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EXHIBIT 10(f)  

  
 

    EMPLOYMENT AGREEMENT    
  

    THIS EMPLOYMENT AGREEMENT (this "Agreement") is made as of the 29th day of November, 2000, by and between Minntech Corporation, a Minnesota corporation, with
its principal executive office at Plymouth, Minnesota (the "Company"), and R. James Danehy, a resident of Libertyville, Illinois (the "Executive"). 

    WHEREAS,
the Executive is experienced in managing significant business enterprises; and 

    WHEREAS,
the Company wishes to secure the Executive's services as President and Chief Executive Officer of the Company under the terms and conditions hereof; and 

    WHEREAS,
the Executive wishes to provide such services to the Company; and 

    WHEREAS,
at the same time he executes this Agreement, the Executive also shall enter into a separate Management Agreement with the Company (the "Management Agreement"), which shall
govern the parties' rights in the event of a Change in Control (as defined in the Management Agreement); 

    NOW
THEREFORE, in consideration of the foregoing and the other covenants and agreements stated herein, the Executive and the Company hereby agree as follows: 

1.  Period of Employment

    The
Company shall employ the Executive as, and the Executive shall serve the Company as, President and Chief Executive Officer during the period commencing on November 29, 2000
and ending on December 31, 2001 (the "Employment Period"), unless the Executive's employment hereunder terminates earlier in accordance with  Section 5 hereof. Commencing on January 1,
2002, and on each January 1 thereafter, the Employment Period shall be extended
automatically for one additional year (also referred to herein as the "Employment Period"), unless not later than the October 31st preceding
any such automatic extension, the Company shall give the Executive written notice that it elects not to so extend the Employment Period. 

2.  Duties and Responsibilities of the Executive

    At
its first regular meeting after the Executive and the Company execute this Agreement, the Board of Directors of the Company (the "Board") shall appoint the Executive as President
and Chief Executive Officer of the Company and shall elect the Executive as a member of the Board. As President and Chief Executive Officer, the Executive shall have all duties and responsibilities
customarily associated with the offices of president and chief executive officer of a significant business enterprise, shall have primary management and operational responsibility for the Company,
including without limitation, its overall strategic direction, and shall perform such other duties consistent with the offices of President and Chief Executive Officer of the Company as may be
specified from time to time by the Board, to whom the Executive shall report. During the Employment Period, the Executive shall devote full time to the Executive's duties and responsibilities
hereunder, and he shall not engage in other employment or in other business activities; provided, however, that the Executive (i) may make appropriate and reasonable personal investments, and
(ii) may provide services of up to five business days per year to JDMD Company, LLC with respect to its real estate development known as Quarry Estates, Carlyle, Illinois. Within ten days after
he commences his employment with the Company, the Executive shall advise the Board in writing of any boards of directors of business corporations or non-profit organizations on which he serves and of
any other outside obligations that he has that could affect the amount of time he has to devote to his duties and responsibilities hereunder. 

3.  Compensation

    (a)  Base Salary.  While the Executive is employed by the Company hereunder, the Company shall pay to the
Executive a base salary ("Base Salary") of $360,000.00 per year. The Company shall pay the 

 

Executive's Base Salary to him in accordance with the Company's standard payroll practices as in effect from time to time. 

    (b)  Annual Bonus Awards.  While the Executive is employed by the Company hereunder, the Executive shall
be entitled to receive annual bonus awards paid by the Company. Beginning with the fiscal year that commences on April 1, 2001 and for each complete fiscal year thereafter during which the
Executive is employed by the Company hereunder, the Company shall pay to the Executive as an annual bonus (the "Bonus Award") an amount that shall be a percentage of the Executive's Base Salary at the
end of each such fiscal year determined according to the following table: 

	Percentage
	 	Fiscal Year End

	 	 	 
	0% to 20%	 	March 31, 2002
	0% to 30%	 	March 31, 2003
	0% to 40%	 	March 31, 2004
	0% to 50%	 	March 31, 2005

The
amount of the Executive's annual Bonus Award shall be determined by the Board in its sole and absolute discretion within the percentages set forth above pursuant to criteria established by the
Board and shall be based on both (i) the financial performance achieved by the Company during the applicable fiscal year as measured by either the Company's attainment of its business plan
goals or other standards as established by the Board in its sole and absolute discretion after consultation with the Executive before such fiscal year, and (ii) the Executive's attainment of
his personal objectives as established by the Board in its sole and absolute discretion after consultation with the Executive before such fiscal year. The Board shall make its determination of the
amount of the Executive's annual Bonus Award, if any, within 30 days following the end of each fiscal year, which Bonus Award shall be paid to the Executive within 60 days following the end of such
fiscal year. 

    (c)  Stock Options.  The Board shall, effective as of its first regular meeting after the Executive and
the Company execute this Agreement or promptly thereafter, grant to the Executive a non-qualified option to purchase 333,964 shares of common stock of the Company at a price per share equal to
the closing sales price of a share of common stock of the Company on the Nasdaq National Market on the trading day immediately preceding the date on which the Board grants such option. Such option
shall be granted pursuant to the terms of a Non-Qualified Stock Option Agreement (the "Option Agreement"), a copy of which is attached hereto as Exhibit 1, and, to the extent provided in the
Option Agreement, shall be exercisable by the Executive in three installments as follows: 111,321 shares on the first anniversary of the Option Date (as defined in the Option Agreement),
111,321 shares on the second anniversary of the Option Date (as defined in the Option Agreement), and 111,322 shares on the third anniversary of the Option Date (as defined in the Option
Agreement). Notwithstanding the foregoing provisions of this Section 3(c) or of the provisions of the Option Agreement, if a Change in
Control (as defined in the Management Agreement) occurs on or before the first anniversary of the commencement of Executive's employment with the Company, then the options to be granted to the
Executive under this Section 3(c) shall immediately be null and void. Notwithstanding anything to the
contrary provided in Section 7 of the Option Agreement, if any Change in Control (as defined in the Management Agreement) occurs other than a
Change in Control described in the preceding sentence, then all unvested, unexpired options granted to the Executive pursuant to this  Section 3(c) shall immediately vest and become
exercisable. If the Executive's employment with the Company terminates for any other
reason, then the exercisability of the options granted to him pursuant to this Section 3(c) shall be determined by the provisions of the Option
Agreement. 

    (d)  Transaction Bonus.  If a Change in Control (as defined in the Management Agreement) occurs on or
before the first anniversary of the commencement of Executive's employment with the Company, then the Company shall pay to the Executive a bonus, the amount of which shall be determined by the 

2

 

Board in its sole and absolute discretion (a "Transaction Bonus"). The Transaction Bonus, if any, shall be paid to the Executive in a lump sum on the tenth business day following the closing of such
transaction. 

4.  Employee Benefits

    (a) While
the Executive is employed by the Company hereunder, the Executive shall be entitled to participate in such group insurance plans, including health, dental,
life, and disability insurance, and such other employee benefits as are provided from time to time by the Company to its senior executives, in accordance with the provisions of the Company's general
employee benefits plans and programs then in effect, to the extent that such provisions are not expressly modified in this Agreement. 

    (b) While
the Executive is employed by the Company hereunder, the Executive shall be entitled to take four weeks of paid vacation each calendar year commencing on
January 1, 2001. 

    (c) While
the Executive is employed by the Company hereunder, the Company shall provide him for business use a leased automobile with a retail value of not more than
$25,000.00 at the inception of the lease. The Company also shall reimburse the Executive on a monthly basis for the reasonable and necessary expenses he incurs to insure, operate, and maintain such
leased automobile (the "Executive Automobile Maintenance Expense") promptly after he submits documentation to the Company verifying such expenses. 

    (d) While
the Executive is employed by the Company hereunder, the Company promptly shall reimburse the Executive for his reasonable and necessary business, travel, and
entertainment expenses in accordance with the Company's general expense reimbursement policies and practices in effect from time to time for its senior executives. 

    (e) After
the Executive and the Company execute this Agreement, the Company shall: 

	(i)
	lease
a furnished apartment located in the Twin Cities metropolitan area for use by the Executive and pay the costs of the utilities for such
apartment, for a period not to exceed 12 months, which leased apartment also shall be available for use by transferring executives of the Company and newly hired executives of the Company as
deemed to be appropriate by the Executive;

	(ii)
	until
the leased apartment referred to in Section 4(e)(i) is available to the
Executive, reimburse the Executive for the reasonable and necessary out-of-pocket expenses that he incurs for temporary accommodations at a residential or suite hotel located in the Twin Cities
metropolitan area; and

	(iii)
	provide
commercial airline tickets to the Executive and reimburse him for all reasonable and necessary expenses that he incurs while commuting on
a weekly basis between Libertyville, Illinois and the Twin Cities metropolitan area, including without limitation, ground transportation and parking, for a period not to exceed 12 months; 

provided,
however, that after the leased apartment referred to in Section 4(e)(i) is available to the Executive the maximum total cost for
the items specified in Section 4(e)(i), Section 4(e)(iii), and the cumulative monthly
Executive Automobile Maintenance Expense shall not exceed, on average, $3,500.00 per month, and no dollar limitation shall be applicable prior to the availability of the leased apartment referred to
in Section 4(e)(i). The Board shall review the expenditures that the Company is obligated to make pursuant to this  Section 4(e) promptly
before the first anniversary of the Executive's employment with the Company and shall decide in its sole and
absolute discretion whether to continue, modify, or discontinue such expenditures. 

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5.  Termination

    The
Executive's employment with the Company hereunder shall terminate immediately upon: 

    (a) receipt
by the Company of written notice from the Executive that he is resigning from the Company, 

    (b) receipt
by the Executive of written notice from the Company that the Company is terminating the Executive's employment, 

    (c) the
Executive's death or Disability (as defined below), or 

    (d) expiration
of the Employment Period following a written notice from the Company pursuant to Section 1 hereof. 

The
date on which the Executive's employment termination occurs shall be the "Termination Date" hereunder. 

6.  Payments Upon Termination

    (a) If
the Executive's employment hereunder terminates by reason of: 

	(i)
	resignation
by the Executive or abandonment by the Executive of his employment,

	(ii)
	Termination
by the Company For Cause (as defined below), or

	(iii)
	the
Executive's death or Disability (as defined below), 

then
the Company shall pay to the Executive or his beneficiary or his estate, as the case may be, his Base Salary through the Termination Date. 

    (b) If
the Executive's employment hereunder terminates for one of the following reasons and he is not entitled to any payments pursuant to the Management Agreement: 

	(i)
	termination
by the Company other than Termination by the Company For Cause,

	(ii)
	termination
by the Company other than because of the Executive's Disability (as defined below), or

	(iii)
	expiration
of the Employment Period following a written notice from the Company pursuant to Section 1  hereof, 

then
the Company (A) shall pay to the Executive in 12 equal monthly installments after the Termination Date an amount equal the Executive's Base Salary as of the Termination Date, and
(B) shall provide to the Executive continuing health care coverage for the 12-month period commencing on the first day of the month immediately after the month in which the Termination Date
occurs, so long as the Executive timely elects continuing health care coverage under COBRA following the Termination Date. The Company either shall make group health insurance available to the
Executive on the same basis and on the same terms that such insurance is made available to senior executives of the Company or shall provide him with an individual health insurance policy, provided
that the Executive is able to comply with all requirements respecting insurability. So long as the Executive is covered under the Company's group health insurance program, the Company shall pay the
same portion of the premium as the Company pays for its senior executives for such coverage, and any portion of the premium for such coverage payable by the Executive shall be paid by him at least
monthly on or before the last day of each month during which he is subject to such coverage. So long as the Executive is covered by an individual health insurance policy provided by the Company, he
shall pay the Company at least monthly on or before the last day of each month during which he has such coverage the same amount that he last paid to the Company for his portion of the premium for
coverage under the Company's group health insurance program, and the Company shall pay the balance of the premium for such individual coverage up to a maximum of $500.00 per month. 

4

 

    (c) Notwithstanding the foregoing provisions of this Section 6, if the Executive's employment hereunder
terminates at the time of, or following, or in connection with, any Change in Control (as defined in the Management Agreement), then the Executive's rights to payments and benefits following his
employment termination shall be determined by the terms of the Management Agreement, and he shall not be entitled to receive any payments or benefits as provided in  Section 6(b). 

    (d) "Termination
by the Company For Cause" shall mean the Executive's employment termination for: 

	(i)
	a
persistent failure by the Executive to perform the duties and responsibilities of his employment hereunder, which failure is willful and
deliberate on the Executive's part and is not remedied by him within 30 days after the Executive's receipt of written notice from the Company of such failure;

	(ii)
	an
act or acts of dishonesty undertaken by the Executive and intended to result in substantial gain or personal enrichment of the Executive at the
expense of the Company;

	(iii)
	unlawful
conduct or gross misconduct that is willful and deliberate on the Executive's part and that, in either event, is materially injurious to
the reputation or financial interests of the Company;

	(iv)
	the
conviction of the Executive of or his entry of a nolo contendre plea to a felony; or

	(v)
	a
material breach by the Executive of this Agreement, which breach is not remedied by him within ten days after the Executive's receipt of written
notice from the Company of such breach. 

    (e) "Disability"
shall mean the inability of the Executive to perform the duties and responsibilities of his employment hereunder by reason of his illness or other
physical or mental impairment or condition, if such inability continues for an uninterrupted period of 90 days or more (or such longer period as provided under the group long-term disability
insurance provided to the Executive by the Company while he is employed hereunder). A period of inability shall be "uninterrupted" unless and until the Executive returns to full-time work for a
continuous period of at least 30 days. 

    (f)  In
the event of termination of the Executive's employment hereunder, the sole obligation of the Company shall be its obligation to make the payments called for by  Section 6(a), Section 6(b), or  Section 6(c) hereof, as the case may be, and the Company shall have no other obligation to the Executive or to his wife, his beneficiary,

or his estate, except as otherwise provided by law, under the Management Agreement or the Stock Option Agreement, or, in the event of the Executive's employment termination by reason of the
Executive's death or Disability, under any insurance policies then in effect covering the Executive. 

    (g) The
Executive shall not be required to mitigate the amount of any payment provided for in this Section 6 by
seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Section 6 be reduced by any
compensation earned by the Executive as the result of his employment by another employer or by retirement benefits after the Termination Date, or otherwise except as specifically provided in or this  Section
 6. 

    (h) Notwithstanding
the foregoing provisions of this Section 6, the Company shall not be obligated to make any
payments to the Executive under Section 3(d), Section 6(b), or  Section 6(c) hereof
unless the Executive shall have signed a release of claims in favor of the Company in a form to be prescribed by the
Board, all applicable consideration and rescission periods provided by law shall have expired, and the Executive is in strict compliance with the terms of  Section 7(b), Section 7(c), and  Section 7(d) hereof. 

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7.  Certain Covenants of the Executive

    (a) As
used in this Section 7, "Company" shall include the Company and each corporation, partnership, and other
entity that controls the Company, is controlled by the Company, or is under common control with the Company (in each case "control" meaning the direct or indirect ownership of 50 percent or
more of all outstanding equity interests). 

    (b) The
Executive shall not, directly or indirectly, while the Executive is employed by the Company, or for a period of three years after his Termination Date if the
Executive's employment hereunder terminates as a result of one of the reasons set forth in Section 6(a),  Section 6(b), or Section 6(c) hereof, own, operate, invest in, lend money to, be employed
by, consult with, render services to, act as agent, officer, or director for, or acquire or hold any interest in any business enterprise that competes with any business owned or operated by the
Company as described in the Company's Form 10-K on file with the Securities and Exchange Commission as of the Executive's Termination Date; provided, however, that nothing herein shall prohibit
the Executive from owning not more than one percent of the
outstanding shares of any class of stock of a corporation if such class of stock is regularly traded on a recognized national securities exchange, including the Nasdaq National Market. 

    (c) The
Executive shall not, directly or indirectly, while the Executive is employed by the Company, or for a period of three years after the Executive's Termination
Date: 

	(i)
	employ
or attempt to employ any director, officer, or employee of the Company, or otherwise interfere with or disrupt any employment relationship
(contractual or otherwise) between the Company and any director, officer, or employee of the Company;

	(ii)
	solicit,
request, advise, or induce any individual or business enterprise that, prior to the Termination Date, was a customer, was actively
solicited to become a customer, or actively sought to become a customer, or was a supplier or other material business contact of the Company, to cancel, curtail, or otherwise change its relationship
with the Company; or

	(iii)
	publicly
criticize or disparage in any manner or by any means the Company, its personnel, or any aspect of its management, policies, operations,
products, services, or practices. 

    (d) The
Executive hereby acknowledges that all non-public and/or proprietary information and data of the Company, including without limitation, its trade secrets and
its information and data that are related to research and development, product and service formulation, customers, pricing, sales, and financial results (collectively "Confidential Information"), are
of substantial value to the Company, provide it with a substantial competitive advantage in its business, and are and have been maintained in the strictest confidence. Except as otherwise approved in
writing in advance by the Board, the Executive shall not at any time divulge, furnish, or make accessible any Confidential Information to anyone (other than the Company and its directors and
officers). 

    (e) The
Executive hereby specifically acknowledges that this Section 7 and each provision hereof are reasonable
and necessary to ensure that the Company receives the expected benefits of this Agreement and that any violation of this Section 7 by the
Executive shall harm the Company to such an extent that monetary damages alone would be an inadequate remedy. Therefore, in the event of any violation by the Executive of any provision of this  Section 7, the Company shall be entitled to an injunction (in addition to all other remedies it may have) restraining the Executive from
committing or continuing to commit such violation. If any provision or application of this Section 7 is held unlawful or unenforceable in any
respect, then this Section 7 shall be revised or applied in a manner that renders it lawful and enforceable to the fullest extent possible. 

6

 

8.  No Violation of Other Agreements

    The
Executive hereby represents that neither (i) the Executive's entering into this Agreement nor (ii) the Executive's carrying out the provisions of this Agreement
shall violate any other agreement (oral or written) to which the Executive is a party or by which the Executive is bound. 

9.  Successors and Assigns

    This
Agreement is binding on the Executive and on the Company and its successors and assigns. The rights and obligations of the Company under this Agreement may be assigned to a
successor. No rights or obligations of the Executive hereunder may be assigned by the Executive to any other person or entity. 

10. Separate Representation

    The
Executive hereby acknowledges that the Executive has sought and received independent advice from counsel of the Executive's own selection in connection with this Agreement and has
not relied to any extent on any director, officer, or stockholder of, or counsel to, the Company in deciding to enter into this Agreement. 

11. Governing Law

    This
Agreement shall be construed under and governed by the laws of the State of Minnesota. 

12. Severability

    Each
section and provision of this Agreement shall be considered severable and any invalidity of any section or provision shall not render invalid or impair to any extent any other
section or provision hereof. 

13. Withholding of Taxes

    All
payments made by the Company to the Executive hereunder are subject to withholding of income and employment taxes and all other amounts required by law. 

14. Notices

    Any
notice hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or sent by registered or certified mail, return receipt requested, postage
prepaid, to the party to receive such notice at the address set forth with the signature of such party below or at such other address as may have been furnished to the sender by notice hereunder. All
notices shall be deemed given on the date on which delivered or, if mailed, on the date postmarked. 

15. Resolution of Disputes

    Except
for disputes arising under Section 7 hereof, all disputes involving the interpretation, construction, application, or
alleged breach of this Agreement or the Management Agreement and all disputes relating to the termination of the Executive's employment with the Company shall be submitted to final and binding
arbitration in the Twin Cities metropolitan area. The arbitrator shall be selected and the arbitration shall be conducted pursuant to the then most recent Employment Dispute Resolution Rules of
the American Arbitration Association. The decision of the arbitrator shall be final and binding, and any court of competent jurisdiction may enter judgment upon the award. All fees and expenses of the
arbitrator shall be shared equally by the Executive and the Company . The arbitrator shall have jurisdiction and authority to interpret and apply the provisions of this Agreement and/or the Management
Agreement and relevant federal, state, and local laws, rules, and regulations insofar as necessary to the determination of the dispute and to remedy any breaches of the Agreement and/or the Management
Agreement and/or violations of applicable laws, but shall not have jurisdiction or authority to alter in any way the provisions 

7

 

of this Agreement or the Management Agreement. The arbitrator shall have the authority to award attorneys' fees and a costs to the prevailing party. The parties hereby agree that this arbitration
provision shall be in lieu of any requirement that either party exhaust such party's administrative remedies under federal, state, or local law. 

16. Miscellaneous

    This
Agreement and the Management Agreement contain the entire understandings of the parties with respect to the employment of the Executive by the Company. No provision of this
Agreement may be altered, amended, modified, waived, or discharged in any way whatsoever except by written agreement executed by both parties. No delay or failure of either party to insist, in any one
or more instances, upon performance of any of the terms and conditions of this Agreement or to exercise any rights or remedies hereunder shall constitute a waiver or a relinquishment of such rights or
remedies or any other rights or remedies hereunder. The captions and paragraph headings used in this Agreement are for convenience of reference only and shall not affect the construction or
interpretation of this Agreement or any of the provisions hereof. 

    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the date and year first above written. 

	R. JAMES DANEHY	 	MINNTECH CORPORATION
	

 	
 	
By:	

 
	
 R. James Danehy	 	 	
 William Hope
 Chairman

8

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EXHIBIT 10(g)  

  
 

    MANAGEMENT AGREEMENT    
  

    THIS AGREEMENT is made as of the 29th day of November, 2000, by and between Minntech Corporation, a Minnesota corporation, with its principal executive office
at Plymouth, Minnesota ("Company") and R. James Danehy, a resident of Libertyville, Illinois (the "Executive"). 

    WHEREAS,
Company considers the establishment and maintenance of a sound and vital management to be essential to protecting and enhancing the best interests of Company and its
shareholders; and 

    WHEREAS,
the Executive is expected to make a significant contribution to the profitability, growth and financial strength of Company; and 

    WHEREAS,
Company, as a publicly held corporation, recognizes that the possibility of a Change in Control may exist and that such possibility, and the uncertainty and questions which
it may raise among management, may result in the departure or distraction of the Executive in the performance of the Executive's duties to the detriment of Company and its shareholders; and 

    WHEREAS,
the Executive and the Company are entering into a separate Employment Agreement (the "Employment Agreement") on the same date on which they execute this Agreement; and 

    WHEREAS,
the Executive is willing to be an employee of Company upon the understanding that Company will provide income security if the Executive's employment is terminated under
certain terms and conditions; and 

    WHEREAS,
it is in the best interests of Company and its shareholders to reinforce and encourage the continued attention and dedication of management personnel, including the
Executive, to their assigned duties without distraction and to increase the likelihood of the continued availability to Company of the Executive in the event of a Change in Control. 

    THEREFORE,
in consideration of the foregoing and other respective covenants and agreements of the parties herein contained, the parties hereto agree as follows: 

    1.  Term of Agreement.  This Agreement shall commence on the date hereof and shall continue in effect
until such time as Company notifies the Executive or the Executive notifies Company of termination of this Agreement; provided, however, that in no event may this Agreement be terminated prior to two
years from the date hereof, and notice of termination on the second or any subsequent anniversary date hereof must be given by Company in writing mailed to the Executive at his or her last known
address within 60 days prior to such anniversary date or by the Executive by notice in writing mailed to Company at the principal executive office of Company within 60 days prior to such
anniversary date. If no such notice is given, then the term of this Agreement shall be extended for additional periods of one year. Notwithstanding the preceding sentence, if a Change in Control
occurs during the term of this Agreement (including any extension hereof), this Agreement shall continue in effect for a period of 36 months from the date of the occurrence of a Change in Control.
Except as provided in Section 2(b) or Section 3(e) of this Agreement, nothing stated herein shall limit the right of the Executive or Company to terminate the employment of
the Executive with Company at any time prior to the expiration of the term of this Agreement, with or without Cause (as defined in Section 3(b) of this Agreement) and for any reason
whatsoever, subject to the right of the Executive to receive any payment and other benefits that may be due pursuant to the terms and conditions of Section 4 of this Agreement. 

    2.  Change in Control.  No amounts shall be payable hereunder unless a Change in Control, as set forth
below, shall occur during the term of this Agreement. 

 

    (a) For
purposes of this Agreement, a "Change in Control" of Company shall be deemed to occur if any of the following occur: 

     (i) Any
"person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, or any successor statute
thereto (the "Exchange Act")) acquires or becomes a "beneficial owner" (as defined in Rule 13d-3 or any successor rule under the Exchange Act), directly or indirectly, of securities of
Company representing 30% or more of the combined voting power of Company's then outstanding securities entitled to vote generally in the election of directors ("Voting Securities"), provided, however,
that the following shall not constitute a Change in Control pursuant to this Section 2(a)(i): 

    (A) any
acquisition or beneficial ownership by Company or a subsidiary of Company; 

    (B) any
acquisition or beneficial ownership by any employee benefit plan (or related trust) sponsored or maintained by Company or one or more of its subsidiaries; 

    (C) any
acquisition or beneficial ownership by any corporation with respect to which, immediately following such acquisition, more than 70% of both the combined voting
power of Company's then outstanding Voting Securities and the common stock of Company is then beneficially owned, directly or indirectly, by all or substantially all of the persons who beneficially
owned Voting Securities and common stock of Company immediately prior to such acquisition in substantially the same proportions as their ownership of such Voting Securities and common stock, as the
case may be, immediately prior to such acquisition; 

    (ii) A
majority of the members of the Board of Directors of Company shall not be Continuing Directors. For purposes of this subsection 2(a)(ii), "Continuing
Directors" shall mean: (A) individuals who, on the date hereof, are directors of Company, (B) individuals elected as directors of Company subsequent to the date hereof for whose election
proxies shall have been solicited by the Board of Directors of Company or (C) any individual elected or appointed by the Board of Directors of Company to fill vacancies on the Board of
Directors of Company caused by death or resignation (but not by removal) or to fill newly-created directorships; 

    (iii) Approval
by the shareholders of Company of a reorganization, merger or consolidation of Company (other than a merger or consolidation with a subsidiary of
Company) or a statutory exchange of outstanding Voting Securities of Company, unless immediately following such reorganization, merger, consolidation or exchange, all or substantially all of the
persons who were the beneficial owners, respectively, of Voting Securities and common stock of Company immediately prior to such reorganization, merger, consolidation or exchange beneficially own,
directly or indirectly, more than 70% of, respectively, the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors and the then
outstanding shares of common stock, as the case may be, of the corporation resulting from such reorganization, merger, consolidation or exchange in substantially the same proportions as their
ownership, immediately prior to such reorganization, merger, consolidation or exchange, of the Voting Securities and common stock of Company, as the case may be; 

    (iv) Approval
by the shareholders of Company of (x) a complete liquidation or dissolution of Company or (y) the sale or other disposition of all or
substantially all of the assets of Company (in one or a series of transactions), other than to a corporation with respect to which, immediately following such sale or other disposition, more than 70%
of, respectively, the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and the then outstanding shares of
common stock of such corporation is then beneficially owned, directly or indirectly, by all or substantially all of the persons who were the beneficial owners, respectively, of the
Voting Securities and common stock of Company immediately prior to such sale or other disposition in substantially the same 

2

 

proportions as their ownership, immediately prior to such sale or other disposition, of the Voting Securities and common stock of Company, as the case may be; or 

    (v) Company
enters into a letter of intent, an agreement in principle or a definitive agreement relating to a Change in Control described in Section 2(a)(i),
2(a)(ii), 2(a)(iii) or 2(a)(iv) above that ultimately results in such a Change in Control or a tender or exchange offer or proxy contest is commenced which ultimately results in a Change
in Control described in Section 2(a)(i) or 2(a)(ii) hereof. 

Notwithstanding
the above, a Change in Control shall not be deemed to occur with respect to the Executive if (x) the acquisition or beneficial ownership of the 30% or greater interest referred
to in Section 2(a)(i) is by the Executive or by a group, acting in concert, that includes the Executive or (y) if a majority of the then combined voting power of the then
outstanding voting securities (or voting equity interests) of the surviving corporation or of any corporation (or other entity) acquiring all or substantially all of the assets of Company shall,
immediately after a reorganization, merger, consolidation, statutory share exchange or disposition of assets referred to in Section 2(a)(iii) or 2(a)(iv), be beneficially owned, directly
or indirectly, by the Executive or by a group, acting in concert, that includes the Executive. 

    (b) The
Executive agrees that, subject to the terms and conditions of this Agreement, in the event of a Change in Control of Company described in
Section 2(a)(i), 2(a)(ii), 2(a)(iii) or 2(a)(iv), occurring after the date hereof, the Executive, if employed by Company immediately prior to such a Change in Control, will not
voluntarily terminate employment with Company except for Good Reason for a period of 90 days after the occurrence of such a Change in Control of Company. 

    (c) For
purposes of this Agreement, a "subsidiary" of Company shall mean any entity of which securities or other ownership interests having general voting power to
elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by Company. 

    3.  Termination Following Change in Control.  If a Change in Control shall occur during the term of this
Agreement, the Executive shall be entitled to the payments and other benefits provided in subsection 4(d) in the event of the termination of the Executive's employment with Company
unless the Executive's termination is (A) because of the Executive's death, (B) by Company for Cause or Disability, or (C) by the Executive other than for Good Reason. 

    (a) Disability. If, as a result of incapacity due to physical or mental illness, the Executive shall have been absent
from the full-time performance of the Executive's duties with Company for six consecutive months, and within 30 days after written Notice of Termination is given, the Executive shall not have
returned to the full-time performance of the Executive's duties, Company may terminate the Executive's employment for "Disability". Any question as to the existence of the Executive's Disability upon
which the Executive and Company cannot agree shall be determined by a qualified independent physician selected by the Executive (or, if the Executive is unable to make such selection, it shall be made
by any adult member of the Executive's immediate family), and approved by Company. The determination of such physician made in writing to Company and to the Executive shall be final and conclusive for
all purposes of this Agreement. 

    (b) Cause. Termination of the Executive's employment for "Cause" shall mean termination upon the conviction of the
Executive by a court of competent jurisdiction for felony criminal conduct. 

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    (c) Good Reason. Termination by the Executive for "Good Reason" shall mean termination by the Executive if, without the
Executive's express written consent, any of the following shall occur: 

     (i) the
assignment to the Executive of any duties inconsistent with the Executive's status or position with Company, or a substantial alteration in the nature or status
of the Executive's responsibilities from those in effect immediately prior to the Change in Control; 

    (ii) a
reduction by Company in the Executive's annual base salary in effect immediately prior to a Change in Control; 

    (iii) the
relocation of Company's principal executive offices to a location more than fifty miles from Plymouth, Minnesota or Company requiring the Executive to be
based anywhere other than Company's principal executive office (or if the Executive is based at a location other than Company's principal executive office immediately prior to the first Change in
Control, anywhere other than such location) except for required travel on Company's business to an extent substantially consistent with the Executive's prior business travel obligations; 

    (iv) the
failure by Company to continue to provide the Executive with benefits at least as favorable to those enjoyed by the Executive under any of Company's pension,
life insurance, medical, health and accident, disability, deferred compensation, incentive awards, employee stock options, or savings plans in which the Executive was participating at the time of the
Change in Control, the taking of any action by Company which would directly or indirectly materially reduce any of such benefits or deprive the Executive of any material fringe benefit enjoyed at the
time of the Change in Control, or the failure by Company to provide the Executive with the number of paid vacation days to which the Executive is entitled at the time of the Change in Control,
provided, however, that Company may amend any such plan or programs as long as such amendments do not reduce any benefits to which the Executive would be entitled upon termination; 

    (v) a
termination pursuant to Section 3(d) of this Agreement; 

    (vi) the
failure of Company to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement, as contemplated in Section 6; or 

   (vii) any
purported termination of the Executive's employment which is not made pursuant to a Notice of Termination satisfying the requirements of subsection
(e) below; for purposes of this Agreement, no such purported termination shall be effective. 

    (d) Voluntary Termination Deemed Good Reason. Notwithstanding anything herein to the contrary, during the period
commencing on the 91st day following a Change in Control under Section 2(a)(i), 2(a)(ii), 2(a)(iii) or 2(a)(iv) of this Agreement and ending on the 180th day following such a
Change in Control, the Executive may voluntarily terminate his or her employment for any reason, and such termination shall be deemed "Good Reason" for all purposes of this Agreement. In the event of
such voluntary termination pursuant to this subsection 3(d)), the multiple applied to the Severance Payment (as defined in Section 4(d)), if any, payable to the Executive pursuant to
subsection 4(d)(ii) below shall be reduced by 50%. 

    (e) Notice of Termination. Any purported termination of the Executive's employment by Company or by the Executive shall
be communicated by written Notice of Termination to the other party hereto in accordance with Section 7. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon and shall set forth the facts and circumstances claimed to provide a basis for termination of the Executive's
employment. 

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    (f)  Date of Termination. For purposes of this Agreement, "Date of Termination" shall mean: 

     (i) if
the Executive's employment is terminated for Disability, 30 days after Notice of Termination is given (provided that the Executive shall not have returned
to the full-time performance of the Executive's duties during such 30 day period); and 

    (ii) if
the Executive's employment is terminated pursuant to subsections (b), (c) or (d) above or for any other reason (other than Disability), the
date specified in the Notice of Termination (which, in the case of a termination pursuant to subsection (b) above, shall not be less than 10 days, and, in the case of a termination pursuant to
subsection (c) or (d) above, shall not be less than 10 nor more than 30 days, respectively, from the date such Notice of Termination is given). 

    (g) Dispute of Termination. If, within 10 days after any Notice of Termination is given, the party receiving such Notice
of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally determined, either by mutual written
agreement of the parties, or by a final judgment, order or decree of a court of competent jurisdiction (which is not appealable or the time for appeal therefrom having expired and no appeal having
been perfected); provided, that the Date of Termination shall be extended by a notice of dispute only if such notice is given in good faith and the party giving such notice pursues the resolution of
such dispute with reasonable diligence. Notwithstanding the pendency of any such dispute, Company shall continue to pay the Executive full compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, base salary) and continue the Executive as a participant in all compensation, benefit and insurance plans in which the Executive was participating
when the notice giving rise to the dispute was given, until the dispute is finally resolved in accordance with this subsection. Amounts paid under this subsection are in addition to all other amounts
due under this Agreement and, except as provided in Section 4(d)(v), shall not be offset against or reduce any other amounts under this Agreement. 

    4.  Compensation Upon Termination or During Disability.  Upon termination of the Executive's employment
(or, with respect to Section 4(a), during a period of Disability) following a Change in Control, as defined in Section 2(a), of Company or if there shall be a termination by Company of
the Executive's employment prior to a Change in Control, or the Executive shall terminate employment with Company for Good Reason prior to a Change in Control (for which purpose the references in
Section 3(c) to changes from circumstances existing immediately prior to or at the time of a Change in Control that constitute Good Reason for termination shall instead be deemed to be
references to circumstances existing immediately prior to or at the time that the Change in Control is first anticipated), and the Executive reasonably demonstrates that such termination by Company or
event constituting Good Reason for termination by the Executive (x) was requested by a third party that had previously taken other steps reasonably calculated to result in a Change in Control
described in Section 2(a)(i), 2(a)(ii), 2(a)(iii) or 2(a)(iv) and ultimately resulting in such a Change in Control following termination of the
Executive's employment or (y) otherwise arose in connection with or in anticipation of a Change in Control described in Section 2(a)(i), 2(a)(ii), 2(a)(iii) or
2(a)(iv) that ultimately occurs following termination of the Executive's employment, the Executive shall be entitled to the following benefits: 

    (a) Except
as provided in Section 4(b), during any period that the Executive fails to perform full-time duties with Company as a result of Disability, Company
shall pay the Executive the base salary of the Executive at the rate in effect at the commencement of any such period, until such time as the Executive is determined to be eligible for long term
disability benefits in accordance with Company's insurance programs then in effect. 

    (b) If
the Executive's employment shall be terminated by Company for Cause or Disability or by the Executive, following a Change in Control, other than for Good Reason,
Company shall pay to the Executive his or her full base salary through the Date of Termination at the rate in effect at the time 

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Notice of Termination is given and Company shall have no further obligation to the Executive under this Agreement. 

    (c) If
the Executive's employment shall be terminated by Company for Cause or Disability, or is terminated by reason of death, Company shall immediately cause to be
commenced payment to the Executive (or the Executive's designated beneficiaries or estate, if no beneficiary is designated) of any and all benefits to which the Executive is entitled, if any, under
Company's insurance programs then in effect. 

    (d) Except
for termination of the Executive's employment with Company by reason of death, if the Executive's employment with Company shall be terminated (A) by
Company other than for Cause or Disability or (B) by the Executive for Good Reason, then the Executive shall be entitled to the benefits provided below: 

     (i) Company
shall pay the Executive the Executive's full base salary through the Date of Termination at the rate in effect at the time the Notice of Termination is
given. 

    (ii) In
lieu of any further salary payments for periods subsequent to the Date of Termination, Company shall pay as a severance payment (the "Severance Payment") an
amount equal to (A) three (3) times (subject to reduction pursuant to Section 3(d) in the event of a termination of employment by the
Executive pursuant to Section 3(d)) the average of the annual compensation which was paid to the Executive by Company (or any corporation affiliated with Company within the meaning of
Section 1504 of the Internal Revenue Code of 1986, as amended (the "Code")) and includible in the Executive's gross income for federal income tax purposes for the shorter of the period
consisting of (1) the five most recently completed taxable years of the Executive ending before the earlier of the first Change in Control (for which purpose the first Change in Control shall
not be deemed to be a Change in Control pursuant to Section 2(a)(v) unless the Executive's termination of employment with Company occurs prior to the first Change in Control pursuant to
Section 2(a)(i), 2(a)(ii), 2(a)(iii) or 2(a)(iv)) or (2) that portion of such five-year period during which the Executive was employed by Company (for which purpose compensation
for a partial year shall be annualized before determining average annual compensation for the period in accordance with temporary or final regulations promulgated under Section 280G(d) of the
Code or any successor provision thereto), less (B) $1.00. Such average shall be determined in accordance with temporary or final regulations promulgated under Section 280G(d) of
the Code or any successor provision thereto. The Severance Payment shall be made in full within 60 days after termination of employment. Such Severance Payment shall be reduced by any severance pay
that the Executive receives from Company, any subsidiary of Company or any successor thereof under any other policy or agreement of Company in the event of involuntary termination of the Executive's
employment. Notwithstanding the foregoing provisions of this Section 4(d)(ii), if a Change in Control occurs on or before the first anniversary of the commencement of Executive's employment
with Company and Executive would otherwise be entitled to a Severance Payment hereunder, then Company shall pay to Executive a Severance Payment equal to Executive's annual base salary in effect at
the time the Notice of Termination is given. 

    (iii) For
a 36 month period after the Date of Termination, Company shall arrange to provide the Executive with life, disability, accident and health insurance benefits
substantially similar to those which the Executive is receiving or entitled to receive immediately prior to the Notice of Termination. Benefits otherwise receivable by the Executive pursuant to this
paragraph (iii) shall be reduced to the extent comparable benefits are actually received by the Executive from another employer or other third party during such 36 month period, and any
such benefits actually received by the Executive shall be reported to Company. Notwithstanding the foregoing provisions of this Section 4(d)(iii), if a Change in Control occurs on or before the
first anniversary 

6

 

of the commencement of Executive's employment with Company and Executive would otherwise be entitled to insurance benefits hereunder, then Company shall arrange to provide Executive with life,
disability, accident and health insurance benefits hereunder for a 12 month period after the Date of Termination. 

    (iv) Company
shall also pay to the Executive all legal fees and expenses incurred by the Executive as a result of such termination (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement). 

    (v) Notwithstanding
any provision to the contrary contained herein except the last sentence of this Section 4(d)(v), if the lump sum cash payment due and the
other benefits to which the Executive shall become entitled under this Section 4 hereof, either alone or together with other payments in the nature of compensation to the Executive which are
contingent on a change in the ownership or effective control of Company or in the ownership of a substantial portion of the assets of Company or otherwise, would constitute a "parachute payment" as
defined in Section 280G of the Code or any successor provision thereto, such lump sum payment and/or such other benefits and payments shall be reduced (but not below zero) to the largest
aggregate amount as will result in no portion thereof being subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or being non-deductible to
Company for federal income tax purposes pursuant to Section 280G of the Code (or any successor provision thereto). The Executive in good faith shall determine the amount of any reduction to be
made pursuant to this Section 4(d)(v) and shall select from among the foregoing benefits and payments those which shall be reduced. No modification of, or successor provision to,
Section 280G or Section 4999 subsequent to the date of this Agreement shall, however, reduce the benefits to which the Executive would be entitled under this Agreement in the absence of
this Section 4(d)(v) to a greater extent than they would have been reduced if Section 280G and Section 4999 had not been modified or superseded subsequent to the date of
this Agreement, notwithstanding anything to the contrary provided in the first sentence of this Section 4(d)(v). 

    (e) The
Executive shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall
the amount of any payment or benefit provided for in this Section 4 be reduced by any compensation earned by the Executive as the result of employment by another employer or by retirement
benefits after the Date of Termination, or otherwise except as specifically provided in this Section 4. 

    (f)  In
addition to all other amounts payable to the Executive under this Section 4, the Executive shall be entitled to receive all benefits payable to the
Executive under any other plan or agreement relating to retirement benefits except as specifically provided in this Section 4. 

    (g) If
Company fails to make any payment at the times and in the amounts specified herein, or with respect to any fringe benefits, fails to provide such benefit as
specified herein, within 10 days from the date of written notice from the Executive to Company of such failure, Company shall be deemed to have waived any right to enforce any restriction on
employment or non-competition provision contained in any agreement between Company and the Executive then in existence which limits the ability of the Executive to accept other employment and,
thereafter, the Executive may work or consult for any person or business organization which is engaged in the design, development, assembly, manufacture, marketing or sale of any product which
competes with any product of Company, or for any person or business organization which is in competition with Company, without liability to Company for such acts. A waiver of such restrictive covenant
or non-competition provision shall not in any way restrict or limit the Executive's right to enforce the provisions of this Agreement, including any legal or equitable
action to enforce any and all payments, rights or benefits under this Agreement, it being the intention of this subsection that such waiver shall be in addition to, not in 

7

 

substitution of, any other rights to which the Executive is entitled hereunder. Once waived, any such restrictive covenant or non-competition provision shall not thereafter be enforceable even though
the Executive may later receive the payment, right or benefit which was the basis of the waiver of such restrictive covenant or non-competition provision. 

    5.  Funding of Payments.  In order to assure the performance of Company or its successor of its
obligations under this Agreement, Company may deposit in trust an amount equal to the maximum payment that will be due the Executive under the terms hereof. Under a written trust instrument, the
Trustee shall be instructed to pay to the Executive (or the Executive's legal representative, as the case may be) the amount to which the Executive shall be entitled under the terms hereof, and the
balance, if any, of the trust not so paid or reserved for payment shall be repaid to Company. If Company deposits funds in trust, payment shall be made no later than the occurrence of the first Change
in Control described in Section 2(a)(i), 2(a)(ii), 2(a)(iii) or 2(a)(iv). Company shall give notice of such a Change in Control to any such trustee upon any occurrence as defined herein.
If and to the extent that the Executive becomes a beneficiary of any such funds deposited in trust, Company shall give prompt notice to the Executive, which shall include a copy of the trust
instrument and amendments from time to time. The rights of the Executive under such trust instrument shall be enforceable against Company and any trustees named therein, as though the provisions of
said trust were incorporated into this Agreement. If and to the extent there are not amounts in trust sufficient to pay the Executive under this Agreement, Company shall remain liable for any and all
payments due to the Executive. In accordance with the terms of such trust, at all times during the term of this Agreement, the Executive shall have no rights, other than as an unsecured general
creditor of Company, to any amounts held in trust and all trust assets shall be general assets of Company and subject to the claims of creditors of Company. 

    6.  Successors; Binding Agreement.  

    (a) Company
will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or
assets of Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that Company would be required to perform it if no such succession had taken place.
Failure of Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Executive to compensation from
Company in the same amount and on the same terms as he would be entitled hereunder if he terminated his employment for Good Reason following a Change in Control, except that for purposes of
implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. 

    (b) This
Agreement shall inure to the benefit of and be enforceable by the Executive's personal or legal representatives, successors, heirs, and designated
beneficiaries. If the Executive should die while any amount would still be payable to the Executive hereunder if the Executive had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the Executive's designated beneficiaries, or, if there is no such designated beneficiary, to the Executive's estate. 

    7.  Notice.  For the purpose of this Agreement, notices and all other communications provided for in the
Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered or certified mail, return receipt requested, postage pre-paid, addressed
to the last known residence address of the Executive or in the case of Company, to its principal executive office to the attention of each of the then directors of Company with a copy to its
Secretary, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt. 

    8.  Miscellaneous.  No provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and signed by the parties. No waiver by either 

8

 

party hereto at any time of any breach by the other party to this Agreement of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at any prior to similar time. No legally binding or enforceable agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof that remain in effect have been made by either party which are not expressly set forth in this Agreement. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of Minnesota. 

    9.  Validity.  The invalidity or unenforceability or any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 

	MINNTECH CORPORATION	 	EXECUTIVE:
	
By:	
 	

 	
 	

 
	 	 	
 William Hope
 Chairman	 	
 R. JAMES DANEHY

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