford's employment by the
Company. This cooperation by Sanford shall include, but not be limited to:

          (i)  making himself reasonably available for interviews and
     discussions with the Company's counsel as well as for depositions and trial
     testimony;

          (ii)  if depositions or trial testimony are to occur, making himself
     reasonably available and cooperating in the preparation therefor as and to
     the extent that the Company or the Company's counsel reasonably requests;

          (iii)  refraining from impeding in any way the Company's prosecution
     or defense of such litigation or administrative proceeding; and

          (iv)  cooperating fully in the development and presentation of the
     Company's prosecution or defense of such litigation or administrative
     proceeding.

          (b) Sanford shall be reimbursed by the Company for reasonable travel,
lodging, telephone and similar expenses incurred in connection with such
cooperation, which the Company shall reasonably endeavor to schedule at times
not conflicting with the reasonable requirements of any employer of Sanford, or
with the requirements of any third party with whom Sanford has a business
relationship permitted hereunder that provides remuneration to Sanford. Sanford
shall not unreasonably withhold his availability for such cooperation.

          (c) Upon the Changeover Date, Sanford will update the Company as to
the status of all pending matters for which he was responsible or otherwise
involved.

          19.  Mutual Nondisclosure of Agreement.  Sanford and his heirs,
               ---------------------------------
executors, successors, assigns, representatives, and attorneys and the Company,
its officers, directors, employees, attorneys and advisors shall hold the terms
of this Agreement in strict confidence and shall not communicate, reveal, or
disclose the terms of this Agreement to any other persons except as required by
law or regulation and to Sanford's immediate family, to legal counsel, to tax
consultants, and to the Corporate Controller and the Human Resources Directors,
all of whom shall be instructed by Sanford and/or the Company similarly to hold
the terms of this Agreement in the strictest confidence, and as otherwise
required by law.  Notwithstanding the foregoing, the parties acknowledge that
this Agreement will be required to be filed with the Securities and Exchange
Commission.

          20.  Warranties and Representations.
               ------------------------------

               (a)  Steris represents and warrants that the Board of Directors
     of Steris has authorized the person whose signature appears below to
     execute this Agreement to bind the Company to all provisions contained in
     this Agreement.

               (b)  Steris warrants and represents to Sanford that he continues
     to be insured by Steris' officers and directors liability insurance policy
     ("D&O Policy") for any current and/or future claims brought for any act
     which occurred or may occur while he was or is an officer, director or
     Special Advisor of Steris; and that

                                      -10-
<PAGE>

     he continues to be indemnified, pursuant to the regulations, bylaws and
     resolutions of the Corporation for any claims against him arising out of
     his duties as Chairman of the Board, President and Chief Executive Officer
     and as Special Advisor.

          21.  Non-Disparagement.  Neither party shall make any statements,
               -----------------
written or oral, to any third party which disparages, criticizes, discredits or
otherwise operates to the detriment of Sanford or the Company, its officers,
directors and employees and their respective business reputation and/or
goodwill, except as required by law or regulation.

          22.  Invalidity.  The invalidity or unenforceability of any one (1)
               ----------
provision or part of this Agreement shall not render any other provision(s) or
part(s) of this Agreement invalid or unenforceable and that such other
provision(s) or part(s) shall remain in full force and effect.

          23.  Entire Agreement.  This Agreement contains the entire agreement
               ----------------
between the parties to this Agreement, and there are no understandings between
the parties other than those specifically and expressly set forth in this
Agreement.  Upon the Effective Date of this Agreement, this Agreement replaces
and supersedes any prior employment agreements between Steris and Sanford
(including, without limitation, the Employment Agreement, dated as of March 21,
2000, between Sanford and STERIS), except that the Agreement, dated July 23,
1998, between the Company and Sanford shall continue until the Changeover Date
and then shall terminate and be of no further force or effect.  Sanford agrees,
recognizes and acknowledges that any employment agreement is made null and void
by reason of this Agreement.  This Agreement shall not be amended or modified in
any manner except upon written agreement by the parties. Notwithstanding the
foregoing, the Promissory Note shall remain in full force and effect until paid
or forgiven as provided in Section 3 of this Agreement, and each Stock Option
Award granted under the Option Plans between the parties shall remain in full
force and effect throughout the Transition Period and Post-CEO Employment
Period.

          24.  Originals.  Four (4) copies of this Agreement shall be executed
               ---------
as "originals" so that both Sanford and Steris and their counsel may possess an
"original" fully-executed document.  The parties to this Agreement expressly
agree and recognize that each fully-executed "original" shall be binding and
enforceable as an original document representing the agreements in this
Agreement.

          25.  Governing Laws.  This Agreement shall be governed and interpreted
               --------------
pursuant to the laws of the State of Ohio.

          26.  Successors to the Company.  Except as otherwise provided in this
               -------------------------
Agreement, this Agreement shall be binding upon and inure to the benefit of the
Company and any successor of the Company, including, without limitation, any
corporation which acquires directly or indirectly all or substantially all of
the assets of the Company whether by merger, consolidation, sale or otherwise
(and such successor shall thereafter be deemed the "Company" for the purposes of
this Agreement), but shall not otherwise be assignable by the Company.

                                      -11-
<PAGE>

          27.  Arbitration.  In order to resolve any dispute which may arise out
               -----------
of or be related to this Agreement, Sanford shall have the right, in addition to
all other rights and remedies provided by law, at his election, to seek
arbitration in Cleveland, Ohio, under the rules of the American Arbitration
Association, as to claims pursued by him, by serving a notice to arbitrate upon
the Company.  Notwithstanding the foregoing, the parties shall have the same
rights of discovery under the Ohio Rules of Civil Procedure as if the dispute
had been filed as an original action in an Ohio court of original jurisdiction.


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                                      -12-
<PAGE>

          IN WITNESS WHEREOF, Sanford and Steris have executed this Agreement
effective and binding as of the Effective Date of this Agreement.



                              /s/ Bill R. Sanford
                              -------------------
                              Bill R. Sanford

                              Dated: June 19, 2000



                              STERIS CORPORATION

                              By: /s/ David C. Dvorak
                              -----------------------
                              Title: Senior Vice President, General Counsel,
                                     and Secretary

                              Dated: June 19, 2000