Exhibit 10.1

 



EMPLOYMENT
AGREEMENT


This
Employment Agreement (“Agreement”) is made effective as of May 7, 2020 (“Effective Date”) by and between
Electromed, Inc., a Minnesota corporation (the “Corporation”) and Michael MacCourt, an individual residing in Minnesota
(“Employee”) (collectively “Parties” or individually “Party”).


RECITALS


WHEREAS,
the Corporation desires to employ Employee, and Employee desires to be employed by the Corporation; and


WHEREAS,
the Corporation and Employee desire to enter into this Agreement, which will govern the terms of Employee’s employment with
the Corporation.


NOW,
THEREFORE, in consideration of the employment of Employee by the Corporation, and further in consideration of the salary,
wages or other compensation and benefits to be provided by the Corporation to Employee, and for additional mutual covenants and
conditions, the receipt and sufficiency of which are hereby acknowledged, the Corporation and Employee, intending legally to be
bound, hereby agree as follows:


AGREEMENT


In consideration
of the above recitals and the mutual promises set forth in this Agreement, the Parties agree as follows:


1.             Nature
and Capacity of Employment.


1.1       Title
and Duties. Effective as of Effective Date, the Corporation will employ Employee as its Chief Financial Officer, or such other
title as may be assigned to Employee by the Corporation’s President and Chief Executive Officer or his or her designee from
time to time, pursuant to the terms and conditions set forth in this Agreement. Employee will perform such duties and responsibilities
for the Corporation as the Corporation’s President and Chief Executive Officer or his or her designee may assign to Employee
from time to time consistent with Employee’s position. Employee shall serve the Corporation faithfully and to the best of
Employee’s ability and shall at all times act in accordance with the law. Employee shall devote Employee’s full working
time, attention and efforts to performing Employee’s duties and responsibilities under this Agreement and advancing the
Corporation’s business interests. Employee shall follow applicable policies and procedures adopted by the Corporation from
time to time, including without limitation the Corporation’s Confidentiality Policy and other Corporation policies, including
those relating to business ethics, conflict of interest and non-discrimination. Employee shall not, without the prior written
consent of the Corporation’s Board of Directors (the “Board”) accept other employment or engage in other business
activities during Employee’s employment with the Corporation that may prevent Employee from fulfilling the duties or responsibilities
as set forth in or contemplated by this Agreement.


1.2       Location.
Employee’s employment will be based at the Corporation’s corporate headquarters. Employee acknowledges and agrees
that Employee’s position, duties and responsibilities will require regular travel, both in the U.S. and internationally.




     


     


    

2.             Term.
Unless terminated at an earlier date in accordance with Section 5, the term of Employee’s employment with the Corporation
under the terms and conditions of this Agreement will be for the period commencing on the Effective Date and ending on the two
(2) year anniversary of the Effective Date (the “Initial Term”). On the two (2) year anniversary of the Effective
Date, and on each succeeding one-year anniversary of the Effective Date (each an “Anniversary Date”), the Term shall
be automatically extended until the next Anniversary Date (each a “Renewal Term”), subject to termination on an earlier
date in accordance with Section 5 or unless either Party gives written notice of non-renewal to the other Party at least ninety
(90) days prior to the Anniversary Date on which this Agreement would otherwise be automatically extended that the Party providing
such notice elects not to extend the Term; provided, however, that if a Change in Control (as defined in Section 6.5) occurs during
the Initial Term or during any Renewal Term then the Term will expire on the one-year anniversary of the date of the Change in
Control. The Initial Term together with any Renewal Terms is the “Term.” If Employee remains employed by the Corporation
after the Term ends for any reason, then such continued employment shall be according to the terms and conditions established
by the Corporation from time to time (provided that any provisions of this Agreement and the Restrictive Covenants Agreement (as
defined in Section 3) that by their terms survive the termination of the Term shall remain in full force and effect).


3.             Restrictive
Covenants Agreement. Employee acknowledges entering into a Non-Competition, Non-Solicitation, and Confidentiality Agreement
simultaneously with this Agreement (the “Restrictive Covenants Agreement”) in consideration of the Corporation entering
into this Agreement, and Employee hereby reaffirms Employee’s commitments and obligations under the Restrictive Covenants
Agreement. Nothing in this Agreement is intended to modify, amend, cancel or supersede the Restrictive Covenants Agreement in
any manner.


4.             Compensation,
Benefits and Business Expenses.


4.1.       Base
Salary. As of the Effective Date, the Corporation agrees to pay Employee an annualized base salary of $260,000.00 (the “Base
Salary”), which Base Salary will be earned by Employee on a pro rata basis as Employee performs services and which shall
be paid according to the Corporation’s normal payroll practices. Employee shall be eligible for a merit-based increase of
the Base Salary payable under this Section 4.1 on or about six months after the Effective Date, and on or about July 1 of each
year during the Term thereafter, with any adjustment to Employee’s Base Salary subject to approval by the Board.


4.2       Annual
Incentive Compensation. For each of the Corporation’s fiscal years during the Term, Employee will be eligible to earn
an annualized cash bonus as determined by the Board in its discretion and subject to the terms of any written document addressing
such annual cash bonus as the Board may adopt in its sole discretion, in each case after consultation with the Corporation’s
President and Chief Executive Officer. For the Corporation’s fiscal year ending June 30, 2021, Employee’s target annualized
cash bonus under this Section 4.2 will be thirty percent (30%) of Employee’s annualized Base Salary, subject to the terms
and conditions identified in the Corporation’s Fiscal Year 2020 Officer Bonus Plan. Future annual cash bonus opportunities
will be determined by the Board in its discretion. Unless specified otherwise in a written annual cash bonus document applicable
to Employee, if a bonus is earned in accordance with this Section 4.2, it will be paid to Employee by the Corporation regardless
of whether Employee is employed by the Corporation on the payment date, with such payment date being no later than March 15 of
the calendar year immediately following the calendar year in which Employee earns a bonus in accordance with this Section 4.2.


4.3       Employee
Benefits. While Employee is employed by the Corporation during the Term, Employee shall be entitled to participate in the
retirement plans, equity compensation plans, health plans, and all other employee benefits made available by the Corporation,
and as they may be changed from time to time. Employee acknowledges and agrees that Employee will be subject to all
eligibility requirements and all other provisions of these benefits plans, and that the Corporation is under no obligation to
Employee to establish and maintain any employee benefit plan in which Employee may participate. The terms and provisions of
any employee benefit plan of the Corporation are matters within the exclusive province of the Board, subject to applicable
law.




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4.4       Vacation
and Sick Leave. While Employee is employed by the Corporation during the Term, Employee shall be entitled to vacation leave
of up to twenty (20) days per calendar year during the Term, prorated for any partial calendar year of employment during the Term.
Employee will use Employee’s vacation leave at times and in a manner so as to minimize disruption to the operations of the
Corporation. The Corporation also agrees that Employee shall be entitled to sick leave of up to five (5) days per calendar year
during the Term, prorated for any partial calendar year of employment during the Term. Employee will accrue and be permitted to
use vacation and sick leave in accordance with the Corporation’s vacation and sick leave policies and practices as in effect
from time to time.


4.5       Relocation
Expenses. Provided Employee completes Employee’s relocation to the Twin Cities, Minnesota metropolitan area no later
than one year following the Effective Date, the Corporation will reimburse Employee’s reasonable household and family moving
costs associated with Employee’s relocation to the Twin Cities, Minnesota metropolitan area, up to a maximum of $25,000.00.
Such reimbursement will be subject to applicable withholdings. Employee must submit receipts or other appropriate documentation
of each expense under this Section 4.5 within thirty (30) days after such expense is incurred, and the Corporation will pay such
reimbursements to Employee within thirty (30) days thereafter. If Employee does not commence employment or Employee terminates
Employee’s employment with the Corporation within two years of the Effective Date, then Employee must promptly reimburse
the Corporation for a pro-rata share of all relocation expenditures made by the Corporation pursuant to this Section 4.5. For
example, if Employee completes one year of service prior to terminating Employee’s employment with the Corporation, Employee
must promptly reimburse the Corporation for fifty (50%) of all relocation expenditures (one year = 50% pro-rata share).


4.6       Business
Expenses. While Employee is employed by the Corporation during the Term, the Corporation shall reimburse Employee for all
reasonable and necessary out-of-pocket business, travel and entertainment expenses incurred by Employee in the performance of
Employee’s duties and responsibilities hereunder, subject to the Corporation’s normal policies and procedures for
expense verification and documentation.


4.7       Other
Benefits:  During the Term, the Corporation shall directly pay the cost of a cell phone or wireless handheld device
for the Employee’s use. Additionally, during the Term, the Corporation shall provide Employee an automobile allowance of
up to $600.00 per month. The Corporation shall also provide a corporate credit card for approved business expenses and shall otherwise
reimburse the Employee for, or pay directly, all reasonable business expenses incurred by the Employee in the performance of Employee’s
duties under this Agreement, provided that the Employee incurs and accounts for such expenses in accordance with all Corporation
policies and directives in effect from time to time.




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5.             Termination
of Employment.


5.1       Termination
of Employment Events. Employee’s employment with the Corporation is at-will. Employee’s employment with the Corporation
will terminate as follows:


		(a)	The
                                         effective date following written notice from the Corporation of the termination of Employee’s
                                         employment as specified herein;



		(b)	Employee’s
                                         abandonment of Employee’s employment or the effective date of Employee’s
                                         resignation for Good Reason (as defined below) or any other reason (as specified in written
                                         notice from Employee);



		(c)	After
                                         thirty (30) days’ advance written notice to Employee by the Corporation of termination
                                         of Employee’s employment for Employee’s Disability (as defined below); or



(d)       Immediately
upon Employee’s death.


5.2       Termination
Date. The date upon which Employee’s termination of employment with the Corporation is effective is the “Termination
Date.” For purposes of Sections 6.1, 6.2 and 7 only, with respect to the timing of the Pre-CIC Severance Payments or the
Post-CIC Severance Payment (as applicable) and the Pre-CIC Benefits Continuation Payments or the Post-CIC Benefits Continuation
Payments (as applicable), and the additional amounts identified in Section 7 (if applicable), the Termination Date means the date
on which a “separation from service” has occurred for purposes of Section 409A of the Internal Revenue Code, as amended,
and the regulations and guidance thereunder (the “Code”).


6.             Payments
Upon Termination of Employment.


6.1.       Termination
of Employment Without Cause or by Employee for Good Reason During the Term and Before the First Change in Control. If Employee’s
employment with the Corporation is terminated during the Term by the Corporation for any reason other than for Cause (as defined
in Section 6.4), or by Employee for Good Reason (as defined in Section 6.6), and the Termination Date occurs before the date of
the first Change in Control (as defined in Section 6.5) to occur during the Term, then the Corporation shall, in addition to paying
Employee’s Base Salary and other compensation and benefits earned through the Termination Date, and subject to Section 6.9,


		(a)	pay
                                         to Employee as severance pay an amount equal to the sum of (i) one (1) times Employee’s
                                         annualized Base Salary as of the Termination Date, plus (ii) an amount equal to one hundred
                                         percent (100%) of Employee’s target annual bonus based on Employee’s individual
                                         performance for the fiscal year in which the Termination Date occurs, plus (iii) an amount
                                         equal to Employee’s target annual bonus based on the Corporation’s performance
                                         for the fiscal year in which the Termination Date, multiplied by a fraction, the numerator
                                         of which is the number of days Employee was employed by the Corporation during the fiscal
                                         year in which the Termination Date occurs and the denominator of which is 365, less all
                                         legally required and authorized deductions and withholdings, payable in substantially
                                         equal installments in accordance with the Corporation’s regular payroll cycle during
                                         the twelve (12) month period immediately following
the Termination Date, provided, however, that any installments that otherwise would be payable on the Corporation’s regular
payroll dates between the Termination Date and the 45th calendar day after the Termination Date will be delayed until
the Corporation’s first regular payroll date that is after the expiration of all rescission periods identified in the Release
(as defined in Section 6.9) but in no event later than seventy-five (75) days after the Termination Date and included with the
installment payable on such payroll date (the “Pre-CIC Severance Payments”); and





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		(b)	if
                                         Employee is eligible for and takes all steps necessary to continue Employee’s group
                                         health insurance coverage with the Corporation following the Termination Date (including
                                         completing and returning the forms necessary to elect COBRA coverage), pay for the portion
                                         of the premium costs for such coverage that the Corporation would pay if Employee remained
                                         employed by the Corporation, at the same level of coverage that was in effect as of the
                                         Termination Date, through the earliest of: (i) the twelve (12) month anniversary of the
                                         Termination Date, (ii) the date Employee becomes eligible for group health insurance
                                         coverage from any other employer, or (iii) the date Employee is no longer eligible to
                                         continue Employee’s group health insurance coverage with the Corporation under
                                         applicable law (“Pre-CIC Benefits Continuation Payments”).



6.2       Termination
of Employment Without Cause or by Employee for Good Reason During the Term and Within Twelve (12) Months after the First Change
in Control. If Employee’s employment with the Corporation is terminated during the Term by the Corporation for any reason
other than for Cause (as defined in Section 6.4), or by Employee for Good Reason (as defined in Section 6.6), and the Termination
Date occurs on or within twelve (12) months after the date of the first Change in Control (as defined in Section 6.5) to occur
during the Term, then the Corporation shall, in addition to paying Employee’s Base Salary and other compensation and benefits
earned through the Termination Date, and subject to Section 6.9,


		(a)	pay
                                         to Employee as severance pay an amount equal to the sum of (i) 1.5 times Employee’s
                                         annualized Base Salary as of the Termination Date, plus (ii) an amount equal to one hundred
                                         fifty percent (150%) of Employee’s target annual bonus based on Employee’s
                                         individual performance for the fiscal year in which the Termination Date occurs, plus
                                         (iii) an amount equal to Employee’s target annual bonus based on the Corporation’s
                                         performance for the fiscal year in which the Termination Date, multiplied by a fraction,
                                         the numerator of which is the number of days Employee was employed by the Corporation
                                         during the fiscal year in which the Termination Date occurs and the denominator of which
                                         is 365, less all legally required and authorized deductions and withholdings, payable
                                         in a lump sum on the Corporation’s first regular payroll date that is after the
                                         expiration of all rescission periods identified in the Release (as defined in Section
                                         6.9) but in no event later than seventy-five (75) days after the Termination Date (the
                                         “Post-CIC Severance Payment”); and



		(b)	if
                                         Employee is eligible for and takes all steps necessary to continue Employee’s group
                                         health insurance coverage with the Corporation following
the Termination Date (including completing and returning the forms necessary to elect COBRA coverage), pay for the portion of
the premium costs for such coverage that the Corporation would pay if Employee remained employed by the Corporation, at the same
level of coverage that was in effect as of the Termination Date, through the earliest of: (i) the eighteen (18) month anniversary
of the Termination Date, (ii) the date Employee becomes eligible for group health insurance coverage from any other employer,
or (iii) the date Employee is no longer eligible to continue Employee’s group health insurance coverage with the Corporation
under applicable law (“Post-CIC Benefits Continuation Payments”); and





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		(c)	all
                                         outstanding unvested equity-based awards granted to Employee during Employee’s
                                         continuous employment with the Corporation preceding the Termination Date (“Equity
                                         Awards”) will be affected as follows: (i) stock options or stock appreciation rights
                                         will become fully vested and exercisable for the remainder of their full term (ii) Equity
                                         Awards, other than stock options and stock appreciation rights, that do not vest based
                                         on the attainment of performance goals, will become fully vested and the restrictions
                                         thereon will lapse; provided that any delays in the settlement or payment of such awards
                                         that are set forth in the applicable award agreement and that are required under Section
                                         409A of the Code will remain in effect, and (iii) all Equity Awards, other than stock
                                         options and stock appreciation rights, that vest based on the attainment of performance
                                         goals will remain outstanding and will vest or be forfeited in accordance with the terms
                                         of the applicable award agreements if and to the extent that the applicable performance
                                         criteria is satisfied.



6.3.       Other
Termination of Employment Events. If Employee’s employment with the Corporation is terminated by the Corporation or
Employee for any reason upon or following the expiration of the Term, or if Employee’s employment with the Corporation is
terminated during the Term by reason of:


		(a)	Employee’s
                                         abandonment of Employee’s employment or Employee’s resignation for any reason
                                         other than Good Reason;



		(b)	termination
                                         of Employee’s employment by the Corporation for Cause; or



		(c)	Employee’s
                                         death or Disability,



then
the Corporation shall pay to Employee or Employee’s beneficiary or Employee’s estate, as the case may be, Employee’s
Base Salary and other compensation earned through the Termination Date and Employee shall not be eligible or entitled to receive
any severance pay or benefits from the Corporation.




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6.4.       Cause
Defined. “Cause” hereunder means:


		(a)	Employee’s
                                         material failure to perform Employee’s job duties competently as reasonably determined
                                         by the Corporation’s President and Chief Executive Officer or the Board;



		(b)	gross
                                         misconduct by Employee which the Corporation’s President and Chief Executive Officer
                                         or the Board determines is (or will be if continued) demonstrably and materially damaging
                                         to the Corporation;



		(c)	fraud,
                                         misappropriation, or embezzlement by Employee;



		(d)	conviction
                                         of a felony crime or a crime of moral turpitude;



		(e)	conduct
                                         in the course of employment that the Corporation’s President and Chief Executive
                                         Officer or the Board determines is unethical; or



		(f)	the
                                         material breach of this Agreement or the Restrictive Covenants Agreement by Employee.



With
respect to Section 6.4(a), Section 6.4(b) and Section 6.4(e), the Corporation shall first provide Employee with written notice
and an opportunity to cure such breach, if curable, in the reasonable discretion of the Corporation’s President and Chief
Executive Officer or the Board, and identify with specificity the action needed to cure within thirty (30) days of Employee’s
receipt of written notice from the Corporation. If the Corporation terminates Employee’s employment for Cause pursuant to
this Section 6.4, then Employee shall not be eligible or entitled to receive any severance pay or benefits from the Corporation.


6.5.       Change
in Control Defined. “Change in Control” hereunder means: 


		(a)	A
                                         “change in ownership,” as described in Section 1.409A-3(i)(5)(v) of the Treasury
                                         Regulations;



		(b)	A
                                         “change in effective control,” as described in Section 1.409A-3(i)(5)(vi)
                                         of the Treasury Regulations; or



		(c)	A
                                         “change in ownership of a substantial portion of the assets,” as described
                                         in Section 1.409A-3(i)(5)(vii) of the Treasury Regulations.



6.6.       Good
Reason Defined. “Good Reason” hereunder means the initial occurrence of any of the following events without Employee’s
consent:


		(a)	a
                                         material diminution in the Employee’s responsibilities, authority or duties; or



		(b)	a
                                         material diminution in the Employee's salary, other than pursuant to a reduction in the
                                         salary for all executive employees of the Corporation and its affiliates, applied on
                                         a pro rata basis to all salaried executives including Employee;





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		(c)	receipt
                                         by Employee of a written non-renewal of this Agreement by the Corporation in accordance
                                         with Section 2; or



		(d)	the
                                         material breach of this Agreement by the Corporation.



provided,
however, that “Good Reason” shall not exist unless Employee has first provided written notice to the Corporation of
the initial occurrence of one or more of the conditions under clauses (a) through (d) above within thirty (30) days of the condition’s
occurrence, such condition is not fully remedied by the Corporation within thirty (30) days after the Corporation’s receipt
of written notice from Employee, and the Termination Date as a result of such event occurs within ninety (90) days after the initial
occurrence of such event.


6.7.       Disability
Defined. “Disability” hereunder means the inability of Employee to perform on a full-time basis, with or without
reasonable accommodation, the duties and responsibilities of Employee’s employment with the Corporation by reason of Employee’s
illness or other physical or mental impairment or condition, if such inability continues for an uninterrupted period of at least
one hundred (100) days or more during any 360-day period. A period of inability shall be “uninterrupted” unless and
until Employee returns to full-time work for a continuous period of at least thirty (30) days. This Section 6.7 does not relieve
the Corporation of any duty to reasonably accommodate a qualifying disability under the Americans with Disabilities Act, the Minnesota
Human Rights Act, any legal duty under the Family Medical Leave Act, or any of its other duties pursuant to applicable law.


6.8.       The
Corporation’s Sole Obligation. In the event of termination of Employee’s employment, the sole obligation of the
Corporation shall be its obligation to make the payments called for by Section 6.1, Section 6.2 or Section 6.3, as the case may
be, and the Corporation shall have no other obligation to Employee or to Employee’s beneficiary or Employee’s estate,
except for any amounts due under the terms of any employee benefit plans or programs then maintained by the Corporation in which
Employee participates.


6.9.       Conditions
To Receive the Pre-CIC Severance Payments or the Post-CIC Severance Payment and the Pre-CIC Benefits Continuation Payments or
the Post-CIC Benefits Continuation Payments. Notwithstanding the foregoing provisions of this Section 6, the Corporation will
not be obligated to make the Pre-CIC Severance Payments under Section 6.1 or the Post-CIC Severance Payment under Section 6.2
(as applicable) or the Pre-CIC Benefits Continuation Payments under Section 6.1 or the Post-CIC Benefits Continuation Payments
under Section 6.2 (as applicable) to or on behalf of Employee unless (a) Employee signs a release of claims in favor of the Corporation
in a form to be prescribed by the Corporation (the “Release”), (b) all applicable consideration periods and rescission
periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (c) Employee is
in strict compliance with the terms of this Agreement and the Restrictive Covenants Agreement and any other written agreement
between Employee and the Corporation.


7.             Anticipatory
Termination; Additional Severance. If a Pre-CIC Termination Event (as defined below) occurs during the Term, then, subject
to Employee satisfying the same conditions identified in Section 6.9 in exchange for Employee’s receipt of the additional
amounts identified in this Section 7, the Corporation shall provide to Employee (in addition to making the Pre-CIC Severance Payments
and the Pre-CIC Benefits Continuation Payments under Section 6.1):


		(a)	an
                                         amount equal to the sum of (i) fifty percent (50%) of Employee’s annualized Base
                                         Salary as of the Termination Date, plus (ii) fifty percent (50%) of Employee’s
                                         target annual bonus based on Employee’s individual performance for the fiscal year in which the Termination Date occurs, less all legally required
and authorized deductions and withholdings, payable in a lump sum on the Corporation’s first regular payroll date that is
after the expiration of all rescission periods identified in the Release (as defined in Section 6.9) but in no event later than
seventy-five (75) days after the date of the Change in Control; and





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		(b)	if
                                         Employee is eligible for and takes all steps necessary to continue Employee’s group
                                         health insurance coverage with the Corporation following the Termination Date (including
                                         completing and returning the forms necessary to elect COBRA coverage), pay for the portion
                                         of the premium costs for such coverage that the Corporation would pay if Employee remained
                                         employed by the Corporation, at the same level of coverage that was in effect as of the
                                         Termination Date, from the end of the payment of the Pre-CIC Benefits Continuation Payments
                                         under Section 6.1 through the earliest of: (i) the eighteen (18) month anniversary of
                                         the Termination Date, (ii) the date Employee becomes eligible for group health insurance
                                         coverage from any other employer, or (iii) the date Employee is no longer eligible to
                                         continue Employee’s group health insurance coverage with the Corporation under
                                         applicable law.



For purposes
of this Section 7, a “Pre-CIC Termination Event” means an involuntary termination of Employee’s employment by
the Corporation without Cause, or Nonrenewal of the Term, resulting in a Termination Date that is within sixty (60) days prior
to the Change in Control; provided that Employee reasonably demonstrates that such termination (i) was requested by a party other
than the Board that has taken other steps reasonably calculated to result in the Change in Control, or (ii) otherwise arose in
connection with or in anticipation of the Change in Control.


8.             Section
409A and Taxes Generally.


8.1       Taxes.
The Corporation shall be entitled to withhold on and report the making of such payments as may be required by law as determined
in the reasonable discretion of the Corporation. Except for any tax amounts withheld by
the Corporation from any compensation that Employee may receive in connection with Employee’s employment with the Corporation
and any employer taxes required to be paid by the Corporation under applicable laws or regulations, Employee is solely
responsible for payment of any and all taxes owed in connection with any compensation, benefits, reimbursement amounts or other
payments Employee receives from the Corporation under this Agreement or otherwise in connection
with Employee’s employment with the Corporation. The Corporation does not guarantee any particular tax consequence
or result with respect to any payment made by the Corporation.


8.2       Section
409A. This Agreement is intended to provide for payments that satisfy, or are exempt from, the requirements of Section 409A,
including Sections 409A(a)(2), (3) and (4) of the Code and current and future guidance and regulations interpreting such provisions,
and should be interpreted accordingly. In furtherance of the foregoing, the provisions set forth below shall apply notwithstanding
any other provision in this Agreement:


(a)
       all payments to be made to Employee hereunder, to the extent they constitute a deferral
of compensation subject to the requirements of Section 409A (after taking into account all exclusions applicable to such payments
under Section 409A), shall be made no later, and shall not be made any earlier, than at the time or times specified in this Agreement
or in any applicable plan for such payments to be made, except as otherwise permitted or required under Section 409A;




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(b)
       the date of Employee’s “separation from service”, as defined in Section
409A (and as determined by applying the default presumptions in Treas. Reg. §1.409A-1(h)(1)(ii)), shall be treated as the
date of Employee’s termination of employment for purposes of determining the time of payment of any amount that becomes
payable to Employee related to Employee’s termination of employment under Section 6.1 or Section 6.2, and any reference
to Employee’s “Termination Date” or “termination” of Employee’s employment in Section 6.1
or Section 6.2 shall mean the date of Employee’s “separation from service”, as defined in Section 409A (and
as determined by applying the default presumptions in Treas. Reg. §1.409A-1(h)(1)(ii));


(c)       in
the case of any amounts payable to Employee under this Agreement that may be treated as payable in the form of “a series
of installment payments”, as defined in Treas. Reg. §1.409A-2(b)(2)(iii), Employee’s right to receive such payments
shall be treated as a right to receive a series of separate payments for purposes of Treas. Reg. §1.409A-2(b)(2)(iii);


(d)
       to the extent that the reimbursement of any expenses eligible for reimbursement or the
provision of any in-kind benefits under any provision of this Agreement would be considered deferred compensation under Section
409A (after taking into account all exclusions applicable to such reimbursements and benefits under Section 409A): (i) reimbursement
of any such expense shall be made by the Corporation as soon as practicable after such expense has been incurred, but in any event
no later than December 31st of the year following the year in which Employee incurs such expense; (ii) the amount of
such expenses eligible for reimbursement, or in-kind benefits to be provided, during any calendar year shall not affect the amount
of such expenses eligible for reimbursement, or in-kind benefits to be provided, in any calendar year; and (iii) Employee’s
right to receive such reimbursements or in-kind benefits shall not be subject to liquidation or exchange for another benefit;


(e)
       to the extent any payment or delivery otherwise required to be made to Employee hereunder
on account of Employee’s separation from service is properly treated as a deferral of compensation subject to Section 409A
after taking into account all exclusions applicable to such payment and delivery under Section 409A, and if Employee is a “specified
employee” under Section 409A at the time of Employee’s separation from service, then such payment and delivery shall
not be made prior to the first business day after the earlier of (i) the expiration of six months from the date of Employee’s
separation from service, or (ii) the date of Employee’s death (such first business day, the “Delayed Payment Date”),
and on the Delayed Payment Date, there shall be paid or delivered to Employee or, if Employee has died, to Employee’s estate,
in a single payment or delivery (as applicable) all entitlements so delayed, and in the case of cash payments, in a single cash
lump sum, an amount equal to aggregate amount of all payments delayed pursuant to the preceding sentence. Except for any tax amounts
withheld by the Corporation from the payments or other consideration hereunder and any employment taxes required to be paid by
the Corporation, Employee shall be responsible for payment of any and all taxes owed in connection with the consideration provided
for in this Agreement; and




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(f)       the
Parties agree that this Agreement may be amended, as may be necessary to fully comply with, or to be exempt from, Section 409A
and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost
to either Party.


9.             Miscellaneous.


9.1.       Integration.
This Agreement, the Restrictive Covenants Agreement and any Equity Awards embody the entire agreement and understanding among
the Parties relative to subject matter hereof and combined supersede all prior agreements and understandings relating to such
subject matter, including but not limited to any earlier offers to Employee by the Corporation.


9.2.       Applicable
Law. All matters relating to the interpretation, construction, application, validity and enforcement of this Agreement are
governed by the laws of the State of Minnesota without giving effect to any choice or conflict of law provision or rule, whether
of the State of Minnesota or any other jurisdiction, that would cause the application of laws of any jurisdiction other than the
State of Minnesota.


9.3.       Choice
of Jurisdiction. Employee and the Corporation consent to jurisdiction of the courts of the State of Minnesota and/or the federal
district courts, District of Minnesota, for the purpose of resolving all issues of law, equity, or fact, arising out of or in
connection with this Agreement or Employee’s employment with the Corporation or the termination of such employment. Any
action involving claims for interpretation, breach or enforcement of this Agreement or related to Employee’s employment
with the Corporation or the termination of such employment shall be brought in such courts. Each party consents to personal jurisdiction
over such party in the state and/or federal courts of Minnesota and hereby waives any defense of lack of personal jurisdiction
or inconvenient forum.


9.4.       Employee’s
Representations. Employee represents that Employee is not subject to any agreement or obligation that would prevent or limit
Employee from entering into this Agreement or that would be breached upon performance of Employee’s duties under this Agreement,
including but not limited to any duties owed to any former employers not to compete. If
Employee possesses any information that Employee knows or should know is considered
by any third party, such as a former employer of Employee’s, to be confidential, trade secret, or otherwise proprietary,
Employee shall not disclose such information to the Corporation or use such information to benefit the Corporation in any way.


9.5.       Counterparts.
This Agreement may be executed in several counterparts and as so executed shall constitute one agreement binding on the Parties.


9.6.       Assignment
and Successors. The rights and obligations of the Corporation under this Agreement
shall inure to the benefit of and will be binding upon the successors and assigns of the
Corporation, provided any such successor or assignee assumes all of the Corporation’s obligations under this Agreement .
Neither party may, without the written consent of the other party, assign or delegate any of its rights or obligations under this
Agreement except that the Corporation may, without any further consent of Employee,
assign or delegate any of its rights or obligations under this Agreement to any corporation or other business entity (a) with
which the Corporation may merge or consolidate, (b) to which the
Corporation may sell or transfer all or substantially all of its assets or capital stock or equity, or (c) any affiliate
or subsidiary of the Corporation. After any such assignment or delegation by the
Corporation, the Corporation will be discharged from all further liability
hereunder and such assignee will thereafter be deemed to be the “Corporation” for purposes of
all terms and conditions of this Agreement, including this Section 9.6. Employee may not assign this Agreement or any rights or
obligations hereunder. Any purported or attempted assignment or transfer by Employee of this Agreement or any of Employee’s
duties, responsibilities, or obligations hereunder is void.




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9.7.       Modification.
This Agreement shall not be modified or amended except by a written instrument signed by the Parties.


9.8.       Severability.
The invalidity or partial invalidity of any portion of this Agreement shall not invalidate the remainder thereof, and said remainder
shall remain in fully force and effect.


9.9.       Opportunity
to Obtain Advice of Counsel. Employee acknowledges that Employee has been advised by the Corporation to obtain legal advice
prior to executing this Agreement, and that Employee had sufficient opportunity to do so prior to signing this Agreement.


9.10.       Indemnification.
As to acts or omissions of Employee which are within the scope of Employee’s authority as an officer, director, or employee
of the Corporation and/or any affiliate of the Corporation, the Corporation will indemnify Employee in accordance with and subject
to the limitations contained in its Articles of Incorporation, Bylaws and Section 302A.521 of the Minnesota Business Corporations
Act. If Employee is made or threatened to be made a party to any threatened, pending, or completed civil, criminal, administrative,
arbitration, or investigative proceeding, including a proceeding by or in the right of the corporation, Employee is entitled,
upon written request to the Corporation, to payment or reimbursement by the Corporation of reasonable expenses, including attorneys'
fees and disbursements, incurred by Employee in advance of the final disposition of the proceeding, (a) upon receipt by the Corporation
of a written affirmation by Employee of a good faith belief that the criteria for indemnification set forth in Section 302A.521,
subdivision 2 of the Minnesota Business Corporations Act have been satisfied and a written undertaking by Employee to repay all
amounts so paid or reimbursed by the Corporation, if it is ultimately determined that the criteria for indemnification have not
been satisfied, and (b) after a determination that the facts then known to those making the determination would not preclude indemnification
under the Corporation’s Articles of Incorporation and Bylaws and Section 302A.521 of the Minnesota Business Corporations
Act, including but not limited to whether the alleged misconduct by Employee that is the subject of the proceeding is within the
course and scope of Employee’s employment.


9.11.       D&O
Insurance. The Corporation shall maintain an insurance policy or policies providing directors' and officers' liability insurance,
comprehensive general liability insurance, and errors and omissions insurance, and the Employee shall be covered by such policy
or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any officer of the Corporation.






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9.12.       280G
Limitations. In the event that the severance and other benefits provided for in this Agreement or otherwise payable to Employee
(a) constitute “parachute payments” within the meaning of Section 280G of the Code and (b) would be subject to the
excise tax imposed by Code Section 4999, then such benefits shall be either be: (i) delivered in full, or (ii) delivered as to
such lesser extent which would result in no portion of such severance benefits being subject to excise tax under Code Section
4999, whichever of the foregoing amounts, taking into account the applicable federal, state and local income and employment taxes
and the excise tax imposed by Code Section 4999, results in the receipt by Employee, on an after-tax basis, of the greatest amount
of benefits, notwithstanding that all or some portion of such benefits may be subject to excise tax under Code Section 4999. Any
determination required under this Section 9.12 will be made in writing
by an accounting firm selected by the Corporation or such other person or entity to which the parties mutually agree (the “Accountants”),
whose determination will be conclusive and binding upon Employee and the Corporation for all purposes. For purposes of making
the calculations required by this Section 9.12, the Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Code Sections 280G and 4999.
The Corporation and Employee shall furnish to the Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this Section. The Corporation shall bear all costs the Accountants may reasonably
incur in connection with any calculations contemplated by this Section 9.12. Any reduction in payments and/or benefits required
by this Section 9.12 shall occur in the following order: (A) cash payments shall be reduced first and in reverse chronological
order such that the cash payment owed on the latest date following the occurrence of the event triggering such excise tax will
be the first cash payment to be reduced; (B) accelerated vesting of stock awards, if any, shall be cancelled/reduced next and
in the reverse order of the date of grant for such stock awards (i.e., the vesting of the most recently granted stock awards will
be reduced first), with full-value awards reversed before any stock option or stock appreciation rights are reduced; and (C) deferred
compensation amounts subject to Section 409A shall be reduced last.


[Signature
Page Follows]




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THIS
EMPLOYMENT AGREEMENT was voluntarily and knowingly executed by the Parties effective as of the Effective Date first set forth
above.


 


 


	 	 	 	ELECTROMED, INC.	 
	 	 	 	 	 
	Date:	May 11, 2020	 	/s/ Kathleen S. Skarvan	 
	 	 	 	By: Kathleen S. Skarvan	 
	 	 	 	Its: President and Chief Executive Officer	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	EMPLOYEE:	 
	 	 	 	 	 
	Date:	May 7, 2020	 	/s/ Michael MacCourt	 
	 	 	 	Michael MacCourt