CONSULTING AGREEMENT

	THIS CONSULTING AGREEMENT (this "Agreement") is entered into this 31st 
day of December, 1998 by and between Sheldahl, Inc., a Minnesota corporation 
("Company") and James E. Donaghy ("Donaghy").

W I T N E S S E T H:

	In consideration of the covenants and agreements herein set forth and 
of the mutual benefits accruing to Company and to Donaghy from the consulting 
relationship to be established between the parties by the terms of this 
Agreement, Company and Donaghy agree as follows:  

1.	Consulting Relationship.  As of January 1, 1999, Company will retain 
Donaghy and Donaghy will be retained by Company, as an independent consultant 
and not as an employee, on the terms and conditions described herein.  The 
consulting arrangement shall terminate on August 27, 1999, unless an earlier 
or later date is agreed upon by the parties in writing prior to that date.

2.	Consulting Services.  During the term of this Agreement, Donaghy will, 
with a reasonable degree of skill and care, perform such duties and execute 
the policies of Company as reasonably requested by its Board of Directors; 
provided, that said duties and policies will not be inconsistent with the 
nature of the duties performed by Donaghy during his active service with 
Company as an officer and employee thereof.  Such duties shall include the 
following:

(a) 	Establish new relationships with investment bankers and improve 
analyst coverage;

(b)	Develop market partners;

(c)	Identify a chip industry candidate for the Company's Board of 
Directors; 

(d)	Continue to develop the Shinko, Hitachi, and Sumitomo Bakelite 
relationships;

(e)	Manage a transition with the Company's large investors;

(f)	Participate in the quarterly conference calls; and

(g)	Assist in capital raising.

(h)	Introduce management team to Institute of Printed Circuitry and 
manage appropriate transition.    

3.	Compensation.  During the term of this Agreement, the Company agrees to 
pay Donaghy at an annual rate of One Hundred Seventy-Five Thousand Dollars 
($175,000), payable in pro rata installments on the first and fifteenth day 
of each month, the first such payment due on January 15, 1999.  

4.	Restrictions on Competition.  So long as payments are being made to 
Donaghy under this Agreement, Donaghy shall not, without the prior written 
consent of the Company, accept employment or render service to any person, 
firm or corporation directly or indirectly in competition with the Company or 
affiliate thereof, in the United States or any of its territories or 
possessions, or directly or indirectly enter into or in any manner take part 
in or lend his name, counsel or assistance to any venture, enterprise, 
business or endeavor, either as proprietor, principal, investor, partner, 
director, officer, employee, consultant, advisor, agent, independent 
contractor, or in any other capacity whatsoever for any purpose which would 
be competitive with the business of the Company or any affiliate thereof, 
provided, however, that the foregoing shall not be deemed to prohibit Donaghy 
from acquiring an equity interest not in excess of five percent (5%) in any 
company, the shares of which are listed on any national stock exchange or are 
traded and quoted on the National Association of Securities Dealers Automated 
Quotations System.

5.	Title to Certain Tangible Property.  All tangible materials (whether 
original or duplicate) including, but not in any way limited to, equipment 
purchase agreements, file or data base materials in whatever form, books, 
manuals, sales literature, equipment price lists, training materials, 
customer lists and records, customer files, correspondence, documents, 
contracts, orders, messages, memoranda, notes, agreements, invoices, 
receipts, lists, software listings or printouts, specifications, models, 
computer programs, and records of any kind in the possession or control of 
Donaghy which in any way relate or pertain to Company's business, including 
the business of the subsidiaries or affiliates of Company, whether furnished 
to Donaghy by Company or prepared, compiled or required by Donaghy during his 
consulting relationship with Company, shall be the sole property of Company.  
At any time upon request of Company, and in any event promptly upon 
termination of this Agreement, Donaghy shall deliver all such materials to 
Company.

6.	Trade Secrets and Confidential Information.  During the term of the 
Agreement or at any time thereafter, Donaghy will not, without the express 
written consent of Company directly or indirectly communicate or divulge to, 
or use for his own benefit or the benefit of any other person, firm, 
association or corporation, any of Company's or its subsidiaries' or 
affiliates' trade secrets, proprietary data or other confidential information 
including, by way of illustration, the information described in Section 5, 
which trade secrets, proprietary data and other confidential information were 
communicated to or otherwise learned or acquired by Donaghy in the course of 
the consulting relationship covered by this Agreement, except that Donaghy 
may disclose such matters to the extent that disclosure is required (a) in 
the course of the consulting relationship with Company, or (b) by a Court or 
other governmental agency of competent jurisdiction.  As long as such matters 
remain trade secrets, proprietary data or other confidential information, 
Donaghy will not use such trade secrets, proprietary data or other 
confidential information in any way or in any capacity other than pursuant to 
this Agreement and to further the Company's interests.

7.	The Complete Agreement.  This Agreement represents the complete 
Agreement between Company and Donaghy concerning the subject matter hereof 
and supersedes all prior agreements or understandings, written or oral.  No 
attempted modification or waiver of any of the provisions hereof shall be 
binding on either party unless in writing and signed by both Donaghy and 
Company.  

8.	General Provisions.  

(a)	Notices.  Any notice required or permitted to be given hereunder 
shall be in writing and shall be effective three business days after it 
is properly sent by registered or certified mail, if to the Company to 
President, Sheldahl, Inc., 1150 Sheldahl Road, Northfield, Minnesota 
55057, or if to Donaghy at his resident address, or to such other 
address as either party may from time to time designate by notice.  

(b)	Assignability.  This Agreement may not be assigned by either 
party without the prior written consent of the other party, except that 
no consent is necessary for the Company to assign this Agreement to a 
corporation succeeding to substantially all of the assets or business 
of the Company whether by merger, consolidation, acquisition or 
otherwise, so long as such successor corporation expressly assumes all 
of the obligations of the Company under this Agreement.  This Agreement 
shall be binding upon Donaghy, his heirs and permitted assigns and the 
Company, its successors and permitted assigns.

(c)	Independent Contractor.  Donaghy is an independent contractor and 
not an employee, partner or co-venturer of, or in any other service 
relationship with, the Company, and the manner in which Donaghy's 
services are rendered shall be within Donaghy's sole control and 
discretion.  Donaghy shall be responsible for all payroll and other 
taxes arising from compensation and other amounts paid under this 
Agreement.

(d)	Termination.  Either the Company or Donaghy may terminate this 
Agreement at any time on thirty (30) days' prior written notice upon a 
material breach of the provisions of this Agreement if such breach has 
not been cured during such notice period.  On termination of this 
Agreement Donaghy shall deliver to the Company all Company property and 
information in the possession of Donaghy or any of his employees, 
representatives or agents.

(e)	Damages.  Donaghy acknowledges that a breach of any of the terms 
of Sections 4, 5 or 6 of this Agreement will render irreparable harm to 
the Company, and that a remedy at law for breach or threatened breach 
of the Agreement is inadequate, and that the Company shall therefore be 
entitled to any and all equitable relief, including, but not limited 
to, injunctive relief, and to any other remedy that may be available 
under any applicable law or agreement between the parties.

(f)	Acknowledgment.  Donaghy acknowledges and agrees that the 
restrictions, covenants, agreements and obligations contained in this 
Agreement hereof are reasonable and necessary for the protection of the 
legitimate interests of the Company. Donaghy represents and warrants 
that Donaghy has not previously assumed any obligations inconsistent 
with those undertaken by Donaghy under this Agreement.

(g)	Waiver.  The waiver by the Company of a breach of any provision 
of this Agreement by Donaghy shall not operate or be construed as a 
waiver of a subsequent breach by Donaghy.

(h)	Applicable Law.  It is the intention of the parties hereto that 
all questions with respect to the construction and performance of this 
Agreement and the rights and liabilities of the parties hereto shall be 
determined in accordance with the laws of the State of Minnesota.

						SHELDAHL, INC.



						By	/s/ Kenneth J. Roering
							Kenneth J. Roering
						Its Vice Chairman of the Board



/s/ James E. Donaghy
James E. Donaghy
<PAGE>