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                                                                   EXHIBIT 10.10

                              EMPLOYMENT AGREEMENT

        EMPLOYMENT AGREEMENT (this "Agreement") dated as of August 12, 2002,
between Rehabilicare Inc. (the "Company"), a Minnesota corporation, and Dan
Gladney (the "Executive"), a resident of Eden Prairie, Minnesota.

        WHEREAS, the Company wishes to employ the Executive to render services
for the Company on the terms and conditions set forth in this Agreement, and the
Executive wishes to be retained and employed by the Company on such terms and
conditions.

        NOW, THEREFORE, in consideration of the premises, the mutual agreements
set forth below and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:

           1. EMPLOYMENT. The Company hereby employs the Executive, and the
Executive accepts such employment and agrees to perform services for the
Company, for the period and upon the other terms and conditions set forth in
this Agreement.

           2. TERM. Unless terminated at an earlier date in accordance with
Section 9 of this Agreement, the term of the Executive's employment hereunder
shall be for a period of one year, commencing on September 3, 2002. Thereafter,
the term of this Agreement shall be automatically extended for successive
one-year periods unless either party objects to such extension by written notice
to the other party at least 60 days prior to the expiration of the initial term
or any extension term.

           3. POSITION AND DUTIES.

           (a) Service with Company. During the term of the Executive's
employment, the Executive agrees to perform such duties as the Board of
Directors of the Company shall assign to him from time to time which duties
shall be compatible with the Executive's position of President and Chief
Executive Officer. The Executive also agrees to serve, for any period for which
he is elected, as an officer or director of the Company; provided, however, that
the Executive shall not be entitled to any compensation in addition to the
compensation provided in Section 4 of this Agreement for serving as an officer
or director. The Executive's title shall be "President and Chief Executive
Officer."

           (b) Performance of Duties. During the term of the Executive's
employment, the Executive agrees to serve the Company faithfully and to the best
of his ability and to devote his full time, attention and efforts to the
business and affairs of the Company during his employment by the Company. The
Executive hereby confirms that he is under no contractual commitments
inconsistent with his obligations set forth in this Agreement and that during
the term of this Agreement, he will not render or perform services for any other
corporation, firm, entity or person which are inconsistent with the provisions
of this Agreement. While he remains


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employed by the Company, the Executive may serve on civic or charitable boards
or committees, participate in charitable activities and manage personal
investment activities so long as such activities do not significantly interfere
with the performance of his obligations under this Agreement. Notwithstanding
any of the foregoing, it is expressly understood and agreed that the Executive
may devote up to three full days per month to the business and affairs of Heart
Leaflet Technologies Inc. and his service on the Boards of Directors of
NeuroVasx, Inc. and Incisive Surgical, Inc.

           4.  COMPENSATION.

           (a) Base Salary. As compensation for the services to be rendered by
the Executive under this Agreement, the Company shall pay to the Executive a
base salary of $320,000 per annum, less deductions and withholdings, which base
salary shall be paid on a monthly basis in arrears in accordance with the
Company's normal payroll procedures and policies. The base salary payable to the
Executive during each year after the first year of the Executive's employment
shall be established by the Company's Board of Directors following an annual
performance review, but in no event shall the base salary for any subsequent
year be less than the base salary in effect for the prior year.

           (b) Incentive Compensation. In addition to the base salary, the
Executive shall be eligible to participate in any bonus or incentive
compensation plans that may be established by the Board of Directors of the
Company from time to time applicable to the Executive. The Company agrees to
establish, with Executive's input, a bonus plan for the year ending June 30,
2003 that is similar to the bonus plan established for its former CEO for the
year ended June 30, 2002.

           (c) Participation in Benefit Plans and Perquisites. While he is
employed by the Company, the Executive shall also be eligible to participate in
all employee benefit plans or programs and perquisites (including medical,
dental, life and disability insurance, sick time, vacation time and all company
holidays) maintained by the Company for its employees generally, or for its
senior executives in particular, on the same basis and subject to the same
requirements and limitations as may be applicable to senior executive employees
of the Company. The Company shall not directly or indirectly make any changes in
any benefit plan or arrangement or perquisite that would adversely affect the
Executive's rights or benefits thereunder, unless such changes do not result in
a proportionately greater reduction in the rights of or benefits to the
Executive compared with other executive officers of the Company.

           (d) Expenses. The Company will pay or reimburse the Executive for all
reasonable out-of-pocket expenses incurred by him in the performance of his
duties under this Agreement, subject to the Company's normal policies for
expense verification. In addition, the Company shall provide the Executive an
automobile expense reimbursement allowance of $750 per month.

           (e) Issuance of Stock Options. Concurrently with the execution of
this Agreement, the Company is granting to the Executive two nonqualified stock
options, each such option to purchase up to 250,000 shares of the Company's
common stock at an exercise price equal to 100% of the fair market value of the
Company's common stock on the date of grant. Copies of such stock options are
attached hereto as Exhibit A and Exhibit B. The Company hereby

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covenants and agrees to file a registration statement on Form S-8 registering
the issuance of the shares of Company common stock underlying such stock options
on or prior to the earlier of: (i) one year after the date of grant of such
options; and (ii) the exercise by the Executive of any part of the options.

               5. CONFIDENTIAL INFORMATION. Except as permitted or directed by
the Company's Board of Directors, during the term of his employment or at any
time thereafter, the Executive shall not divulge, furnish or make accessible to
anyone or use in any way (other than in the ordinary course of the business of
the Company) any confidential or secret knowledge or information of the Company
that the Executive has acquired or become acquainted with or will acquire or
become acquainted with prior to the termination of the period of his employment
by the Company, whether developed by himself or by others, concerning any trade
secrets, confidential or secret designs, processes, formulae, plans, devices or
material (whether or not patented or patentable) directly or indirectly useful
in any aspect of the business of the Company, any customer or supplier lists of
the Company, any confidential or secret development or research work of the
Company, or any other confidential information or secret aspects of the business
of the Company. The Executive acknowledges that the above-described knowledge or
information constitutes a unique and valuable asset of the Company and
represents a substantial investment of time and expense by the Company, and that
any disclosure or other use of such knowledge or information other than for the
sole benefit of the Company would be wrongful and would cause irreparable harm
to the Company. The foregoing obligations of confidentiality shall not apply to
any knowledge or information, that is now or which subsequently becomes
generally publicly known, other than as a direct or indirect result of the
breach of this Agreement by the Executive, or to disclosure of any knowledge or
information when Executive is advised by counsel that such disclosure is
required by law or judicial or administrative process; provided, however, the
Executive shall provide the Company prompt notice of any request that disclosure
of such knowledge or information be made in accordance with law or legal process
so that the Company may seek a protective order or other appropriate remedy and
shall cooperate with the Company, at the Company's expense, in its efforts to
obtain such remedy.

           6. VENTURES. If, during the term of his employment the Executive is
engaged in or associated with the planning or implementing of any project,
program or venture involving the Company and a third party or parties, all
rights in such project, program or venture shall belong to the Company. Except
as approved by the Company's Board of Directors, the Executive shall not be
entitled to any interest in such project, program or venture or to any
commission, finder's fee or other compensation in connection therewith other
than the compensation to be paid to the Executive as provided in this Agreement.

           7. COVENANTS AGAINST COMPETITION AND SOLICITATION.

           (a) Covenants. During the term of his employment with the Company and
for a period of one year after the termination of such employment in the event
such employment is terminated by Executive without Good Reason (as defined in
Section 9(b)(ii)) or by the Company for Cause (as defined in Section 9(b)(i)),
or in the event such employment is terminated without Cause prior to a Change of
Control, for the period during which Executive is entitled to any severance
payment from the Company in accordance with Section 9(e) of this Agreement, or
in the event

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such employment is terminated without Cause after a Change of Control, for a
period of one year after such termination, Executive shall not, directly or
indirectly, as an advisor, principal, agent, partner, officer, director,
stockholder, employee, member of any association or otherwise, without the
consent of the Board of Directors of the Company:

               (i) engage in competition with the Company in any manner or
        capacity in any phase of the business that the Company is conducting
        during the term of this Agreement, including the design, development,
        manufacture, distribution, marketing, leasing or selling of accessories,
        devices or systems related to the products or services being sold by the
        Company;

               (ii) solicit or aid in soliciting as a customer or client for
        medical device products or services that are competitive with the
        products or services of the Company at the time of termination of
        employment, any person, firm, corporation, association or other entity
        (other than solicitations on behalf of the Company): (i) that was a
        customer or client of the Company or with which substantial business
        relations were maintained by the Company at any time during the two
        years prior to the termination of Executive's employment; or (ii) whose
        identity or other customer specific information Executive otherwise
        discovered or gained access to as a result of Executive's employment
        with the Company;

               (iii) solicit or aid in soliciting for employment any employee of
        the Company (other than for the benefit of the Company); provided,
        however, that Executive shall not be prohibited from soliciting any such
        employee who has been terminated by the Company; provided, further, that
        nothing contained herein shall restrict Executive or any future employer
        of Executive from making general advertisements to the general public,
        not targeted at the Company's employees, for positions and hiring any
        person responding to such general advertisements.

           (b) Geographic Extent of Covenants. The obligations of the Executive
under Section 7(a) shall apply to any geographic area in which the Company (i)
has engaged in business during the term of this Agreement through production,
promotional, sales or marketing activity, or otherwise, or (ii) has otherwise
established its goodwill, business reputation or any customer or supplier
relations.

           (c) Limitations of Covenants. Ownership by the Executive, as a
passive investment, of less than five percent of the outstanding shares of
capital stock of any corporation listed on a national securities exchange or
publicly traded on Nasdaq shall not constitute a breach of this Section 7. In
addition, the restrictions contained in Section 7(a) of this Agreement will not
prevent the Executive from accepting employment with a large diversified
organization with separate and distinct divisions that do not compete, directly
or indirectly, with the Company, provided that Executive notifies the Company
prior to accepting such employment and provides the Company written assurances
from the prospective employer and from the Executive, reasonably satisfactory to
the Company, to the effect that the Executive will not render any services,
directly or indirectly, to any division or business unit that competes, directly
or indirectly, with the Company; provided further, that nothing in this sentence
shall affect the

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Company's right to pursue any remedy if Executive, despite such assurances,
breaches his obligations under this Section 7.

           (d) Indirect Competition. The Executive will not, directly or
indirectly, assist or encourage any other person in carrying out, directly or
indirectly, any activity that would be prohibited by the above provisions of
this Section 7 if such activity were carried out by the Executive, either
directly or indirectly. In particular the Executive agrees that he will not,
directly or indirectly, induce any executive of the Company to carry out,
directly or indirectly, any such activity.

           (e) Acknowledgment. The Executive agrees that the restrictions and
agreements contained in this Section 7 are reasonable and necessary to protect
the legitimate interests of the Company and that any violation of this Section 7
will cause substantial and irreparable harm to the Company that would not be
quantifiable and for which no adequate remedy would exist at law and accordingly
injunctive relief shall be available for any violation of this Section 7.

           (f) Blue Pencil Doctrine. If the duration or geographical extent of,
or business activities covered by, this Section 7 are in excess of what is valid
and enforceable under applicable law, then such provision shall be construed to
cover only that duration, geographical extent or activities that are valid and
enforceable. The Executive acknowledges the uncertainty of the law in this
respect and expressly stipulates that this Agreement be given the construction
which renders its provisions valid and enforceable to the maximum extent (not
exceeding its express terms) possible under applicable law.

           8.  PATENT AND RELATED MATTERS.

           (a) Disclosure and Assignment. The Executive will promptly disclose
in writing to the Company reasonably complete information concerning each and
every invention, discovery, improvement, device, design, apparatus, practice,
process, method or product, whether patentable or not, made, developed,
perfected, devised, conceived or first reduced to practice by the Executive,
either solely or in collaboration with others, during the term of this
Agreement, whether or not during regular working hours, relating either directly
or indirectly to the business, products, practices or techniques of the Company
("Developments"). The Executive, to the extent that he has the legal right to do
so, hereby acknowledges that any and all of the Developments are the property of
the Company and hereby assigns and agrees to assign to the Company any and all
of the Executive's right, title and interest in and to any and all of the
Developments. At the request of the Company, the Executive will confer with the
Company and its representatives for the purpose of disclosing all Developments
to the Company as the Company shall reasonably request during the period ending
one year upon termination of the Executive's employment with the Company.

           (b) Future Developments. As to any future Developments made by the
Executive that relate to the business, products or practices of the Company and
that are first conceived or reduced to practice during the term of this
Agreement, but which are claimed for any reason to belong to an entity or person
other than the Company, the Executive will promptly disclose the same in writing
to the Company and shall not disclose the same to others if the Company, within

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20 days thereafter, shall claim ownership of such Developments under the terms
of this Agreement. If the Company makes no such claim, the Executive hereby
acknowledges that the Company has made no promise to receive and hold in
confidence any such information disclosed by the Executive.

           (c) Limitation on Sections 8(a) and 8(b). Notwithstanding any of the
foregoing, the provisions of Section 8(a) and 8(b) shall not apply to any
Development meeting the following conditions:

                  (i)     such Development was developed entirely on the
                          Executive's own time;

                  (ii)    such Development was made without the use of any
                          equipment, supplies, facility or trade secret
                          information of the Company;

                  (iii)   such Development does not relate (A) directly to the
                          business of the Company or (B) to the Company's actual
                          or demonstrably anticipated research or development;
                          and

                  (iv)    such Development does not result from any work
                          performed by the Executive for the Company.

           (d) Assistance of the Executive. Upon request and without further
compensation therefor, but at no expense to the Executive, the Executive will do
all lawful acts, including but not limited to, the execution of papers and
lawful oaths and the giving of testimony, that in the reasonable opinion of the
Company, may be necessary or desirable in obtaining, sustaining, reissuing,
extending and enforcing United States and foreign copyrights and Letters Patent,
including but not limited to, design patents, on the Developments, and for
perfecting, affirming and recording the Company's complete ownership and title
thereto, and to cooperate otherwise in all proceedings and matters relating
thereto. Notwithstanding the foregoing, after the termination of the Executive's
employment hereunder, the Company shall compensate the Executive at a reasonable
rate for the time actually spent by the Executive at the Company's request on
such assistance and reimburse the Executive for any reasonable expenses
incurred.

           (e) Records. The Executive will keep reasonably complete, accurate
and authentic accounts, notes, data and records of the Developments in the
manner and form requested by the Company. Such accounts, notes, data and records
shall be the property of the Company, and, upon its request, the Executive will
promptly surrender same to it or, if not previously surrendered upon its request
or otherwise, the Executive will surrender the same, and all copies thereof, to
the Company upon the conclusion of his employment.

           (f) Obligations, Restrictions and Limitations. The Executive
understands that the Company may enter into agreements or arrangements with
agencies of the United States Government, and that the Company may be subject to
laws and regulations which impose obligations, restrictions and limitations on
it with respect to inventions and patents which may be acquired by it or which
may be conceived or developed by executives, consultants or other agents
rendering services to it. The Executive shall be bound by all such obligations,
restrictions and limitations applicable to

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any such invention conceived or developed by him while he is employed by the
Company and shall take any and all further action which may be required to
discharge such obligations and to comply with such restrictions and limitations.

           (g) Copyrightable Material. All right, title and interest in all
copyrightable material that the Executive shall conceive or originate, either
individually or jointly with others, and which arise out of the performance of
this Agreement, will be the property of the Company and are by this Agreement
assigned to the Company along with ownership of any and all copyrights in the
copyrightable material. Upon request and without further compensation therefor,
but at no expense to the Executive, the Executive shall execute all papers and
perform all other acts necessary to assist the Company to obtain and register
copyrights on such materials in any and all countries. Where applicable, works
of authorship created by the Executive for the Company in performing his
responsibilities under this Agreement shall be considered "works made for hire,"
as defined in the U.S. Copyright Act.

           (h) Know-How and Trade Secrets. All know-how and trade secret
information conceived or originated by the Executive that arises out of the
performance of his obligations or responsibilities under this Agreement or any
related material or information shall be the property of the Company, and all
rights therein are by this Agreement assigned to the Company.

           9. TERMINATION OF EMPLOYMENT.

           (a) Grounds for Termination. The Executive's employment shall
terminate prior to the expiration of the initial term set forth in Section 2 or
any extension thereof in the event that at any time:

                      (i)    The Executive dies;

                      (ii)   The Executive becomes "Disabled" and as a result
                             the Board of Directors of the Company elects to
                             terminate this Agreement and notifies the Executive
                             in writing of such election;

                      (iii)  The Board of Directors of the Company elects to
                             terminate this Agreement for "Cause" and notifies
                             the Executive in writing of such election,
                             specifying the reasons for such election;

                      (iv)   The Board of Directors of the Company elects to
                             terminate this Agreement without "Cause" and
                             notifies the Executive in writing of such election;

                      (v)    The Executive elects to terminate this Agreement
                             for Good Reason and notifies the Company in writing
                             of such election, specifying the reasons for such
                             election; or

                      (vi)   The Executive elects to terminate this Agreement
                             without Good Reason and notifies the Company in
                             writing of such election.

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        If this Agreement is terminated pursuant to clause (i), (ii), (iii) or
(v) of this Section 9(a), such termination shall be effective immediately. If
this Agreement is terminated pursuant to clause (iv) or (vi) of this Section
9(a), such termination shall be effective 30 days after delivery of the notice
of termination.

        (b) Definitions. As used in this Section 9, the following terms will
have the meanings assigned to them below:

        (i) "Cause" means that the Board of Directors of the Company has
determined, in good faith, that:

               (A)    The Executive has breached the provisions of Section 5, 7
                      or 8 of this Agreement in any material respect,

               (B)    The Executive has engaged in willful and material
                      misconduct, including willful and material failure to
                      perform the Executive's duties as an officer or executive
                      of the Company and has failed to cure such default within
                      30 days after receipt of written notice of default from
                      the Company,

               (C)    The Executive has committed fraud, misappropriation or
                      embezzlement in connection with the Company's business, or

               (D)    The Executive has been convicted or has pleaded nolo
                      contendere to any felony or other crime involving
                      dishonesty, theft or similar malfeasance.

        In the event that the Company terminates the Executive's employment for
        "Cause" pursuant to clause (B) of this Section 9(b)(i) and the Executive
        objects in writing to the Board's determination that there was proper
        "Cause" for such termination within 20 days after the Executive is
        notified of such termination, the matter shall be resolved by
        arbitration in accordance with the provisions of Section 10(a). If the
        Executive fails to object to any such determination pursuant to clause
        (B) of "Cause" in writing within such 20-day period, he shall be deemed
        to have waived his right to object to that determination. If such
        arbitration determines that there was not proper "Cause" for
        termination, such termination shall be deemed to be a termination
        pursuant to clause (iv) of Section 9(a) and the Executive's sole remedy
        shall be to receive the severance benefits contemplated by Section 9(e)
        or 9(f), as the case may be.

        (ii)  "Good Reason" means:

                      (A)    the assignment to Executive of employment
                             responsibilities or the removal of employment
                             responsibilities which are not commensurate with
                             Executive's responsibilities, authority and status
                             as chief executive officer of the Company;

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                      (B)    a breach of the obligations of the Company under
                             this Agreement that has not been cured within 20
                             days of notice from Executive; or

                      (C)    the Company's requiring Executive to be based or
                             maintain a regular office outside of the seven
                             county Twin Cities Metropolitan Area.

        In the event that the Executive terminates the Executive's employment
        for "Good Reason" pursuant to clause (A) of this Section 9(b)(2) and the
        Company objects in writing to the Executive's determination that there
        was proper "Good Reason" for such termination within 20 days after the
        Company is notified of such termination, the matter shall be resolved by
        arbitration in accordance with the provisions of Section 10(a). If the
        Company fails to object to any such determination of "Good Reason" in
        writing within such 20-day period, it shall be deemed to have waived its
        right to object to that determination. If such arbitration determines
        that there was not "Good Reason" for termination, such termination shall
        be deemed to be a termination pursuant to clause (vi) of Section 9(a),
        and the Executive's sole remedy shall be to receive the cash
        compensation and reasonable benefits contemplated by Section 9(e) or
        9(f), as the case may be.

        (iii) "Disabled" means any mental or physical condition that renders the
        Executive unable to perform the essential functions of his position,
        with or without reasonable accommodation, for a period in excess of six
        months.

        (iv) A "Change in Control" shall mean the occurrence of any of the
        following events as a result of a transaction or series of transactions:

                      (A)    a change in control of the Company of a nature
                             required to be reported in response to Item 6(e) of
                             Schedule 14A of Regulation 14A promulgated under
                             the Securities Exchange Act of 1934, as amended
                             ("Exchange Act"), whether or not the Company is
                             then subject to such reporting requirement;

                      (B)    any "person" (as such term is used in Sections
                             13(d) and 14(d) of the Exchange Act) is or becomes
                             the "beneficial owner" (as defined in Rule 13d-3
                             promulgated under the Exchange Act), directly or
                             indirectly, of securities of the Company
                             representing 50% or more of the combined voting
                             power of the Company's then outstanding securities;

                      (C)    individuals who at the date hereof constitute the
                             Board of Directors of the Company cease to
                             constitute a majority thereof, provided that such
                             change is the direct or indirect result of a proxy
                             fight and contested election for positions on the
                             Board; or

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                      (D)    the Board of Directors of the Company determines,
                             in its sole and absolute discretion, that there has
                             been a change in control of the Company.

        (c) Effect of Termination. Notwithstanding any termination of this
Agreement, the Executive, in consideration of his employment hereunder to the
date of such termination, shall remain bound by the provisions of this Agreement
which specifically relate to periods, activities or obligations upon or
subsequent to the termination of the Executive's employment.

        (d) Surrender of Records and Property. Upon termination of his
employment with the Company, the Executive shall deliver promptly to the Company
all records, manuals, books, blank forms, documents, letters, memoranda, notes,
notebooks, reports, data, tables, calculations or copies thereof that relate in
any way to the business, products, practices or techniques of the Company, and
all other property, trade secrets and confidential information of the Company,
including, but not limited to, all documents that in whole or in part contain
any trade secrets or confidential information of the Company, which in any of
these cases are in his possession or under his control.

        (e) Severance -- Prior to Change of Control. If the Executive's
employment is terminated prior to a Change of Control by the Company pursuant to
clause (ii) or (iv) of Section 9(a), or by the Executive pursuant to clause (v)
of Section 9(a), the Company shall:

                      (i)    pay to Executive his base salary through the date
                             of termination;

                      (ii)   pay to Executive the value of any vacation time
                             accrued in accordance with the Company's policies
                             and not taken through the date of termination;

                      (iii)  continue to pay to the Executive his base salary
                             for a period of six months after the date of such
                             termination in the event the termination occurs
                             within the first year of this Agreement and for a
                             period of twelve months after the date of such
                             termination in the event the termination occurs
                             after the first year of this Agreement;

                      (iv)   continue to provide health, life, disability and
                             dental insurance benefits for the Executive through
                             the earlier of (A) the date that the Executive
                             obtains an employment position providing equivalent
                             benefits, or (B) the period set for in subsection
                             (iii); and

                      (v)    provided Executive has served for a period of at
                             least three months since the commencement of the
                             fiscal year, pay Executive a pro rata portion
                             (based on the number of days of employment during
                             that fiscal year) of any bonus payment that would
                             have been payable to him for that fiscal year
                             pursuant to Section 3(b) if the Executive had been
                             in the employ of the Company for the full fiscal
                             year.

                      The Executive agrees that the payment in clause (v) above
                      shall be made at the same time bonus payments are made to
                      other executives with respect to such year (after the
                      completion of the fiscal year when a determination has
                      been made that bonus objectives have been achieved). The
                      Executive also agrees that the compensation set forth in
                      this Section 9(e) constitutes all the compensation and
                      benefits due Executive upon termination pursuant to clause
                      (ii), (iv) or (v) of Section 9(a) and that no other
                      compensation of any kind shall be due Executive upon such
                      termination, including, without limitation, no

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                      compensation by way of (A) 401K or other ERISA or stock
                      plan benefits accruing after the date of such termination,
                      (B) automobile allowance, expense allowance, materials or
                      equipment allowance or phone or cell phone allowance, (C)
                      bonus with respect to any fiscal year after the fiscal
                      year in which the Executive's employment terminated, (D)
                      payment with respect to any other severance plan or
                      policy, including the executive officer severance policy
                      otherwise in place at the Company.

If this Agreement is terminated pursuant to clauses (i), (iii) or (vi) of
Section 9(a), the Executive's right to base salary and benefits after the date
of such termination shall immediately terminate, except as may otherwise be
required by applicable law. Notwithstanding the foregoing, the Executive shall
be entitled to receive all accrued but unpaid base salary and accrued benefits
if Executive's employment is terminated pursuant to clause (i), (iii), of (vi)
of Section 9(a) through the date of termination.

        (f) Severance Payment after Change in Control. In lieu of any payments
due Executive for periods subsequent to the date of termination of Executive's
employment becomes effective pursuant to Section 9(e) or otherwise, in the event
the Executive's employment is terminated after a Change of Control by the
Company pursuant to clause (ii) or (iv) of Section 9(a), or after a Change of
Control pursuant to clause (vi) of Section 9(a) or within 60 days after a change
of control pursuant clause (vi) of Section 9(a), the Company shall:

                      (i)     pay to Executive his base salary through the date
                              of termination;

                      (ii)    pay to Executive the value of any vacation time
                              accrued in accordance with the Company's policies
                              and not taken through the date of termination;

                      (v)     pay Executive a pro rata portion (based on the
                              number of days of employment during that fiscal
                              year) of any bonus payment that would have been
                              payable to him for that fiscal year pursuant to
                              Section 3(b) if the Executive had been in the
                              employ of the Company for the full fiscal year,
                              assuming for purposes of calculating such bonus,
                              that the Company's financial and business
                              performance for the current compensation year
                              through the date of such termination is
                              annualized;

                      (vi)    either (a) pay Executive a cash payment, in lump
                              sum or over such period of time as Executive, in
                              his discretion, shall designate, in an amount
                              equal to the greater of (x) Executive's salary at
                              the date of such termination, or (y) Executive's
                              salary at the date of consummation of the Change
                              of Control, in the event the Executive's
                              employment is terminated after a Change of Control
                              by the Executive pursuant to clause (vi) of
                              Section 9(a); or (b) pay Executive a cash payment,
                              in lump sum or over such period of time as
                              Executive, in his discretion, shall designate, in
                              an amount equal to two (2) times the greater of
                              (x) Executive's salary at the date of such
                              termination, or (y) Executive's salary at the date
                              of consummation of the Change of Control, in the
                              event the Executive's employment is terminated
                              after a Change of Control = by the Company
                              pursuant to clause (ii) or (iv) of Section 9(a) or
                              by the Executive pursuant to clause (v) of Section
                              9(a); and

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<PAGE>

                      (vii)  continue to provide health, life, disability and
                             dental insurance benefits for the Executive through
                             the earlier of (A) the date that the Executive
                             obtains an employment position providing equivalent
                             benefits, or (B) two years from the date of such
                             termination in the event the Executive's employment
                             is terminated after a Change of Control by the
                             Company pursuant to clause (ii) or (iv) of Section
                             9(a) or by the Executive pursuant to clause (v) of
                             Section 9(a) or one year from the date of such
                             termination in the event the Executive's employment
                             is terminated after a Change of Control by the
                             Executive pursuant to clause (vi) of Section 9(a).

        subject, however, to the restriction that the Executive shall not be
        entitled to receive any amount pursuant to this Agreement which
        constitutes an "excess parachute payment" within the meaning of Section
        280G of the Internal Revenue Code of 1986, as amended, or any successor
        provisions or regulations promulgated thereunder.

        If this Agreement is terminated pursuant to clauses (i) or (iii) of
        Section 9(a), or pursuant to clause (vi) more than 60 days after a
        Change in Control, the Executive's right to base salary and benefits
        after the date of such termination shall immediately terminate, except
        as may otherwise be required by applicable law. Notwithstanding the
        foregoing, the Executive shall be entitled to receive all accrued but
        unpaid base salary and accrued benefits through the date of termination
        if Executive's employment is terminated pursuant to clause (i), or (iii)
        of Section 9(a), or pursuant to clause (vi) more than 60 days after a
        Change in Control.

           10. SETTLEMENT OF DISPUTES.

           (a) Arbitration. Except as provided in Section 10(b), any claims or
disputes of any nature between the Company and the Executive arising from or
related to the performance, breach, termination, expiration, application or
meaning of this Agreement or any matter relating to the Executive's employment
and the termination of that employment by the Company shall be resolved
exclusively by arbitration in Minnesota, in accordance
with the applicable rules of the American Arbitration Association. In the event
of submission of any dispute to arbitration, each party shall, not later than 30
days prior to the date set for hearing, provide to the other party and to the
arbitrator(s) a copy of all exhibits upon which the party intends to rely at the
hearing and a list of all persons each party intends to call at the hearing. The
decision of the arbitrator(s) shall be final and binding upon both parties.
Judgment of the award rendered by the arbitrator(s) may be entered in any court
of competent jurisdiction.

           (b) Resolution of Certain Claims -- Injunctive Relief. Section 10(a)
shall have no application to claims by the Company asserting a violation of
Sections 5, 7, 8 or 9(d) or seeking to enforce, by injunction or otherwise, the
terms of Sections 5, 7, 8 or 9(d) . Such claims may be maintained by the Company
in a lawsuit subject to the terms of Section 10(c). The Executive acknowledges
that it would be difficult to fully compensate the Company for damages resulting
from any breach by him of the provisions of this Agreement. Accordingly, the
Executive agrees that, in addition to, but not to the exclusion of any other
available remedy, the Company shall have the


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<PAGE>
right to enforce the provisions of Sections 5, 7, 8 and 9(d) by applying for and
obtaining temporary and permanent restraining orders or injunctions from a court
of competent jurisdiction without the necessity of filing a bond therefor, and
without the necessity of proving actual damages, and the Company shall be
entitled to recover from the Executive its reasonable attorneys' fees and costs
in enforcing the provisions of Sections 5, 7, 8 and 9(d) .

        (c) VENUE. Any action at law, suit in equity or judicial proceeding
arising directly, indirectly, or otherwise in connection with, out of, related
to or from this Agreement, or any provision hereof, shall be litigated only in
the courts of the State of Minnesota, County of Hennepin. The Executive and the
Company consent to the jurisdiction of such courts over the subject matter set
forth in Section 10(b). The Executive waives any right the Executive may have to
transfer or change the venue of any litigation brought against the Executive by
the Company.

        11. MISCELLANEOUS.

        (a) Entire Agreement. This Agreement (including the exhibits, schedules
and other documents referred to herein) contains the entire understanding
between the parties hereto with respect to the subject matter hereof and
supersedes any prior understandings, agreements or representations, written or
oral, relating to the subject matter hereof.

        (b) Counterparts. This Agreement may be executed in separate
counterparts, each of which will be an original and all of which taken together
shall constitute one and the same agreement, and any party hereto may execute
this Agreement by signing any such counterpart.

        (c) Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law but if any provision of this Agreement is held to be invalid,
illegal or unenforceable under any applicable law or rule, the validity,
legality and enforceability of the other provision of this Agreement will not be
affected or impaired thereby. In furtherance and not in limitation of the
foregoing, should the duration or geographical extent of, or business activities
covered by, any provision of this Agreement be in excess of that which is valid
and enforceable under applicable law, then such provision shall be construed to
cover only that duration, extent or activities which may validly and enforceably
be covered. The Executive acknowledges the uncertainty of the law in this
respect and expressly stipulates that this Agreement be given the construction
which renders its provision valid and enforceable to the maximum extent (not
exceeding its express terms) possible under applicable law.

        (d) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, personal
representatives and, to the extent permitted by subsection (e), successors and
assigns.

        (e) Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable (including by operation of law) by either party without the prior
written consent of the other party to this Agreement, except that the Company
may, without the consent of the Executive, assign its rights and obligations
under this

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<PAGE>
Agreement to any corporation, firm or other business entity with or
into which the Company may merge or consolidate, or to which the Company may
sell or transfer all or substantially all of its assets, or of which 50% or more
of the equity investment and of the voting control is owned, directly or
indirectly, by, or is under common ownership with, the Company.

        (f) Modification, Amendment, Waiver or Termination. No provision of this
Agreement may be modified, amended, waived or terminated except by an instrument
in writing signed by the parties to this Agreement. No course of dealing between
the parties will modify, amend, waive or terminate any provision of this
Agreement or any rights or obligations of any party under or by reason of this
Agreement. No delay on the part of the Company or the Executive in exercising
any right hereunder shall operate as a waiver of such right. No waiver, express
or implied, by the Company or the Executive of any right or any breach by the
Company or the Executive shall constitute a waiver of any other right or breach
by the Company or the Executive.

        (g) Notices. All notices, consents, requests, instructions, approvals or
other communications provided for herein shall be in writing and delivered by
personal delivery, overnight courier, mail, electronic facsimile or e-mail
addressed to the receiving party at the address set forth herein. All such
communications shall be effective when received.

        Dan Gladney
        10235 Summer Place
        Eden Prairie, MN 55437

        Rehabilicare Inc.
        c/o Chairman
        1811 Old Highway 8
        New Brighton, MN  55112

Any party may change the address set forth above by notice to each other party
given as provided herein.

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<PAGE>

        (h) Headings. The headings and any table of contents contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.

        (i) Governing Law. ALL MATTERS RELATING TO THE INTERPRETATION,
CONSTRUCTION, VALIDITY AND ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO ANY CHOICE
OF LAW PROVISIONS THEREOF.

        (j)Third-Party Benefit. Nothing in this Agreement, express or implied,
is intended to confer upon any other person any rights, remedies, obligations or
liabilities of any nature whatsoever.

        (k) Withholding Taxes. The Company may withhold from any benefits
payable under this Agreement all federal, state, city or other taxes as shall be
required pursuant to any law or governmental regulation or ruling.

        (l) No Obligation to Mitigate Damages. Unless otherwise specifically
contemplated herein, the Executive shall not be required to mitigate damages or
the amount of any payment provided for under this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by the Executive as a
result of employment by another employer.

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<PAGE>

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph.

                                                    REHABILICARE INC.

                                                    By:_________________________
                                                    Name:_______________________
                                                    Title:______________________

                                                    ____________________________
                                                    Dan Gladney


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